Page 686 - Introduction to Business

G-12 GLOSSARY

limited liability company (LLC) A type of corporation that management or operational audit The audit done to evaluate
combines the corporate advantage of limited liability pro- the economy and efficiency with which scarce resources
tection with the personal taxation of a partnership or S cor- are utilized (Ch 12)
poration (Ch 4) managerial information systems Information systems for
limited partners Partners whose liability is limited to the middle managers that help them plan, control, and make
amount of money they invested in the partnership and routine decisions (Ch 17)
who generally aren’t involved in running the business managers People involved in the management of organiza-
(Ch 3) tions (Ch 5)
line authority The right to achieve organizational goals by manufacturers’ agents Wholesalers that are not given control
being part of an organization’s direct chain of command over the terms of sale and pricing because they sell only
(Ch 5) part of a client’s output or product line (Ch 10)
line process A process where the product is produced at a rela- maquiladoras The Maquiladora program allowed factories
tively high volume with relatively low product customiza- (primarily on the Mexican border to the U.S.) to temporar-
tion (Ch 16) ily import supplies, parts, machinery, and equipment nec-
liquidity How easily an asset can be converted into cash essary to produce goods and services in Mexico duty-free,
(Ch 15) as long as the output was exported back to the United
liquidity risk The risk that a security cannot be sold quickly for States (Ch 2)
a fair market price (Ch 13) markdown A reduction in price used by retailers to sell prod-
local area network (LAN) A network that provides connectivity ucts that have not already sold (Ch 9)
within a limited physical area such as an office, a building, market clearing, or equilibrium, price The price at which
or several buildings in close proximity (Ch 17) supply will equal demand (Ch 1)
lock box system A way for firms to speed the collection of pay- market domination A strategy of either acquiring competitors
ments from customers, who submit payments to local post or colluding with them to control product prices and pre-
offices, where the payments are picked up by local banks vent new competitors from entering the market (Ch 1)
and forwarded to the firm’s bank (Ch 13) market efficiency The ability of prices of stocks, bonds, and
logistics The materials management and physical distribution other assets to rapidly reflect publicly available informa-
activities of a firm (Ch 10) tion (Ch 14)
market portfolio The portfolio of assets that investors should
machine languages First-generation programming languages purchase to earn the highest return-risk trade-off (Ch 13)
where all programming instructions had to be written market risk The risk of an individual firm’s stock prices going
using binary code (Ch 17) down in value as bond market prices moves up, and vice
mail-ins Premiums provided to consumers once the consumer versa (Ch 13)
has requested them by mail (Ch 10) market segmentation The breakdown of target consumers
mainframe computers Large, fast, and powerful computers into categories on the basis of age, gender, education,
that are used for very large business applications (Ch 17) ethnic background, or other criteria to determine the
maintainability (of an item) The ease and speed with which an products or services that could be made to suit the seg-
item can be repaired (Ch 16) ments’ specific needs (Ch 1)
maintenance The information systems development stage market share The percentage of total units sold of a product
when the production system is being changed to correct or service divided into the number of units of that product
errors, meet new requirements, or improve its operation sold by a specific company (Ch 8)
(Ch 17) market structure The organization of an industry determined
maintenance objective A pricing objective involving the desire by the level of competition within the industry (Ch 1)
to retain the current market or competitive situation (Ch 9) market testing Marketing a product on a limited basis to help
managed floating exchange rate system A floating exchange decide which marketing mix should be used when it is
rate system in which the values of some currencies are commercialized (Ch 9)
partly determined by active government intervention (cen- market timing approach An investment strategy where the
tral bank purchases and sales of their own currencies) (Ch investor attempts to purchase shares when their price is
2) low and to sell when their price is high (Ch 15)
management The process of planning, organizing, directing, market value The price of a company’s stock multiplied by the
and controlling an organization’s resources in the manner number of shares of the stock (Ch 8)
most effective for it to achieve its goals (Ch 5) marketing The determination of the needs and desires of
management accounting The component of the accounting markets so that products and services can be developed,
information system that provides the financial information priced, promoted, and distributed to these markets in
needed internally by business managers for efficient and order to satisfy the market’s needs and desires and the
effective decision making (Ch 11) organization’s objectives (Ch 8)
management by objective (MBO) A top-down approach to marketing environment Areas outside the firm (competi-
management that requires full collaboration of employees tion, technology, economy, legal and political arenas,
right down the line to be a success (Ch 7) and culture) that companies need to monitor and react
management information system (MIS) A business system to (Ch 8)
that provides all the information, financial and nonfinan- marketing information systems (MIS) Systems that continu-
cial, needed by management for decision making; The sys- ally monitor, with heavy use of computers, a company’s
tems that manage the direct resources needed for creating, market, competition, customers, products, and marketing
storing, and distributing information in a business organi- operations in order to determine if problems exist;
zation (Ch 11; Ch 17) Information systems that provide information to support

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