A  B  C  D  E  F  G  H   I  J  K  L  M  N  O  P   Q  R  S  T  U  V  W

A

absolute advantage
A nation’s ability to produce something more cheaply or better than any other country.

accommodative stance
A company meets all of its legal and ethical requirements, and in some cases even goes beyond what is required.

accountability
Liability of subordinates for accomplishing tasks assigned by managers.

accounting
A comprehensive system for collecting, analyzing, and communicating financial information.

accounting system
An organized procedure for identifying, measuring, recording, and retaining financial information so that it can be used in accounting statements and management reports.

accounts payable
Amounts due from the firm to its suppliers for goods and/or services purchased on credit; a form of current liability.

accounts receivable
Amounts due to the firm from customers who have purchased goods or services on credit; a form of current asset.

acid rain
A form of pollution affecting the eastern United States and Canada as a result of sulphur expelled into the air by midwestern power and manufacturing plants.

acquisition
The purchase of a company by another, larger firm, which absorbs the smaller company into its operations.

activity ratios
Measures of how efficiently a firm uses its resources; used by investors to assess their probable returns.

administrative law
Rules and regulations that government agencies develop based on their interpretations of statutory law.

advertising
Any promotional technique involving paid, nonpersonal communication used by an identified sponsor to persuade or inform a large number of people about a product.

advertising agency
A firm that specializes in creating and placing advertisements in the media for clients.

advertising campaign
The arrangement of ads in selected media to reach target audiences.

advertising medium
The specific communication device—television, radio, newspapers, direct mail, magazines, billboards—used to carry a firm’s advertising message to potential customers.

advocacy advertising
Advertising that promotes a particular viewpoint or candidate.

agency–principal relationship
When one party (the agent) is authorized to act on behalf of another party (the principal).

agency shop
All employees for whom the union bargains must pay dues, but they are not required to join the union.

agent/broker
An independent business person who represents a business and receives a commission in return, but never takes legal possession of the product.

analytic process
Any production process in which resources are broken down.

application program
A program that actually processes data according to a particular user’s specific needs.

artificial intelligence (AI)
The construction and/or programming of computers to imitate human thought processes.

assembly line
A type of product layout in which a partially finished product moves through a plan on a conveyor belt or other equipment.

assessment centre
A series of exercises in which management candidates perform realistic management tasks while being observed by appraisers.

asset
Anything of economic value owned by a firm or individual.

audit
An accountant’s examination of a company’s financial records to determine if it used proper procedures to prepare its financial reports.

authority
The power to make the decisions necessary to complete a task.

autocratic style
A managerial style in which managers generally issue orders and expect them to be obeyed without question.

B

bailor–bailee relationship
When a bailor, a property owner, gives possession of the property to a bailee, a custodian, but retains ownership of the property.

balance of payments
The difference between money flowing into and out of a country as a result of trade and other transactions.

balance of trade
The total of a country’s exports (sales to other countries) minus its imports (purchases from other countries).

balance sheet
A type of financial statement that summarizes a firm’s financial position on a particular date in terms of its assets, liabilities, and owners’ equity.

Bank of Canada
Canada’s central bank; formed in 1935.

bank rate
The rate at which chartered banks can borrow from the Bank of Canada.

banker’s acceptance
A promise that the bank will pay a specified amount of money at a future date.

bankruptcy
Permission granted by the courts to individuals and organizations not to pay some or all of their debts.

bargain retailers
Retail outlets that emphasize low prices as a means of attracting consumers.

bargaining unit
Individuals grouped together for purposes of collective bargaining.

batch processing
A method of transforming data into information in which data are collected over a period of time and then processed as a group or batch.

bear market
A period of falling stock prices; a period in which investors act on a belief that stock prices will fall.

bearer (coupon) bond
Require bondholders to clip coupons from certificates and send them to the issuer in order to receive interest payments.

benchmarking
Comparing the quality of the firm’s output with the quality of the output of the industry’s leaders.

beneficiary
The person to whom benefits of a life insurance policy are paid.

benefits
What a firm offers its workers other than wages and salaries in return for their labour.

blue-chip stocks
Stocks of well-established, financially sound firms.

blue-sky laws
Laws regulating how corporations must back up securities.

board of directors
A group of individuals elected by a firm’s shareholders and charged with overseeing, and taking legal responsibility for, the firm’s actions.

bona fide occupational requirement
When an employer may choose one applicant over another based on overriding characteristics of the job.

bond
A written promise that the borrower will pay the lender, at a stated future date, the principal plus a stated rate of interest.

bookkeeping
Recording accounting transactions.

boycott
A tactic of labour unions in disputes with management in which members refuse to buy the products of the company and encourage other consumers to do the same.

branch office
A location that an exporting firm establishes in a foreign country in order to sell its products more effectively.

brand advertising
Advertising that promotes a specific brand-name product.

brand competition
Competitive marketing that appeals to consumer perceptions of similar products.

brand loyalty
Customers’ recognition of, preference for, and insistence on buying a product with a certain brand name.

breach of contract
When one party to an agreement fails, without legal reason, to live up to the agreement’s provisions.

break-even analysis
An assessment of how many units must be sold at a given price before the company begins to make a profit.

break-even point
The number of units that must be sold at a given price before the company covers all of its variable and fixed costs.

broker
An individual licensed to buy and sell securities for customers in the secondary market; may also provide other financial services.

browser
Software that enables a user to access information on the Web.

budget
A detailed financial plan for estimated receipts and expenditures for a period of time in the future, usually one year.

budget deficit
The result of the government spending more in one year than it takes in during that year.

bull market
A period of rising stock prices; a period in which investors act on a belief that stock prices will rise.

business
An organization that seeks to earn profits by providing goods and services.

business agent
In a large union, the business agent plays the same role as a shop steward.

business continuation agreement
An agreement in which owners of a business make plans to buy the ownership interest of a deceased associate from his or her heirs.

business cycle
The fluctuation in the level of economic activity that an economy goes through over time.

business ethics
Ethical or unethical behaviours by a manager or employee of an organization.

business interruption insurance
Insurance to cover potential losses incurred during times when a company is unable to conduct its business.

business-level (competitive) strategy
Identifies the ways a business will compete in its chosen line of products or services.

business law
Laws that specifically affect how businesses are managed.

C

cafeteria-style benefit plans
A flexible approach to providing benefits in which employees are allocated a certain sum to cover benefits and can “spend” this allocation on the specific benefits they prefer.

call option
The purchased right to buy a particular stock at a certain price until a specified date.

callable bond
A bond that may be paid off by the issuer before the maturity date.

Canada Labour Code
Legislation that applies to the labour practices of firms operating under the legislative authority of parliament.

Canada–U.S. Free Trade Agreement (FTA)
An agreement to eliminate over time tariffs on goods and services that move between the two countries.

Canada Water Act
Controls water quality in fresh and marine waters of Canada.

Canadian Federation of Independent Business (CFIB)
A non-profit, nonpartisan lobby group representing small and medium-sized businesses.

Canadian Human Rights Act
Ensures that any individual who wishes to obtain a job has an equal opportunity to apply for it.

Canadian Radio-television and Telecommunications Commission (CRTC)
Regulates and supervises all aspects of the Canadian broadcasting system.

Canadian Transport Commission (CTC)
Makes decisions about route and rate applications for commercial air and railway companies.

Canadian Wheat Board
A Crown corporation that regulates the price farmers receive for their wheat.

capacity
The amount of a good that a firm can produce under normal working conditions.

capital
The funds needed to operate an enterprise.

capital gains
Profits from the sale of an asset (such as stock) for a higher price than that at which it was purchased.

capital items
Expensive, long-lasting industrial goods that are used in producing other goods or services and have a long life.

capitalism
An economic system in which markets decide what, when, and for whom to produce.

capitalization
The dollar value (market value) of stocks listed on a stock exchange.

cartel
Any association of producers whose purpose is to control supply of and prices for a given product.

cash discount
A form of discount in which customers paying cash, rather than buying on credit, pay lower prices.

cash flow management
Managing the pattern in which cash flows into the firm in the form of revenues and out of the firm in the form of debt payments.

catalogue marketing
A form of nonstore retailing in which customers place orders for merchandise shown in catalogues and receive their orders via mail.

catalogue showroom
A bargain retail store in which customers place orders for items described in a catalogue and pick up those items from an on-premises warehouse.

category killers
Retailers who carry a deep selection of goods in a narrow product line.

CD-ROMs
Look like music CDs but can hold as much data as 400 regular diskettes.

cellular layout
Used to produce goods when families of products can follow similar flow paths.

central processing unit (CPU)
Hardware in which the actual transforming of data into information takes place; contains the primary storage unit, the control unit, and the arithmetic logic unit.

centralization
Occurs when top managers retain most decision-making rights for themselves.

certification vote
A vote supervised by a government representative to determine whether a union will be certified.

certified general accountant (CGA)
An individual who has completed an education program and passed a national exam; works in private industry or a CGA firm.

certified management accountant (CMA)
An individual who has completed an education program; works in industry and focuses on internal management accounting.

chain of command
Reporting relationships within a business; the flow of decision-making power in a firm.

channel captain
The channel member that is the most powerful in determining the roles and rewards of organizations involved in a given channel of distribution.

chartered accountant (CA)
An individual who has met certain experience and education requirements and has passed a licensing examination; acts as an outside accountant for other firms.

chartered bank
A privately owned, profit-seeking firm that serves individuals, nonbusiness organizations, and businesses as a financial intermediary.

chequable deposit
A chequing account.

cheque
An order instructing the bank to pay a given sum to a specified person or firm.

cheque kiting
The illegal practice of writing cheques against money that has not yet arrived at the bank on which the cheque has been written, relying on that money arriving before the cheque clears.

chief executive officer (CEO)
The person responsible for the firm’s overall performance.

classical theory of motivation
A theory of motivation that presumes that workers are motivated almost solely by money.

client
A point of entry in a client–server network.

client–server network
A network composed of both clients (users) and servers that allows the clients to access various services without costly and unnecessary duplication.

closed shop
An employer can hire only union members.

closing
In personal sales, the process of asking the customer to buy the product.

collateral
Any asset that a lender has the right to seize if a borrower does not repay a loan.

collective bargaining
The process through which union leaders and management personnel negotiate common terms and conditions of employment for those workers represented by the union.

collusion
An illegal agreement among companies in an industry to “fix’’ prices for their products.

command economy
An economic system in which government controls all or most factors of production and makes all or most production decisions.

commercial paper
A method of short-run fundraising in which a firm sells unsecured notes for less than the face value and then repurchases them at the face value within 270 days; buyers’ profits are the difference between the original price paid and the face value.

committee and team authority
Authority granted to committees or work teams involved in a firm’s daily operations.

commodities market
Market in which futures contracts are traded.

common carriers
Transportation companies that transport goods for any firm or individual wishing to make a shipment.

common law
The unwritten law of England, derived from precedent and legal judgments.

common stock
Shares whose owners usually have last claim on the corporation’s assets (after creditors and owners of preferred stock) but who have voting rights in the firm.

communism
A type of command economy in which the government owns and operates all industries.

comparable worth
A legal idea that aims to pay equal wages for work of equal value.

comparative advantage
A nation’s ability to produce some products more cheaply or better than it can others.

comparative advertising
An advertising strategy, appropriate to the growth stage of the product life cycle, in which the goal is to influence the customer to switch from a competitor’s similar product to the firm’s product by directly comparing the two products.

compensation
What a firm offers its employees in return for their labour.

competition
The vying among businesses in a particular market or industry to best satisfy consumer demands and earn profits.

competitive strategy
A plan to establish a profitable and sustainable competitive position against the forces that determine industry competition.

compressed workweek
Employees work fewer days per week, but more hours on the days they do work.

compulsory arbitration
A method of settling a contract dispute in which the union and management are forced to explain their positions to a neutral third party who issues a binding resolution.

computer-aided design (CAD)
Computer analysis and graphics programs that are used to create new products.

computer-aided manufacturing (CAM)
Computer systems used to design and control all the equipment and tools for producing goods.

computer graphics programs
Application programs that convert numerical and character data into pictorial forms.

computer network
A form of computer system architecture in which computers at different locations can function independently but are also interconnected and able to exchange information with one another.

concentration strategy
Involves focusing the company on one product or product line.

conceptual skills
Abilities to think in the abstract, diagnose and analyze different situations, and see beyond the present situation.

conglomerate merger
A merger of two firms in completely unrelated businesses.

Constitution Act, 1867
Divided authority over labour regulations between the federal and provincial governments.

consumer behaviour
The study of the process by which customers come to purchase and consume a product or service.

consumer finance company
Makes personal loans to consumers.

consumer goods
Products purchased by individuals for their personal use.

Consumer Packaging and Labelling Act
A federal law that provides comprehensive rules for packaging and labelling of consumer products.

consumer price index
Changes in the cost of a basket of goods and services that the typical family buys.

consumerism
A social movement that seeks to protect and expand the rights of consumers in their dealings with businesses.

containerization
The use of standardized heavy-duty containers in which many items are sealed at the point of shipment and opened only at the final destination.

contingency approach
An approach to managerial style holding that the appropriate behaviour in any situation is dependent (contingent) on the elements unique to that situation.

contingency planning
Identifying aspects of a business or its environment that might entail changes in strategy.

continuous improvement
The ongoing commitment to improve products and processes, step by step, in pursuit of ever-increasing customer satisfaction.

contract
An agreement between two parties to act in a specified way or to perform certain acts.

contract carriers
Independent transporters who contract to serve as transporters for industrial customers only.

control chart
A statistical process control method in which results of test sampling of a product are plotted on a diagram that reveals when the process is beginning to depart from normal operating conditions.

control limit
The critical value on a control chart that indicates the level at which quality deviation is sufficiently unacceptable to merit investigation.

controller
The individual who manages all the firm’s accounting activities.

controlling
That portion of a manager’s job concerned with monitoring the firm’s performance and, if necessary, acting to bring it in line with the firm’s goals.

convenience goods/services
Relatively inexpensive consumer goods or services that are bought and used rapidly and regularly, causing consumers to spend little time looking for them or comparing their prices.

convenience stores
Retail stores that offer high accessibility, extended hours, and fast service on selected items.

convertible bond
Any bond that offers bondholders the option of accepting common stock instead of cash in repayment.

cooperative
An organization that is formed to benefit its owners in the form of reduced prices and/or the distribution of surpluses at year-end.

cooperative advertising
Advertising in which a manufacturer together with a retailer or a wholesaler advertise to reach customers.

corporate bond
A promise by the issuing company to pay the holder a certain amount of money on a specified date, with stated interest payments in the interim; a form of long-term debt financing.

corporate culture
The shared experiences, stories, beliefs, and norms that characterize a firm.

corporate governance
The relationship between shareholders, the board of directors, and other top managers in the corporation.

corporate-level strategy
Identifies the various businesses that a company will be in, and how these businesses will relate to each other.

corporation
A business considered by law to be a legal entity separate from its owners with many of the legal rights and privileges of a person; a form of business organization in which the liability of the owners is limited to their investment in the firm.

cost leadership
Becoming the low cost leader in an industry.

cost of goods sold
Any expenses directly involved in producing or selling a good or service during a given time period. cost-of-living adjustment (COLA)
A contract clause specifying that wages will increase automatically with the rate of inflation.

coupon
A method of sales promotion featuring a certificate that entitles the bearer to stated savings off a product’s regular price.

craft unions
Unions organized by trades; usually composed of skilled workers.

creative selling
In personal sales, the use of techniques designed to persuade a customer to buy a product when the benefits of the product are not readily apparent or the item is very expensive.

credit insurance
Insurance to protect against customers’ failure to pay their bills.

credit union
Cooperative savings and lending association formed by a group with common interests.

crisis management
An organization’s methods for dealing with emergencies.

critical incident method
A technique of performance appraisal in which raters recall examples of especially good or poor performance by an employee and then describe what the employee did (or did not do) that led to success or failure.

cumulative preferred stock
Preferred stock on which dividends not paid in the past must first be paid up before the firm may pay dividends to common shareholders.

currency
Paper money and coins issued by the government.

current assets
Cash and other assets that can be converted into cash within a year.

current liabilities
Any debts owed by the firm that must be paid within one year.

current ratio
A form of liquidity ratio calculated as current assets divided by current liabilities. customer departmentalization
Departmentalization according to the types of customers likely to buy a given product.

cybermalls
Collections of virtual storefronts representing diverse products.

D

data
Raw facts and figures.

data communication networks
Global networks that permit users to send electronic messages quickly and economically.

database
A centralized, organized collection of related data.

database management systems
Application programs that keep track of and manipulate the relevant data of a business.

debentures
Unsecured bonds.

debit card
A type of plastic money that immediately on use reduces the balance in the user’s bank account and transfers it to the store’s account.

debt
Borrowed funds that require interest payments and must be repaid; a company’s total liabilities.

debt financing
Raising money to meet long-term expenditures by borrowing from outside the company; usually takes the form of long-term loans or the sale of corporate bonds.

debt ratios
Measures of a firm’s ability to meet its long-term debts; used to analyze the risks of investing in the firm.

debt-to-owners’-equity ratio
A form of debt ratio calculated as total liabilities divided by owner’s equity.

decentralization
Occurs when lower- and middle-level managers are allowed to make significant decisions.

decertification
The process by which employees terminate their union’s right to represent them.

decision-making skills
Skills in defining problems and selecting the best courses of action.

decision support system (DSS)
Computer systems used to help managers consider alternatives when making decisions on complicated problems.

deed
A document that shows ownership of real property.

defensive stance
An organization does only what is legally required and nothing more.

definition of the service package
Identification of the tangible and intangible features that define the service.

delegation
Assignment of a task, a responsibility, or authority by a manager to a subordinate.

demand
The willingness and ability of buyers to purchase a product or service.

demand and supply schedule
Assessment of the relationships between different levels of demand and supply at different price levels.

demand curve
Graph showing how many units of a product will be demanded (bought) at different prices.

demand deposit
Money in chequing accounts; counted as M-1 because such funds may be withdrawn at any time without notice.

democratic style
A managerial style in which managers generally request input from subordinates before making decisions but retain final decision-making power.

department stores
Large retail stores that offer a wide variety of high-quality items divided into specialized departments.

departmentalization
The process of grouping jobs into logical units.

depreciation
Distributing the cost of a major asset over the years in which it produces revenues; calculated by each year subtracting the asset’s original value divided by the number of years in its productive life.

depression
A particularly severe and long-lasting recession such as the one that affected the world in the 1930s.

deregulation
A reduction in the number of laws affecting business activity.

derived demand
Demand for industrial products caused by (derived from) demand for consumer products.

desktop publishing
Combines word processing and graphics capability in producing typeset-quality text from personal computers.

differentiation
A firm seeks to be unique in its industry along some dimension that is valued by buyers.

direct channel
A distribution channel in which the product travels from the producer to the consumer without passing through any intermediary.

direct mail
Printed advertisements, such as flyers, mailed directly to consumers’ homes or places of business.

direct-response retailing
A type of retailing in which firms make direct contact with customers both to inform them about products and to receive sales orders.

direct selling
A form of nonstore selling sometimes called door-to-door sales.

directories
Features that help people find the content they want on the Web. The user types in key words and the directory retrieves a list of Web sites with titles containing those words.

discount
Any price reduction offered by the seller in order to persuade customers to purchase a product.

discount houses
Bargain retail stores that offer major items such as televisions and large appliances at discount prices.

diskettes
Portable disks that can be easily inserted into and removed from the computer.

distribution
That part of the marketing mix concerned with getting products from the producer to the buyer, including physical transportation and choice of sales outlets.

distribution centres
Warehouses used to provide storage of goods for only short periods before they are shipped to retail stores.

distribution channel
The path a product follows from the producer to the end-user.

distribution mix
The combination of distribution channels a firm selects to get a product to end-users.

diversification
Expanding into related or unrelated products or market segments.

divestiture
Occurs when a company sells part of its existing business operations to another company.

divisional structure
Divides the organization into divisions, each of which operates as a semi-autonomous unit.

double-entry accounting system
A bookkeeping system, developed in the fifteenth century and still in use, that requires every transaction to be entered in two ways—how it affects assets and how it affects liabilities and owners’ equity—so that the accounting equation is always in balance.

double taxation
A corporation must pay taxes on its profits, and the shareholders must pay personal income taxes on the dividends they receive.

drop shipper
A type of wholesaler that does not carry inventory or handle the product.

dumping
Selling a product for less abroad than in the producing nation; illegal in Canada.

E

e-agent
A type of intermediary that helps Internet consumers by gathering and sorting information they need to make purchases.

e-cash
Money that moves among consumers and businesses via digital electronic transmissions.

e-catalogues
Use the Internet to display products and services for both retail shoppers and business customers.

e-intermediaries
Internet-based distribution-channel members that collect information about sellers and present it in convenient form to consumers and/or help deliver Internet products to consumers.

earnings per share
A form of profitability ratio calculated as net income divided by the number of common shares outstanding.

economic system
The way in which a nation allocates its resources among its citizens.

electronic conferencing
Allows people to communicate simultaneously from different locations via telephone, video, or mail group software.

electronic funds transfer (EFT)
A combination of computer and communications technology that transfers funds or information into, from, within, and among financial institutions.

electronic information technologies (EIT)
IS applications based on telecommunications technologies.

electronic mail (e-mail) system
Electronic transmission of letters, reports, and other information between computers.

electronic spreadsheets
Application programs that allow the user to enter categories of data and determine the effect of changes in one category (e.g., sales) on other categories (e.g., profits).

electronic storefront
A seller’s Web site in which consumers collect information about products and buying opportunities, place sales orders, and pay for their purchases.

embargo
A government order forbidding exportation and/or importation of a particular product.

emotional motives
Those reasons for purchasing a product that involve nonobjective factors.

employee information systems (skills inventories)
Computerized systems that contain information on each employee’s education, skills, work experience, and career aspirations.

employee stock ownership plan (ESOP)
An arrangement whereby a corporation buys its own stock with loaned funds and holds it in trust for its employees. Employees “earn’’ the stock based on some condition such as seniority. Employees control the stock’s voting rights immediately, even though they may not take physical possession of the stock until specified conditions are met.

Employment Equity Act of 1986
Federal legislation that designates four groups as employment disadvantaged—women, visible minorities, aboriginal people, and people with disabilities.

employment insurance
A protection plan that provides a basic subsistence payment to employees who are between jobs.

empowerment
Motivating employees to produce high-quality products.

endorsement
Signing your name to a negotiable instrument making it transferable to another person or organization.

endowment
Insurance that pays face value after a fixed period of time whether the policyholder is alive or dead.

entrepreneur
An individual who organizes and manages labour, capital, and natural resources to produce goods and services to earn a profit, but who also runs the risk of failure; a business person who accepts both the risks and the opportunities involved in creating and operating a new business venture.

environmental analysis
The process of scanning the environment for threats and opportunities.

Environmental Contaminants Act
Establishes regulations for airborne substances that are a danger to human health or to the environment.

equal employment opportunity
Regulations to protect people from unfair or inappropriate discrimination in the workplace.

equilibrium price
Profit-maximizing price at which the quantity of goods demanded and the quantity of goods supplied are equal.

equity
Money invested in the enterprise by individuals or companies who become owners.

equity financing
Raising money to meet long-term expenditures by issuing common stock or by retaining earnings.

equity theory
The theory that people compare (1) what they contribute to their job with what they get in return, and (2) their input/output ratio with that of other employees.

ethical behaviour
Behaviour that conforms to individual beliefs and social norms about what is right and good.

ethics
Individual standards or moral values regarding what is right and wrong or good and bad.

European Union (EU)
An agreement among Western European nations to eliminate quotas and keep tariffs low on products traded among themselves, but to impose high tariffs and low quotas on goods imported from other nations.

exchange rate
The ratio of one currency to another.

exclusive distribution
A distribution strategy in which a product’s distribution is limited to only one wholesaler or retailer in a given geographic area.

executive support system (ESS)
A quick-reference, easy-access application of information systems specially designed for upper-level managers.

expectancy theory
The theory that people are motivated to work towards rewards that they want and that they believe they have a reasonable chance of obtaining.

expedited transportation
Paying a higher-than-normal fee for truck delivery for guaranteed delivery times.

expense items
Relatively inexpensive industrial goods that are consumed rapidly and regularly.

experimentation
A market research technique in which the reactions of similar people are compared under different circumstances.

expert system
A form of artificial intelligence in which a program draws on the rules an expert in a given field has laid out in order to arrive at a solution for a problem.

exporter
A firm that makes products in one country and then distributes and sells them in others.

exports
Products made or grown in Canada that are sold abroad.

express warranty
A specific claim that a manufacturer makes about a product.

external environment
Outside factors that influence marketing programs by posing opportunities or threats.

external failures
Allowing defective products to leave the factory and get into consumers’ hands.

external recruiting
Attracting people outside the organization to apply for jobs.

extranet
A network that allows outsiders limited access to a firm’s internal information system.

F

factoring
Selling a firm’s accounts receivable to another company for some percentage of their face value in order to realize immediate cash; the buyer’s profits depend on its ability to collect the receivables.

factoring company
Buys accounts receivable from a firm for less than their face value, and then collects the face value of the receivables.

factors of production
The resources used to produce goods and services: labour, capital, entrepreneurs, and natural resources.

factory outlets
Bargain retail stores that are owned by the manufacturers whose products they sell.

factory system
A process in which all the machinery, materials, and workers required to produce a good in large quantities are brought together in one place.

fax machine
A machine that can quickly transmit a copy of documents or graphics over telephone lines.

features
The qualities, both tangible and intangible, that a company builds into its products. Federal Business Development Bank (FBDB)
Took over operation of the IDB in 1975; particularly active in lending money to small businesses.

FIFO (first-in-first-out) method
Older inventories (first in) are sold first and newer inventories are held for later use.

finance
The business function involving decisions about a firm’s long-term investments and obtaining the funds to pay for those investments.

finance era
The period during the 1980s when there were many mergers and much buying and selling of business enterprises. financial accounting system
The process whereby interested groups are kept informed about the financial condition of a firm.

financial control
The process of checking actual performance against plans to ensure that the desired financial status is achieved.

financial managers
Those managers responsible for planning and overseeing the financial resources of a firm.

financial plan
A description of how a business will reach some financial position it seeks for the future; includes projections for sources and uses of funds.

financial statement
Any of several types of broad reports regarding a company’s financial status; most often used in reference to balance sheets, income statements, and/or statements of cash flows.

finished goods inventory
That portion of a firm’s inventory consisting of completed goods ready for sale.

firewall
Hardware and software security systems that are not accessible to outsiders.

first-line managers
Those managers responsible for supervising the work of employees.

fiscal policies
Policies by means of which governments collect and spend revenues.

fiscal year
The 12-month period used for financial reporting purposes.

Fisheries Act
Regulates the discharge of harmful substances into water.

fixed assets
Assets that have long-term use or value to the firm such as land, buildings, and machinery.

fixed costs
Those costs unaffected by the number of goods or services produced or sold.

flat organizational structure
An organization with relatively few layers of management.

flexible manufacturing system (FMS)
A production system that allows a single factory to produce small batches of different goods on the same production line.

flextime
A method of increasing employees’ job satisfaction by allowing them some choice in the hours they work.

focus
Selecting a market segment and serving the customers in that market niche better than competitors.

focus group
A market research technique involving a small group of people brought together and allowed to discuss selected issues in depth.

follow-up
Checking to ensure that production decisions are being implemented.

Food and Drug Act
Prohibits the sale of food unfit for human consumption and regulates food advertising.

forced distribution method
A method of performance appraisal that involves grouping employees into predefined frequencies of performance ratings.

forecasts
Estimates of future demand for both new and existing products.

foreign currency exchange rates
What buyers are willing to pay for a given currency.

foreign direct investment (FDI)
Buying or establishing tangible assets in another country.

Foreign Investment Review Agency (FIRA)
Established in 1973 to screen new foreign direct investment in Canada; supposed to ensure that significant benefits accrued to Canada.

forensic accountant
An accountant who tracks down hidden funds in business firms, usually as part of a criminal investigation.

form utility
That quality of a product satisfying a human want because of its form; requires raw materials to be transformed into a finished product.

franchise
An arrangement that gives franchisees (buyers) the right to sell the product of the franchiser (the seller).

franchising agreement
Stipulates the amount and type of payment that franchisees must make to the franchiser.

free-rein style
A managerial style in which managers typically serve as advisers to subordinates who are allowed to make decisions.

freedom of choice
The right to choose what to buy or sell, including one’s labour.

freight forwarders
Common carriers that lease bulk space from other carriers and resell that space to firms making small shipments.

friendly takeover
An acquisition in which the management of the acquired company welcomes the firm’s buyout by another company.

full-service merchant wholesaler
A merchant wholesaler that provides storage and delivery in addition to wholesaling services.

functional departmentalization
Departmentalization according to functions or activities.

functional strategy
The basic course of action that each department follows so that the business accomplishes its overall goals.

functional structure
Various units are included in a group based on functions that need to be performed for the organization to reach its goals.

futures contract
Agreement to purchase specified amounts of a commodity at a given price on a set future date.

G

gainsharing program
An incentive program in which employees receive a bonus if the firm’s costs are reduced because of greater worker efficiency and/or productivity.

General Agreement on Tariffs and Trade (GATT)
An international trade accord in which the 92 signatories agreed to reduce tariffs; often ignored by signatories.

general partner
A partner who is actively involved in managing the firm and has unlimited liability. generally accepted accounting principles (GAAP)
Standard rules and methods used by accountants in preparing financial reports.

generic products
Products carrying no brand or producer name and sold at lower prices.

geographic departmentalization
Departmentalization according to the area of the country or world supplied.

geographic expansion
Expanding operations in new geographic areas or countries.

global perspective
Company’s approach to directing its marketing towards worldwide rather than local or regional markets.

globalization
The integration of markets globally.

goal-setting theory
The theory that people perform better when they set specific, quantified, time-framed goals.

goals
Objectives that a business hopes and plans to achieve. goods production
Production activities that yield tangible products.

goodwill
The amount paid for an existing business beyond the value of its other assets.

grapevine
An informal communications network that carries gossip and other information throughout an organization.

graphic rating scale
A statement or question about some aspect of an individual’s job performance for which the rater must select the response that fits best.

graphical user interface (GUI)
The user-friendly display that helps users select from among the many possible applications of the computer.

grievance
A complaint on the part of a union member that management is violating the terms of the contract in some way. g

ross domestic product (GDP)
The value of all goods and services produced in Canada during a one-year period.

gross national product (GNP)
The value of all goods and services produced by a country regardless of where the factors of production are located.

gross profit (gross margin)
A firm’s revenues (gross sales) less its cost of goods sold.

group life insurance
Life insurance underwritten for a group as a whole rather than for each individual member.

groupware
A system that allows two or more individuals to communicate electronically between desktop PCs.

growth
An increase in the amount of goods and services produced using the same resources.

H

hard disks
Rigid metal disks permanently enclosed in the computer.

hardware
The physical components of a computer system.

Hawthorne effect
The tendency for workers’ productivity to increase when they feel they are receiving special attention from management.

Hazardous Products Act
Regulates banned products and products that can be sold but must be labelled hazardous.

high-contact system
A system in which the service cannot be provided without the customer being physically in the system (e.g., transit systems).

horizontal integration
Acquiring control of competitors in the same or similar markets with the same or similar products.

horizontal merger
A merger of two firms that have previously been direct competitors in the same industry.

hostile takeover
An acquisition in which the management of the acquired company fights the firm’s buyout by another company.

hub
Central distribution outlet that controls all or most of a firm’s distribution activities.

human relations
Interactions between employers and employees and their attitudes towards one another. human relations skills
Skills in understanding and getting along with people.

human resource management (HRM)
The development, administration, and evaluation of programs to acquire and enhance the quality and performance of people in a business.

human resource managers
Those managers responsible for hiring, training, evaluating, and compensating employees.

hypermarkets
Large institutions with broad product offerings but with somewhat higher prices than warehouse clubs.

I

icons
Small images on a computer screen that represent various applications.

implied warranty
An assumption that a product will perform as the manufacturer claims it will.

importer
A firm that buys products in foreign markets and then imports them for resale in its home country.

imports
Products that are made or grown abroad and sold in Canada.

income (profit-and-loss) statement
A type of financial statement that describes a firm’s revenues and expenses and indicates whether the firm has earned a profit or suffered a loss during a given period.

independent agent
A foreign individual, or organization, who agrees to represent an exporter’s interests in foreign markets.

independent local union
One not formally affiliated with any labour organization.

individual incentive plans
A compensation system in which an employer gives an individual a salary increase or some other financial reward for outstanding performance immediately or shortly after the performance occurred.

industrial advertising
Advertising by manufacturers designed to reach other manufacturers’ professional purchasing agents and managers of firms buying raw materials or components.

Industrial Development Bank (IDB)
A subsidiary of the Bank of Canada created to make loans to business firms.

Industrial Disputes Investigation Act (1907)
Provided for compulsory investigation of labour disputes by a government-appointed board before a strike was allowed.

industrial distribution
The network of channel members involved in the flow of manufactured goods to industrial customers.

industrial goods
Products purchased by companies to use directly or indirectly to produce other products.

industrial market
Businesses that buy goods to be converted into other products that will be sold to ultimate consumers.

Industrial Revolution
A major change in goods production that began in England in the mid-eighteenth century and was characterized by a shift to the factory system, mass production, and specialization of labour.

industrial selling
Selling products to other businesses, either for manufacturing other products or for resale.

industrial unions
Unions organized by industry; usually composed of semiskilled and unskilled workers.

inelasticity of demand
Exists when a price change for a product does not have much effect on demand.

inflation
A period of widespread price increases throughout an economic system.

informal organization
A network of personal interactions and relationships among employees unrelated to the firm’s formal authority structure.

information
A meaningful, useful interpretation of data.

information management
An internal operation that arranges the firm’s information resources to support business performance and outcomes.

information manager
The manager responsible for the activities needed to generate, analyze, and disseminate information that a company needs to make good decisions.

information resources
Information such as market forecasts, economic data, and specialized knowledge of employees that is useful to a business and that helps it achieve its goals.

information systems (IS)
An organized method of transforming data into information that can be used for decision making.

informative advertising
An advertising strategy, appropriate to the introduction stage of the product life cycle, in which the goal is to make potential customers aware that a product exists.

initial public offering (IPO)
Selling shares of stock in a company for the first time to the general investing public.

input device
Hardware that gets data into the computer in a form the computer can understand.

input market
Firms buy resources that they need in the production of goods and services.

inside directors
Members of a corporation’s board of directors who are also full-time employees of the corporation.

insider trading
The use of confidential information to gain from the purchase or sale of stock.

institutional advertising
Advertising that promotes a firm’s long-term image, not a specific product.

institutional investors
Organizations such as mutual and pension funds that purchase large blocks of company stock; organizations whose investments for themselves and their clients are so large that they can influence prices on securities markets.

institutional market
Nongovernment organizations such as hospitals, churches, and schools.

instructional-based programs
Training workers through the use of classroom-based programs such as the lecture approach.

insurance agent
A person who markets insurance and is paid a commission by the insurance company.

insurance broker
A freelance agent who represents insurance buyers rather than insurance sellers.

intangible assets
Nonphysical assets such as patents, trademarks, copyrights, and franchise fees, that have economic value but whose precise value is difficult to calculate.

intensive distribution
A distribution strategy in which a product is distributed in nearly every possible outlet, using many channels and channel members.

intentional tort
A wrongful act intentionally committed.

interactive marketing
Selling products and services by allowing customers to interact with multimedia Web sites using voice, graphics, animation, film clips, and access to live human advice.

intermediary
Any individual or firm other than the producer who participates in a product’s distribution.

intermediate goals
Goals set for a period of one to five years.

intermodal transportation
The combined use of different modes of transportation.

internal failures
Expenses incurred during production and before bad product leaves the plant.

internal recruiting
Considering present employees as candidates for job openings.

international competition
Competitive marketing of domestic against foreign products.

international firm
A company that conducts a significant portion of its business abroad and maintains manufacturing facilities overseas.

International Monetary Fund (IMF)
A United Nations agency consisting of about 150 nations who have combined resources to promote stable exchange rates, provide temporary short-term loans, and serve other purposes.

international organizational structure
An organizational structure that is designed to help a company succeed in international markets. International departments, international divisions, or an integrated global organization are all variations of the international organizational structure.

international union
A union with members in more than one country.

Internet
A gigantic network of networks that serves millions of computers, offers information on business, science, and government, and provides communication flows among more than 170 000 separate networks around the world.

Internet service provider (ISP)
A commercial firm that maintains a permanent connection to the Internet and sells temporary connections to subscribers.

intranet
A company’s private network that is accessible only to employees via entry through electronic firewalls.

intrapreneuring
The process of creating and maintaining the innovation and flexibility of a small business environment within the confines of a large organization.

inventory
Materials and goods currently held by the company that will be sold within the year.

inventory control
The part of warehouse operations that keeps track of what is on hand and ensures adequate supplies of products in stock at all times; the receiving, storing, handling, and counting of all resources, partly finished goods, and finished goods.

inventory turnover ratio
An activity ratio that measures the average number of times inventory is sold and restocked during the year.

investment banker
Any financial institution engaged in purchasing and reselling new stocks and bonds.

Investment Canada
Replaced FIRA in 1985; designed primarily to attract and facilitate foreign investment in Canada.

investment reduction
Reducing the company’s investment in one or more of its lines of business.

involuntary bankruptcy
Bankruptcy proceedings initiated by the creditors of an indebted individual or organization.

J

job analysis
A detailed study of the specific duties in a particular job and the human qualities required for that job.

job description
The objectives, responsibilities, and key tasks of a job; the conditions under which it will be done; its relationship to other positions; and the skills needed to perform it.

job enrichment
A method of increasing employees’ job satisfaction by extending or adding motivating factors such as responsibility or growth.

job evaluation
A method for determining the relative value or worth of a job to the organization so that individuals who perform it can be appropriately compensated.

job redesign
A method of increasing employees’ job satisfaction by improving the worker–job fit through combining tasks, creating natural work groups, and/or establishing client relationships.

job satisfaction
The pleasure and feeling of accomplishment employees derive from performing their jobs well.

job sharing
A method of increasing employee job satisfaction by allowing two people to share one job.

job specialization
The use of individuals with specialized skills to perform specialized tasks within a business.

job specification
The specific skills, education, and experience needed to perform a job.

joint venture
Another name for a strategic alliance.

journal
A chronological record of a firm’s financial transactions along with a brief description of each transaction.

just-in-time (JIT) production systems
A method of inventory control in which materials are acquired and put into production just as they are needed.

K

key person insurance
Insurance that protects a company against loss of the talents and skills of key employees.

knowledge-based pay
Pay awarded to employees for learning.

knowledge workers
Workers who are experts in specific fields like computer technology and engineering, and who add value because of what they know, rather than how long they have worked or the job they do; employees whose jobs involve the use of information and knowledge as the raw materials of their work.

L

label
That part of a product’s packaging that identifies the product’s name and contents and sometimes its benefits.

labour
The mental and physical training and talents of people; sometimes called human resources.

labour productivity
A partial productivity ratio calculated as total outputs divided by labour inputs for a company and as gross domestic product divided by the total number of workers for a nation.

labour relations
The process of dealing with employees who are represented by a union.

labour union
A group of individuals who work together to achieve shared job-related goals.

language program
A program that allows computer users to write specialized instructions for their computers.

law
The set of rules and standards that a society agrees upon to govern the behaviour of its citizens.

law of demand
The principle that buyers will purchase (demand) more of a product as price drops.

law of large numbers
The statistical principle that the larger the number of cases involved, the more closely the actual rate will match the statistically calculated rate.

law of one price
The principle that identical products should sell for the same price in all countries.

law of supply
The principle that producers will offer (supply) more of a product as price rises.

leadership
The process of motivating others to work to meet specific objectives.

leading
That portion of a manager’s job concerned with guiding and motivating employees to meet the firm’s objectives.

lease
A document that grants the use of an asset for a specified period of time in return for payment.

lecture or discussion approach
An instructional-based program in which a trainer presents material in a descriptive fashion to those attending a trainee program.

ledger
Summations of journal entries, by category, that show the effects of transactions on the balance in each account.

letter of credit
A promise by a bank to pay money to a business firm if certain conditions are met.

level of productivity
The dollar value of goods and services produced versus the dollar value of resources used to produce them.

leverage
Using borrowed funds to make purchases, thus increasing the user’s purchasing power, potential rate of return, and risk of loss.

liability
Any debt owed by a firm or individual to others.

liability insurance
Covers losses resulting from damage to people or property when the insured party is judged liable.

licensed brands
Selling the right to use a brand name, a celebrity’s name, or some other well-known identification mark to another company to use on a product.

licensing arrangement
An arrangement by an owner of a process or product to allow another business to produce, distribute, or market it for a fee or royalty.

life insurance
Insurance that pays benefits to survivors of a policyholder.

life insurance company
A mutual or stock company that shares risk with its policyholders for payment of premiums.

LIFO (last-in-first-out) method
Inventories received last (most recently) are sold first, thus leaving older inventories on hand for future use.

limit order
An order to a broker to buy a certain security only if its price is less than or equal to a given limit.

limited-function merchant wholesaler
An independent wholesaler that provides only wholesaling—not warehousing or transportation—services.

limited liability
Investor liability is limited to their personal investments in the corporation; courts cannot touch the personal assets of investors in the event that the corporation goes bankrupt.

limited partner
A partner who generally does not participate actively in the business, and whose liability is limited to the amount invested in the partnership.

line authority
An organizational structure in which authority flows in a direct chain of command from the top of the company to the bottom.

line department
A department directly linked to the production and sales of a specific product.

line of credit
A standing agreement between a bank and a firm in which the bank specifies the maximum amount it will make available to the borrower for a short-term unsecured loan; the borrower can then draw on those funds, when available.

liquidate
Sell the assets of a business.

liquidity
The ease and speed with which an asset can be converted to cash; cash is said to be perfectly liquid.

liquidity ratios
Measures of a firm’s ability to meet its immediate debts; used to analyze the risks of investing in the firm.

load fund
A mutual fund in which investors are charged a sales commission when they buy into or sell out of the fund.

lobbyist
A person hired by a company or an industry to represent its interests with government officials.

local area network (LAN)
A system to link computers in one building or in a small geographical area by cabling or wireless technology.

local-content laws
Laws requiring that products sold in a particular country be at least partly made in that country.

local union
The basic unit of union organization.

lockout
A tactic of management in which the firm physically denies employees access to the workplace in order to pressure workers to agree to the company’s latest contract offer.

long-term goals
Goals set for extended periods of time, typically five years or more into the future.

long-term liabilities
Any debts owed by the firm that are not due for at least one year.

low-contact system
A system in which the service can be provided without the customer being physically in the system (e.g., lawn care services).

M

M-1
Only the most liquid forms of money (currency and demand deposits).

M-2
Everything in M-1 plus savings deposits, time deposits, and money market mutual funds.

mail order (catalogue marketing)
A form of nonstore retailing in which customers place orders for merchandise shown in catalogues and receive their orders via mail.

main memory
The part of a computer’s CPU that stores those programs that it needs in order to operate.

management
The process of planning, organizing, leading, and controlling a business’s financial, physical, human, and information resources in order to achieve its goals.

management by objectives (MBO)
A system of collaborative goal setting that extends from the top of an organization to its bottom.

management information systems (MIS)
Systems that support an organization’s managers by providing daily reports, schedules, plans, and budgets.

management’s discussion and analysis (MD&A)
A type of full disclosure that in financial reports provides an interpretation “as seen through the eyes of management.”

managerial accounting
Internal procedures that alert managers to problems and aid them in planning and decision making.

managerial styles
Patterns of behaviour that a manager exhibits in dealing with subordinates.

manufacturing resource planning (MRP II)
An advanced version of MRP that ties together all parts of the organization into the company’s production activities.

margin
The percentage of the total sales price that a buyer must put up to place an order for stock or a futures contract.

marine insurance
A form of transportation insurance covering both the act of transportation (by water, land, or air) the transported goods.

market
An exchange process between buyers and sellers of a particular good or service.

market economy
An economic system in which individuals control all or most factors of production and make all or most production decisions.

market index
A measure of the market value of stocks; provides a summary of price trends in a specific industry or of the stock market as a whole.

market order
An order to a broker to buy or sell a certain security at the current market price.

market penetration
Boosting sales of present products by more aggressive selling in the firm’s current markets.

market price (or equilibrium price)
Profit-maximizing price at which the quantity of goods demanded and the quantity of goods supplied are equal.

market research
The systematic study of what buyers need and how best to meet those needs.

market segmentation
Dividing a market into categories according to traits customers have in common.

market share
A company’s percentage of the total market sales for a specific product.

market value
The current price of one share of a stock in the secondary securities market; the real value of a stock.

marketing
Planning and executing the development, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy both buyers’ and sellers’ objectives.

marketing concept
The idea that the whole firm is directed towards serving present and potential customers at a profit.

marketing era
The period during the 1950s and 1960s when businesses began to identify and meet consumer wants in order to make a profit.

marketing managers
Those managers responsible for developing, pricing, promoting, and distributing goods and services to buyers.

marketing mix
The combination of product, pricing, promotion, and distribution strategies used in marketing a product.

marketing plan
A detailed strategy for gearing the marketing mix to meet consumer needs and wants.

mass-customization
Producing large volumes of products or services, but giving customers the choice of features and options they want.

mass production
The manufacture of products of uniform quality in large quantities.

material requirements planning (MRP)
A method of inventory control in which a computerized bill of materials is used to estimate production needs so that resources are acquired and put into production only as needed.

materials handling
The transportation and arrangement of goods within a warehouse and orderly retrieval of goods from inventory.

materials management
Planning, organizing, and controlling the flow of materials from purchase through distribution of finished goods.

materials productivity
A partial productivity ratio calculated as total outputs divided by materials inputs.

matrix organization
A project structure in which the project manager and the regular line managers share authority until the project is concluded.

maturity date
The date on or before which a company must pay off the principal of a particular bond issue.

media mix
The combination of media through which a company chooses to advertise its products.

mediation
A method of settling a contract dispute in which a neutral third party is asked to hear arguments from both the union and management and offer a suggested resolution.

merchandise inventory
The cost of merchandise that has been acquired for sale to customers but is still on hand.

merchant wholesaler
An independent wholesaler that buys and takes legal possession of goods before selling them to customers.

merger
The union of two companies to form a single new business.

merit pay
Pay awarded to employees according to the relative value of their contributions.

merit pay plans
Compensation plans that formally base at least some meaningful portion of compensation on merit.

microenterprise
An enterprise that the owner operates part-time from the home while continuing regular employment elsewhere.

middle managers
Those managers responsible for implementing the decisions made by top managers.

mission statement
An organization’s statement of how it will achieve its purpose in the environment in which it conducts its business.

missionary selling
In personal sales, the indirect promotion of a product by offering technical assistance and/or promoting the company’s image.

mixed market economy
An economic system with elements of both a command economy and a market economy; in practice, typical of most nations’ economies.

modem
A hardware device permitting the user of a personal computer to link up with other computer systems via telephone lines.

monetary policies
Policies by means of which the government controls the size of the nation’s money supply.

money
Any object generally accepted by people as payment for goods and services.

money market mutual funds
Funds operated by investment companies that bring together pools of assets from many investors.

monopolistic competition
A market or industry characterized by a large number of firms supplying products that are similar but distinctive enough from one another to give firms some ability to influence price.

monopoly
A market or industry with only one producer, who can set the price of its product and/or resources.

morale
The generally positive or negative mental attitude of employees towards their work and workplace.

motivation
The set of forces that causes people to behave in certain ways.

multilevel marketing
A system in which a salesperson earns a commission on their own sales and on the sales of any other salespeople they recruit.

multimedia communication systems
Connected networks of communication appliances such as faxes, televisions, sound equipment, cellphones, printers, and photocopiers that may also be linked by satellite with other remote networks.

multinational firm
Controls assets, factories, mines, sales offices, and affiliates in two or more foreign countries.

mutual fund
Any company that pools the resources of many investors and uses those funds to purchase various types of financial securities, depending on the fund’s financial goals.

mutual insurance company
Any insurance company that is owned by its policyholders, who share in its profits.

N

National Association of Securities Dealers Inc. (NASD)
With more than 5500 member firms, the largest securities-regulation organization in the United States.

National Association of Securities Dealers Automated Quotation (NASDAQ)
A stock market implemented by NASD that operates by broadcasting trading information on an intranet to more than 350 000 terminals worldwide.

national brands
Products distributed by and carrying a name associated with the manufacturer.

national competitive advantage
A country will be inclined to engage in international trade when factor conditions, demand conditions, related and supporting industries, and strategies/structures/rivalries are favourable.

national debt
The total amount of money that Canada owes its creditors (presently more than $500 billion).

national union
A union with members across Canada.

natural monopoly
A market or industry in which having only one producer is most efficient because it can meet all of consumers’ demand for the product.

natural resources
Items used in the production of goods and services in their natural state, including land, water, mineral deposits, and trees.

negligence
A wrongful act that inadvertently causes injury to another person.

negotiable instrument
Types of commercial paper that can be transferred among individuals and business firms.

net income (net profit or net earnings)
A firm’s gross profit less its operating expenses and income taxes.

net profit margin
A form of profitability ratio calculated as net income divided by net sales.

no-load fund
A mutual fund in which investors are not charged a sales commission when they buy into or sell out of the fund.

North American Free Trade Agreement (NAFTA)
A trade agreement signed by Canada, the U.S., and Mexico whose purpose is to create a free trade area.

O

observation
A market research technique involving viewing or otherwise monitoring consumer buying patterns.

obstructionist stance
A company does as little as possible to solve social or environmental problems.

odd-even psychological pricing
A form of psychological pricing in which prices are not stated in even dollar amounts.

odd lots
The purchase or sale of stock in units other than 100 shares.

off-the-job training
Those development programs in which employees learn new skills at a location away from the normal work site.

oligopoly
A market or industry characterized by a small number of very large firms that have the power to influence the price of their product and/or resources.

on-the-job training
Those development programs in which employees gain new skills while performing them at work.

online processing
A method of transforming data into information in which data are entered and processed immediately.

open-book credit
Form of trade credit in which sellers ship merchandise on faith that payment will be forthcoming.

open shop
An employer may hire union or nonunion workers.

operating expenses
Costs incurred by a firm other than those included in cost of goods sold.

operating income
Compares the gross profit from business operations against operating expenses.

operational plans
Plans setting short-term targets for daily, weekly, or monthly performance.

operations control
Managers monitor production performance by comparing results with plans and schedules.

operations managers
Those managers responsible for controlling production, inventory, and quality of a firm’s products.

operations process
A set of methods and technologies used in the production of a good or a service.

operations (production) management
The systematic direction and control of the processes that transform resources into finished goods.

order-cycle time
The total amount of time from order placement to when the customer actually receives the order.

order processing
In a product’s distribution, the receiving and filling of orders.

organization chart
A physical depiction of the company’s structure showing employee titles and their relationship to one another.

organizational analysis
The process of analyzing a firm’s strengths and weaknesses.

organizational stakeholders
Groups, individuals, and organizations that are directly affected by the practices of an organization and that therefore have a stake in its performance.

organizational structure
The specification of the jobs to be done within a business and how those jobs relate to one another.

organizing
That portion of a manager’s job concerned with mobilizing the necessary resources to complete a particular task.

orientation
The initial acquainting of new employees with the company’s policies and programs, personnel with whom they will interact, and the nature of the job.

output device
That part of a computer’s hardware that presents results to users; common forms include printers and video monitors.

output market
Firms supply goods and services in response to demand on the part of consumers.

outside directors
Members of a corporation’s board of directors who are not also employees of the corporation on a day-to-day basis.

over-the-counter (OTC) market
A complex of dealers in constant touch with each other who trade stocks and bonds of some smaller corporations and all fixed-income securities (bonds and debentures).

owners’ equity
Any positive difference between a firm’s assets and its liabilities; what would remain for a firm’s owners if the company were liquidated, all its assets were sold, and all its debts were paid.

ownership (possession) utility
That quality of a product satisfying a human want during its consumption or use.

P

packaging
The physical container in which a product is sold, including the label.

paid-in capital
Any additional money invested in the firm by the owners.

par value
The arbitrary value of a stock set by the issuing company’s board of directors and stated on stock certificates; used by accountants but of little significance to investors.

parent corporation
A corporation that owns a subsidiary.

partial productivity ratio
A measure of a firm’s overall productivity based on the productivity of its most significant input; calculated as total outputs divided by the selected input.

participative management
A method of increasing employees’ job satisfaction by giving them a voice in how they do their jobs and how the company is managed.

partnership
A business with two or more owners who share in the operation of the firm and in financial responsibility for the firm’s debts.

patent
Protects an invention or idea for a period of 20 years.

pay survey
A survey of compensation paid to employees by other employers in a particular geographic area, an industry, or an occupational group.

penetration-pricing strategy
The decision to price a new product very low to sell the most units possible and to build customer loyalty.

pension fund
Accumulates money that will be paid out to plan subscribers in the future.

per capita GDP
Allows comparison of GDP figures for different countries, taking into account population size.

per capita income
The average income per person of a country.

performance appraisal
A formal program for comparing employees’ actual performance with expected performance; used in making decisions about training, promoting, compensating, and firing.

performance quality
The overall degree of quality; how well the features of a product meet consumers’ needs and how well the product performs.

personal liability
For a business, responsibility for certain actions of those who work for the business.

personal property
Tangible or intangible assets other than real property.

personal selling
A promotional technique involving the use of person-to-person communication to sell products.

ersuasive advertising
An advertising strategy, appropriate to the growth stage of the product life cycle, in which the goal is to influence the customer to buy the firm’s product rather than the similar product of a competitor.

physical distribution
Those activities needed to move a product from the manufacturer to the end consumer.

picketing
A tactic of labour unions in which members march at the entrance to the company with signs explaining their reasons for striking.

piece-rate incentive plan
A compensation system in which an organization pays an employee a certain amount of money for every unit produced.

place utility
That quality of a product satisfying a human want because of where it is made available.

planning
That portion of a manager’s job concerned with determining what the business needs to do and the best way to achieve it.

pledging accounts receivable
Using accounts receivable as collateral for a loan.

point-of-purchase (POP) display
A method of sales promotion in which a product display is so located in a retail store as to encourage consumers to buy the product.

positioning
The process of fixing, adapting, and communicating the nature of the product.

preferred stock
Shares whose owners have first claim on the corporation’s assets and profits but who usually have no voting rights in the firm.

premises liability
For a business, responsibility for occurrences on its premises.

premium
A method of sales promotion in which some item is offered free or at a bargain price to customers in return for buying a specified product; money paid to an insurance company by customers in return for being covered for certain types of losses should they occur.

prepaid expense
Includes supplies on hand and rent paid for the period to come.

presentation graphics software
Application programs that offer choices for assembling graphics for visual displays, slides, video, and even sound splices for professional presentations.

price leadership
The dominant firm in the industry establishes product prices and other companies follow suit.

price lining
The practice of offering all items in certain categories at a limited number of predetermined price points.

price-skimming strategy
The decision to price a new product as high as possible to earn the maximum profit on each unit sold.

pricing
That part of the marketing mix concerned with choosing the appropriate price for a product to meet the firm’s profit objectives and buyers’ purchasing objectives; deciding what the company will receive in exchange for its product.

primary data
Information developed through new research by the firm or its agents.

primary securities market
The sale and purchase of newly issued stocks and bonds by firms or governments.

prime rate of interest
The lowest rate charged to borrowers.

private accountant
An accountant hired as a salaried employee to deal with a company’s day-to-day accounting needs.

private brands
Products promoted by and carrying a name associated with the retailer or wholesaler, not the manufacturer.

private carriers
Transportation systems owned by the shipper.

private corporation
A business whose stock is held by a small group of individuals and is not usually available for sale to the general public.

private enterprise
An economic system characterized by private property rights, freedom of choice, profits, and competition.

private property
The right to buy, own, use, and sell an item.

private warehouses
Warehouses owned and used by just one company.

privatization
The transfer of activities from the government to the public sector.

Privy Council Order 1003 (1943)
Recognized the right of employees to bargain collectively.

proactive stance
An organization actively seeks opportunities to be socially responsible.

process capability study
A statistical process control method in which samples of the product are measured to determine the amount of process variation; shows the outputs’ conformity with or deviation from specification limits.

process departmentalization
Departmentalization according to the production process used to create a good or service.

process layout
A way of organizing production activities such that equipment and people are grouped together according to their function.

process variation
Any change in employees, materials, work methods, or equipment that affects output quality.

product
A good, service, or idea that satisfies buyers’ needs and demands.

product advertising
A variation on brand advertising that promotes a general type of product or service.

product departmentalization
Departmentalization according to the products being created.

product development
Developing improved products for current markets.

product differentiation
The creation of a product or product image that differs enough from existing products to attract consumers.

product layout
A way of organizing production activities such that equipment and people are set up to produce only one type of good.

product liability
The liability of businesses for injuries caused to product users because of negligence in design or manufacture.

product life cycle (PLC)
The concept that the profit-producing life of any product goes through a cycle of introduction, growth, maturity (levelling off), and decline.

product line
A group of similar products intended for a similar group of buyers who will use them in a similar fashion.

product mix
The group of products a company has available for sale.

product positioning
The establishment of an easily identifiable image of a product in the minds of consumers.

production era
The period during the early twentieth century when businesses focused almost exclusively on improving productivity and manufacturing methods.

productivity
A measure of efficiency that compares how much is produced with the resources used to produce it.

professional liability
For a business or a business person, responsibility for an individual’s actions in working at the business or profession.

profit
What remains (if anything) after a business’s expenses are subtracted from its sales revenues.

profit centre
A separate company unit responsible for its own costs and profits.

profit-sharing plan
An incentive program in which employees receive a bonus depending on the firm’s profits.

profitability ratios
Measures of a firm’s overall financial performance in terms of its likely profits; used by investors to assess their probable returns.

program
Any sequence of instructions to a computer.

program trading
The purchase or sale of stocks by computerized trading programs that can be launched without human supervision or control.

progressive revenue taxes
Taxes levied at a higher rate on higher-income taxpayers and at a lower rate on lower-income taxpayers.

project organization
An organization that uses teams of specialists to complete specific projects.

promissory note
Form of trade credit in which buyers sign promise-to-pay agreements before merchandise is shipped.

promotion
That part of the marketing mix concerned with selecting the appropriate technique for selling a product to a consumer.

promotional mix
That portion of marketing concerned with choosing the best combination of advertising, personal selling, sales promotions, and publicity to sell a product.

property
Anything of tangible or intangible value that the owner has the right to possess and own.

property insurance
Covers injuries to firms resulting from physical damage to or loss of real estate or personal property.

prospecting
In personal sales, the process of identifying potential customers.

prospectus
A detailed registration statement about a new stock filed with a provincial securities exchange; must include any data helpful to a potential buyer.

protection plan
A plan that protects employees when their income is threatened or reduced by illness, disability, death, unemployment, or retirement.

protectionism
Protecting domestic business at the expense of free market competition.

protectionist tariff
A tariff imposed at least in part to discourage imports of a particular product.

oxy
A legal document temporarily transferring the voting rights of a shareholder to another person.

psychographic variables
Psychological traits that a group has in common, including motives, attitudes, activities, interests, and opinions.

psychological contract
The set of expectations held by an employee concerning what he or she will contribute to an organization (contributions) and what the organization will provide the employee (inducements) in return.

psychological pricing
The practice of setting prices to take advantage of the nonlogical reactions of consumers to certain types of prices.

public corporation
A business whose stock is widely held and available for sale to the general public.

public relations
Any promotional activity directed at building good relations with various sectors of the population of buyers.

public warehouses
Independently owned and operated warehouses that store the goods of many firms.

publicity
A promotional technique that involves unpaid communication about a product or firm and that is outside the control of the firm.

pull strategy
A promotional strategy in which a company appeals directly to customers, who demand the product from retailers, which demand the product from wholesalers.

purchase anxiety
A fear on the part of people who have made a purchase that their selection was wrong.

urchasing
The acquisition of all the raw materials and services that a company needs to produce its products.

pure competition
A market or industry characterized by a very large number of small firms producing an identical product so that none of the firms has any ability to influence price.

pure risk
An event that offers no possibility of gain; it offers only the chance of a loss.

push strategy
A promotional strategy in which a company aggressively pushes its product through wholesalers and retailers, which persuade customers to buy it.

put option
The purchased right to sell a particular stock at a certain price until a specified date.

Q

qualifying
In personal sales, the process of determining whether potential customers have the authority to buy and the ability to pay for a product.

quality
A product’s fitness for use in terms of offering the features that consumers want.

quality circle
A technique for maximizing quality of production by grouping employees into small teams that define, analyze, and solve quality and other process-related problems within their areas.

quality control
The management of the production process so as to manufacture goods or supply services that meet specific quality standards.

quality/cost study
A method of improving product quality by assessing a firm’s current quality-related costs and identifying areas with the greatest cost-saving potential.

quality ownership
The concept that quality belongs to each employee who creates or destroys it in producing a good or service; the idea that all workers must take responsibility for producing a quality product.

quality reliability
The consistency of quality from unit to unit of a product.

quantity discount
A form of discount in which customers buying large amounts of a product pay lower prices.

quick (acid-test) ratio
A form of liquidity ratio calculated as quick assets (cash plus marketable securities and accounts receivable) divided by current liabilities.

quick assets
Cash and assets one step removed from cash: marketable securities and accounts receivable.

quota
A restriction by one nation on the total number of products of a certain type that can be imported from another nation.

R

rack jobber
A full-function merchant wholesaler specializing in nonfood merchandise that sets up and maintains display racks of some products in retail stores.

random access memory (RAM)
The computer’s short-term active memory that lasts only as long as the computer stays on.

ational motives
Those reasons for purchasing a product that involve a logical evaluation of product attributes such as cost, quality, and usefulness.

raw materials inventory
That portion of a firm’s inventory consisting of basic supplies used to manufacture products for sale.

R&D
Those activities that are necessary to provide new products, services, and processes.

real property
Land and any permanent buildings attached to that land.

re-engineering
The process of rethinking and redesigning business processes to achieve dramatic improvements in productivity and quality.

recession
The part of the business cycle characterized by a decrease in employment, income, and production.

recruiting
The phase in the staffing of a company in which the firm seeks to develop a pool of interested, qualified applicants for a position.

recycling
The reconversion of waste materials into useful products.

registered bond
The names of holders are registered with the company.

regressive revenue taxes
Taxes that cause poorer people to pay a higher percentage of income than richer people pay.

reinforcement
Controlling and modifying employee behaviour through the use of systematic rewards and punishments for specific behaviours.

relationship marketing
A type of marketing that emphasizes lasting relationships with customers and suppliers.

reminder advertising
An advertising strategy, appropriate to the latter part of the maturity stage of the product life cycle, in which the goal is to keep the product’s name in the minds of customers.

repetitive strain injuries
Injuries that occur when workers perform the same functions over and over again.

replacement chart
An HR technique that lists each important managerial position, who occupies it, how long he or she will probably stay in it before moving on, and who (by name) is now qualified or soon will be qualified to move into it.

reseller market
Intermediaries like wholesalers and retailers who buy finished products and resell them.

reserve requirement
The requirement (until 1991) that banks keep a portion of their chequable deposits in vault cash or as deposits with the Bank of Canada.

responsibility
The duty to perform an assigned task.

restrictive taxes
Taxes levied to control certain activities that legislators believe should be controlled.

retail advertising
Advertising by retailers designed to reach end-users of a consumer product.

retail selling
Selling a consumer product for the buyer’s own personal or household use.

retailers
Intermediaries who sell products to end-users.

retained earnings
A company’s net profits less any dividend payments to shareholders; profits reinvested in an enterprise.

return on equity
A form of profitability ratio calculated as net income divided by total owners’ equity.

return on sales (net profit margin)
A form of profitability ratio calculated as net income divided by net sales.

revenue tariff
A tariff imposed solely to raise money for the government that imposes it.

revenue taxes
Taxes whose main purpose is to fund government services and programs.

revenues
Any monies received by a firm as a result of selling a good or service or from other sources such as interest, rent, and licensing fees.

revolving credit agreement
A guaranteed line of credit for which the firm pays the bank interest on funds borrowed as well as a fee for extending the line of credit.

risk
Uncertainty about future events.

risk avoidance
Stopping participation in or refusing to participate in ventures that carry any risk.

risk control
Techniques to prevent, minimize, or reduce losses or the consequences of losses.

risk management
Conserving a firm’s (or an individual’s) financial power or assets by minimizing the financial effect of accidental losses.

risk retention
The covering of a firm’s unavoidable losses with its own funds.

risk-return relationship
Shows the amount of risk and the likely rate of return on various financial instruments.

risk transfer
The transfer of risk to another individual or firm, often by contract.

robotics
The use of computer-controlled machines that perform production tasks.

round lot
The purchase or sale of stock in units of 100 shares.

royalties
Fees that an exporter receives for allowing a company in a foreign company to manufacture or market the exporter’s products.

S

salary
Dollars paid at regular intervals in return for doing a job, regardless of the amount of time or output involved.

sales agent
An independent business person who represents a business and receives a commission in return, but never takes legal possession of the product.

sales commission
Paying salespeople based on the number of units they sell or the dollar value of sales they generate for the company.

sales era
The period during the 1930s and 1940s when businesses focused on sales forces, advertising, and keeping products readily available.

sales finance company
Specializes in financing instalment purchases made by individuals or firms.

sales force management
Setting goals at top levels of an organization; setting practical objectives for salespeople; organizing a sales force to meet those objectives; implementing and evaluating the success of a sales plan.

sales offices
Offices maintained by sellers of industrial goods to provide points of contact with their customers.

sales promotion
A promotional technique involving one-time direct inducements to buyers (such as coupons, sales displays, and contests) to purchase a product.

scientific management
Analyzing jobs and finding better, more efficient ways to perform them.

scrambled merchandising
The retail practice of carrying any product expected to sell well, regardless of whether it fits into the store’s original product offering.

search engine
Software for searching Web pages that does not pre-classify them into a directory.

seasonal discount
A form of discount in which lower prices are offered to customers making a purchase at a time of year when sales are traditionally slow.

secondary data
Information already available to market researchers as a result of previous research by the firm or other agencies.

secondary securities market
The sale and purchase of previously issued stocks and bonds.

secondary storage
Any medium that can be used to store computerized data and information outside the computer’s primary storage mechanism; magnetic tape, hard disks, diskettes, and CD-ROMs are common forms.

secured bonds
Bonds issued by borrowers who pledge assets as collateral in the event of nonpayment.

secured loan
A short-term loan in which the borrower is required to put up collateral.

securities
Stocks and bonds (which represent a secured-asset-based claim on the part of investors) that can be bought and sold.

selective distribution
A distribution strategy that falls between intensive and exclusive distribution, calling for the use of a limited number of outlets for a product.

serial bond
A bond issue in which redemption dates are staggered so that a firm pays off portions of the issue at different predetermined dates.

server
A computer that provides the services shared by network users.

service flow analysis
An analysis that shows the process flows that are necessary to provide a service to customers; it allows managers to determine which processes are necessary.

service operations
Production activities that yield intangible products.

service process design
Selecting the process, identifying worker requirements, and determining facilities requirements so that the service can be effectively provided.

shareholders
Those who own shares of stock in a company.

shop steward
A regular employee who acts as a liaison between union members and supervisors.

shopping agent
A type of intermediary that helps Internet consumers by gathering and sorting information they need to make purchases.

shopping goods/services
Moderately expensive consumer goods or services that are purchased infrequently, causing consumers to spend some time comparing their prices.

short sale
Selling borrowed shares of stock in the expectation that their price will fall before they must be replaced, so that replacement shares can be bought for less than the original shares were sold.

short-term goals
Goals set for the very near future, typically less than one year.

shortage
Situation in which quantity demanded exceeds quantity supplied.

simple ranking method
A method of performance appraisal that requires a manager to rank-order from top to bottom or from best to worst each member of a particular work group or department.

sinking-fund provision
A clause in the bond indenture (contract) that requires the issuing company to put enough money into a special bank account each year to cover the retirement of the bond issue on schedule.

skill-based pay
Pay awarded to employees not for any specific level of performance, but for the acquisition of job-related skills.

slowdown
Instead of striking, workers perform their jobs at a much slower pace than normal.

small business
A independently owned and operated business not dominant in its field of operations.

smart card
A credit card–sized computer that can be programmed with “electronic money.”

social audit
A systematic analysis of how a firm is using funds earmarked for social-responsibility goals and how effective these expenditures have been.

social responsibility
A business’s collective code of ethical behaviour towards the environment, its customers, its employees, and its investors.

socialism
A kind of command economy in which the government owns and operates the main industries, while individuals own and operate less crucial industries.

software
Programs that instruct the computer in what to do and how to do it.

soft manufacturing (SM)
Emphasizes computer software and computer networks instead of production machines.

sole proprietorship
A business owned (and usually operated) by one person who is personally responsible for the firm’s debts.

solvency ratios
Ratios that estimate the financial risk that is evident in a company.

span of control
The number of people managed by one manager.

specialization
The breaking down of complex operations into simple tasks that are easily learned and performed.

specialty goods/services
Very expensive consumer goods or services that are purchased rarely, causing consumers to spend a great deal of time locating the exact item desired.

specialty stores
Small retail stores that carry one line of related products.

specification limits
Limits defining acceptable and unacceptable quality in production of a good or service.

speculative risk
An event that offers the chance for either a gain or a loss.

speed to market
Strategy of introducing new products to respond quickly to customer and/or market changes.

stability
A situation in which the relationship between the supply of money and goods, services, and labour remains constant.

staff authority
Authority that is based on expertise and that usually involves advising line managers.

staff members
Advisers and counsellors who aid line departments in making decisions but do not have the authority to make final decisions.

standard of living
A measure of a society’s economic well-being.

standardization
Using standard and uniform components in the production process.

statement of cash flows
A financial statement that describes a firm’s generation and use of cash during a given period.

statistical process control (SPC)
Statistical analysis techniques that allow managers to analyze variations in production data and to detect when adjustments are needed to create products with high quality reliability.

statutory law
Written law developed by city councils, provincial legislatures, and parliament.

stock
A share of ownership in a corporation.

stock exchange
A voluntary organization of individuals formed to provide an institutional setting where members can buy and sell stock for themselves and their clients in accordance with the exchange’s rules.

stock insurance company
Any insurance company whose stock is held by members of the public, who may or may not be policyholders of the company.

stock option
The purchased right to buy or sell a stock.

stockholders
Those who own shares of stock in a company.

stop order
An order to a broker to sell a certain security if its price falls to a certain level or below.

storage warehouses
Warehouses used to provide storage of goods for extended periods of time.

strategic alliance
An enterprise in which two or more persons or companies temporarily join forces to undertake a particular project.

strategic goals
Long-term goals derived directly from a firm’s mission statement.

strategic plans
Plans that reflect decisions about resource allocations, company priorities, and steps needed to meet strategic goals.

strategy formulation
Creation of a broad program for defining and meeting an organization’s goals.

strict product liability
The liability of businesses for injuries caused by their products even if no evidence of negligence in the product’s design or manufacture exists.

strike
A tactic of labour unions in which members temporarily walk off the job and refuse to work in order to win concessions from management.

strikebreaker
An individual hired by a firm to replace a worker on strike; a tactic of management in disputes with labour unions.

subsidiary corporation
One that is owned by another corporation.

subsidy
A government payment to help domestic business compete with foreign firms.

substitute product
A product that is dissimilar from those of competitors but that can fulfil the same need.

supermarkets
Large retail stores that offer a variety of food and food-related items divided into specialized departments.

supplier selection
Finding and determining suppliers to buy from.

supply
The willingness and ability of producers to offer a good or service for sale.

supply curve
Graph showing how many units of a product will be supplied (offered for sale) at different prices.

surplus
Situation in which quantity supplied exceeds quantity demanded.

survey
A market research technique based on questioning a representative sample of consumers about purchasing attitudes and practices.

syndicated selling
Occurs when a Web site offers other Web sites a commission for referring customers.

synthetic process
Any production process in which resources are combined.

system program
A program that tells a computer what resources to use and how to use them.

systematic job rotations and transfers
A technique in which an employee is systematically rotated or transferred from one job to another.

system operations personnel
People who run a company’s computer equipment.

T

tactical plans
Generally, short-range plans concerned with implementing specific aspects of a company’s strategic plans.

tall organizational structure
An organization with many layers of management.

target market
Any group of people who have similar wants and needs and may be expected to show interest in the same product(s).

tariff
A tax levied on imported products.

technical skills
Skills associated with performing specialized tasks within a firm.

technology
The application of science that enables people to do entirely new things or to perform established tasks in a new and better way.

telecommuting
Allowing employees to do all or some of their work away from the office.

telemarketing
Use of the telephone to sell directly to consumers.

term deposit
Money that remains with the bank for a period of time with interest paid to the depositor.

term insurance
Insurance coverage for a fixed period of time, often 1, 5, 10, or 20 years.

Textile Labelling Act
Regulates the labelling, sale, importation, and advertising of consumer textile articles.

Theory X
A management approach based on the belief that people must be forced to be productive because they are naturally lazy, irresponsible, and uncooperative.

Theory Y
A management approach based on the belief that people want to be productive because they are naturally energetic, responsible, and cooperative.

360-degree feedback
Gathering information from a manager’s subordinates, peers, and superiors when assessing the manager’s performance.

threshold pricing
A form of psychological pricing in which prices are set at what appears to be the maximum price consumers will pay for an item.

time-and-motion studies
The use of industrial-engineering techniques to study every aspect of a specific job to determine how to perform it most efficiently.

time deposit
A deposit that requires prior notice to make a withdrawal; cannot be transferred to others by cheque.

time management skills
Skills associated with the productive use of time.

time utility
That quality of a product satisfying a human want because of the time at which it is made available.

title
A document that shows legal possession of personal property.

title insurance
Insurance that guarantees a seller has clear title to a property.

Tobacco Act
Prohibits cigarette advertising on billboards in retail stores, and assigns financial penalties to violators.

top managers
Those managers responsible for a firm’s overall performance and effectiveness and for developing long-range plans for the company.

tort
A wrongful civil act that one party inflicts on another.

total factor productivity ratio
A measure of a firm’s overall productivity calculated as outputs divided by all inputs.

total quality management (TQM)
A concept that emphasizes that no defects are tolerable and that all employees are responsible for maintaining quality standards.

toxic waste
Pollution resulting from the emission of chemical and/or radioactive byproducts of various manufacturing processes into the air, water, or land.

trade acceptance
Trade draft that has been signed by the buyer.

rade advertising
Advertising by manufacturers designed to reach potential wholesalers and retailers.

trade association
An organization dedicated to promoting the interests and assisting the members of a particular industry.

trade credit
The granting of credit by a selling firm to a buying firm.

trade deficit
Occurs when a country imports more than it exports.

trade discount
A discount given to firms involved in a product’s distribution.

trade draft
Form of trade credit in which buyers must sign statements of payment terms attached to merchandise by sellers.

trade shows
A method of sales promotion in which members of a particular industry gather for displays and product demonstrations designed to sell products to customers.

trade surplus
Occurs when a country exports more than it imports.

trademark
The exclusive legal right to use a brand name.

transaction processing systems (TPS)
Applications of information processing for basic day-to-day business transactions.

transportation
The means of transporting resources to the company and finished goods to buyers.

trust company
Safeguards funds and estates entrusted to it; may also serve as trustee, transfer agent, and registrar for corporations.

trust services
The management of funds left in the bank’s trust.

two-factor theory
A theory of human relations developed by Frederick Herzberg that identifies factors that must be present for employees to be satisfied with their jobs and factors that, if increased, lead employees to work harder.

U

umbrella insurance
Insurance that covers losses over and above those covered by a standard policy as well as losses excluded by a standard policy.

underwriting
Determining which applications for insurance to accept and deciding what rates the insurer will charge.

unethical behaviour
Behaviour that individual beliefs and social norms define as wrong and bad.

union security
The maintenance of a union’s membership so that it can continue to meet the criteria for certification.

union shop
An employer can hire nonunionized workers, but they must join the union within a certain period.

unitization
A materials handling strategy in which goods are transported and stored in containers with a uniform size, shape, and/or weight.

unlimited liability
A person who invests in a business is liable for all debts incurred by the business; personal possessions can be taken to pay debts.

universal life policy
A term insurance policy with a savings component.

unsecured loan
A short-term loan in which the borrower is not required to put up collateral.

utility
The power of a product to satisfy a human want; something of value.

V

validation
The process of determining the predictive value of information.

value-added analysis
The evaluation of all work activities, material flows, and paperwork to determine the value they add for customers.

variable costs
Those costs that change with the number of goods or services produced or sold.

variable life insurance (VLI)
A modified form of life insurance where the policyholder chooses the minimum face value of the policy.

venture capital firm
Provides funds for new or expanding firms thought to have significant potential.

vertical integration
Owning or controlling the inputs to the firm’s processes and/or the channels through which the products or services are distributed.

vertical marketing system (VMS)
A system in which there is a high degree of coordination among all the units in the distribution channel so that a product moves efficiently from manufacturer to consumer.

vertical merger
A merger of two firms that have previously had a buyer-seller relationship.

vestibule training
A work simulation in which the job is performed under conditions closely simulating the actual work environment.

video assessment
Involves showing potential hires videos of realistic work situations and asking them to choose a course of action to deal with the situation.

video marketing
Selling to consumers by showing products on television that consumers can buy by telephone or mail.

voice mail
A computer-based system for receiving and delivering incoming telephone calls.

voluntary arbitration
A method of settling a contract dispute in which the union and management ask a neutral third party to hear their arguments and issue a binding resolution.

voluntary bankruptcy
Bankruptcy proceedings initiated by an indebted individual or organization.

W

wage reopener clause
A contract clause that allows wage rates to be renegotiated at preset times during the life of the contract.

wages
Dollars paid based on the number of hours worked.

warehouse club (wholesale club)
Huge, membership-only, combined retail-wholesale operations that sell brand-name merchandise.

warehousing
The storage of both incoming materials for production and finished goods for physical distribution to customers.

warranty
A promise that the product or service will perform as the seller has promised it will.

Web servers
Dedicated work stations—large computers—that are customized for managing, maintaining, and supporting Web sites.

Weights and Measures Act
Sets standards of accuracy for weighing and measuring devices.

wellness program
A program that concentrates on preventing illness in employees rather than simply paying their expenses when they become sick.

wheel of retailing
The idea that retail stores evolve over time from low-priced stores that provide few services in simple surroundings to higher-priced stores that provide many services in more upscale surroundings.

whistle-blower
An individual who calls attention to an unethical, illegal, and/or socially irresponsible practice on the part of a business or other organization.

whole life insurance
Insurance coverage in force for the whole of a person’s life, with a build-up of cash value.

wholesalers
Intermediaries who sell products to other businesses, which in turn resell them to the end-users.

wide area network (WAN)
A system to link computers across the country through telephone wires or satellites.

word of mouth
Opinions about the value of products passed among consumers in informal discussions.

word-processing programs
Application programs that allow the computer to act as a sophisticated typewriter to store, edit, and print letters and numbers.

work-based programs
A technique that ties training and development activities directly to task performance.

work-in-process inventory
That portion of a firm’s inventory consisting of goods partway through the production process.

workers’ compensation
Mandated insurance that covers individuals who suffer a job-related illness or accident.

workers’ compensation coverage
Compensation for medical expenses, loss of wages, and rehabilitation services for injuries arising from activities related to occupation.

workforce diversity
The range of workers’ attitudes, values, beliefs, and behaviours that differ by gender, race, age, ethnicity, physical ability, and other relevant characteristics.

working capital
The difference between a firm’s current assets and current liabilities.

worksharing
A method of increasing employee job satisfaction by allowing two people to share one job.

World Bank
A United Nations agency that provides a limited scope of financial services, such as funding national improvements in undeveloped countries.

world product mandating
The assignment by a multinational of a product responsibility to a particular branch.

World Wide Web
A system with universally accepted standards for storing, retrieving, formatting, and displaying information on the Internet.

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