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433 Cards in this Set

  • Front
  • Back

Market Price

the price at which the quantity demanded is exactly equal to the quantity supplied

Service Economy

an economy in which more effort is devoted to the production of services than to the production of goods

Free Enterprise

the system of business in which individuals are free to decide what to produce, how to produce it, and at what price to sell it


the average level of output per worker per hour


the quantity of a product that producers are willing to sell at each of various prices

Gross Domestic Product


the total dollar value of all goods and services produced by all people within the boundaries of a country during a one-year period

Perfect (or Pure) Competition

the market situation in which there are many buyers and sellers of a product, and no single buyer or seller is powerful enough to affect the price of that product


the study of how wealth is created and distributed


a general decrease in the level of prices

Consumer Products

goods and services purchased by individuals for personal consumption


creating and maintaining the conditions under which humans and nature can exist in productive harmony while fulfilling the social, economic, and other requirements of present and future generations

Unemployment Rate

the percentage of a nation's labor force unemployed at any time

Monetary Policies

Federal Reserve's decisions that determine the size of the supply of money in the nation and the level of interest rates


the study of the decisions made by individuals and businesses

Federal Deficit

a shortfall created when the federal government spends more in a fiscal year than it receives

Standard of Living

a loose, subjective measure of how well off an individual or a society is, mainly in terms of want satisfaction through goods and services


a market (or industry) in which there are few sellers


the organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society's needs

Monopolistic Competition

a market situation in which there are many buyers along with a relatively large number of sellers who differentiate their products from the products of competitors

Producer Price Index


an index that measures prices that producers receive for their finished goods

Mixed Economy

an economy that exhibits elements of both capitalism and socialism


the way in which people deal with the creation and distribution of wealth


the separation of a manufacturing process into distinct tasks and the assignment of the different tasks to different individuals


all the different people or groups of people who are affected by an organization's policies, decisions, and activities

Product Differentiation

the process of developing and promoting differences between one's products and all competitive products

Factory System

a system of manufacturing in which all the materials, machinery, and workers required to manufacture a product are assembled into one place

Consumer Price Index


a monthly index that measures the changes in prices of a fixed basket of goods purchased by a typical consumer in an urban area


a system of exchange in which goods or services are traded directly for other goods or services without using money


a general rise in the level of prices


a person who risks time, effort, and money to start and operate a business


the study of the national economy and the global economy


rivalry among businesses for sales to potential customers


the quantity of a product that buyers are willing to purchase at each of various prices


two or more consecutive three-month periods of decline in a country's GDP (Gross Domestic Product)


a severe recession that lasts longer than a typical recession and has a larger decline in business activity when compared to a recession

Market Economy

an economic system in which businesses and individuals decide what to produce and buy, and the market determines quantities sold and prices

Social Media

the online interaction that allows people and businesses to communicate and share ideas, personal information, and information about products or services


what remains after all business expenses have been deducted from sales revenue

Sales Revenue - Business Expenses


a market (or industry) with only one seller, and there are barriers to keep other firms from entering the industry


an economic system in which individuals own and operate the majority of businesses that provide goods and services

Command Economy

an economic system in which the government decides what goods and services will be produced, how they will be produced, for whom available goods and services will be produced, and who owns and controls the major factors of production

Domestic System

a method of manufacturing in which an entrepreneur distributes raw materials to various homes, where families process them into finished goods to be offered for sale by the merchant entrepreneur

Invisible Hand

a term created by Adam Smith to describe how an individual's personal gain benefits others and a nation's economy

Business Cycle

the recurrence of periods of growth and recession in a nation's economic activity

Factors of Production

resources used to produce goods and services

Fiscal Policy

government influence on the amount of savings and expenditures; accomplished by altering the tax structure and by changing the levels of government spending

National Debt

the total of all federal deficits

Cultural (or Workplace) Diversity

differences among people in a workforce owing to race, ethnicity, and gender




informing the press or government officials about unethical practices within one's organization

Social Responsibility

the recognition that business activities have an impact on society and the consideration of that impact in business decision making

Code of Ethics

a guide to acceptable and ethical behavior as defined by the organization

Economic Model of Social Responsibility

the view that society will benefit most when business is left alone to produce and market profitable products that society needs

Equal Employment Opportunity Commission


a government agency with the power to investigate complaints of employment discrimination and the power to sue firms that practice it


the study of right and wrong and of the morality of the choices individuals make

Sarbanes-Oxley Act of 2002

provides sweeping (new) legal protection for employees who report corporate misconduct

Caveat Emptor

a Latin phrase meaning "let the buyer beware"


a racial, religious, political, national, or other group regarded as different from the larger group of which it is a part and that is often singled out for unfavorable treatment

Social Audit

a comprehensive report of what an organization has done and is doing with regard to social issues that affect it

Affirmative Action Program

a plan designed to increase the number of minority employees at all levels within an organization

Socioeconomic Model of Social Responsibility

the concept that business should emphasize not only profits but also the impact of its decisions on society

Business Ethics

the application of moral standards to business situations


the contamination of water, air, or land through the actions of people in an industrialized society

Hard-core Unemployed

workers with little education or vocational training and a long history of unemployment


all activities undertaken to protect the rights of consumers

Foreign-Exchange Control

a restriction on the amount of a particular foreign currency that can be purchased or sold

Import Quota

a limit on the amount of a particular good that may be imported into a country during a given period of time

Trade Deficit

a negative balance of trade

Balance of Payments

the total flow of money into a country minus the total flow of money out of that country over some period of time

Total Flow $ into country - $ out of country


a contractual agreement in which one firm permits another to produce and market its product and use its brand name in return for a royalty or other compensation

Strategic Alliance

a partnership formed to create competitive advantage on a worldwide basis


a complete halt to trading with a particular nation or in a particular product

International Business

all business activities that involve exchanges across national boundaries

Balance of Trade

the total value of a nation's exports minus the total value of its imports over some period of time

Total Value Exports - Total Value Imports


an international barter transaction

World Trade Organization


powerful successor to GATT (General Agreement on Tariffs and Trade)that incorporates trade in goods, services, and ideas

Comparative Advantage

the ability to produce a specific product more efficiently than any other product

Import Duty


a tax levied on a particular foreign product entering a country


selling and shipping raw materials or products to other nations

Trading Company

provides a link between buyers and sellers in different countries

Multilateral Development Bank


an internationally supported bank that provides loans to developing countries to help them grow

General Agreement on Tariffs and Trade


an international organization of 159 nations dedicated to reducing or eliminating tariffs and other barriers to world trade

Absolute Advantage

the ability to produce a specific product more efficiently than any other nation

Bill of Lading

document issued by a transport carrier to an exporter to prove that merchandise has been shipped

Multinational Enterprise

a firm that operates on a worldwide scale without ties to any specific nation or region


exportation of large quantities of a product at a price lower than that of the same product in the home market

Currency Devaluation

the reduction of the value of a nation's currency relative to the currencies of other countries

International Monetary Fund


an international bank with 188 member nations that makes short-term loans to developing countries experiencing balance-of-payment deficits

Economic Community

an organization of nations formed to promote the free movement of resources and products among its members and to create common economic policies

Letter of Credit

issued by a bank on request of an importer stating that the bank will pay an amount of money to a stated beneficiary

Nontariff Barrier

a nontax measure imposed by a government to favor domestic over foreign supplies

Export-Import Bank of the United States

an independent agency of the U.S. government whose function is to assist in financing the exports of American firms


issued by the exporter's bank, ordering the importer's bank to pay for the merchandise, thus guaranteeing payment once accepted by the importer's bank


purchasing raw materials or products in other nations and bringing them into one's own country

Corporate Officers

the chairman of the board, president, executive vice presidents, corporate secretary, treasurer, and any other top executive appointed by the board of directors


the purchase of one corporation by another


a distribution of earnings to the stockholders of a corporation

Board of Directors

the top governing body of a corporation, the members of which are elected by the stockholders

Tender Offer

an offer to purchase the stock of a firm targeted for acquisition at a price just high enough to tempt stockholders to sell their shares


a temporary association of individuals or firms organized to perform a specific task that requires a large amount of capital

Limited Partner

a person who invests money in a business but has no management responsibility or liability for losses beyond the amount he or she invested in the partnership

Limited Liability

a feature of corporate ownership that limits each owner's financial liability to the amount of money that he or she has paid for the corporation's stock

Closed Corporation

a corporation whose stock is owned by relatively few people and is not sold to the general public

Domestic Corporation

a corporation in the state in which it is incorporated


a voluntary association of two or more persons to act as co-owners of a business for profit


a person who owns a corporation's stock

Preferred Stock

stock owned by individuals or firms who usually do not have voting rights but whose claims on dividends are paid before those of common-stock owners

General Partner

a person who assumes full or shared responsibility for operating a business

Foreign Corporation

a corporation in any state in which it does business except the one in which it is incorporated

Hostile Takeover

a situation in which the management and board of directors of a firm targeted for acquisition disapprove of the merger

Joint Venture

an agreement between two or more groups to form a business entity in order to achieve a specific goal or to operate for a specific period of time

Open Corporation

a corporation whose stock can be bought and sold by any individual

Not-for-profit Corporation

a corporation organized to provide a social, educational, religious, or other service rather than to earn a profit


the shares of ownership of a corporation

Alien Corporation

a corporation chartered by a foreign government and conducting business in the United States

Unlimited Liability

a legal concept that holds a business owner personally responsible for all the debts of the business

Common Stock

stock owned by individuals or firms who may vote on corporate matters but whose claims on profits and assets are subordinate to the claims of others


an artificial person created by law with most of the legal rights of a real person, including the rights to start and operate a business, to buy or sell property, to borrow money, to sue or be sued, and to enter into binding contracts


a corporation that is taxed as though it were a partnership


a legal form listing issues to be decided at a stockholders' meeting and enabling stockholders to transfer their voting rights to some other individual(s)

Proxy Fight

a technique used to gather enough stockholder votes to control a targeted company

Sole Proprietorship

a business that is owned (and usually operated) by one person

Limited-liability Company


a form of business ownership that combines the benefits of a corporation and a partnership while avoiding some of the restrictions and disadvantages of those forms of ownership


a person who owns a corporation's stock

Small-business Development Centers


university-based groups that provide individual counseling and practical training to owners of small businesses

Small Business Administration


a governmental agency that assists, counsels, and protects the interests of small businesses in the United States

Small-business Investment Companies


privately owned firms that provide venture capital to small enterprises that meet their investment standards

Business Plan

a carefully constructed guide for the person starting a business


a license to operate an individually owned business as though it were part of a chain of outlets or stores

Small Business

one that is independently owned and operated for profit and is not dominant in its field

Venture Capital

money that is invested in small (and sometimes struggling) firms that have the potential to become very successful


the actual granting of a franchise


an individual or organization granting a franchise

Service Corps of Retired Executives


a group of business people who volunteer their services to small businesses through the SBA


a person or organization purchasing a franchise

Small-business Institutes


groups of senior and graduate students in business administration who provide management counseling to small businesses

Analytic Skills

the ability to identify problems correctly, generate reasonable alternatives, and select the "best" alternatives to solve problems

Autocratic Leadership

task-oriented leadership style in which workers are told what to do and how to accomplish it without having a say in the decision-making process

Participative Leadership

leadership style in which all members of a team are involved in identifying essential goals and developing strategies to reach those goals


the grouping of resources and activities to accomplish some end result in an efficient and effective manner


the process of evaluating and regulating ongoing activities to ensure that goals are achieved


the process of influencing people to work toward a common goal

Operations Manager

a manager who manages the systems that convert resources into goods and services

Contingency Plan

a plan that outlines alternative courses of action that may be taken if an organization's other plans are disrupted or become ineffective

Marketing Manager

a manager who is responsible for facilitating the exchange of products between an organization and its customers or clients

Technical Skills

specific skills needed to accomplish a specialized activity

Middle Manager

a manager who implements the strategy and major policies developed by top management

Interpersonal Skills

the ability to deal effectively with other people

Conceptual Skills

the ability to think in abstract terms


a process used to evaluate the products, processes, or management practices of another organization that is superior in some way in order to improve quality


a specific statement detailing what an organization intends to accomplish over a shorter period of time

Administrative Manager

a manager who is not associated with any specific functional area but who provides overall administrative guidance and leadership

Strategic Planning Process

the establishment of an organization's major goals and objectives and the allocation of resources to achieve them


establishing organizational goals and deciding how to accomplish them

Total Quality Management


the coordination of efforts directed at improving customer satisfaction, increasing employee participation, strengthening supplier partnerships, and facilitating an organizational atmosphere of continuous quality improvement

Strategic Plan

an organization's broadest plan, developed as a guide for major policy setting and decision making

Top Manager

an upper-level executive who guides and controls the overall fortunes of an organization

Communication Skills

the ability to speak, listen, and write effectively


the process of providing reasons for people to work in the best interests of an organization

Tactical Plan

a smaller scale plan developed to implement a strategy

Core Competencies

approaches and processes that a company performs well that may give it an advantage over its competitors


the ability to influence others


the combined processes of leading and motivating

Decision Making

the act of choosing one alternative from a set of alternatives

First-line Manager

a manager who coordinates and supervises the activities of operating employees


a statement of the basic purpose that makes an organization different from others

SWOT Analysis

the identification and evaluation of a firm's strengths, weaknesses, opportunities, and threats


the process of coordinating people and other resources to achieve the goals of an organization


an end result that an organization is expected to achieve over a one- to ten-year period

Human Resources Manager

a person charged with managing an organization's human resources programs

Financial Manager

a manager who is primarily responsible for an organization's financial resources


an outline of the actions by which an organization intends to accomplish its goals and objectives

Operational Plan

a type of plan designed to implement tactical plans

Entrepreneurial Leadership

personality-based leadership style in which the manager seeks to inspire workers with a vision of what can be accomplished to benefit all stakeholders


the discrepancy between an actual condition and a desired condition

Problem Solving

identifying the problem or opportunity, generating alternatives, selecting an alternative, and implementing and evaluating the solution


the examination of the quality of work-in-process

Computer-integrated Manufacturing


a computer system that not only helps to design products but also controls the machinery needed to produce the finished product

International Organization for Standardization


a network of national standards institutes and similar organizations from over 160 different countries that is charged with developing standards for quality products and services that are traded throughout the globe

Quality Circle

a team of employees who meet on company time to solve problems of product quality

Just-in-time Inventory System

a system designed to ensure that materials or supplies arrive at a facility just when they are needed so that storage and holding costs are minimized

Lean Manufacturing

a concept built on the idea of eliminating waste from all the activities required to produce a product or service

Capital-intensive Technology

a process in which machines and equipment do most of the work

Quality Control

the process of ensuring that goods and services are produced in accordance with design specifications

Mass Production

a manufacturing process that lowers the cost required to produce a large number of identical or similar products over a long period of time

Labor-intensive Technology

a process in which people must do most of the work

Inventory Control

the process of managing inventories in such a way as to minimize inventory costs, including both holding costs and potential stock-out costs

Six Sigma

a disciplined approach that relies on statistical data and improved methods to eliminate defects for a firm's products and services


the process of ensuring that materials and other resources are at the right place at the right time

Materials Requirements Planning


a computerized system that integrates production planning and inventory control

Form Utility

utility created by people converting raw materials, finances, and information into finished products

Malcolm Baldrige National Quality Award

an award given by the President of the United States to organizations judged to be outstanding in specific managerial tasks that lead to improved quality for both products and services

Analytical Process

a process in operations management in which raw materials are broken into different component parts

Synthetic Process

a process in operations management in which raw materials or components are combined to create a finished product

Computer-aided Manufacturing


the use of computers to plan and control manufacturing processes


the ability of a good or service to satisfy a human need

Intermittent Process

a manufacturing process in which a firm's manufacturing machines and equipment are changed to produce different products

Planning Horizon

the period during which an operational plan will be in effect

Plant Layout

the arrangement of machinery, equipment, and personnel within a production facility


a situation in which U.S. manufacturers bring manufacturing jobs back to the United States

Product Line

a group of similar products that differ only in relatively minor characteristics

Research and Development


a set of activities intended to identify new ideas that have the potential to result in new goods and services


the amount of products or services that an organization can produce in a given time


the total or near-total use of machines to do work

Continuous Process

a manufacturing process in which a firm produces the same product(s) over a long period of time

Flexible Manufacturing System


a single production system that combines electronic machines and CIM

Operations Management

all the activities required to produce goods and services

Design Planning

the development of a plan for converting an idea into an actual product or service


all the activities involved in obtaining required materials, supplies, components, and parts from other firms

Product Design

the process of creating a set of specifications from which a product can be produced

Service Economy

an economy in which more effort is devoted to the production of services than to the production of goods


the use of programmable machines to perform a variety of tasks by manipulating materials and tools

Computer-aided Design


the use of computers to aid in the development of products

Social Needs

the human requirements for love and affection and a sense of belonging

Problem-solving Team

a team of knowledgeable employees brought together to tackle a specific problem

Job Redesign

a type of job enrichment in which work is restructured to cultivate the worker-job match


working at home all the time or for a portion of the work week


making employees more involved in their jobs by increasing their participation in decision making

Piece-rate System

a compensation system under which employees are paid a certain amount for each unit of output they produce

Hygiene Factors

job factors that reduce dissatisfaction when present to an acceptable degree but that do not necessarily result in high levels of motivation

Job Sharing

an arrangement whereby two people share one full-time position

Virtual Team

a team consisting of members who are geographically dispersed but communicate electronically

Job Enlargement

expanding a worker's assignments to include additional but similar tasks

Part-time Work

permanent employment in which individuals work less than a standard work week

Scientific Management

the application of scientific principles to management of work and workers

Theory Y

a concept of employee motivation generally consistent with the ideas of the human relations movement; assumes responsibility and work toward organizational goals, and by doing so they also achieve personal rewards

Motivation Factors

job factors that increase motivation, although their absence does not necessarily result in dissatisfaction

Theory Z

the belief that some middle ground between type A and type J practices is best for American business


an employee's feelings about the job, about superiors, and about the firm itself


a personal requirement

Goal-setting Theory

a theory of motivation suggesting that employees are motivated to achieve goals that they and their managers establish together

Management by Objectives


a motivation technique in which managers and employees collaborate in setting goals

Esteem Needs

our need for respect, recognition, and a sense of our own accomplishment and worth

Theory X

a concept of employee motivation generally consistent with Taylor's scientific management; assumes that employees dislike work and will function only in a highly controlled work environment

Physiological Needs

the things we require for survival

Reinforcement Theory

a theory of motivation based on the premise that rewarded behavior is likely to be repeated, whereas punished behavior is less likely to recur

Cross-functional Team

a team of individuals with varying specialties, expertise, and skills that are brought together to achieve a common task

Employee Ownership

a situation in which employees own the company they work for by virtue of being stockholders

Self-managed Teams

groups of employees with the authority and skills to manage themselves

Maslow's Hierarchy of Needs

a sequence of human needs in the order of their importance


the individual internal process that energizes, directs, and sustains behavior; the personal "force" that causes you or me to behave in a particular way

Expectancy Theory

a model of motivation based on the assumption that motivation depends on how much we want something and on how likely we think we are to get it

Job Enrichment

a motivation technique that provides employees with more variety and responsibility in their jobs

Self-actualization Needs

the need to grow and develop and to become all that we are capable of being


two or more workers operating as a coordinated unit to accomplish a specific task or goal

Motivation-Hygiene Theory

the idea that satisfaction and dissatisfaction are separate and distinct dimensions

Safety Needs

the things we require for physical and emotional security

Equity Theory

a theory of motivation based on the premise that people are motivated to obtain and preserve equitable treatment for themselves

Behavior Modification

a systematic program of reinforcement to encourage desirable behavior


a system in which employees set their own work hours within employer-determined limits

Human Resources Planning

the development of strategies to meet a firm's future human resources needs

Replacement Chart

a list of key personnel and their possible replacements within a firm


a specific amount of money paid for an employee's work during a set calendar period, regardless of the actual number of hours worked


the payment employees receive in return for their labor

Cultural (or Workplace) Diversity

differences among people in a workforce owing to race, ethnicity, and gender

Comparable Worth

a concept that seeks equal compensation for jobs requiring about the same level of education, training, and skills

External Recruiting

the attempt to attract job applicants from outside an organization

Compensation System

the policies and strategies that determine employee compensation


a payment that is a percentage of sales revenue


the process of acquainting new employees with an organization

Human Resources Management


all the activities involved in acquiring, maintaining, and developing an organization's human resources


the distribution of a percentage of a firm's profit among its employees

Incentive Payment

a payment in addition to wages, salary, or commissions

Employee Benefit

a reward in addition to regular compensation that is provided indirectly to employees

Performance Appraisal

the evaluation of employees' current and potential levels of performance to allow managers to make objective human resources decisions

Hourly Wage

a specific amount of money paid for each hour of work

Lump-sum Salary Increase

an entire pay raise taken in one lump sum

Internal Recruiting

considering present employees as applicants for available positions

Job Analysis

a systematic procedure for studying jobs to determine their various elements and requirements

Job Specification

a list of the qualifications required to perform a particular job

Job Evaluation

the process of determining the relative worth of the various jobs within a firm

Flexible Benefit Plan

compensation plan whereby an employee receives a predetermined amount of benefit dollars to spend on a package of benefits he or she has selected to meet individual needs


the process of gathering information about applicants for a position and then using that information to choose the most appropriate applicant

Skills Inventory

a computerized data bank containing information on the skills and experience of all present employees

Wage Survey

a collection of data on prevailing wage rates within an industry or a geographic area

Management Development

the process of preparing managers and other professionals to assume increased responsibility in both present and future positions

Job Description

a list of the elements that make up a particular job

Employee Training

the process of teaching operations and technical employees how to do their present jobs more effectively and efficiently


the process of attracting qualified job applicants

Cultural (Workplace) Diversity

differences among people in a workforce owing to race, ethnicity, and gender

Consumer Buying Behavior

the purchasing of products for personal or household use, not for business purposes

Marketing Strategy

a plan that will enable an organization to make the best use of its resources and advantages to meet its objectives

Customer Relationship Management


using information about customers to create marketing strategies that develop and sustain desirable customer relationships

Relationship Marketing

establishing long-term, mutually satisfying buyer-seller relationships

Customer Lifetime Value

a measure of a customer's worth (sales minus costs) to a business over one's lifetime

Sales - Costs

Marketing Mix

a combination of product, price, distribution, and promotion developed to satisfy a particular target market

Market Segmentation

the process of dividing a market into segments and directing a marketing mix at a particular segment(s) rather than at the total market


a group of individuals or organizations, or both, that need products in a given category and that have the ability, willingness, and authority to purchase them

Buying Behavior

the decisions and actions of people involved in buying and using products

Disposable Income

personal income less all additional personal taxes


the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

Business Buying Behavior

the purchasing of products by producers, resellers, governmental units, and institutions

Marketing Concept

a business philosophy that a firm should provide goods and services that satisfy customers' needs through a coordinated set of activities that allow the firm to achieve its objectives

Undifferentiated Approach

directing a single marketing mix at the entire market for a particular product

Marketing Research

the process of systematically gathering, recording, and analyzing data concerning a particular marketing problem

Possession Utility

utility created by transferring title (or ownership) of a product to a buyer

Sales Forecast

an estimate of the amount of a product that an organization expects to sell during a certain period of time based on a specified level of marketing effort

Form Utility

utility created by converting production inputs into finished products

Place Utility

utility created by making a product available at a location where customers wish to purchase it

Target Market

a group of individuals or organizations, or both, for which a firm develops and maintains a marketing mix suitable for the specific needs and preferences of that group

Market Segment

a group of individuals or organizations within a market that share one or more common characteristics

Time Utility

utility created by making a product available when customers wish to purchase it

Discretionary Income

disposable income less savings and expenditures on food, clothing, and housing

Personal Income

the income an individual receives from all sources less the Social Security taxes the individual must pay

Marketing Information System

a system for managing marketing information that is gathered continually from internal and external sources


the ability of a good or service to satisfy a human need

Marketing Plan

a written document that specifies an organization's resources, objectives, strategy, and implementation and control efforts to be used in marketing a specific product or product group


tech-savvy digital natives born after 1980

Social Media Marketing

the utilization of social media technologies, channels, and software to create, communicate, deliver, and exchange offerings that have value for an organization

Revenue Stream

a source of revenue flowing into a firm

Cloud Computing

a type of computer usage in which services stored on the internet is provided to users on a temporary basis


a small piece of software sent by a website that tracks an individual's internet use


a collaborative online working space that enables members to contribute content that can be shared with other people

Qualitative Social Media Measurement

the process of accessing the opinions and beliefs about a brand and primarily uses sentiment analysis to categorize what is being said about a company


digital audio or video files that people listen to or watch online on tablets, computers, MP3 players, or smartphones


the process of finding outside vendors and suppliers that provide professional help, parts, or materials at a lower cost

Inbound Marketing

a marketing term that describes new ways of gaining attention and ultimately customers by creating content on a website that pulls customers in

Business-to-business Model

B2B Model

a model used by firms that conduct business with other businesses

Sentiment Analysis

a measurement that uses technology to detect the moods, attitudes, or emotions of people who experience a social media activity

Business Model

represents a group of common characteristics and methods of doing business to generate sales revenues and reduce expenses

Electronic Business


the organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society's needs through the facilities available on the internet

Social Media

the online interactions that allow people and businesses to communicate and share ideas, personal information, and information about products and services

Green IT

a term used to describe all of a firm's activities to support a healthy environment and sustain the planet


a general term that describes software designed to infiltrate a computer system without the user's consent


an interactive version of a community bulletin board that focuses on threaded discussions


a website that allows a company to share information in order to not only increase the customer's knowledge about its products and services but also to build trust

Social Content Sites

allow companies to create and share information about their products and services

Data Mining

the practice of searching through data records looking for useful information

Social Game

a multiplayer, competitive, goal-oriented activity with defined rules of engagement and online connectivity among a community of players

Quantitative Social Media Measurement

using numerical measurements, such as counting the number of website visitors, number of fans and followers, number of leads generated, and the number of new customers


outsourcing tasks to a group of people in order to tap into the ideas of the crowd

Business-to-consumer Model

B2C Model

a model used by firms that focus on conducting business with individual consumers

Social Media Communities

social networks based on the relationships among people

Key Performance Indicators


measurements that define and measure the progress of an organization toward achieving its objectives

Media Sharing Sites

allow users to upload photos, videos, and podcasts


the process of apportioning the cost of a fixed asset over the period during which it will be used

Current Assets

assets that can be converted quickly into cash or that will be used in one year or less

Certified Public Accountant


an individual who has met state requirements for accounting education and experience and has passed a rigorous accounting examination

Inventory Turnover

a financial ratio calculated by dividing the cost of goods sold in one year by the average value of the inventory

Cost of goods sold in 1 yr ÷ Avg Value of Inventory


the ease with which an asset can be converted into cash

Net Sales

the actual dollar amounts received by a firm for the goods and services it has sold after adjustment for returns, allowances, and discounts

Balance Sheet

a summary of the dollar amounts of a firm's assets, liabilities, and owners' equity accounts at the end of a specific accounting period

Statement of Cash Flows

a statement that illustrates how the company's operating, investing, and financing activities affect cash during an accounting period

Expert System

a type of computer program that uses artificial intelligence to imitate a human's ability to think

Return on Sales

Profit Margin

a financial ratio calculated by dividing net income after taxes by net sales

Net Income after taxes ÷ Net Sales

Fixed Assets

assets that will be held or used for a period longer than one year

Cost of Goods Sold

the dollar amount equal to beginning inventory plus net purchases less ending inventory

$ = Begin Inventory + Net Purchases - EndInventory

Retained Earnings

the portion of a business's profits not distributed to stockholders


a single collection of data and information stored in one place that can be used by people throughout an organization to make decisions

Accounting Equation

the basis for the accounting process: assets = liabilities + owners' equity

Assets = Liabilities + Owner Equity

Operating Expenses

all business costs other than the cost of goods sold

Knowledge Management


a firm's procedures for generating, using, and sharing the data and information

Decision-Support System


a type of software program that provides relevant data and information to help a firm's employees make decisions


the resources that a business owns


a firm's debts and obligations

Current Ratio

a financial ratio computed by dividing current assets by current liabilities

Assets ÷ Liabilities


numerical or verbal descriptions that usually result from some sort of measurement

Net Income

occurs when revenues exceed expenses

Revenue > Expenses

Gross Sales

the total dollar amount of all goods and services sold during the accounting period

Total $ = Goods + Services Sold

Annual Report

a report distributed to stockholders and other interested parties that describes the firm's operating activities and its financial condition

Double-entry Bookkeeping System

a system in which each financial transaction is recorded as two separate accounting entries to maintain the balance shown in the accounting equation

Management Information System


a system that provides managers and employees with the information they need to perform their jobs as effectively as possible

Data Processing

the transformation of data into a form that is useful for a specific purpose

Generally Accepted Accounting Principles


an accepted set of guidelines and practices for U.S. companies reporting financial information and for the accounting profession

Current Liabilities

debts that will be repaid in one year or less

Long-term Liabilities

debts that need not be repaid for at least one year


the dollar amounts earned by a firm from selling goods, providing services, or performing business activities

Managerial Accounting

provides managers and employees with the information needed to make decisions about a firm's financing, investing, marketing, and operating activities


an examination of a company's financial statements and the accounting practices that produced them

Executive Information System


a computer-based system that facilitates and supports the decision-making needs of top managers and senior executives by providing easy access to both internal and external information

Intangible Assets

assets that do not exist physically but that have a value based on the rights or privileges they confer on a firm


a measure that summarizes a particular characteristic of an entire group of numbers

Financial Accounting

generates financial statements and reports for interested people outside an organization

Statement of Financial Position

a summary of the dollar amounts of a firm's assets, liabilities, and owners' equity accounts at the end of a specific accounting period

Net Loss

occurs when expenses exceed revenues

Income Statement

a summary of a firm's revenues and expenses during a specified accounting period


data presented in a form that is useful for a specific purpose

Financial Ratio

a number that shows the relationship between two elements of a firm's financial statements

Gross Profit

a firm's net sales less the cost of goods sold

Net Sales - Cost of Goods Sold


the process of systematically collecting, analyzing, and reporting financial information

Owners' Equity

the difference between a firm's assets and its liabilities

Statement of Financial Position

Balance Sheet

a summary of the dollar amounts of a firm's assets, liabilities, and owners' equity accounts at the end of a specific accounting period

Electronic Funds Transfer System

EFT System

a means of performing financial transactions through a computer terminal

Corporate Bond

a corporation's written pledge that it will repay a specified amount of money with interest


real estate or property pledged as security for a loan

Capital Budget

a financial statement that estimates a firm's expenditures for major assets and its long-term financing needs


an individual or an independent firm that acts as a bond owner's representative

Zero-base Budgeting

a budgeting approach in which every expense in every budget must be justified

Equity Capital

money received from the owners or from the sale of shares of ownership in a business

Speculative Production

the time lag between the actual production of goods and when the goods are sold

Chief Financial Officer


a high-level corporate executive who manages a firm's finances and reports directly to the company's chief executive officer CEO or president

Financial Management

all the activities concerned with obtaining money and using it effectively

Debenture Bond

a bond backed only by the reputation of the issuing corporation

Initial Public Offering


occurs when a corporation sells common stock to the general public for the first time

Debit Card

a card that electronically subtracts the amount of a customer's purchase from her or his bank account at the moment the purchase is made

Serial Bonds

bonds of a single issue that mature on different dates

Cash Budget

a financial statement that estimates cash receipts and cash expenditures over a specified period

Mortgage Bond

a corporate bond secured by various assets of the issuing firm


a written order for a bank or other financial institution to pay a stated dollar amount to the business or person indicated on the face of the check

Investment Banking Firm

an organization that assists corporations in raising funds, usually by helping to sell new issues of stocks, bonds, or other financial securities

Convertible Bond

a bond that can be exchanged, at the owner's option, for a specified number of shares of the corporation's common stock

Registered Bond

a bond registered in the owner's name by the issuing company

Prime Interest Rate

the lowest rate charged by a bank for a short-term loan

Financial Leverage

the use of borrowed funds to increase the return on owners' equity

Banker's Acceptance

a written order for a bank to pay a third party a stated amount of money on a specific state

Risk-return Ratio

a ratio based on the principle that a high-risk decision should generate higher financial returns for a business and more conservative decisions often generate lower returns

Promissory Note

a written pledge by a borrower to pay a certain sum of money to a creditor at a specified future date

Securities Exchange

a marketplace where member brokers meet to buy and sell securities

Letter of Credit

a legal document issued by a bank or other financial institution guaranteeing to pay a seller a stated amount for a specified period of time

Secondary Market

a market for existing financial securities that are traded between investors

Private Placement

occurs when stock and other corporate securities are sold directly to insurance companies, pension funds, or large institutional investors

Debt Capital

borrowed money obtained through loans of various types

Short-term Financing

money that will be used for one year or less

Sinking Fund

a sum of money to which deposits are made each year for the purpose of redeeming a bond issue

Long-term Financing

money that will be used for longer than one year

Cash Flow

the movement of money into and out of an organization

Line of Credit

a loan that is approved before the money is actually needed

Unsecured Financing

financing that is not backed by collateral


a firm that specializes in buying other firms' accounts receivable

Certificate of Deposit


a document stating that the bank will pay the depositor a guaranteed interest rate on money left on deposit for a specified period of time

Preferred Stock

stock whose owners usually do not have voting rights but whose claims on dividends and assets are paid before those of common-stock owners

Over-the-counter Market

OTC Market

a network of dealers who buy and sell the stocks of corporations that are not listed on a securities exchange

Bond Indenture

a legal document that details all the conditions relating to a bond issue

Maturity Date

the date on which a corporation is to repay borrowed money

Trade Credit

a type of short-term financing extended by a seller who does not require immediate payment after delivery of merchandise

Term-loan Agreement

a promissory note that requires a borrower to repay a loan in monthly, quarterly, semiannual, or annual installments

Revolving Credit Agreement

a guaranteed line of credit

Financial Plan

a plan for obtaining and using the money needed to implement an organization's goals and objectives

Retained Earnings

the portion of a corporation's profits not distributed to stockholders


a financial statement that projects income, expenditures, or both over a specified future period

Commercial Paper

a short-term promissory note issued by a large corporation

Primary Market

a market in which an investor purchases financial securities (via an investment bank) directly from the issuer of those securities

Certificate of Deposit

a document stating that the bank will pay the depositor a guaranteed interest rate on money left on deposit for a specified period of time