Glossary

is the process of measuring and summarizing business activities, interpreting financial information, and communicating the results to management and other decision makers

Things of value owned by a firm.

What a firm owes to its creditors; also called debts.

reflects the financial position of a firm at a given point in time, including its assets, liabilities, and owner’s equity. It is based on the following equation: assets – liabilities = owner’s equity.

Dividing consumers by such variables as attitude toward the product, user status, or usage rate is called behavioural segmentation.

comparing one’s own company’s performance with an industry average, a leader within the industry, or a market segment

A group of people elected by the stockholders to handle the overall management of a corporation, such as setting major corporate goals and policies, hiring corporate officers, and overseeing the firm’s operations and finances.

funding strategy that seeks to optimize use of personal funds and other creative strategies (such as bartering) to minimize cash outflows

level of operations that results in exactly enough revenue to cover costs

bundle of products that is discounted to encourage customers to buy in bulk

An organization that strives for a profit by providing goods and services desired by its customers.

the conduct by which companies and their agents abide by the law and respect the rights of their stakeholders, particularly their customers, clients, employees, and the surrounding community and environment

plan for how venture will be funded; how the venture creates value for its stakeholders, including customers; how the venture’s offerings are made and distributed to the end users; and the how income will be generated through this process

formal document that typically describes the business and industry, market strategies, sales potential, and competitive analysis, as well as the company’s long-term goals and objectives

flexible benefits, allowing the employee, based on his or her family situation, to choose which benefits are right for them

cash, valuables, or goods used to generate income for a business

money collected by the business through revenue and funding versus money disbursed by the business through expenses

management of cash inflows and outflows to support cash needs of the venture

An executive with responsibility for managing all information resources in an organization.

A set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition; also called differential advantage.

the extent to which a company conducts its business operations in accordance with applicable regulation and statutes

is derived from a particular context or a sociocultural setting.

Market consisting of buyers who want the product for personal use

A legal entity typically formed by people with similar interests, such as suppliers or customers, to reduce costs and gain economic power. A cooperative has limited liability, an unlimited life span, an elected board of directors, and an administrative staff; all profits are distributed to the member-owners in proportion to their contributions.

the shared beliefs, values, and behaviors that create the organizational context within which employees and managers interact

the practice in which a business views itself within a broader context, as a member of society with certain implicit social obligations and responsibility for its own effects on environmental and social well-being

A legal entity with an existence and life separate from its owners, who are not personally liable for the entity’s debts. A corporation is chartered by the state in which it is formed and can own property, enter into contracts, sue and be sued, and engage in business operations under the terms of its charter.

It is the difference between perceived benefits and perceived costs

Special subset of a data warehouse that deals with a single area of data and is organized for quick analysis.

An information technology that combines many databases across a whole company into one central database that supports management decision-making.

An electronic filing system that collects and organizes data and information.

a graphic representation of the relationship between price and quantity demanded of a certain good or service, with quantity on the horizontal axis and the price on the vertical axis

a table that shows a range of prices for a certain good or service and the quantity demanded at each price

the way in which the work required to produce a good or service is divided into tasks performed by different workers

The marketing of a company’s product and/or services within a single country.

conducting the necessary research and investigation to make informed decisions that minimize risk

the study of how humans make choices under conditions of scarcity

when the average cost of producing each individual unit declines as total output increases exports products (goods and services) made domestically and sold abroad fiscal policy economic policies that involve government spending and taxes

is derived from the ability to evoke an emotional or an affective response.

any business, organization, project, or operation of interest that includes a level of risk in acting on an opportunity that has not previously been established

is generated by a sense of novelty or simple fun, which can be derived by inducing curiosity or a desire to learn more about a product or a service.

the quantity at which quantity demanded and quantity supplied are equal for a certain price level excess demand at the existing price, the quantity demanded exceeds the quantity supplied; also called a shortage excess supply at the existing price, quantity supplied exceeds the quantity demanded; also called a surplus

the conduct by which companies and their agents abide by the law and respect the rights of their stakeholders, particularly their customers, clients, employees, and the surrounding community and environment

entails selling products to foreign customers

Accounting that focuses on preparing external financial reports that are used by outsiders such as lenders, suppliers, investors, and government agencies to assess the financial strength of a business.

allowing employees to set their own schedules

refers to the formal establishment of business operations on foreign soil

a company grants a foreign company the right to use its brand name and sell its products.

Franchising is based on a marketing concept which can be adopted by an organization as a strategy for business expansion. Where implemented, a franchisor licenses its know-how, procedures, intellectual property, use of its business model, brand, and rights to sell its branded products and services to a franchisee.

is encouraged by a number of agreements and organizations set up to monitor trade policies.
 The General Agreement on Tariffs and Trade (GATT) regulates free trade, reduces tariffs and provides a forum for resolving trade disputes.
 The World Trade Organization (WTO) encourages global commerce and lower trade barriers, enforces international rules of trade, and provides a forum for resolving disputes.

relates to the product’s or the service’s ability to perform its utilitarian purpose.

A partnership in which all partners share in the management and profits. Each partner can act on behalf of the firm and has unlimited liability for all its business obligations.

The differentiation of markets by region of the country, city or county size, market density or climate.

the value of a business beyond its tangible assets, usually including its reputation, the value of its brand, the attitude of its workforce, and customer relations

the process of employing people, training them, compensating them, developing policies relating to them, and developing strategies to retain them

involves purchasing products from other countries and reselling them in one’s own.

captures sales and expenses over a period of time and shows how much a firm made or lost in that period.

Market consisting of buyers who want the product for use in making other products.

the combination of labour, materials, and machinery that is used to produce goods and services; also called factors of production

the adherence to a code of moral values implying trustworthiness and incorruptibility because there is unity between what we say and what we do

a company has its products manufactured or services provided in other countries.

The marketing of a company’s product and/or services outside of its home nation.

is a type of strategic alliance in which a separate entity funded by the participating companies is formed

the common relationship that a higher price leads to a lower quantity demanded of a certain good or service and a lower price leads to a higher quantity demanded, while all other variables are held constant

the common relationship that a higher price leads to a greater quantity supplied and a lower price leads to a lower quantity supplied, while all other variables are held constant

allows a foreign company to sell a company’s products or use its intellectual property in exchange for royalty fees.

A legal status where a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership.

A hybrid organization that offers the same liability protection as a corporation but may be taxed as either a partnership or a corporation.

A management support system that helps managers make decisions using interactive computer models that describe real-world processes.

a broad view of profit maximization that recognizes the fact that the impact of a business decision may not manifest for a long time

the branch of economics that focuses on broad issues such as growth, unemployment, inflation, and trade balance

deals with information produced for internal users, while financial accounting deals with external reporting

It is the process of getting the right goods or services or ideas to the right people at the right place, time, and price, using the right promotion techniques.

Identifying consumer needs and then producing the goods or services that will satisfy them while making a profit for the organization.

Product, price, promotion, place (distribution), and people, which together make up the marketing mix.

It involves selecting one or more target markets, deciding how to differentiate and position the product or the service, and creating and maintaining a marketing mix that will hopefully prove successful with the selected target market(s).

the branch of economics that focuses on actions of particular agents within the economy, like households, workers, and business firms

policy that involves altering the level of interest rates, the availability of credit in the economy, and the extent of borrowing

to work on more than one task at a time

Non-government organizations

An organisation that operates for a purpose other than to generate profit.

oversees the process of transforming resources into goods and services

An association of two or more individuals who agree to operate a business together for profit.

the total number of units of a good or service consumers are willing to purchase at a given price

the total number of units of a good or service producers are willing to sell at a given price

when wants for goods and services exceed the available supply

The process of separating, identifying, and evaluating the layers of a market in order to identify a target market.

an individual or institution that owns stock or shares in a corporation, by definition a type of stakeholder; also called stockholder

when a change in some economic factor (other than price) causes a different quantity to be supplied at every price

a focus on the goal of maximizing periodic (i.e., quarterly and annual) profits

for a company’s manufacturing operations, managers look for locations that minimize shipping costs, have an ample supply of skilled workers, provide a favorable community for workers and their families, offer resources at low cost, and have a favorable business climate.

an implicit agreement among societal members to cooperate for social benefit; when applied specifically to a business, it suggests a company that responsibly gives back to the society that permits it to incorporate, benefiting the community at the same time that it enriches itself

A business that is established, owned, operated, and often financed by one person.

when workers or firms focus on particular tasks for which they are well-suited within the overall production process

individuals and entities affected by a business’s decisions, including customers, suppliers, investors, employees, the community, and the environment, among others

an individual or institution that owns stock or shares in a corporation, by definition a type of stakeholder; also called shareholder

The owners of a corporation who hold shares of stock that carry certain rights.

a line that shows the relationship between price and quantity supplied on a graph, with quantity supplied on the horizontal axis and price on the vertical axis

a table that shows a range of prices for a good or service and the quantity supplied at each price surplus at the existing price, quantity supplied exceeds the quantity demanded; also called excess supply total surplus see social surplus

The specific group of consumers toward which a firm could direct its marketing efforts. It is often divided into segments so that marketing strategies can be directed to a more specific target.

allowing employees to work from home or a remote location for a specified period of time

Canadian corporation designation, wherein shareholders are liable up to unlimited amounts for any liability, act or default of the corporation.