Page 689 - Introduction to Business

GLOSSARY G-15

outside directors Corporate board of directors members not phased strategy A strategy for implementing an ERP system
employed full-time by the company (Ch 3) where modules are implemented one at a time and, if it is
outsourcing Buying goods and services from outside sources the case, one location at a time (Ch 18)
rather than producing them in-house (Ch 16) physical distribution The movement of finished goods from
over-the-counter (OTC) exchanges Securities exchanges that manufacturers to their customers (Ch 10)
do not have a physical location, due to the use of telecom- piece-rate system A compensation method where employees
munications and computer networks (Ch 14) are paid on the basis of the number of units they pro-
owners’ equity The residual interest in the assets of the firm duce (Ch 7)
after subtracting the liabilities; also called stockholders’ pierce the corporate veil The situation where creditors of a
equity (Ch 12) corporation are able to break down the legal wall separat-
ing the corporation and its shareholders and reach the
par value The initial value of stocks issued by a firm (Ch 4) assets of its shareholders (Ch 3)
parallel conversion strategy The conversion strategy where pilot conversion strategy The conversion strategy where a
an old information system and a new information system new information system is operated using a subset of
are in operation until users agree that the new system is users and, once it proves to be fully functional, is installed
functioning properly (Ch 17) for all users (Ch 17)
participative management A management approach where place utility The satisfaction for customers created when
employees participate in the management decision- products are transported to locations that are convenient
making process as well as in the operation of the com- for them (Ch 10)
pany (Ch 7) planning Establishing organizational goals and deciding how
partnership agreement An agreement spelling out the organi- best to get them achieved (Ch 5)
zational details of a partnership (Ch 3) planning decisions Decisions related to preparing the pro-
partnerships Unincorporated businesses run by two or more duction system for production (Ch 16)
individuals (Ch 3) plunge conversion strategy The conversion strategy where a
part-time work Work that is permanent and in which the new information system replaces at once the old informa-
employee agrees with the firm’s management to work for tion system on an agreed-on day (Ch 17)
less than the normal 40 hours per week (Ch 7) policy tools The tools that the central bank uses to implement
patents Awards to companies or individuals by governments to monetary policy, such as open market operations, the dis-
protect their inventions (intellectual property) by providing count rate, and reserve requirements (Ch 14)
exclusive rights to the owner to produce the goods (e.g., political union The union created when member countries of
pharmaceutical products) or services (e.g., software or an economic and monetary union work closely with each
operating systems) for a set period of time, thereby prevent- other to arrive at common defense and foreign policies
ing others from doing so during that time period (Ch 1) and behave as a single country (Ch 2)
Pension Benefit Guaranty Corporation (PBGC) The federal P-O-P Point-of-purchase materials provided to retailers to
agency administering the defined benefit plan insurance help them promote sales (Ch 10)
program (Ch 6) portfolio of assets All the assets an individual possesses (Ch 15)
pension funds Financial institutions that offer various kinds positioning Endowing a new or existing product or service
of retirement savings plans to individuals (Ch 14) with attributes deemed important by a market so that the
perception The awareness of cues or stimuli from the physical market perceives the offering as superior to competitive
surroundings that affect what, why, and how consumers products on these attributes (Ch 8)
purchase goods and services (Ch 8) positive reinforcement Giving of rewards by managers to try
performance appraisals Formal evaluations of the effective- to strengthen employees’ good behavior (Ch 7)
ness of employees’ job performance (Ch 6) preemptive right The right of shareholders to maintain their
performance objective A pricing objective designed to achieve proportionate ownership of a firm’s outstanding stock if
a certain level of profit, revenues, or market share (Ch 9) new shares are issued by the firm (Ch 13)
personal balance sheet A balance sheet that lists what an preliminary investigation The step in the marketing research
individual owns (assets) and what she or he owes (liabili- process wherein companies try to get some idea as to what
ties) (Ch 15) is the cause of a problem (Ch 8)
personal financial planning Planning that enables a person premiums Merchandise offered to consumers as an incentive
to meet current and future financial needs (Ch 15) to buy a product (Ch 10)
personal financial planning (PFP) software Software that present value The value today of money to be received in the
facilitates financial planning with features such as a com- future (Ch 13)
puterized checkbook, budget forms, and a net worth prevention objective A pricing objective designed to keep
report (Ch 15) other firms from entering the market (Ch 9)
Personal Financial Specialist (PFS) A specialty designation preventive controls A type of internal control whose purpose
awarded by the American Institute of CPAs to a CPA after it is to prevent mistakes or intentional misrepresentations
he or she meets designated requirements (Ch 15) from occurring in the accounting data (Ch 11)
personal selling Using a sales force to sell products and ser- price elastic demand The demand where a small change in
vices (Ch 10) the price will have a significant impact on the quantity
petabyte One thousand terabytes (Ch 17) demanded of a product or service (Ch 1)
phased conversion strategy The conversion strategy where a price elastic supply The supply where a small change in the
new information system is introduced in stages, either by price will bring about significant increases in the quan-
function or by organizational units (Ch 17) tity of a product or service supplied by the producer (Ch 1)

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