Glossary

An organization that strives for a profit by providing goods and services desired by its customers

The process of making sure that a firm has enough cash on hand to pay bills as they come due and to meet unexpected expenses.

The individual or company that sells goods or services of the franchisor in a certain geographic area within a franchising agreement.

The company that supplies the product or service concept to the franchisee within a franchising agreement.

A leadership style in which the leader turns over all authority and control to subordinates.

The concept that each country should specialize in the products that it can produce more readily and cheaply and trade those products for products that other countries can produce more readily and cheaply.

The general level of human happiness based on factors such as life expectancy, educational standards, health, sanitation, and leisure time.

A business with under 500 employees that is independently managed, is owned by an individual or a small group of investors, is based locally, and is not a dominant company in its industry.

A business that is established, owned, operated, and often financed by one person.

Financing obtained from venture capitalists, investment firms that specialize in financing small, high growth oriented companies and receive an ownership interest and a voice in management in return for their money.

The situation when a country can produce and sell a product at a lower cost than any other country or when it is the only country that can produce the product.

Purchases for which a buyer has not yet paid the seller.

Sales for which a firm has not yet been paid.

The purchase of a target company by another corporation or by an investor group typically negotiated with the target company board of directors.

Individual investors or groups of experienced investors who provide financing for start-up businesses by investing their own funds.

Directive leaders who prefer to make decisions and solve problems on their own with little input from subordinates.

A summary of a country's international financial transactions showing the difference between the country's total payments to and its total receipts from other countries.

The difference between the value of a country's exports and the value of its imports during a specific time.

The interest rate that the Bank of Canada charges its member banks.

Factors, such as technological or legal conditions, within an industry that prevent new firms from competing equally with an existing firm.

A group of people elected by the stockholders to handle the overall management of a corporation, such as setting major corporate goals and policies, hiring corporate officers, and overseeing the firms operations and finances.

Long-term debt obligations (liabilities) issued by corporations and governments.

National and regional securities exchanges that bring buyer and sellers together through brokers on a centralized trading floor.

When the government spends more money than it takes in.

When the government takes in more money than it spends on goods and services.

An organization that strives for profit by providing goods and services desired by its customers

Upward and downward changes in the level of economic activity.

A formal written statement that describes in detail the idea for a new business and how it will be carried outs; includes a general description of the company, the qualifications of the owner(s), a description of the product or service, an analysis of the market, and a financial plan.

The inputs, such as tools, machinery, equipment, and buildings used to produce and distribute goods and services.

The process of analyzing long-term projects and selecting those that offer the best returns while maximizing the firm's value.

Investments in long-lived assets, such as land, buildings, machinery, equipment, and information services, that are expected to provide benefits over a period longer than one year.

An economic system based on competition in the marketplace and private ownership of the factors of production (resources); also known as the private enterprise system.

The inflow and outflow of cash for a firm.

A form of marketable security that offered by banks and credit unions and is designed to hold a fixed amount of money for a fixed amount of time.

The movement of inputs and outputs among households, businesses, and governments; a way of showing how the sectors of the economy interact.

risk-takers who start their own business based on innovative ideas.

A set of guidelines prepared by a firm to provide its employees with the knowledge of what the firm expects in terms of responsibilities and behaviour toward fellow employees, customers, and suppliers.

Power that is derived from an individual's ability to threaten negative outcomes.

Profit-oriented financial institutions that accept deposits, make business and consumer loans, invest in government and corporate securities, and provide other financial services.

Is a form of marketable security that is an unsecured short-term debt—an IOU(I owe you) and is issued by a financially strong corporation.

A security that represents ownership interest in a corporation.

An economic system characterized by government ownership of virtually all resources, government control of all markets, and economic decision-making by central government planning.

A managers ability to view the organization as a whole, understand how the various parts are interdependent, and assess how the organization relates to its external environment.

A merger of companies in unrelated businesses; done to reduce risk.

Leaders who encourage discussion about issues and then require that all parties involved agree to the final decision.

Leaders who confer with subordinates before making a decision but retain the final decision-making authority.

An index of the prices of a "market basket" of goods and services purchased by typical urban consumers.

Plans that identify alternative courses of action for very unusual or crisis situations; typically stipulate the chain of command, standard operating procedures, and communication channels the organization will use during an emergency.

Plans that identify alternative courses of action for very unusual or crisis situations; typically stipulate the chain of command, standard operating procedures, and communication channels the organization will use during an emergency.

The practice in which a foreign firm manufactures private-label goods under a domestic firm's brand name.

A legal entity typically formed by people with similar interests, such as suppliers or customers, to reduce costs and gain economic power. A cooperative has limited liability, an unlimited life span, an elected board of directors, and an administrative staff; all profits are distributed to the member-owners in proportion to their contributions.

The set of attitudes, values, and standards that distinguishes one organization from another.

The practice of charitable giving by corporations; includes contributing cash, donating equipment and products, and supporting the volunteer efforts of company employees.

The concern of businesses for the welfare of society as a whole; consists of obligations beyond those required by law or contracts.

A legal entity with an existence and life separate from its owners, who are not personally liable for the entity's debts. A corporation is chartered by the province in which it is formed and can own property, enter in contracts, sue and be sued, and engage in business operations under the terms of its charter.

Inflation that occurs when increases in production costs push up the prices of final goods and services.

A form of international trade in which part or all of the payment for goods or services is in the form of other goods and services.

Not-for-profit, member owned financial cooperatives.

Cash held in the form of coins and paper money.

Unemployment that occurs when a downturn in the business cycle reduces the demand for labour throughout the economy.

A form of business financing consisting of borrowed funds that must be repaid with interest over a stated period.

The quantity of a good or service that people are willing to buy at various prices.

A graph showing the the quantity of a good or service that people are willing to buy at various prices.

Money kept in chequing accounts that can be withdrawn by depositors on demand.

Inflation that occurs when the demand for goods and services is greater than the supply.

Leaders who solicit input from all members of the group and then allow the members to make the final decision through a vote.

The study of a population's statistics, such as their age, gender, race, ethnicity, and location.

A lowering of the value of a nation's currency relative to other currencies.

Active ownership of a foreign company or manufacturing or marketing facilities in a foreign country.

Payments to stockholders from a corporations profits.

The practice of charging a lower price for a product in foreign markets than in the firm's home market.

An increase in a nation's output of goods and services.

The combination of policies, laws, and choices made by a nation's government to establish the systems that determine what goods and services are produced and how they are allocated.

The study of how a society uses scarce resources to produce and distribute goods and services.

The ability to produce the desired result or good.

Using the least amount of resources to accomplish the organization's goals.

A total ban on imports or exports of a product.

The process of giving employees increased autonomy and discretion to make decisions, as well as control over the resources needed to implement those decisions.

People who combine inputs of natural resources, labour, and capital to produce goods or services with the intention of making a profit or accomplishing a not-for-profit goal.

The point at which quantity demanded equals quantity supplied.

A form of business financing consisting of funds raised through the sale of stock (i.e. ownership) in a business.

A situation where a person must choose from a set of actions that may be ethical or unethical

A set of moral standards for judging whether something is right or wrong.

The delegation of limited sovereignty by European Union member states to the EU so that common laws and policies can be created at the European level.

Trade agreement among 28 European nations.

Power that is derived from an individual's extensive knowledge in one or more areas.

The practice of selling domestically produced goods to buyers in another country.

Goods and services produced in one country and sold to other countries.

A form of short-term financing in which a firm sells its accounts receivable outright at a discount to a factor.

The resources used to create goods and services.

The process in which financial institutions act as intermediaries between suppliers and demanders of funds.

The art and science of managing a firm's money so that it can meet its goals.

The chance that a firm will be unable to make scheduled interest and principal payments on its debt.

A system in which prices of currencies move up and down based upon the demand for and supply of the various currencies.

A form of business organization based on a business arrangement between a franchisor, which supplies the product or service concept, and the franchisee, who sells the goods or services of the franchisor in a certain geographic area.

The policy of permitting the people and businesses of a country to buy and sell where they please without restrictions.

An area where the nations allow free, or almost free, trade among each other while imposing tariffs on goods of nations outside the zone.

Short-term unemployment that is not related to the business cycle.

The condition when all people who want to work and can work have jobs.

A partnership in which all partners share in the management and profits. Each partner can act on behalf of the firm and has unlimited liability for all its business obligations.

A manager's ability to operate in diverse cultural environments.

The ability to recognize and react to international business opportunities, be aware of threats from foreign competition, and effectively use international distribution networks to obtain raw materials and move finished products to customers.

Tangible items manufactured by business.

The total market value of all final goods and services produced within a nation's borders each year.

Entrepreneurs who want their business operation to grow into a major corporation.

A merger of companies at the same stage in the same industry; done to reduce costs, expand product offerings, or reduce competition.

A manager's interpersonal skills that are used to accomplish goals through the use of human resources.

A limit on the quantity of a certain good that can be imported.

Good and services that are bought from other countries.

The situation in which the average of all prices of goods and services is rising.

The basic institutions and public facilities upon which an economy's development depends. International Monetary Fund (IMF) is an international organization, founded in 1945. The IMF promotes trade, makes short-term loans to member nations, and acts as a lender of last resort for troubled nations.

A company's first sale of stock to the public; offered in the primary market.

Investment professionals who are paid to manage other people's money.

A fixed amount of money paid by the issuer of a bond to the bondholder on a regular schedule, typically every six months; stated as the coupon rate.

Created in 1945, the IMG has 190 member nations and helps foster global trade through the promotion of financial stability, eliminate trade barriers and enhance monetary cooperation amongst its member nations. The IMF makes short-term loans to member nations that are unable to meet their budgetary expenses. It also operates as a lender of last resort for troubled nations. In exchange for these emergency loans, IMF lenders frequently extract significant commitments from the borrowing nations to address the problems that led to the crises. These steps may include curtailing imports or even devaluing the currency.

Entrepreneurs who apply their creativity, vision and risk-taking within a large corporation, rather than starting their own company.

Firms that act as intermediaries, buying securities form corporations and governments and then reselling them to the public.

An agreement in which a domestic firm buys part of a foreign firm or joins with a foreign firm to create a new entity.

What is considered fair according to the prevailing standards of society; an equitable distribution of the burdens and rewards that society has to offer.

The process of guiding and motivating others toward the achievement of organizational goals.

The relatively consistent way that individuals in leadership positions attempt to influence the behaviour of others.

Power that is derived from an individual's position within an organization.

The legal process whereby a firm agrees to allow another firm to use a manufacturing process, trademark, patent, trade secret, or other proprietary knowledge in exchange for the payment of a royalty.

Partners whose liability for the firm's business obligations is limited to the amount of their investment. They help to finance the business but do not participate in the firm's operations.

A partnership with one or more general partners, who have unlimited liability, and one or more limited partners, whose liability is limited to the amount of their investment in the company.

An agreement between a bank and a business that specifies the maximum amount of unsecured short-term borrowing the bank will allow a firm over a given period, typically one year.

When costs and expenditures are greater than revenue

The subarea of economics that focuses on the economy as a whole by analyzing aggregate data for large groups of people, companies, or products.

The process of guiding the development, maintenance, and allocation of resources to attain organizational goals.

The number of suppliers in a market.

Short-term investments that are easily converted into cash.

The combination of two or more firms to form one new company.

The subarea of economics that focuses on individual parts of the economy, such as household or firms.

Entrepreneurs who start small and plan to stay small.

Managers who design and carry out tactical plans in specific areas of the company.

An organization's purpose and reason for existing; its long-term goals.

A formal document that states an organization's purpose and reason for existing and describes its basic philosophy.

Economies that combine several economic systems; for example, an economy where the government owns certain industries but others are owned by the private sector.

A market structure in which many firms offer products that are close substitutes, and entry into the industry is relatively easy.

A long-term loan made against real estate as collateral.

Corporations that move resources, goods, services, and skills across national boundaries without regard to the country in which their headquarters are located.

Bonds issued by governments of provinces, cities and municipalities.

A financial services company that pools investor's funds to buy a selection of securities that meet its stated investment goals.

A sense of national consciousness that boosts the culture and interests of one country over those of all other countries.

Responses to infrequent, unforeseen, or very unusual problems and opportunities where the manager does not have a precedent to follow in decision-making.

A 1993 agreement creating a free-trade zone including Canada, Mexico and the United States.

An organization that exists to achieve some goal other than gaining profit.

A market structure in which a few firms produce most or all of the output, and large capital requirements or other factors limit the total number of firms.

The purchase or sale of Canadian government bonds by the Bank of Canada to stimulate or slow down the economy.

Expenditures related to current production and selling activities.

The process of creating specific standards, methods, policies, and procedures that are used in specific functional areas of the organization; helps guide and control the implementation of tactical plans.

The process of creating specific standards, methods, policies, and procedures that are used in specific functional areas of the organization; helps guide and control the implementation of tactical plans.

The process of coordinating and allocating a firm's resources in order to carry out its plans.

Sending work functions to another country, resulting in domestic workers losing their jobs.

Leaders who share decision making with group members and encourage discussion of issues and alternatives; includes democratic, consensual, and consultative styles.

An association of two or more individuals who agree to operate a business together for profit.

An organization that strives for a profit by providing goods and services desired by its customers

Large pools of money set aside by corporations, unions, and governments for later use in paying retirement benefits to their employees or members.

A market structure in which a large number of small firms sell similar products, buyers and sellers have good information, and businesses can be easily opened or closed.

The ability to influence others to behave in a particular way.

A tariff that is lower for some nations than for others.

An equity security for which the dividend amount is set at the time the stock is issued and the dividend must be paid before the company can pay dividends to common stockholders.

The securities market where new securities are sold to the public.

The amount borrowed by the issuer of a bond; also called par value.

An index of the prices paid by producers and wholesalers for various commodities, such as raw materials, partially finished goods, and finished products.

The amount of goods and services one worker can produce.

Decisions made in response to frequently occurring routine situations.

The policy of protecting home industries from outside competition by establishing artificial barriers such as tariffs and quotas.

Tariffs that are imposed in order to make imports less attractive to buyers than domestic products are.

The value of what money can buy.

A market structure in which a single firm accounts for all industry sales of a particular good or service, and there are barriers to entry.

A decline in GDP that lasts for at least two consecutive quarters.

Power that is derived from an individual's personal charisma and the respect and/or admiration the individual inspires.

Profits that have been reinvested in a firm.

The opportunity for profit.

The money a company receives by providing services or selling goods to customers.

A guaranteed line of credit whereby a bank agrees that a certain amount of funds will be available for a business to borrow over a given period, typically two to five years.

Power that is derived from an individual's control over rewards.

The potential to lose time and money or otherwise not be able to accomplish an organization's goals.

A basic principle in finance that holds that the higher the risk, the greater the return that is required.

Unemployment that occurs during specific seasons in certain industries.

The securities market where old (already issued) securities are bought and sold, or traded, among investors; includes broker markets, dealer markets, the over-the-counter market, and the commodities exchanges.

Loans for which the borrower is required to pledge specific assets as collateral, or security.

Investment certificates issued by corporations or governments that represent either equity or debt.

Intangible offerings of business that can't be held, touched, or stored

Selecting a leadership style based on the maturity and competency level of those who will complete the task.

The practice of limiting investments to securities of companies that behave in accordance with the investor's beliefs on ethical and social responsibility to encourage businesses to be more socially responsible.

An economic system in which the basic industries are owned either by the government itself or by the private sector with strong government control.

A country's output of goods and services that people can buy with the money they have.

Payments to stockholders in the form of more stock; may replace or supplement cash dividends.

A person who is licensed to buy and sell securities on behalf of clients.

The owners of a corporation who hold shares of stock that carry certain rights.

The process of creating long-range (one to five years), broad goals for the organization and determining what resources will be needed to accomplish those goals.

The process of creating long-range (one to five years), broad goals for the organization and determining what resources will be needed to accomplish those goals.

Unemployment caused by a mismatch between available jobs and the skills of the available workers in an industry or region; not related to the business cycle.

Managers who design and carry out operational plans for the ongoing daily activities of the firm.

The quantity of a good or service that businesses will make available at various prices.

A graph showing the quantity of a good or service that businesses will make available at various prices.

The ability of a society or company to continue to operate without compromising the planet's environmental condition in the future.

The process of beginning to implement a strategic plan by addressing issues of coordination and allocating resources to different parts of the organization; has a shorter time frame (less than one year) and more specific objectives than strategic planning.

The process of beginning to implement a strategic plan by addressing issues of coordination and allocating resources to different parts of the organization; has a shorter time frame (less than one year) and more specific objectives than strategic planning.

A tax imposed on imported goods.

A manager's specialized areas of knowledge and expertise, as well as the ability to apply that knowledge.

The application of science, engineering, and knowledge to solve production and organizational problems.

A business loan with a maturity of more than one year; can be secured or unsecured.

Deposits at a bank or other financial institutions that pay interest but cannot be withdrawn on demand.

Announcements of both primary and secondary stock and bond offerings in major newspapers.

The highest level of managers; includes CEO's, presidents, and vice-presidents, who develop strategic plans.

The extension of credit by the seller to the buyer between the time the buyer receives the good or services and when it pays for them.

An unfavourable balance of trade that occurs when a country imports more than its exports.

A favourable balance of trade that occurs when a country exports more than it imports.

A highly liquid and very secure form of marketable security that is issued by the federal government.

The process of buying securities from corporations and governments and reselling them to the public; the main activity of investment bankers.

The percentage of the total labour force that is not working but, is actively looking for work.

Loans for which the borrower does not have to pledge specific assets as security.

A 1994 agreement originally signed by 117 nations to lower trade barriers worldwide.

A merger of companies at different stages in the same industry; done to gain control over supplies of resources or to gain access to different markets.

A person who exposes any kind of information that reveals illegal, unethical, or not correct activity within an organization that is either private or public.

Established in 1944, the World Bank is another institution that is instrumental in fostering global trade. The World Bank has 189 member nations and provides funding for development projects to developing countries around the world through traditional loans, interest free credits and grants. The World Bank also offers loans to help developing nations relieve their debt burdens. To receive the loans, countries must pledge to lower trade barriers and aid private enterprise. In addition to making loans, the World Bank is a major source of advice and information for developing nations.

An organization established by the Uruguay Round in 1994 to oversee international trade, reduce trade barriers, and resolve disputes among member nations.