Page 681 - Introduction to Business

GLOSSARY G-7

ERP systems Software packages designed to integrate the fair information practices (FIP) A set of principles governing
majority of a firm’s business processes, execute all trans- the collection and use of information about individu-
actions related to the firm’s business processes being inte- als (Ch 18)
grated, store each piece of data only once in an Fair Labor Standards Act (FLSA) A federal law passed in 1938
enterprise-wide database, allow access to data and infor- regulating employee wages and work hours (Ch 6)
mation in real time, and operate in a client/server envi- feasibility study A study to determine if the proposed solution
ronment, traditional or Web-based (Ch 18) of a business problem is feasible organizationally, eco-
estate plan A plan that seeks to reduce taxes on the family nomically, technically, and operationally (Ch 17)
level and provide for an orderly transfer of wealth and federal funds rate The interest rates that banks charge one
leadership within a firm (Ch 4) another for borrowing money (Ch 14)
ethics Beliefs about what is right and wrong, what is morally feedback controls A type of internal control that reports the
acceptable and what is not (Ch 3) occurrence of mistakes or intentional misrepresentations
euro The new currency issued in 2002 by the 12 countries in after they have occurred, so that corrective action can be
the European Monetary Union (Ch 14) taken (Ch 11)
Eurobonds Bonds that are issued outside a firm’s home coun- fiat money Money that is valuable because the government
try (Ch 13) deems it so (Ch 14)
exabyte One million terabytes (Ch 17) fiber-optic cable Thousands of hair-thin glass fiber filaments
exchange rate The price of one currency compared with that wrapped in a protective cover (Ch 17)
of another currency (Ch 2) field A grouping of characters (Ch 17)
exchange rate policy A policy of managing the country’s file A group of related records (Ch 17)
exchange rate, to improve the country’s balance of pay- financial accounting The component of the accounting
ments position (Ch 2) information system that provides financial information
exchange traded funds (ETFs) Diversified portfolios of securi- needed by external users such as investors and
ties offered by the American Stock Exchange that can be lenders (Ch 11)
bought and sold as individual stocks can be (Ch 13) financial holding company A conglomerate financial services
executive information systems Information systems for firm that can offer its customers banking, securities, and
senior managers that support nonroutine, unstructured insurance services (Ch 14)
decisions requiring judgment, evaluation, and insight financial information systems Information systems that sup-
(Ch 17) port decisions regarding the financing of a business
Executive Order 11246 The presidential executive order man- organization and the allocation of financial resources
dating affirmative action in employment by large federal within the organization (Ch 17)
government contractors (Ch 6) financial institutions Privately owned firms that provide
expectancy theory The theory that an individual will be moti- financial services (Ch 14)
vated to work hard to achieve a coveted reward, provided financial intermediation The process of pooling individuals’
the prospect of receiving that reward is reasonaable, or the savings in financial institutions that channel them to busi-
individual will not bother at all (Ch 7) ness firms (Ch 14)
export-import business A relatively low-risk operation, that financial managers Managers in charge of the money side of
involves penetrating foreign markets (by exporting) or an organization (Ch 5)
importing merchandise (of all kinds) at competitive prices Financial Services Modernization Act Legislation passed in
for domestic consumption (Ch 2) 1999 that allows banks, securities firms, and insurance
exports Goods or services that are sold to citizens abroad (Ch 2) companies to freely compete with one another (Ch 14)
express warranty An explicit warranty that is either written or financial statements The income statement, statement of
spoken (Ch 9) retained earnings, balance sheet, and statement of cash
external auditing Auditing of a firm’s financial statements by flows, which together represent a business firm in finan-
an independent external auditor who is a certified public cial terms (Ch 12)
accountant (Ch 12) financial success Having enough money to pay for one’s living
external recruiting Considering individuals outside the expenses and at the same time saving enough to meet
organization as candidates for the job (Ch 6) future financial needs (Ch 15)
external source A source for new products that is located out- financial system The financial marketplace, including finan-
side of a company (Ch 9) cial instruments, financial markets, and financial institu-
extranet A network that links the intranet resources of a com- tions (Ch 14)
pany with other organizations (Ch 18) financing decisions The choice made between internal and
extrinsic motivation Motivation for which the reward is external funding and between debt and equity funds to
obtained as a consequence of the activity (Ch 7) finance the firm’s investment projects (Ch 13)
firm concentration ratios The percentage of total industry
facility controls Controls to protect an organization’s comput- output that can be accounted for by the four largest
ing facilities from loss or destruction (Ch 17) firms and so a measure of the sellers’ market power
factoring The sale of accounts receivables to a financial insti- (Ch 1)
tution that then collects payments by customers (Ch 13) firm-specific risk Any risk that is particular to an individual
factory system A method of mass production in which raw firm and not related to market, liquidity, and tax risks that
materials, machinery, and labor are brought together in affect all firms (Ch 13)
large volumes in one location to produce goods less first mover The company that is first into a market with a new
expensively than in dispersed locations (Ch 1) product or service (Ch 8)

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