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BUS 101 Exam 1 Vocab
Professor Baleja, Alma College 2012
177
Business
Undergraduate 1
02/07/2012

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Term
Free Enterprise
Definition
the system of business in which individuals are free to decide what to produce, how to produce, and what price to sell it
Term
cultural/workplace diversity
Definition
differences among people in a workforce owing to race, ethnicity, and gender
Term
business
Definition
the organized effort of individuals to produce and sell for a profit the products and services that satisfy society's needs
Term
profit
Definition
what remains after all business expenses have been deducted from sales revenue
Term
stakeholder
Definition
all the different people or groups of people who are affected by the policies and decisions made by an organization
Term
economics
Definition
the study of how wealth is created and distributed
Term
microeconomics
Definition
the study of the decisions made by individuals and businesses
Term
macroeconomics
Definition
the study of the national economy and the global economy
Term
economy
Definition
the way in which people deal with the creation and distribution of wealth
Term
factors of production
Definition
resources used to produce goods and services: natural resources, labor, capital, entrepreneurship
Term
entrepreneur
Definition
a person who risks time, effort, and money to start and operate a business
Term
capitalism
Definition
an economic system in which individuals own and operate the majority of businesses that provide goods and services
Term
invisible hand
Definition
Adam Smith: to describe how an individual's personal gain benefits others and nation's economy
Term
market economy
Definition
an economic system in which businesses and individuals decide what to produce and buy, and the market determines quantities sold and prices
Term
mixed economy
Definition
an economy that exhibits elements of both capitalism and socialism
Term
consumer products
Definition
goods and services purchased by individuals for personal consumption
Term
command economy
Definition
govt. decides what,how, and for whom goods and services will be produced and who owns/controls major factors of production
Term
productivity
Definition
the avg. level of output per worker per hr.
Term
Gross Domestic Product (GDP)
Definition
total dollar value of all goods and services produced by all people within the boundaries of a country during a 1 yr. period.
Term
inflation
Definition
a general rise in the level of prices
Term
deflation
Definition
a general decrease in the level of prices
Term
unemployment rate
Definition
the percentage of a nation's labor force unemployed at any time
Term
Consumer Price Index (CPI)
Definition
a monthly index that measures the changes in prices of a fixed basket of goods purchased by a typical consumer in an urban area
Term
Producer Price Index (PPI)
Definition
an index that measures prices that producers receive for their finished goods
Term
business cycle
Definition
the recurrence of periods of growth and recession in a nation's economic activity
Term
recession
Definition
two or more consecutive 3 month periods of decline in a country's GDP
Term
depression
Definition
a severe recession that lasts longer than a typical recession
Term
fiscal policy
Definition
government influence on the amount of savings and expenditures; accomplished by altering the tax structure and by changing the levels of govt. spending
Term
federal deficit
Definition
a shortfall created when the federal govt. spends more in a fiscal year than it receives
Term
national debt
Definition
the total of all federal deficits
Term
competition
Definition
rivalry among businesses for sales for potential customers
Term
perfect/pure competition
Definition
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 prices of a product
Term
supply
Definition
the quantity of a product that producers are willing to sell at each of various prices
Term
demand
Definition
the quantity of a product that buyers are willing to purchase at each of various prices
Term
market prices
Definition
the price where the quantity demanded is exactly equal to the quantity supplied
Term
monopolistic competition
Definition
many buyers along with a relatively large number of sellers who differentiate their products from the products of competitors
Term
product differentiation
Definition
process of developing and promoting differences between one's products and all similar products
Term
oligopoly
Definition
a market in which there are few sellers
Term
monopoly
Definition
a market with only 1 seller, and there are barriers to keep others from entering the industry
Term
natural monopoly
Definition
an industry requiring huge investments in capital and where duplication of facilities would be wasteful and not in the public interest
Term
standard of living
Definition
a loose, subjective measure of how well off an individual/society i, in terms of want satisfaction through goods and services
Term
barter
Definition
a system of exchange in which goods/services are traded directly for other goods or services without using money
Term
domestic system
Definition
an entrepreneur distributes raw materials to various homes where families process them into finished goods to be offered for sale by the merchant entrepreneur
Term
factory system
Definition
all materials, machinery and workers required to manufacture a product are assembled in one place
Term
specialization
Definition
the separation of a manufacturing process into distinct tasks and the assignment of the different tasks to different individuals
Term
e-business
Definition
the organized effort of individuals to produce and sell through the Internet, for a profit, the products and services that satisfy society's needs
Term
service economy
Definition
an economy in which more effort is devoted to the production of services than to the production of goods
Term
sustainability
Definition
meeting the needs of the present without compromising the ability of future generations to meet their own needs
Term
ethics
Definition
the study of right and wrong and of the morality of the choices individuals make
Term
business ethics
Definition
the application of moral standards to business situation
Term
Sarbanes-Oxley Act of 2002
Definition
provides sweeping new legal protection for employees who report corporate misconduct
Term
code of ethics
Definition
a guide to acceptable and ethical behavior as defined by the organization
Term
whistle-blowing
Definition
informing the press or government officials about unethical practices within one's organization
Term
social responsibility
Definition
the recognition that business activities have an impact on society and the consideration of that impact in business decision making
Term
caveat emptor
Definition
a Latin phrase meaning "let the buyer beware"
Term
economic model of social responsibility
Definition
the view that society will benefit most when business is left alone to produce and market profitable products that society needs
Term
socioeconomic model of social responsibility
Definition
the concept that business should emphasize not only profits but also the impact of its decisions on society
Term
consumerism
Definition
all activities undertaken to protect the rights of consumers
Term
minority
Definition
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
Term
affirmative action program
Definition
a plan designed to increase the number of minority employees at all levels within an organization
Term
Equal Employment Opportunity Commission (EEOC)
Definition
a govt. agency with the power to investigate complaints of employment discrimination and the power to sue firms that practice it
Term
hard-core unemployed
Definition
workers with little education or vocational training and a long history of unemployment
Term
National Alliance of Business
Definition
a joint business-govt. program to train the hard-core unemployed
Term
pollution
Definition
the contamination of water, air, or land through the actions of people in an industrialized society
Term
social audit
Definition
a comprehensive report of what an organization has done and is doing with regard to social issues that affect it
Term
international business
Definition
all business activities that involve exchanges across national boundaries
Term
absolute advantage
Definition
the ability to produce a specific product more efficiently than any other nation
Term
comparative advantage
Definition
the ability to produce a specific product more efficiently than any other product
Term
exporting
Definition
selling and shipping raw materials or products to other nation
Term
importing
Definition
purchasing raw materials or products in other nations and bringing them into one's own country
Term
balance of trade
Definition
the total value of a nation's exports minus the total value of its imports over some period of time
Term
trade deficit
Definition
a negative balance of trade
Term
balance of payments
Definition
the total flow of money into a country minus the total flow of money out of that country over some period of time
Term
import duty (tariff)
Definition
a tax levied on a particular foreign product entering a country
Term
dumping
Definition
exportation of large quantities of a product at a price lower than that of the same product in the home market
Term
nontariff barrier
Definition
a nontax measure imposed by a govt. to favor domestic over foreign suppliers
Term
import quota
Definition
a limit on the amount of a particular good that may be imported into a country during a given period of time
Term
embargo
Definition
a complete halt to trading with a particular nation or in a particular product
Term
foreign exchange control
Definition
a restriction on the amount of a particular foreign currency that can be purchased or sold
Term
currency devaluation
Definition
the reduction of the value of a nation's currency relative to the currencies of other countries
Term
General Agreement on Tariffs and Trade (GATT)
Definition
an international organization of 153 nations dedicated to reducing or eliminating tariffs and other barriers to world trade
Term
World Trade Organization (WTO)
Definition
powerful successor to GATT that incorporates trade in goods, services, and ideas
Term
economic community
Definition
an organization of nations formed to promote the free movement of resources and products among its members and to create common economic policies
Term
licensing
Definition
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
Term
letter of credit
Definition
issued by a band on request of an importer stating that the bank will pay an amount of money to the stated beneficiary
Term
bill of lading
Definition
document issued by a transport carrier to an exporter to prove that merchandise has been shipped
Term
draft
Definition
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
Term
strategic alliance
Definition
a partnership formed to create competitive advantage on a worldwide basis
Term
trading company
Definition
provides a link between buyers and sellers in different countries
Term
countertrade
Definition
an international barter transaction
Term
multinational enterprise
Definition
a firm that operates on a worldwide scale without ties to any specific nation or region
Term
Export-Import Bank of the United States
Definition
an independent agency of the U.S. govt. whose function is to assist in financing the exports of American firms
Term
multilateral development bank (MDB)
Definition
an internationally supported bank that provides loans to developing countries to help them grow
Term
International Monetary Fund (IMF)
Definition
an international bank with 186 member nations that makes short-term loans to developing countries experiencing balance-of-payment deficits
Term
sole proprietorship
Definition
a business that is owned (and usually operated) by one person
Term
unlimited liability
Definition
a legal concept that holds a business owner personally responsible for all the debts of the business
Term
partnership
Definition
a voluntary association of two or more persons to act as co-owners of a business for profit
Term
general partner
Definition
a person who assumes full or shared responsibility for operating a business
Term
limited partner
Definition
a person who contributes capital to a business but has no management responsibility or a liability for losses beyond the amount he or she invested in the partnership
Term
master limited partnership (MLP)
Definition
a business partnership that is owned and managed like a corporation but often taxed like a partnership
Term
corporation
Definition
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
Term
stock
Definition
the shares of ownership of a corporation
Term
stockholder
Definition
a person who owns a corporation's stock
Term
closed corporation
Definition
a corporation whose stock is owned by relatively few people and is not sold to the general public
Term
open corporation
Definition
a corporation whose stock can be bought and sold by any individual
Term
domestic corporation
Definition
a corporation in the state in which it is incorporated
Term
foreign corporation
Definition
a corporation in any state in which it does business except the one in which it is incorporated
Term
alien corporation
Definition
a corporation chartered by a foreign govt. and conducting business in the United States
Term
common stock
Definition
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
Term
preferred stock
Definition
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
Term
dividend
Definition
a distribution of earnings to the stockholders of a corporation
Term
proxy
Definition
a legal form listing issues to be decided at a stockholders' meeting and enabling stockholders to transfer their voting rights to some other individual or individuals
Term
board of directors
Definition
the top governing body of a corporation, the members of which are elected by the stockholders
Term
corporate officers
Definition
the chairman of the board, president, executive vice presidents, corporate secretary, treasurer, and any other top executive appointed by the board of directors
Term
limited liability
Definition
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
Term
S-corporation
Definition
a corporation that is taxed as though it were a partnership
Term
limited-liablity company (LLC)
Definition
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
Term
not-for-profit corporation
Definition
a corporation organized to provide a social, educational, religious, or other service rather than to earn a profit
Term
cooperative
Definition
an association of individuals or firms whose purpose is to perform some business function for its members
Term
joint venture
Definition
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
Term
syndicate
Definition
a temporary association of individuals or firms organized to perform a specific task that requires a large amount of capital
Term
merger
Definition
the purchase of one corporation by another
Term
hostile takeover
Definition
a situation in which the management and board of directors of a firm targeted for acquisition disapprove of the merger
Term
tender offer
Definition
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
Term
proxy fight
Definition
a technique used to gather enough stockholder votes to control a targeted company
Term
horizontal merger
Definition
merger between firms that make and sell similar product or services in similar markets
Term
vertical mergers
Definition
merger between firms that operate at different but related levels in the production and marketing of a product
Term
conglomerate merger
Definition
between firms in completely different industries
Term
small business
Definition
one that is independently owned an operated for profit and is not dominant in its field
Term
business plan
Definition
a carefully constructed guide for the person starting a business
Term
Small Business Administration (SBA)
Definition
a governmental agency that assists, counsels, and protects the interests of small businesses in the US
Term
Service Corps of Retired Executives (SCORE)
Definition
a group of business people who volunteer their services to small businesses through the SBA
Term
small business institutes (SBIs)
Definition
groups of senior and graduate students in business administration who provide management counseling to small businesses
Term
small-business development centers (SBDCs)
Definition
university-based groups that provide individual counseling and practical training to owners of small businesses
Term
venture capital
Definition
money that is invested in small (and sometimes struggling) firms that have the potential to become very successful
Term
small-business investment companies (SBICs)
Definition
privately owned firms that provide venture capital to small enterprises that meet their investment standards
Term
franchise
Definition
a license to operate an individual an individually owned business as though it were part of a chain of outlets or stores
Term
franchising
Definition
the actual granting of a franchise
Term
franchisor
Definition
an individual or organization granting a franchise
Term
franchisee
Definition
a person or organization purchasing a franchise
Term
data
Definition
numerical or verbal descriptions that usually result from some sort of measurement
Term
information
Definition
data presented in a form that is useful for a specific purpose
Term
database
Definition
a single collection of data and information stored in one place that can be used by people throughout an organization to make decisions
Term
knowledge management (KM)
Definition
a firm's procedures for generating, using and sharing the data and information
Term
management information system (MIS)
Definition
a system that provides managers and employees with the information they need to perform their jobs as effectively as possible
Term
information technology (IT) officer
Definition
a manger at the executive level who is responsible for ensuring that a firm has the equipment necessary to provide the information the firm's employees and manager need to make effective decisions
Term
data processing
Definition
the transformation of data into a form that is useful for a specific purpose
Term
statistic
Definition
a measure that summarizes particular characteristic of an entire group of numbers
Term
decision-support system (DSS)
Definition
a type of computer program that provides relevant data and information to help a firm's employees make decision
Term
executive information system (EIS)
Definition
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
Term
expert system
Definition
a type of computer program that uses artificial intelligence to imitate a human's ability to think
Term
groupware
Definition
one of the latest types of software that facilitates the management of large projects among geographically dispersed employees as well as such group activities as problem solving and brainstorming
Term
collaborative learning system
Definition
a work environment that allows problem solving participation by all team members
Term
virtual office
Definition
allows employees to work at any place where they have access to computers, software, and other technology that enables them to perform their normal work activities
Term
computer backup
Definition
a process of storing data, information, and computer systems on secondary computer systems that can be accessed if a firm's main computer system fails
Term
information society
Definition
a society in which large groups of employees generate or depend on information to perform their jobs
Term
internet
Definition
a worldwide network of computers linked through telecommunications
Term
World Wide Web (the Web)
Definition
the internet's multimedia environment of audio, visual, and text data
Term
broadband technology
Definition
a general term referring to higher speed internet connections that deliver data, voice, and video material
Term
intranet
Definition
a smaller version of the internet for use within a firm's computer network
Term
computer network
Definition
a group of two or more computers linked together that allows users to share data and information
Term
wide-area network (WAN)
Definition
a network that connects computers over a large geographic area, such as a city, state, or world
Term
local-area network (LAN)
Definition
a network that connects computers that are in close proximity to each other, such as an office building or a college campus
Term
e-business (electronic business)
Definition
the organized effort of individual to produce and sell, for a profit, the products and services that satisfy society's needs through the facilities available on the internet
Term
outsourcing
Definition
the process of finding outside vendors and suppliers that provide professional help, parts, or materials at a lower cost
Term
revenue stream
Definition
a source of revenue flowing into a firm
Term
business model
Definition
represents a group of common characteristics and methods of doing business to generate sales revenues and reduce expenses
Term
business-to-business (B2B)
Definition
businesses that conduct business with other businesses
Term
business-to-consumer B2C
Definition
business that conducts business to individual consumers
Term
social network site
Definition
website that functions like an online community
Term
spamming
Definition
sending massive amounts of unsolicited e-mails
Term
cookie
Definition
small piece of software that tracks internet use
Term
log-file records
Definition
files that store a record of the websites visited
Term
data mining
Definition
the practice of searching through data records
Term
computer virus
Definition
software code designed to disrupt normal functions
Term
cloud computing
Definition
type of computer usage in which services stored on the internet are provided to users on a temporary basis
Term
green IT
Definition
used to describe all of the firm's activities to support a healthy enviroment
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