ETHICS Tangible or intangible assets other than real property.

Individual standards or moral values regarding what is right and wrong DEED
or good and bad. A document that shows ownership of real property.
BUSINESS ETHICS LEASE
Ethical or unethical behaviours by a manager or employee of an Grants the use of an asset for a specified period of time in return for
organization. payment.
MANAGERIAL ETHICS TITLE
Standards of behaviour that guide individual managers in their work. Shows legal possession of personal property.
CONFLICT OF INTEREST WARRANTY
Occurs when an activity benefits the employee at the expense of the A promise that the product or service will perform as the seller has
employer. promised it will.
CORPORATE SOCIAL RESPONSIBILITY EXPRESS WARRANTY
The idea that a business should balance its commitments to individuals A specific claim that the manufacturer makes about a product.
and groups that are directly affected by the organization’s activities. IMPLIED WARRANTY
FAIR-TRADE MOVEMENT A suggestion that a product will perform as the manufacturer claims it
A movement designed to help workers in developing countries receive will.
fair payments for their work. TRADEMARK
ORGANIZATIONAL STAKEHOLDERS The exclusive legal right to use a brand name.
Groups, individuals, and organizations that are directly affected by the PATENT
practices of an organization and that therefore have a stake in its Protects an invention or idea for a period of 20 years.
performance. COPYRIGHT
CONSUMERISM Exclusive ownership rights granted to creators for the tangible
A social movement that seeks to protect and expand the rights of expression of an idea.
consumers in their dealings with businesses. TORT
WHISTLE-BLOWER A wrongful civil act that one party inflicts on another and that results in
An individual who calls attention to an unethical, illegal, and/or socially injury to the person, to the person’s property, or to the person’s good
irresponsible practice on the part of a business or other organization. name.
INSIDER TRADING INTENTIONAL TORT
The use of confidential information to gain from the purchase or sale of A wrongful act intentionally committed.
stock. NEGLIGENCE
POLLUTION A wrongful act that inadvertently causes injury to another person.
The introduction of harmful substances into the environment. PRODUCT LIABILITY
RECYCLING The liability of businesses for injuries caused to product users because
The reconversion of waste materials into useful products. of negligence in design or manufacturing.
SUSTAINABLE DEVELOPMENT STRICT PRODUCT LIABILITY
Activities that meet current needs, but will not put future generations at The liability of businesses for injuries caused by their products even if
a disadvantage when they try to meet their needs. there is no evidence of negligence in the design or manufacture of the
SOCIAL AUDIT product.
A systematic analysis of how a firm is using funds earmarked for NEGOTIABLE INSTRUMENTS
social-responsibility goals and how effective these expenditures have Instruments like cheques, bank drafts, and certificates of deposit that
been. can be transferred among individuals and business firms.
LAW ENDORSEMENT
The set of rules and standards that a society agrees upon to govern Signing your name to a negotiable instrument, making it transferable to
the behaviour of its citizens. another person or organization.
COMMON LAW BANKRUPTCY
The unwritten law of England, derived from precedent and legal The court-granted permission for organizations or individuals to not pay
judgments. some or all of their debts.
STATUTORY LAW INSOLVENT PERSON (OR COMPANY)
Written law developed by city councils, provincial legislatures, and One who cannot pay current obligations to creditors as they come due,
parliament. or whose debts exceed their assets.
ADMINISTRATIVE LAW BANKRUPT PERSON (OR COMPANY)
The rules and regulations that government agencies and commissions One who has either made a voluntary application to start bankruptcy
develop based on their interpretations of statutory laws. proceedings (voluntary bankruptcy) or has been forced by creditors
BUSINESS LAW into bankruptcy (involuntary bankruptcy) by a process referred to as a
Laws that specifically affect how business firms are managed. receiving order.
CONTRACT INTERNATIONAL LAW
An agreement between two parties to act in a specified way or to The very general set of co-operative agreements and guidelines
perform certain acts. established by countries to govern the actions of individuals,
EXPRESS CONTRACT businesses, and nations themselves.
Clearly specifies the terms of an agreement. MANAGERS
IMPLIED CONTRACT The people who plan, organize, lead, and control the operations of an
Specifies the necessary behaviours of the parties to the contract. organization.
BREACH OF CONTRACT MANAGEMENT
When one party to an agreement fails, without legal reason, to live up The process of planning, organizing, leading, and controlling a
to the agreement’s provisions. business’s financial, physical, human, and information resources in
AGENCY – PRINCIPAL RELATIONSHIP order to achieve its goals.
Established when one party (the agent) is authorized to act on behalf PLANNING
of another party (the principal). That portion of a manager’s job concerned with determining what the
BAILOR – BAILEE RELATIONSHIP business needs to do and the best way to achieve it.
In a bailor – bailee relationship, the bailor (the property owner) gives ORGANIZING
possession of his or her property to the bailee (a custodian) but retains That portion of a manager’s job concerned with mobilizing the
ownership of the item. necessary resources to complete a particular task.
PROPERTY LEADING (OR DIRECTING)
Anything of tangible or intangible value that the owner has the right to That portion of a manager’s job concerned with guiding and motivating
possess and use. employees to meet the firm’s objectives.
REAL PROPERTY CONTROLLING
Land and any permanent buildings attached to that land.
PERSONAL PROPERTY

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That portion of a manager’s job concerned with monitoring the firm’s An organization that seeks to earn profits by providing goods and
performance and, if necessary, acting to bring it in line with the firm’s services.
goals. PROFIT
TOP MANAGERS What remains (if anything) after a business’s expenses are subtracted
Those managers responsible for a firm’s overall performance and from its sales revenues.
effectiveness and for developing long-range plans for the company. NOT-FOR-PROFIT ORGANIZATION
MIDDLE MANAGERS An organization that provides goods and services to customers, but
Those managers responsible for implementing the decisions made by does not seek to make a profit while doing so.
top managers. ECONOMIC SYSTEM
FIRST-LINE MANAGERS The way in which a nation allocates its resources among its citizens.
Those managers responsible for supervising the work of employees. FACTORS OF PRODUCTION
TECHNICAL SKILLS The resources used to produce goods and services: labour, capital,
Skills associated with performing specialized tasks within a firm. entrepreneurs, and natural resources.
HUMAN RELATIONS SKILLS COMMAND ECONOMY
Skills in understanding and getting along with people. An economic system in which government controls all or most factors
CONCEPTUAL SKILLS of production and makes all or most production decisions.
Abilities to think in the abstract, diagnose and analyze various MARKET ECONOMY
situations, and see beyond the present situation. An economic system in which individuals control all or most factors of
TIME MANAGEMENT SKILLS production and make all or most production decisions.
Skills associated with the productive use of time. COMMUNISM
DECISION-MAKING SKILLS A type of command economy in which the government owns and
Skills in defining problems and selecting the best courses of action. operates all industries.
STRATEGIC MANAGEMENT MARKET
The process of helping an organization maintain an effective alignment An exchange process between buyers and sellers of a particular good
with its environment. or service.
GOALS INPUT MARKET
Objectives that a business plans to attain. Firms buy resources that they need in the production of goods and
STRATEGY services.
The broad set of organizational plans for implementing the decisions OUTPUT MARKET
made for achieving organizational goals. Firms supply goods and services in response to demand on the part of
VISION (OR PURPOSE) consumers.
A statement indicating why an organization exists and what kind of CAPITALISM
organization it wants to be. An economic system in which markets decide what, when, and for
MISSION STATEMENT whom to produce.
An organization’s statement of how it will achieve its purpose in the MIXED MARKET ECONOMY
environment in which it conducts its business. An economic system with elements of both a command economy and
SMART GOALS a market economy; in practice, typical of most nations’ economies.
Goals that are Specific, Measurable, Achievable, Relevant, and Time- PRIVATIZATION
framed. The transfer of activities from the government to the private sector.
STRATEGY FORMULATION DEREGULATION
Creation of a broad program for defining and meeting an organization’s A reduction in the number of laws affecting business activity.
goals. COMPETITION ACT
STRATEGIC GOALS Prohibits a variety of business practices that lessen competition.
Long-term goals derived directly from the firm’s mission statement. LOBBYIST
SWOT ANALYSIS A person hired by a company or an industry to represent its interests
Identification and analysis of organizational strengths and weaknesses with government officials.
and environmental opportunities and threats as part of strategy TRADE ASSOCIATION
formulation. An organization dedicated to promoting the interests and assisting the
STRATEGIC PLANS members of a particular industry.
Plans that reflect decisions about resource allocations, company MARKET
priorities, and steps needed to meet strategic goals. An exchange process between buyers and sellers of a particular good
TACTICAL PLANS or service.
Generally, short-range plans concerned with implementing specific DEMAND
aspects of a company’s strategic plans. The willingness and ability of buyers to purchase a product or service.
OPERATIONAL PLANS SUPPLY
Plans setting short-term targets for daily, weekly, or monthly The willingness and ability of producers to offer a good or service for
performance. sale.
CORPORATE-LEVEL STRATEGY LAW OF DEMAND
Identifies the various businesses a company will be in, and how these The principle that buyers will purchase (demand) more of a product as
businesses will relate to each other. price drops.
BUSINESS-LEVEL (COMPETITIVE) STRATEGY LAW OF SUPPLY
Identifies the ways a business will compete in its chosen line of The principle that producers will offer (supply) more of a product as
products or services. price rises.
FUNCTIONAL STRATEGIES DEMAND AND SUPPLY SCHEDULE
Identify the basic courses of action each department in the firm will Assessment of the relationships between different levels of demand
pursue so that it contributes to the business’s overall goals. and supply at different price levels.
COMPETITIVE STRATEGY DEMAND CURVE
A plan to establish a profitable and sustainable competitive position. Graph showing how many units of a product will be demanded
CONTINGENCY PLANNING (bought) at different prices.
Identifying aspects of a business or its environment that might require SUPPLY CURVE
changes in strategy. Graph showing how many units of a product will be supplied (offered
CRISIS MANAGEMENT for sale) at different prices.
An organization’s methods for dealing with emergencies. MARKET PRICE (EQUILIBRIUM PRICE)
CORPORATE CULTURE Profit-maximizing price at which the quantity of goods demanded and
The shared experiences, stories, beliefs, and norms that characterize a the quantity of goods supplied are equal.
firm. SURPLUS
BUSINESS Situation in which quantity supplied exceeds quantity demanded.
PRIVATE ENTERPRISE

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An economic system characterized by private property rights, freedom OUTSOURCING
of choice, profits, and competition. Strategy of paying suppliers and distributors to perform certain
PERFECT COMPETITION business processes or to provide needed materials or services.
A market or industry characterized by a very large number of small BUSINESS PROCESS MANAGEMENT
firms producing an identical product so that none of the firms has any Approach by which firms move away from department-oriented
ability to influence price. organization and toward process-oriented team structures that cut
MONOPOLISTIC COMPETITION across old departmental boundaries.
A market or industry characterized by a large number of firms ACQUISITION
supplying products that are similar but distinctive enough from one The purchase of a company by another, larger firm, which absorbs the
another to give firms some ability to influence price. smaller company into its operations.
OLIGOPOLY MERGER
A market or industry characterized by a small number of very large The union of two companies to form a single new business.
firms that have the power to influence the price of their product and/or POISON PILL
resources. A defence management adopts to make a firm less attractive to an
MONOPOLY actual or potential hostile suitor in a takeover attempt.
A market or industry with only one producer, who can set the price of DIVESTITURE
its product and/or resources. Occurs when a company sells part of its existing business operations
EXTERNAL ENVIRONMENT to another company.
Everything outside an organization’s boundaries that might affect it. SPINOFF
ECONOMIC ENVIRONMENT Strategy of setting up one or more corporate units as new, independent
Conditions of the economic system in which an organization operates. corporations.
AGGREGATE OUTPUT STRATEGIC ALLIANCE
Total quantity of goods and services produced by an economic system An enterprise in which two or more persons or companies temporarily
during a given period. join forces to undertake a particular project.
BUSINESS CYCLE SMALL BUSINESS
Pattern of short-term ups and downs (expansions and contractions) in An independently owned and managed business that does not
an economy. dominate its market.
GROSS DOMESTIC PRODUCT (GDP) NEW VENTURE
Total value of all goods and services produced within a given period by A recently formed commercial organization that provides goods and/or
a national economy through domestic factors of production. services for sale.
GROSS NATIONAL PRODUCT (GNP) ENTREPRENEURSHIP
Total value of all goods and services produced by a national economy The process of identifying an opportunity in the marketplace and
within a given period regardless of where the factors of production are accessing the resources needed to capitalize on it.
located. ENTREPRENEUR
GDP PER CAPITA A business person who accepts both the risks and the opportunities
Gross domestic product per person. involved in creating and operating a new business venture.
REAL GDP INTRAPRENEURS
GDP calculated to account for changes in currency values and price People who create something new within an existing large firm or
changes. organization.
PURCHASING POWER PARITY PRIVATE SECTOR
Principle that exchange rates are set so that the prices of similar The part of the economy made up of companies and organizations not
products in different countries are about the same. owned or controlled by the government.
PRODUCTIVITY SALES FORECAST
Measure of economic growth that compares how much a system An estimate of how much of a product or service will be purchased by
produces with the resources needed to produce it. prospective customers over a specific period.
BALANCE OF TRADE FRANCHISE
The total of a country’s exports (sales to other countries) minus its An arrangement that gives franchisees (buyers) the right to sell the
imports (purchases from other countries). product of the franchiser (the seller).
NATIONAL DEBT BUSINESS PLAN
The total amount of money that a country owes its creditors. Document in which the entrepreneur summarizes her or his business
BUDGET DEFICITS strategy for the proposed new venture and how that strategy will be
The result of the government spending more in one year than it takes implemented.
in during that year. BOOTSTRAPPING
INFLATION Doing more with less.
Occurrence of widespread price increases throughout an economic COLLATERAL
system. Assets that a borrower uses to secure a loan or other credit, and that
CONSUMER PRICE INDEX (CPI) are subject to seizure by the lender if the loan isn’t repaid according to
Measure of the prices of typical products purchased by consumers the specified repayment terms.
living in urban areas. INCUBATORS
DEFLATION Facilities that support small businesses during their early growth phase
A period of generally falling prices. by providing basic services, office space, legal advice, and more.
UNEMPLOYMENT FRANCHISING AGREEMENT
The level of joblessness among people actively seeking work in an Stipulates the duties and responsibilities of the franchisee and the
economic system. franchiser.
FISCAL POLICIES SOLE PROPRIETORSHIP
Policies whereby governments collect and spend revenues. Business owned and usually operated by one person who is
MONETARY POLICIES responsible for all of its debts.
Policies whereby the government controls the size of the nation’s UNLIMITED LIABILITY
money supply. A person who invests in a business is liable for all debts incurred by
RESEARCH AND DEVELOPMENT (R&D) the business; personal possessions can be taken to pay debts.
Those activities that are necessary to provide new products, services, PARTNERSHIP
and processes. A business with two or more owners who share in the operation of the
POLITICAL – LEGAL ENVIRONMENT firm and in financial responsibility for the firm’s debts.
Conditions reflecting the relationship between business and GENERAL PARTNER
government, usually in the form of government regulation. A partner who is actively involved in managing the firm and has
SOCIO-CULTURAL ENVIRONMENT unlimited liability.
Conditions including the customs, values, attitudes, and demographic LIMITED PARTNER
characteristics of the society in which an organization functions.

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A partner who generally does not participate actively in the business, Situation in which a country’s imports exceed its exports, creating a
and whose liability is limited to the amount invested in the partnership. negative balance of trade.
CORPORATION BALANCE OF PAYMENTS
A business considered by law to be a legal entity separate from its Flow of all money into or out of a country.
owners with many of the legal rights and privileges of a person; a form EXCHANGE RATE
of business organization in which the liability of the owners is limited to Rate at which the currency of one nation can be exchanged for the
their investment in the firm. currency of another nation.
SHAREHOLDERS EURO
Investors who buy shares of ownership in the form of stock. A common currency shared among most of the members of the
COMMON STOCK European Union.
Shares whose owners usually have last claim on the corporation’s EXPORTER
assets (after creditors and owners of preferred stock) but who have Firm that distributes and sells products to one or more foreign
voting rights in the firm. countries.
BOARD OF DIRECTORS IMPORTER
A group of individuals elected by a firm’s shareholders and charged Firm that buys products in foreign markets and then imports them for
with overseeing, and taking legal responsibility for, the firm’s actions. resale in its home country.
CHIEF EXECUTIVE OFFICER (CEO) INTERNATIONAL FIRM
The highest-ranking executive in a company or organization. Firm that conducts a significant portion of its business in foreign
PUBLIC CORPORATION countries.
A business whose stock is widely held and available for sale to the MULTINATIONAL FIRM
general public. Firm that designs, produces, and markets products in many nations.
PRIVATE CORPORATION INDEPENDENT AGENT
A business whose stock is held by a small group of individuals and is Foreign individual or organization that agrees to represent an
not usually available for sale to the general public. exporter’s interests.
INITIAL PUBLIC OFFERING (IPO) LICENSING ARRANGEMENT
Selling shares of stock in a company for the first time to a general Arrangement in which firms choose foreign individuals or organizations
investing public. to manufacture or market their products in another country.
PRIVATE EQUITY FIRMS BRANCH OFFICE
Companies that buy publicly traded companies and then make them A location that an exporting firm establishes in a foreign country to sell
private. its products more effectively.
INCOME TRUST FOREIGN DIRECT INVESTMENT (FDI)
A structure allowing companies to avoid paying corporate income tax if Buying or establishing tangible assets in another country.
they distribute all or most of their earnings to investors. QUOTA
LIMITED LIABILITY A restriction by one nation on the total number of products of a certain
Investor liability is limited to their personal investments in the type that can be imported from another nation.
corporation; courts cannot touch the personal assets of investors in the EMBARGO
event that the corporation goes bankrupt. A government order forbidding exportation and/or importation of a
STOCK particular product.
A share of ownership in a corporation. TARIFF
DOUBLE TAXATION A tax levied on imported products.
A corporation must pay income taxes on its profits, and then SUBSIDY
shareholders must also pay personal income taxes on the dividends A government payment to help domestic business compete with
they receive from the corporation. foreign firms.
DIVIDENDS PROTECTIONISM
The amount of money, normally a portion of the profits that is Protecting domestic business at the expense of free market
distributed to the shareholders. competition.
CO-OPERATIVE LOCAL-CONTENT LAWS
An organization that is formed to benefit its owners in the form of Laws requiring that products sold in a particular country be at least
reduced prices and/or the distribution of surpluses at year-end. partly made in that country.
GLOBALIZATION BUSINESS-PRACTICE LAW
Process by which the world economy is becoming a single Law or regulation governing business practices in given countries.
interdependent system. CARTEL
IMPORT Any association of producers whose purpose is to control supply of and
Product made or grown abroad but sold domestically. prices for a given product.
EXPORT DUMPING
Product made or grown domestically but shipped and sold abroad. Selling a product for less abroad than in the producing nation.
BRICS GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT)
A term denoting a group of five important and powerful emerging International trade agreement to encourage the multilateral reduction
markets in the business world: Brazil, Russia, India, China, and South or elimination of trade barriers.
Africa. WORLD TRADE ORGANIZATION (WTO)
ABSOLUTE ADVANTAGE Organization through which member nations negotiate trading
The ability to produce something more efficiently than any other agreements and resolve disputes about trade policies and practices.
country. EUROPEAN UNION (EU)
COMPARATIVE ADVANTAGE Agreement among major Western European nations to eliminate or
The ability to produce some products more efficiently than others. make uniform most trade barriers affecting group members.
NATIONAL COMPETITIVE ADVANTAGE NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA)
International competitive advantage stemming from a combination of Agreement to gradually eliminate tariffs and other trade barriers among
factor conditions; demand conditions; related and supporting the United States, Canada, and Mexico.
industries; and firm strategies, structures, and rivalries.
INTERNATIONAL COMPETITIVENESS
Competitive marketing of domestic products against foreign products.
BALANCE OF TRADE
The economic value of all the products that a country exports minus
the economic value of all the products it imports.
SURPLUS
Situation in which a country exports more than it imports, creating a
favourable balance of trade.
DEFICIT