Page 692 - Introduction to Business

G-18 GLOSSARY

riskless rate of interest The interest rate charged by lenders sensitivity analysis A modeling activity in a decision-support
in the case that the borrower has no default risk (Ch 13) system where what-if analysis is used repeatedly to estab-
risk-return trade-off The basic finance principle that higher lish a range where the variables of interest do not
returns can only be earned by taking more risk (Ch 13) change (Ch 17)
robust design Design that allows products to perform well separation of ownership and control The fact that the share-
under a wide variety of conditions (Ch 16) holders of major corporations generally do not have much
Rule FD The federal fair disclosure rule prohibiting selective control with respect to the corporation (Ch 3)
disclosure of corporate information to certain parties (Ch 3) servant leadership The leader creating a work environment
that induces participants to function at their best
S corporation A hybrid form of corporation that has limited (Ch 7)
liability but is taxed as a partnership and therefore avoids servers Midrange or mainframe computers in a client/server
double taxation of earnings; also known as a Subchapter S network that perform most processing on an application,
corporation (Ch 4) all computations, and database management (Ch 18)
salary Monies paid to employees for fulfilling job responsibil- share of wallet The percentage of a customer’s spending on a
ities (Ch 6) product or service category that is obtained by a specific
sales branches Wholesale operations that carry inventories company’s product or service (Ch 8)
that are established by manufacturers (Ch 10) shareholder model of business governance The business
sales offices Wholesale operations that do not carry invento- governance model operating from the premise that the
ries that are established by manufacturers (Ch 10) purpose of the business is to maximize financial returns to
sales promotion A nonpersonal form of promotion that does shareholders (Ch 3)
not involve measured media (Ch 10) shareholder proposal process The process by which share-
samples Free merchandise that is provided to retailers or con- holders make proposals a number of months before a
sumers (Ch 10) firm’s annual meeting, so that they can be included in the
Sarbanes-Oxley Act Federal corporate governance legislation company’s annual proxy materials (Ch 3)
increasing the duties and liabilities of corporate officers shortage The amount of a good or service that will not be
and directors (Ch 3) available when the price of the good or service is set below
scheduling Allocating available production resources to tasks, the equilibrium price (Demand will exceed supply.) (Ch 1)
jobs, orders, activities, or customers in a given time short-swing profits Stock trading profits made by corporate
period (Ch 16) insiders within a six-month period (Ch 3)
scientific management Figuring out and using the best way of simulated test markets An alternative to test markets that
getting a job done by dissecting the work into its logical offers speed, lower cost, and less competitor interfer-
components (Ch 7) ence (Ch 9)
screening The step in the new product development process six sigma initiatives Organizational initiatives seeking to limit
in which new product ideas are subjected to an initial defects to 3.4 per million (Ch 5)
evaluation (Ch 9) skills inventory A data bank listing skills, experiences, and
search engine A tool for locating websites on the Internet (Ch 18) aspirations of present employees (Ch 6)
seasoned issues Stock issues by a firm that are not initial skunk works R&D personnel being allowed to use their time
public offerings (Ch 13) to develop new products in which they are interested
secondary drives Motives that are acquired through learning, (Ch 9)
such as a work ethic (Ch 7) small business A firm with fewer than 500 employees that is
secondary market The market for a new product whose needs typically owned and managed by the same person and
and desires are not as congruent with the new product’s serves a niche market (Ch 4)
features and benefits as those of the primary market; The small-order problem The problem of a shipment that
trading of outstanding securities in the financial market- contains only a few pieces or lightweight pieces (Ch 10)
place (Ch 9; Ch 14) social class structure The social level in a society that affects
secondary storage The computer system component that what, why, and how consumers purchase goods and ser-
stores large quantities of data outside the computer and vices (Ch 8)
retains its contents when the computer is turned off (Ch 17) social security A government program that provides for the
secured creditors Creditors to whom proceeds of a firm’s liq- economic security and social welfare of the U.S. worker
uidation due to bankruptcy are paid before other unse- and his or her family (Ch 15)
cured creditors (Ch 13) societal responsibility model of business governance The
selection Choosing the best individual from the applicant business governance model operating from the premise
pool (Ch 6) that a purpose of business is to benefit society at large
self-concept The combination of self-image, ideal image, (Ch 3)
looking-glass self, and real self that determines what, why, sociological factors Group-related variables that affect what,
and how consumers purchase goods and services (Ch 8) why, and how consumers purchase goods and services
self-managing teams Employee-formed teams that make (Ch 8)
wide range of decisions, including traditional manage- soft currencies Currencies that are issued by emerging market
ment choices (Ch 7) countries whose economies are developing (Ch 14)
selling agents Wholesalers that represent a client and sell all software The entire set of programs, procedures, and related
the client’s specific line or entire output and are given con- documentation associated with a system (Ch 17)
trol over the terms of sale and pricing (Ch 10) software program A specific set of statements to direct and
seniority Longevity on the job (Ch 6) control computer hardware (Ch 17)

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