Page 715 - Business Principles and Management

Glossary

licensing A way to limit and control manufacturing Form of production in Medicare Supplemental health insur-
those who plan to enter certain types which raw and semifinished materials ance for retirement-age people as well
of businesses. are processed, assembled, or converted as others with specified disabilities.
life insurance Insurance that pays money into finished products. merchandise inventory Goods pur-
on the death of the insured to a person margin (gross profit) The difference chased to sell to customers at a profit.
or people identified in the insurance between the selling price and the cost merchant account provider A private
policy. of goods sold. company that acts as an intermediary
limited liability company (LLC) A spe- markdown Any amount by which the between businesses and one or more
cial type of corporation that is taxed original selling price is reduced before credit card companies to establish and
as if it were a sole proprietorship or an item is sold. maintain credit services.
partnership. market The types of buyers a business mid-manager A manager who com-
limited partnership Partnership in wishes to attract and where such buyers pletes all of the management functions
which a partner’s liability is limited to are located. but spends more time on one of the
the amount of the partner’s investment. market economy An economic system functions or is responsible for a specific
line of credit The authorization to bor- that determines what, how, and for part of the company’s operations.
row up to a maximum amount for a whom goods and services are produced minimum wage law A law that specifies
specified period of time. by coordinating individual choices that it is illegal for employers to pay
line organization Business structure in through arrangements that aid buying less than an identified wage rate to any
which all authority and responsibility and selling goods and services. employee.
may be traced in a direct line from the market research The study of a mission statement A short, specific
top executive down to the lowest em- company’s current and prospective statement of the purpose and direction
ployee level. customers. of the business.
line-and-staff organization The addition market value The value at which stock mixed economy An economic system
of staff specialists to a line organization. is bought and sold on any given day. that uses aspects of a market and a
list price The original price that the marketing The process of planning command economy to make decisions
seller posts on the product. and executing the conception, pricing, about what, how, and for whom goods
local area network (LAN) An elec- promotion, and distribution of ideas, and services are produced.
tronic system that allows computer goods, and services to create exchanges modem An electronic device inside or
information to move over short dis- that satisfy individual and organiza- outside the computer that enables it to
tances between or among different tional objectives. send data over phone lines or cable.
computers. marketing concept Keeping the needs of modified rebuy When a business pur-
long-term debt Capital that is borrowed the consumer uppermost in mind during chases a new or modified product
for longer than a year. the design, production, and distribution from established suppliers.
of a product. money market account A type of sav-
low-context culture A culture in
which people communicate directly marketing mix The blending of all ings account in which the deposits are
and explicitly. decisions that are related to the four invested in short-term, government-
elements of marketing. backed securities.
marketing plan A detailed written de- monopoly Situation created when only
M scription of all marketing activities that one company provides a product or
a business must accomplish in order to service without competition from other
malpractice insurance A type of liability
insurance that protects against financial sell a product. companies.
loss arising from suits for negligence in markup The amount added to the cost of Moore’s Law The prediction that the
providing professional services. a product to determine its selling price. amount of data that can be processed
management The process of accom- mass production Assembly process that by a computer chip will double about
plishing the goals of an organization produces a large number of identical every 18 months.
through the effective use of people and products; usually involves an assembly motivation The set of factors that cause
other resources. line. a person to act in a certain way.
management information system matrix organization An organization motivators Factors that increase job
(MIS) Integrates data from various which combines workers into tempo- satisfaction.
departments to make it available to rary work teams to complete specific multinational firm A business that
help managers with daily business projects. owns or controls production or service
operations. maturity date Date on which a loan facilities outside the country in which
manager A person who completes all must be repaid. it is based.
four management functions on a regular maturity stage Stage of the product life mutual fund Company that pools the
basis and has authority over other jobs cycle when there are many competing money of many small investors for the
and people. brands with very similar features. purchase of stocks and bonds.

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