Page 676 - Introduction to Business

G-2 GLOSSARY

bandwidth The amount of data and other information that business analysis The step in the new product development
can be transferred in a second via the Internet (Ch 1) process in which a new product’s potential profits are esti-
bank reconciliation A bank reconciliation is an analysis that mated (Ch 9)
resolves differences between your checkbook’s cash balance business codes of ethics Formal written documents adop-
and the bank statement’s cash balance. The result is the ted by businesses regarding ethical conduct standards
“true” cash balance in your checking account (Ch 15) (Ch 3)
bank reserves The amount of cash held by commercial banks business cycles The up- and downswings in real GNI, GNP, or
(Ch 14) GDP levels over time (Ch 1)
bank statement A statement of the bank’s record of disburse- business ethics The principles governing whether certain busi-
ments from and receipts to a checking account (Ch 15) ness practices are morally acceptable especially when they
bank-centered systems Financial systems that are dominated have a detrimental impact on consumers, investors, or
by banks (Ch 14) employees; The application of ethical standards to business
bankruptcy A legal remedy afforded to firms that default on situations (Ch 1; Ch 3)
their debt that provides some amount of protection from business judgment rule The requirement that corporate direc-
creditors and others to whom it owes money (Ch 13) tors and officers act in good faith and exercise at least an
bargaining unit The specifically defined group of employees eli- ordinary prudent person’s judgment in making business
gible for union representation (Ch 6) decisions (Ch 3)
barriers to competition Barriers that arise when certain legal business processes The unique ways in which companies
restrictions (patent protection, licensing, and tariffs) that organize, coordinate, and execute activities, information,
reduce the level of competition are imposed on an industry and knowledge in order to produce goods or services
(Ch 1) (Ch 18)
basic research Research whose aim is to obtain knowledge with business risks Internal and external risks of losses that can
no specific, immediate payoff in mind (Ch 9) severely cripple a business or even cause bankruptcy (Ch 4)
batch process A process where the product is produced at businesses Those organizations that try to create value for the
medium volumes and customization levels (Ch 16) customer (Ch 1)
benefits The nonwage or nonsalary portion of employee com- business-to-business (B2B) e-business The e-business that
pensation, such as health and life insurance (Ch 6) involves selling goods and services among businesses
best-of-breed approach An approach for implementing an ERP (Ch 18)
system where the modules of the system are from different business-to-business market The market where businesses
ERP software vendors (Ch 18) purchase goods and services from other businesses (Ch 8)
big-bang strategy A strategy for implementing an ERP system business-to-consumer (B2C) e-business The e-business that
where all required modules are implemented at once and, if involves selling goods and services to individual con-
it is the case, at all locations (Ch 18) sumers (Ch 18)
bill of material A graphical representation of the sequence in bypassing A supply chain management strategy where one
which products are assembled (Ch 16) member of the supply chain eliminates the functions per-
bit A binary 0 or 1 digit representing the presence or absence of formed by another member of the chain (Ch 18)
an electronic or magnetic signal in a computer (Ch 17) byte A string of eight bits, representing a number, letter, or
board of directors The governing board of a corporation which symbol, that the computer stores as a unit (Ch 17)
generally must have at least three members (Ch 3)
bonded warehouse A public warehouse that leases space to C corporation A legal entity that is chartered under state
users to store products that the user offers as collateral for law (Ch 4)
loans (Ch 10) capacity The capability of the production system measured in
bonds Long-term debt securities issued by firms to raise funds to units of input or output per unit time (Ch 16)
finance long-term capital budgeting projects, such as land, capital budgeting The process of comparing or ranking the
buildings, and equipment (Ch 13) profitability of alternative investment projects within a
brainstorming Considering potential new product ideas in a firm (Ch 13)
group setting (Ch 9) capital gain The difference between the price paid to purchase
brand equity The monetary value or worth of a brand (Ch 9) a share of stock and the money received when it is sold; The
brand name The name placed on a brand (Ch 9) difference between the purchase price and sales price of a
break-even formula The calculation that tells a company the real or financial asset (Ch 4; Ch 13)
number of units a new product needs to sell in order for it to capital goods Finished goods like machinery and equipment
cover the cost of development and the expected profit (Ch 9) that can be used as inputs for further production of goods
brokers Wholesalers with limited authority over the terms of and services (Ch 1)
sale; they bring buyer and seller together and are important capital market instruments Long-term securities that have
in the sale of food products; Investment managers who exe- maturities more than one year (Ch 14)
cute buy-and-sell orders for securities and earn commis- capital market line The line that shows the return-risk trade-off
sions on this service (Ch 10; Ch 13) available to investors, who have a choice between a riskless
bullwhip effect The property of supply chains where demand asset and the market portfolio (Ch 13)
increases in variability as it travels up in the supply chain (Ch capital risk The chance that unanticipated losses will exceed
18) the institution’s level of equity capital on its balance sheet
bus network A network topology where all computers in the net- and cause bankruptcy (Ch 14)
work share the same communications channel and there is capitalism The economic system that is based on private prop-
no host computer (Ch 17) erty rights, the free market system, the pursuit of self-inter-

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