Glossary of Terms


Being able to communicate with and reach the segment.


The art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of a financial character, and interpreting the results thereof.

Accounts payable

short-term obligations that a business owes to suppliers, vendors, and other creditors.

Accounts receivables

the amount of money due to a business from prior credit sales.

accrual accounting

an accounting system where transactions are recorded when they occur.


when another business buys a business.


Whether a small business is capable of designing an effective marketing program that can serve the chosen market segment.

activity log

a technique that involves writing down every task and activity that one is involved with during a day.

activity-based costing systems

an accounting system where costs are assigned due to the cause-and-effect relationship between costs and the activity that drives the cost.


any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.

advertising media

Radio, television, newspapers, billboards, the Internet, and magazines.


how a product looks, feels, sounds, tastes, or smells.

affiliate marketing

Company A places an ad for its product on the site of company B.


a document the outlines the purpose, membership, and required resources for an upcoming meeting.

all-in-one e-commerce platform solution

the core e-commerce platform plus hosting, accounting, analytics, and marketing tools such as e-mail management.


the software that makes it possible for a business to sell online.


negotiation under which the third party studies the situation and arrives at a binding agreement

artificial intelligence

the science of developing computer systems that can mimic human behavior.

asset management or efficiency ratios

ratios that are designed to show how well a business is using its assets


economic resources that are expected to produce a benefit in the future.

augmented layer

where additional value is added via things such as packaging, promotion, warranties, guarantees, brand name, design, financing opportunities where appropriate, prompt and on-time service, and additional services that may enhance a product.

Autocratic leadership

The leader makes decisions without involving others.


the negative effect felt by a company when it is found out that a company has done something not in accord with good business practices.

balance of payments

the difference, over a period of time, between the total flow of money coming into a country and the total flow of money going out.

balance sheet

a report that examines a business’s assets, liabilities, and owner’s equity at some particular point in time.


an extreme form of business termination that uses a legal method for closing a business and paying off creditors when a business is failing and the debts are substantially greater than the assets.

banner ads

image ads that range in size and technical capability.


compensation other than salaries, hourly wages, or financial incentives. Types of benefits include the following:
Legally required benefits (Social Security and Medicare, unemployment insurance, workers’ compensation)
Paid time off (vacations, holidays, sick leave)
Insurance (health benefits, life insurance, disability insurance)
Retirement benefits


a web page made up of usually short, frequently updated posts that are arranged chronologically.

blog advertising

buying ads directly on popular blogs.


annual income given in addition to salary


in which union workers refuse to buy a company’s products and try to get other people to follow suit


a group process by which individuals produce solutions to problems without any restriction placed on their possible options.


name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or the services of one seller or a group of sellers and to differentiate them from those of competitors.

brand equity

The value added to a brand by customer perceptions of quality and customer awareness of the brand.

break-even analysis

used to determine the amount of sales volume a company needs to start making a profit: when its total sales or revenues equal its total expenses.


businesses that combine a physical presence with an online presence.

brokerage model

brings buyers and sellers together and facilitates transactions.

browser safe colors

Colors that look the same on PC and Macintosh operating systems.

Business intelligence

the activities that a small business may undertake to collect, store, access, and analyze information about its market or competition to help with decision making.

Business interruption insurance

protects a business in the event of a natural disaster, a fire, or other extenuating circumstances that affects the ability of a company to conduct business.

Business-to-business (B2B)

Sales among other businesses or organizations.

Business-to-consumer (B2C)

Retail sales among businesses and individual consumers.

Business-to-government (B2G)

Transactions with the government.


a legal entity that must be chartered by the state in which it is headquartered, giving it the capability to enter into legal agreements with individuals and other corporations


an acronym used by bankers to describe factors that they consider when evaluating a loan: character, ability, means, purpose, amount, repayment, and insurance.

cash-based accounting

an accounting system where transactions are recorded when money is either received or spent.

cash-flow projections statement

a statement that attempts to identify cash flows into a firm and cash flows from a firm for some future period. It recognizes that there may be a significant difference between profits and cash flow.

cash-flow statement

maps out where cash is flowing into a firm and where it flows out and recognizes that there may be a significant difference between profits and cash flow.


very little authority; job activities are not delegated to subordinates.

certificate authority

a third-party (such as VeriSign) that verifies the identify of the responding computer and sends you a digital certificate of authenticity stating that it trusts the site.

close proximity

in the same building or office complex.

Cloud computing

the situation in which vendor software does not reside on the computer system of a small business.

collective bargaining

The process of settling differences and establishing mutually agreeable conditions under which employees will work


getting paid for quantity of sale


the process of transferring information from a sender to a receiver.

competitive advantage

The ability to perform in one or more ways that competitors cannot or will not match.

Conceptual skills

a manager’s ability to see an organization as a unified whole and understand how each part of the overall organization interacts with other parts.

Conditional value

a basis of value that is derived from a particular context or a sociocultural setting.


the extent to which a product matches established standards.

consists of grouping people and assigning activities so that job tasks and the mission can be properly carried out.

consists of grouping people and assigning activities so that job tasks and the mission can be properly carried out.

constructive conflict

conflict that is beneficial to a family business

Consumer-to-business (C2B)

Private individuals who use the Internet to sell products or services to organizations and individuals who seek sellers to bid on products or services.

Consumer-to-consumer (C2C)

Where consumers sell products and personal services to each other.


all the words, images, products, sound, video, interactive features, and any other material that a business puts on its website.

contingency approach

there is no “one best” structure appropriate for every organization. The “best” structure for an organization fits its needs for the current situation.

contingent workers

workers hired to supplement a company’s permanent workforce


the process of evaluating and regulating ongoing activities to ensure that the goals are achieved.

core layer

the nuts and bolts of a product, its physical anatomy, and its basic features.


an artificial person created by law, with most of the legal rights of a real person.

Cost of capital

The weighted average of a firm’s debt and equity, where equity is directly related to the firm’s stock.

cost of goods sold (COGS)

All the costs associated with the direct production of goods and services that were sold during the time period.

Cost-based pricing

a company figures out how much it costs to make a product or deliver a service and then sets the price by adding a profit to the cost.


securing small amounts of money from multiple contributors online.

cultural competence

an understanding of the culture of a specific firm.

Current assets

assets that will be held for less than one year.

Current liabilities

debts and obligations that are to be paid within the year.

customer lifetime value

A measure of the revenue generated by a customer, the cost generated for that particular customer, and the projected retention rate of that customer over his or her lifetime.

customer outsourcing

Anything that the customer does individually, such as searching for product or service information, entering billing information, and signing up for an e-mail confirmation.

Customer relationship management

a customer service approach that focuses on building long-term and sustainable customer relationships that add value for the customer and the company.

Customer relationship management (CRM)

a service approach that hopes to build a long-term and sustainable relationship with customers that has value for both the customer and the company.

customer value

the difference between the benefits a customer receives from a product or a service and the costs associated with obtaining the product or the service.

cyber crimes

criminal activity done using computers or the Internet.


any criminal activity that is done using computers and the Internet.


unprocessed facts

data mining

the process of searching and analyzing large amounts of data to reveal patterns and trends that can be used to predict future behavior.

data warehouse

a centralized database in which data from several databases are consolidated and organized so that they can be easily analyzed.


electronic collections of related data that can be accessed by various members of the organization.


authority and job activities are delegated rather than being held by a small management group.

Decision making

the ability to identify a problem or an opportunity, creatively develop alternative solutions, select an alternative, delegate authority to implement a solution, and implement and evaluate the solution.

Deming method

the philosophy and the techniques to ensure quality that were enunciated by W. Edwards Deming.

Democratic leadership

the leader involves other people in decision making.


a noncash expense that specifically recognizes that assets decline in value over time,

differential response

The extent to which market segments are easily distinguishable from each other and respond differently to company marketing strategies.

direct channel

producers sell products directly to the customer, with no intermediaries.

direct exporting

exporting directly to a customer who is interested in buying a product.

Direct foreign investment

Investment in a foreign country.

Direct marketing

the promotion of a product from the producer directly to the consumer or business user without using any type of channel members.


is the managerial function that initiates action: issuing directives, assignments, and instructions; building an effective group of subordinates who are motivated to do what must be done; explaining procedures; issuing orders; and making sure that mistakes are corrected.


occurs when a person is treated unfairly on the basis of a characteristic unrelated to ability.

distribution process

The physical handling and distribution of goods, the passage of ownership or title, and the buying and selling negotiations between producers and middlemen and middlemen and customers.

division of labor

a job can be performed much more efficiently if the jobholder is allowed to specialize.

divisional structure

a decentralized version of the functional structure in which functions still exist in an organization but are based on product, geographic area or territory, or customer.

domain name

a company’s business address or name on the Internet.

domain name registration

registering your domain name with a domain name registrar and paying a fee that has to be renewed annually.


cutting costs by eliminating jobs


the practice of selling exported goods below the price that producers would normally charge in their home markets (and often below the costs of producing the goods)


the expectation of how long a product will last and how it will function under various working conditions.

dynamic pricing

Prices are varied for individual consumers by varying prices for individual customers.


conducting business over the Internet.

e-commerce business model

the method that a business uses to generate revenue online.

e-commerce platform

the software that makes it possible for a business to sell online.

e-mail advertising

ads in newsletters, an ad in another company’s e-mail, e-mailing a list with a dedicated message, or a company advertising to its own customers with its own e-mail list.


Information technology applied to traditional marketing.


the purchasing of supplies through the Internet and the timing of invoices to customers and from suppliers to improve the cash flow of a firm.


An online business that sells products made by several producers or manufacturers.


Achieving the outcomes that someone wishes to produce.


producing the desired results with the minimum expenditure of energy, time, money, personnel, or material.

Electronic transactions

all transactions that take place online.


a quota that, for economic or political reasons, bans the import or export of certain goods to or from a specific country

Emotional value

a basis of value that is derived from the ability to evoke an emotional or an affective response.

Employee benefits

health and disability insurance, sick leave, vacation time, child and elder care, retirement plans and other perks paid entirely or in part by a company that represent a large component of each employee’s compensation.

employee stock option plan (ESOP)

a stock equity plan that lets employees buy ownership in the business.


By and large, management can no longer fire employees at will: usually, employers must show just cause for termination, and in some cases, they must furnish written documentation to substantiate the reasons for terminating an employee.


the process of encoding data so that only individuals (or computers) armed with a secret code (or key) can decode it.

Enterprise resource planning (ERP)

is about integrating all departments and functions across a company (sales, marketing, human resources, finance, accounting, production, engineering, etc.) into a single computer system that can serve the particular needs of each department.

enterprise resource planning (ERP) system

An ERP system integrates the computer needs of all activities across the enterprise into a single system that serves all users.

Epistemic value

a basis of value that is generated by a sense of novelty or simple fun.

Equal Employment Opportunity Commission (EEOC)

enforcement agency for a number of federal employment laws


the amount of money invested in a firm.

equity theory

focuses on our perceptions of how fairly we’re treated relative to others.

European Union (EU)

a group of twenty-seven countries that have eliminated trade barriers among themselves.

Even-odd pricing

used to communicate quality (even-numbered price) or value (odd-numbered price).

exchange rate

the rate at which one country’s currency can be exchanged for the currency of another country.

expectancy theory

proposes that employees will work hard to earn rewards that they value and that they consider obtainable.


entails selling products to foreign customers


the part of an intranet that is made available to business partners, vendors, or others outside a company

family business

a business that is actively owned and/or managed by more than one member of the same family.


the secondary operating characteristics of a product.

financial accounting

an accounting system that provides the appropriate information to the external community—bankers, angel investors, venture capitalists, and/or the government.

financial leverage

the proportion of a firm that is financed by debt and by equity.

financial leverage ratios

ratios that provide information on a firm’s ability to meet its total and long-term debt obligations.


software and hardware systems that prevent unauthorized users from accessing their computer networks.

first trippers

first-time casino customers.

first-generation time-management system

a system composed of essentially a list of tasks that must be done.


the group that works directly with the people who produce and sell the goods and/or the services of a business and implements the plans of middle management.

Fixed assets

long-term assets generally valued at their original cost.


set guidelines that allow employees to designate starting and quitting times.

foreign affiliate

a branch or a subsidiary of the parent company established outside the national boundaries of the parent company’s home market.

Foreign direct investment (FDI)

refers to the formal establishment of business operations on foreign soil.

Formal authority

the right to give orders and set policy.

formal competence

formal education, training, and experience outside the family business.

formal organization

The details of the roles and the responsibilities of all employees.

formal succession planning

planning for the family business to be transferred to a family member or members.

founder’s dilemma

The choice between making money or controlling and running a business.

fourth-generation time-management system

a system designed to bring balance into the personal and professional life of an individual.

franchise agreement

franchise agreement, a company grants a foreign company the right to use its brand name and sell its products

friendly buyout

the transfer of ownership to family members, customers, employees, children, or friends.

Full-service web developers

provide design, programming, support, hosting, search engine optimization, and more.

functional structure

organized according to job or purpose in the organization.

Functional value

a basis of value that relates to a product’s or a service’s ability to perform its utilitarian purpose.


a processor that allows dissimilar networks to communicate with one another.

General Agreement on Tariffs and Trade (GATT)

encourages free trade by regulating and reducing tariffs and by providing a forum for resolving disputes

general partnership

a business composed of two or more owners who contribute the initial capital of the business and share in the profits and the losses.

geographic pricing

a pricing strategy that takes the geographic location of a customer into consideration.


an intangible asset that reflects the value of intangible assets, such as a strong brand name, good customer relations, good employee relations, patents, intellectual property, the size and the quality of the customer list, and market penetration.

grapevine (or water cooler)

The informal communications network within an organization, separate from—and sometimes much faster than—formal channels of communication.


pictures, artwork, animations, or videos.


worker complaints on contract-related matters

gross profit

income minus COGS.


the tendency to conform to group pressure in making decisions, while failing to think critically or to consider outside influences.

hierarchy-of-needs theory

Psychologist Abraham Maslow’s hierarchy-of-needs theory proposed that we are motivated by the five unmet needs, arranged in the hierarchical order

historic cash-flow statement

a statement similar to the income statement in that it looks at cash inflows and cash outflows for a business during a specified period of time.


the housing, serving, and maintaining of the files for one or more websites.

human resource management (HRM)

consists of all actions that an organization takes to attract, develop, and retain quality employees.


Importing involves purchasing products from other countries and reselling them in one’s own.

incentive marketing model

a customer loyalty program that provides incentives such as redeemable points or coupons.

incentive programs

programs designed to reward employees for good performance

income statement

a report that examines the overall profitability of a firm over a particular period of time.

indirect channel

when a retailer and/or a wholesaler is an intermediary between the producer or the manufacturer and the final consumer.

Indirect exporting

entering into an agreement with an agent, a distributor, or a traditional exporting house for the purpose of selling (or marketing and selling) the products in the target market.

industrial robots

computer-run machines that can perform repetitive or dangerous tasks.

informal organization

all the connections and relationships that relate to how people throughout an organization actually network to get the job done.


data that have been processed, or turned into some useful form.

information system (IS)

the combination of technologies, procedures, and people who collect and distribute the information needed to make decisions and coordinate and control company-wide activities.

initial public offering (IPO)

A stock offering in which the owner or owners of equity in the formerly private company have their private holdings transferred into issues tradable on public markets.


New ways in which a product or a service might be used, new ways of packaging a product or a service, or identifying new customers or new ways to reach customers.


A service is performed and consumed at the same time.


a service cannot be seen, smelled, heard, tasted, or touched prior to purchase.

intangible assets

assets that provide economic value to a business but do not have a tangible, physical presence.

integrated marketing communications (IMC)

The coordination and integration of all marketing communication tools, avenues, and sources within a company into a seamless program designed to maximize the communication impact on consumers, businesses, and other constituencies of an organization,

Intellectual property

a creation of the mind—such as inventions; literary and artistic works; and symbols, names, images, and designs used in commerce.

Interactive marketing

online activities and programs designed to engage customers or prospects and directly or indirectly raise awareness, improve image, or elicit sales of products and services.


Retailers and wholesalers that operate between the producer and the consumer to facilitate some distribution processes (retailers and wholesalers, also known as middlemen) in the process.

international contract manufacturing

also known as outsourcing, a company has its products manufactured or services provided in other countries.

Interpersonal skills

the ability to communicate with, motivate, and lead employees to complete assigned activities.


a private network within a business that is used for information sharing, processing, and communication., e-mail, and instant messaging

Inventory control

ensuring that goods are where customers want them when they want them.

job analysis

identifing the tasks, responsibilities, and skills that a job entails, as well as the knowledge and abilities needed to perform it.

job description

the major areas of an employee’s job or position.

job enlargement

the policy of enhancing a job by adding tasks at similar skill levels

Job enrichment

Job enrichment is the practice of adding tasks that increase both responsibility and opportunity for growth.

job redesign

Many companies practice a policy of job redesign to make jobs more interesting and challenging. Common strategies include job rotation, job enlargement, and job enrichment.

job rotation

allows employees to rotate from one job to another on a systematic basis, eventually cycling back to their original tasks.

job sharing

two people share one full-time position, splitting the salary and benefits of the position as each handles half the job.

job specification

lists the qualifications—skills, knowledge, and abilities—needed to perform the job

joint venture

a specific type of strategic alliance in which a separate entity funded by the participating companies is formed to manage the alliance.

Joint venture (JV)

A partnership with a foreign firm formed to achieve a specific goal or operate for a specific period of time.


the right and power that a court has to interpret and apply the law in a particular geographic location.


a Japanese term that refers to any program that seeks small improvements on a regular basis rather than a huge quality initiative.

labor-union density

union membership as a percentage of payrolls

Laissez-faire leadership

Leadership that minimizes the leader’s involvement in decision making, but the leader is responsible for the final decision.


the positioning of the various elements that comprise a web page.


the process of influencing people to work toward a common goal.

lean thinking

a management approach that seeks to eliminate all forms of waste from operations.


the amount of money owed to outside claims—people outside of a business.

licensing agreement

allows a foreign company to sell a company’s products or use its intellectual property in exchange for royalty fees.

limited liability company

an organizational form that can be limited to a single individual or several other owners or shareholders.

limited partnership

a business format that may have several general partners and several more limited partners who do not have unlimited liability.

Line authority

having direct authority over lower positions in the hierarchy.


the sale of a business’s assets.

liquidity ratios

ratios drawn from a business’s current assets and current liabilities on the balance sheet that provide insight on its ability to meet short-term debt obligations

loading speed

how fast the pages respond to a user request.


closing the workplace to workers

Long-term assets

assets that will not be turned into cash within the next year.

loss leaders

a product that is discounted to get customers in the door in the hope that they will also buy more profitable products.

Man-made disasters

a disastrous event caused directly and principally by one or more identifiable deliberate or negligent human actions.


the application of planning, organizing, staffing, directing, and controlling functions in the most efficient manner possible to accomplish meaningful organizational objectives.

management hierarchy

the three levels of management: top or executive, middle, and first-line or supervisory.

Management skill

the ability to carry out the process of reaching organizational goals by working with and through people and other organizational resources.

manager-led team

the manager is the team leader and is in charge of setting team goals, assigning tasks, and monitoring the team’s performance.

managerial accounting

An accounting system that provides information to the management of a business and aids in internal controls—systems and policies that make a firm more efficient.

market reader

a firm that actively interacts with its present and future customers and carefully listens to them so that it can develop new products and services.

market segmentation

Dividing the market into several portions that are different from each other.

market value ratios

ratios that measure the performance of the stock of publicly held companies.

marketable securities

stocks and bonds that a business may hold in the hope that they will provide a greater return to the business rather than just letting cash “sit” in a bank account.


consists of everything that a company does to identify customers’ needs (i.e. market research) and design products to meet those needs.

marketing communications

A more contemporary word for promotion.

marketing communications mix

advertising, sales promotion, events and experiences, PR and publicity, direct marketing, interactive marketing, word-of-mouth communication, and personal selling.

marketing objectives

What a company wants to accomplish with its marketing strategy.

marketing strategy

Selecting one or more target markets, making differentiation and positioning decisions, and creating and maintaining a marketing mix.

matrix structure

brings together specialists from different areas of a business to work on different projects on a short-term basis.


The ease with which a segment can be identified and how easily the size of the segment be estimated


under which an impartial third party assesses the situation and makes recommendations for reaching an agreement


tiny companies that operate globally, having a presence and people in multiple countries.

Middle management

a conduit between top management and first-line management.

mind mapping

a diagram that specifies all the types of relationships among key elements of a problem or an issue.

mission statement

a document that articulates the fundamental nature of the business. It should address what business the company is in, the company’s potential customers, and how customer value will be provided.

Mobile commerce (m-commerce)

The purchase of goods and services through wireless technology, such as cell phones and handheld devices.

monetary component

a component that consists of the purchase, operating, service, switching, and opportunity costs associated with any product or service.


the process of providing reasons for people to work in the best interests of an organization working together in the directing function.


an internally generated drive to achieve a goal or follow a particular course of action.

multichannel distribution system

Two or more channels of distribution to reach one or more customer segments that offers customers multiple purchase and communication options.

multinational corporation

a company that operates on a worldwide scale without ties to any specific nation or region and organized under the laws of its own country.

multinational corporation (MNC)

A company that operates in many countries


to handle several tasks simultaneously.

need seeker

a firm that actively interacts with its present and future customers and carefully listens to them so that it can develop new products and services.

net present value

A value that discounts the value of future cash flows.

net present value (NPV)

a financial model that examines future cash flows from an investment and discounts the value of those investments by a specified interest rate. It then subtracts this discounted cash flow from the original value of the investment to determine whether or not a business should make an investment.


linking computers to one another.

news site advertising

placing ads on news, opinion, entertainment, and other sites that the audience frequents.

niche market

A small, more narrowly defined market that is not being served well or at all by mainstream product or service marketers.

Nontariff trade barriers

Laws or regulations enacted by a country to protect its domestic industries against foreign competition.

North American Free Trade Association (NAFTA)

an agreement among the governments of the United States, Canada, and Mexico to open their borders to unrestricted trade.

notes payable

money, such as lines of credit from banks, short-term bank loans, mortgage obligations, or payments on specific assets, that is owed and must be repaid within the year.

notes receivable

a formal debt instrument that will be paid to the company within a year.

off-the-job training

This approach allows them to focus on learning without the distractions that would occur in the office


occurs when a company sets up facilities in a foreign country that replaces U.S. manufacturing facilities to produce goods that will be sent back to the United States for sale. Shifting production to low-wage countries is often criticized as it results in the loss of jobs for U.S. workers.

on-the-job training

which may be supplemented with formal training programs

online market maker

An online company that provides catalog, search engine, and transaction-clearing capabilities so that products can be easily displayed, discovered, and paid for.

operating expenses

expenses that are incurred during the normal operation of a business.

operating profit

gross profit minus operating expenses.

order fulfillment

meeting customer expectations with respect to processing the order and delivering of the product.

organization chart

a visual representation of the formal organization of a business.


grouping people and assigning activities so that job tasks and the mission of a business can be properly carried out.


the way a company introduces new employees to the organization and their jobs.

other revenues and expenses

other nonoperational revenues and interest payments on loans and other debt instruments.


using outside firms, some of which may be offshore, to handle work that is normally performed within a company.

Owner’s equity

the claims on a business by those who own the business.


all the activities of designing and producing the container for a product.


two or more people voluntarily operating a business as co-owners for profit.

PDCA cycle

a series of steps to ensure continuous improvement.

Peer-to-peer (P2P)

Internet users share files and computer resources directly without having to go through a central web server.

penetration pricing

a business prices a product below that of the competition to quickly penetrate the market at the competitor’s expense, acquire a large market share, and then gradually raise the price.


the primary measurable operating characteristics of a product.


A service cannot be stored like a physical good.

personal digital assistant (PDA)

a small mobile handheld device that provides computing and information storage and retrieval capabilities for personal and business use.

Personal selling

the process of communicating with a potential buyer (or buyers) face-to-face with the purpose of selling a product or a service

Physical distribution (logistics)

All the activities involved in the physical flow and storage of materials, semifinished goods, and finished goods to customers in a manner that is efficient and cost-effective.


The purpose of picketing is informative—to tell people that a workforce is on strike or to publicize some management practice that’s unacceptable to the union


Workers’ pay is based on the amount of an item that is processed .


getting a product or a service to the target customer at a reasonable cost and at the right time.


is the process of anticipating future events and conditions and determining courses of action for achieving organizational objectives.

Positive conflict

conflict that is beneficial to a family business

Prepaid expenses

an accrual accounting term that represents payments in advance of their actual occurrence and inventory.

Prestige pricing

Based on the premise that consumers will feel that products below a particular price will have inferior quality and will not convey a desired status and image.


the amount of money charged for a product or a service. It is the sum of all values that buyers exchange for the benefits of having or using a good or a service.

price skimming

a product is priced over that of the competition to maximize profit.

price transparency

where buyers and sellers can view and compare prices for products sold online.

Price-quality signaling

when the cost of a good or a service reflects the perceived quality of that product or service.

Pricing objectives

what a company wants to accomplish with its pricing strategy.


the protection of personal information of customers on the Internet.

product decline stage

when sales decline and profits erode.

Product design

aesthetic properties such as color, shape, texture, and entire form plus a consideration of ergonomics, technology, and usability as well as touch, taste, smell, sight, and sound.

product development (incubation)

when a product is being prepared for sale.

product growth stage

when sales grow rapidly as the target market adopts a product and competition enters the marketplace once it observes the success.

product introduction stage

when a product is available to buy for the first time.

product life cycle (PLC)

The performance of a product in terms of sales and profits over time.

product maturity stage

characterized by slow growth because most of the buyers interested in a product have bought it.

product reliability

the accurate display and description of a product so that what customers receive is what they thought they ordered.

professional manager

external, non-family, non-owner manager.

profit-sharing plan

relies on a predetermined formula to distribute a share of the company’s profits to eligible employees

profitability ratios

ratios that look at the amount of profit that is being generated by each dollar of sales (revenue).


the means by which firms attempt to inform, persuade, and remind customers—directly or indirectly—about the products and brands they sell.


the use of controls to restrict free trade

psychic component

the element of cost that is associated with factors that might induce stress in a customer.

psychological attributes

features that have little to do with the primary function of a product but add value to customer satisfaction.

Public relations (PR)

designed to promote a company’s image or its individual products.


An outcome of PR that is produced by the news media and not paid for or sponsored by the business involved.

pull system

the production of the goods and services are triggered by customer demand.


a business that has an online presence only.


overall product quality, reliability, and the extent to which a product or a service meets consumers’ needs.

Quality function deployment (QFD)

An approach that takes the concept of the VOC seriously and uses it to help design new products and services or to improve existing ones.

quick changeover

a program to reduce setup times to make it more attractive to produce in smaller batches.

quick-response (QR) codes

A high-tech bar code to target customers on the go.


restrictions on imports that impose a limit on the quantity of a good that can be imported over a period of time


Changing the brand.


the process of identifying suitable candidates and encouraging them to apply for openings in the organization


the probability that a product will function for a given period of time or how often it breaks down.

Reputation management

the process of tracking opinions and comments about a company’s actions and products and reacting to those opinions and comments to protect and enhance the company’s reputation.

Retained earnings

the cumulative net income that has been reinvested in a business and not paid out to shareholders as dividends.


keeping employees


funds an enterprise receives in exchange for its goods or services


An indicator of how profitable a business is relative to its assets and indicates how efficient management is at using its assets to generate earnings.


A performance measure used to evaluate the efficiency of an investment or compare the efficiency of several investments.


a special format designed to eliminate the problem of double taxation that one might find with a C-corporation format.


calculated weekly, biweekly, or monthly and usually paid to office personnel, executives, and professional employees.


Being paid for fulfilling the responsibilities of a position—regardless of the number of hours required to do it

sales conversion rate

The percentage of site visitors who make a purchase.

Sales promotion

the variety of short-term incentives to encourage trial or purchase of a product or a service.

scalar principle

authority and responsibility should flow in a clear, unbroken line from the highest manager to the lowest manager.

SCORE (Service Corps of Retired Executives)

A nonprofit association dedicated to educating entrepreneurs and helping small businesses start, grow, and succeed nationwide.

Search engine optimization

the strategies intended to position a website at the top of web search engines.

search engine placement

submitting your website to specific search engines of your choice.

second-generation time-management system

a system that ties deadlines to those tasks that must be done.

Secure Sockets Layer (SSL)

A security protocol that is used by web browsers and web servers to help users protect their data during transfer.


entails gathering information on candidates, evaluating their qualifications, and choosing the right one.


a computer or a series of computers that link other computers or electronic devices together.


the speed, competence, and courtesy of repairs or maintenance of a product.


A market research instrument that plays a prominent role in improving quality in service environments.

Shopping cart abandonment

leaving a website without buying any of the items in the shopping cart.

Site interactivity

things on a company’s website site that prompt some kind of action from visitors.

site navigation

The design to help visitors quickly and easily find the information they need on a website.

Six Sigma

a quality management program created by the Motorola Corporation that seeks to reduce defects to the Six Sigma level, which translates as no more than 3.4 defects per million parts.


a technological device that lets a person make phone calls but has other features found on a digital assistant or a computer.

Social media

websites that feature user-generated content or material created by visitors rather than the website publishers and encourage visitors to read and respond to that material.

social media advertising

advertising, such as Twitter, Facebook, and LinkedIn.

Social value

a basis of value that involves a sense of relationship with other groups by using images or symbols.

sole proprietorship

the most basic type of business organization in which there is only one owner.

Span of control (span of management)

the number of people or subordinates that a manager supervises.


Whether consumer preferences are stable over time.

Staff authority

advisory only; there is no authority to take action and no responsibility for revenue generation.


selecting, placing, training, developing, compensating, and evaluating employees.


those with a legitimate interest in the success or failure of the business and the policies it adopts.

standard deviation

a statistical measure of dispersal about the mean.

statistical process control (SPC)

A mathematical approach that measures how well products conform to previously determined standards.

stock-option plans

a plan gives employees the right to buy a specific number of shares of company stock at a set price on a specified date

strategic alliance

an agreement between two companies to pool talent and resources to achieve business goals that benefit both partners.

strategic human resource planning

the process of developing a plan for satisfying an organization’s human resources (HR) needs.


workers walk away from their jobs and refuse to return until the issue at hand has been resolved.


nonunion workers who are willing to cross picket lines to replace strikers


an independent company owned by a foreign firm.


The segment is large and profitable enough to justify an investment


Passing the business to the next generation.

symbolic layer

the meaning of a product to a consumer—its emotional and psychological connections.

target market

One or more segments that have been chosen as the focus for business operations.


taxes on imports


a group of people with complementary skills who work together to achieve a specific goal.

Technical skills

abilities related to working with processes or physical objects.

technology driver

a business that puts money into research and development to produce revolutionary breakthroughs and/or incremental changes.


means that you regularly work from home (or from some other nonwork location). You’re connected to the office by computer, fax, and phone.


ending the employment of current employees against their will.

termination at-will

Employment at will means that a person does not have an employment contract. The person is employed “at the will” of the employer for as little or as long as the owner desires. It also means that a person can stop working for an employer at any time. An employer “doesn’t need to give a reason for termination of an ‘at will’ employee, as long as the termination isn’t unlawful or discriminatory.

termination for cause

a person is fired (terminated) for a specific reason.


This is a test

third-generation time-management system

a system that incorporates a system of prioritization to tasks that must be done.

time component

The time required to evaluate, acquire, and purchase a product or a service.

Time management

Working on the right things (effectiveness) and doing them the best way (efficiency).

times interest earned ratio

a highly effective measure to determine a business’s ability to meet it debt obligations. It is given by times interest earned = earnings before interest and taxes (EBIT) / interest charges.

Top management

devotes most of its time to developing the mission, long-range plans, and strategy of a business.

Total Quality Management

a catchall term that covers a variety of methods and approaches to improve organizational quality.

trading blocs

a continual process of providing employees with skills and knowledge they need to perform at a high level.

two-factor theory

Figure 14.5 “Herzberg’s Two-Factor Theory” illustrates Herzberg’s two-factor theory. Note that motivation factors (such as promotion opportunities) relate to the nature of the work itself and the way the employee performs it. Hygiene factors (such as physical working conditions) relate to the environment in which it’s performed. (Note, too, the similarity between Herzberg’s motivation factors and Maslow’s esteem and self-actualization needs).


A specific type or font.


the use of typefaces (or fonts) in a design.

Unity of command

no subordinate has more than one boss.


a website’s ease of use.

user interface

the way a person interacts with a website.

value proposition

The set of benefits offered to customers to satisfy their needs and wants consisting of some combination of products, services, information, and experiences.

value stream

the entire set of activities associated with the production of goods and services.

value-added network

a private system supplied by a third-party firm.


Each time a service is performed, it will be performed in a different way.

venture capitalist

individuals who provide money for start-up businesses or additional capital for a business to grow.

virtual merchant model

used by online retailers that operate only over the Internet.

virtual or telecommuting employee

An employee who works at home, on the road, or in a satellite location for all or part of his or her regular workweek.

virtual organization (or network organization)

Administration is the primary function performed; other functions—such as marketing, engineering, production, and finance—are outsourced to other organizations or individuals.

vision statement

a document that articulates the long-term purpose and idealized notion of what the business wishes to become.

visual management

a program where key metrics are presented visually to all personnel so they can be aware of any and all progress.

voice of the customer (VOC)

Any and all attempts to identify the real wants and needs of a customer.

vulture capitalists

a venture capitalist who invests in floundering firms in the hope that they will turn around. They invest to make not only a profit but also returns that are substantially greater than those found in the market.


payments based on an hourly pay rate or the amount of output.


a small business that is closed with all debts paid.

Web 1.0

All websites were static, and all you could do was read.

Web 2.0

Websites that are more interactive, engaging, and interesting than available with Web 1.0.

Web browsers

software, such as Microsoft’s Internet Explorer and Netscape Navigator, that locates and displays Web pages.

webinars or webcasts

seminars or presentations that are delivered online and that are typically an hour in length.

Website objectives

what a company wants its website to do.

Website security

the protection of a company, its suppliers, its customers, and its employees from criminal activity.


a (large or small) business that sells to retailers, contractors, or other types of businesses but not to the general public.


a web page that can be viewed and modified by anybody with a web browser and access to the Internet unless it is password protected

worker-owned cooperative

interested employees who become members of a cooperative that buys a business.

Workforce planning

the process of placing the right number of people with the right skills, experiences, and competencies in the right jobs at the right time.

World Trade Organization (WTO)

encourages global commerce and lower trade barriers, enforces international rules of trade, and provides a forum for resolving disputes


Icon for the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License

Maritime Management: Micro and Small Businesses Copyright © 2019 by Matthew Pauley is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

Share This Book