Page 680 - Introduction to Business

G-6 GLOSSARY

dispersion The channel of distribution function involving the economic goals The aims of monetary policy, including pro-
breaking down of large lots into smaller lots (Ch 10) ductivity, employment, stable prices, and trade (Ch 14)
displays Materials for holding merchandise sold in a retail economic profits Higher stock prices due to earning higher
store (Ch 10) accounting profits or reducing the riskiness of profits
disposable income The money left over after taxes are taken (Ch 13)
out of a person’s paycheck (Ch 2) economic resources Land, labor, capital, and technology that
distribution mix The channels of distribution and logistics are scarce (Ch 1)
operations a company uses to move its products to its cus- economic transition The move from a command economic
tomers (Ch 10) system to a capitalist economic system (in the direction of
diversification Buying different financial and real assets competitive, market-oriented economics) that is aimed at
whose prices or values have different patterns of move- ending the inefficiencies of central planning (Ch 1)
ment up and down over time, such that the total risk or economies of scale The reduction in cost per unit output that
volatility is reduced for the entire portfolio of assets; occurs as a firm mass-produces a product or service (Ch 4)
Allocating your money among many different types of efficient frontier The set of portfolios of assets that has mini-
assets rather than concentrating them in one asset (Ch 13; mum risk over a range of expected returns (Ch 13)
Ch 15) elastic demand A combination of prices and quantities
dividend The portion of profits distributed to stockholders; demanded that indicates that the market is very respon-
Quarterly payments by the firm from net income after sive to prices (Ch 9)
taxes to shareholders; Income paid to common sharehold- electronic money The use of computers, equipment, and
ers from a firm’s net income after taxes (Ch 1; Ch 4; Ch 13) electronic communications to make payments, including
divisibility The aspect of a new product that enables con- credit cards, stored value cards, debt cards, wire transfers,
sumers to try it in a piecemeal manner without having to and Internet payments (Ch 14)
purchase the entire product (Ch 9) electronic payment system A system that uses digital tech-
division of labor The idea of dividing production operations nologies to pay for goods and services electronically
into a series of many small tasks, where workers are (Ch 18)
assigned to perform one of these tasks (Ch 16) embargoes Trade sanctions that are imposed on a country
divisional organizational structure The structure of an and that restrict trade with that country (Ch 2)
organization with various divisions operating auto- empathy (of service) The flexibility in adapting the service to
nomously under a broad organizational framework (Ch 5) meet individual needs (Ch 16)
dollar cost averaging An investment approach where the employee empowerment A proactive approach to manage-
investor ignores price trends and invests a fixed amount at ment where workers decide what, when, and how they will
regular intervals (Ch 15) work to achieve corporate goals (Ch 7)
domestic exporter An organizational structure where there is Employee Retirement Income Security Act (ERISA) A federal
heavy centralization of corporate activities in the home law passed in 1974 to regulate employer-defined benefit
country of origin (Ch 17) plans (Ch 6)
double taxation of earnings The taxation of a corporation’s employer pay confidentiality rules Employer rules mandat-
profits plus the taxation of the dividends paid to share- ing that employees not speak to others about their pay
holders from after-tax profits (Ch 4) (Ch 6)
drop shippers Limited-service wholesalers that take title to employment-at-will Legal rule stating that an employer can
merchandise but do not take physical possession (Ch 10) fire an employee at any time for any reason, and an
dumping The practice of selling a product in foreign markets employee can quit at any time (Ch 6)
for less than its cost (Ch 9) entrepreneur People with initiative who seize opportunities
duplicated configuration strategy The strategy where the as they see them to get things done or make things
development of all information systems is done at a home happen, generally for profit; Anyone who starts, owns, or
base, but the operation of these systems is handed over to runs a small or large business (Ch 1; Ch 4)
autonomous business units at foreign locations (Ch 17) envelope budget A budgeting system in which money is
durability (of an item) The length of an item’s life (Ch 16) placed in envelopes labeled as rent, car payment, food,
duty of fair representation The duty of a union to fairly repre- and so on (Ch 15)
sent all employees in its bargaining unit (Ch 6) environmental analysis A strategic scan by an organization
for external threats and opportunities (Ch 5)
East India Company The first joint-stock company, which was equal employment opportunity The principle that all groups
given its charter by Queen Elizabeth in 1600 and achieved of employees should be treated equally in the employ-
fame for engaging in international trade in the early days ment relationship (Ch 6)
of the British Empire (Ch 11) Equal Employment Opportunity Commission (EEOC) The
e-business The process of buying and selling goods and ser- federal agency that administers U.S. employment discrim-
vices electronically (Ch 18) ination laws (Ch 6)
economic and monetary union A union formed when mem- Equal Pay Act A federal law passed in 1963 requiring equal pay
bers of a common market agree to implement common for men and women doing equal work (Ch 6)
social programs (on education, employee benefits and equity theory The theory that employees are motivated to
retraining, health care, etc.) and coordinated macroeco- work smart and contribute to the success of the firm as
nomic policies (such as fiscal and monetary policies) that long as they believe that they are treated and compen-
would lead to the creation of a single regional currency sated fairly relative to others with similar levels of educa-
and an apex central bank (Ch 2) tion and professional experience (Ch 7)

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