business voc 1-6

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Global business
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Any activity that seeks to provide goods and services to others across national borders at a profit
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Exporting
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Selling products to another country
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Importing
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Buying products from another country
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Free trade
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The movement of goods and services amongs nations without political or economic trade barriers
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Global trade
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The exchange of goods and services across national borders
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Comparative advantage theory
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A theory that states that a country should sell to other countries those products that it produces most effectively and efficiently and buy from other countries those products that it cannot products as effectively or efficiently
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Absolute advantage
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The advantage that exists when a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries
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Balance of trade
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The total value of a nation’s exports compared to its imports measured over a particular period
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Trade surplus
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A favorable balance of trade; occurs when the value of a country’s exports exceeds that of its imports
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Trade deficit
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An unfavorable balance of trade; occurs when value of a country’s imports exceeds that of its exports
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Balance of payments
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The difference between money coming into a country (from exports) and money leaving the country (for imports) plus money flows from other factors, such as tourism, foregin aid, military expenditures, and foreign investment
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Dumping
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Selling products in a foreign country at lower prices than those charged in the producing country
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Gray market
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The flow goods in a distribution channel or channels other than those intended by the manufacturer or licensor
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Trade protectionism
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The use government regulations to limit the import of goods and services
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Tariff
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A tax on imports
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Harmonized tariff schedule
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A schedule of costs for every product from every country that is published by the U.S. government
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Import quota
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A protectionist policy that limits the number of products in certain categories that a natin can import
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Embargo
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A complete ban on the import or export of a certain product o the stopping of all trade with a particular country
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Nontariff barriers
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Restrictive standards that details exactly how a product must be sold in a country
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General agreement on tariff and trade (GATT)
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A 1948 agreement that established an international forum for negotiating mutual reductions in trade restrictions
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World trade orgaization (WTO)
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The international organization that replaced the General Agreement on Tariffs and Trade and was assigned the duty of mediating trade disputes among nations
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Common market (trading bloc)
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A regional group of countries that have a common external tariff, no internal tariffs, and coordinated laws that aid trade among member countries
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European union (EU)
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A agreement among European member countries to eventually reduce all barriers to trade and become unified, both economically and politically
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The organization of the petroleum exporting countres (OPEC)
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An organization of 13 oil producing nations that work together to protect their interests
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North american free trade agreement (NAFTA)
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An agreement that created a free trade area among the United State, Canada,and Mexico
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Licensing
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A global strategy in which a firm (the licensor) allows a foreign company (the licensee) to produce its product in exchange for a fee (a royalty)
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Contract manufacturing
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A foreign country’s production of private-label goods to which a domestic company then attaches its brand name or trademark; part of the broad category of outsourcing
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Join venture
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A partnership in which two or more companies (often from different countries) undertake a major project
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Greenfield investment
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A form of foreign direct investment in which a company builds factories and offices in a foreign country on its own
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Strategic alliance
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A long term partnership between two or more companies established to help each company build competitive market advantage
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Foreign direct investment (FDI)
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The buying of permanent property and business in foreign nations
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Foreign subsidiary
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A company owned in a foreign country by another company,called the parent company
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Expropriation
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When a host government takes over a foreign subsidiary in a country
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Multinational corporation
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An organization that manufactures and markets products in many different countries and has multinational management
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Culture
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The set of values, beliefs, rules, and institutions held by a specific group of people
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Ethnocentriciy
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An attitude that one’s own culture is superior to other cultures
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Exchange rate
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The value of one nation’s currency relative to the currencies of other countries
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Countertrading
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A complex form of bartering in which several countries may be involved, each trading goods for goods or services for services
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Entrepreneurship
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Accepting the risk of stating and running a business
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Market
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People with unsatified needs and wants who have both the resources and the willingness to buy
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Business plan
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A detailed written statement that describes the nature of business, the target market, the advantages the business wll have in relation to competition, and the resources and qualifications of the owners
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Sole proprietor
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A business owner who has only one employee-him-or herself
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Mentor
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An adviser experienced in a particular job or type of business who acts as a guide for someone entering a field
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Chain store
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A business location that is one of many stores, all of which have central management (meaning all stores are run by the same people) and share a brand name
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Company store
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A store owned and operated by a chain
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Francisee
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A person who buys a franchise
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Franchisor
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A person or entity that owns the rights to a franchise
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Cannibalization
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A situation in which a new franchise takes away customers from an existing franchise nearby
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Sole proprietorship
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A business operated by sole proprietorship
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Unlimited liability
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The responsibility of business owners for all the debt of the business
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Partnership
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A legal form or business with two or more owners
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General partnership
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A partnership in which all owners share in operating te business and in assuming liability for the business’s debts
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Limited partnership
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A partnership wih one or more general partners and one or more limited partners
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General partner
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An owner (partner) who has unlimited liability and is active in managing the firm
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Limited partner
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An owner who invests money in the business but does not have any management responsibility or liability for losses beyond the investment
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Limited liability
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Means limited partners are not responsible for the debts of th business beyond the amount of their investment- their liability is limited to the amount they put into the company; their personal assets are not a risk
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Master limited partnership (MLP)
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Structured much like a corporation in that it acts like a corporation in that it acts like a corporation and is traded on stock exchange like a corporation, but taxed like a partnership and thus aviods the corporate income tax
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Limited liability partnership (LLP)
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Risk of losing their personal assets to only their own acts and omissions and to the acts and omissions of people under their supervision
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Corporate governance
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The processes, customs, policies, laws, and institutions that affect how a corporation is directed, administered, or controlled
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Board of director
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The group ultimately responsible for the decisions of a business
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Conventional (C) corporation
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A form of business ownership that provides limited liability
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Double taxaton
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Occurs when the owners of a corporation are tased twice-once when the corporation is taxed and then again when the dividends are taxed
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Dividend
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Part of a firm’s profits that may be distributed to stockholders as cash payments or additional shares of stock
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S corporation
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A legal form of corporation for which the biggest advantage is it tax status, which is the same as a sole proprietorship
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Venture capitalists
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People or companies that invest money in businesses in return for a stake in them
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Angel investors
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People (usually wealthy) who invest their own funds in a business in exchange for a stake in the company
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Small business adminstration (SBA)
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A u.s. government agency that advises and assists small businesses by providing management tranining, finanical advice, and loans
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Economic
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The study of how individuals and society choose to use scarce resources to produce goods and services and distribute them for consumption
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Opportunity cost
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Refers to what you give up (your next best choices) in order to do of get something else (your chosen decision)
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Macroeconomics
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the study of the operation of a nation’s economy as a whole
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Microeconomics
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The study of the behaveior of people and organizations in paricular markets
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Resource development
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The study of how to increase resources and create the conditions that will make better use of those resource
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Invisible hand
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A phrase a coined by Adam Smith to descride the process that turns self-directed gain into social and economic benefits for all
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Supply
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The quantity of products manuafacturers or owners are willing to sell at different prices at a specific time
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Demand
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The quanity of products people are willing and able to buy at different prices at a specific time
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Equilibrium point
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The point at which the amount of goods sought by buyers is equal to the amount of goods produced by suppliers
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Business cycle
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A common pattern in which there is a period of rapid economic growth (recovery and prosperity) when supply and demand stimulate each other, alternating with a period of decline (contraction or recession) with diminishing demand and supply
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Capitalism
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An economic system in which all or most of the factors of production and distribution are privately owned and operated for profit
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Free market
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A system in which decisions about what to produce and in what quantities are made by the market
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Perfect competition
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A market condiction in which there are many businesses and no one business is large enough to dictate the price of a product
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Monopolistic competition
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A market condiction in which a large number of businesses produce products that are very similar but are perceived by buyers as different
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Product differentiation
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An attempt to make buyers think similar products are different in some way
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Oligopoly
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A form of competition in which just a few businesses dominate a market
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Monopoly
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A form of competition in which only one business controls the total supply of a product and its price
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Deregulation
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The removal or government control and strict oversight in a market that thereby opens the market for others to enter
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Socialism
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An economic system based on the premise that some, if not most, basic businesses should be owned by the government so profits can b evenly distributed among all people
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Brain drain
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The loss of the best and brightest people to other countries
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Communism
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An Economic and political system in which the state (the government makes almost all economic decisions and owns almost all the major factors of production, including housing for its people
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Free-market economies
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Economic systems in which the market largely determines what goods and services get produce, who get them, and how the economy grow
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Command economies
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Economic systems in which the government largey decides what goods and services will produces, who will get them, and how the economy will grow
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Mixed Economies
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Economic systemsin which some allocation of resources is made by the market and some is by the government
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Gross domestic product (GDP)
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The total value of final goods and services produced in a country in a given year
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Gross national product (GNP)
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The value of goods and services produced by a country’s factors of production, regardless of where these factors are based
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Recession
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A period during which during GDP of nation declines for two or more quarters
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Depression
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A severe recession
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Recovery
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A period following a recession during which an economy sabilizes and begins grow again
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Unemployment rate
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The number of civilians 16yrs of age and older who are unemployed and have tried to find a job within the prior four weeks
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Inflation
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A general rise in that prices of goods and services over time
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Stagflation
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A situation where the economy is slowing but prices are rising
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Deflation
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A general decline in the prices of goods and services over time
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Producer price index (PPI)
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A set of monthly statistics that measures prices at the wholesale level
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Consumer price index (CPI)
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A set of monthly statistics that measures the pace of inflation of deflation
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Monetary policy
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The management of the money supply and interest rates by the Federal Reserve Bank
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Interest rate
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A rate charged for using money
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National deficit
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The money the federal government spends over and above its revenue for a specific period of time
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National debt
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The sum of the government deficits overtime
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Bankruptcy
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The legal process by which an individual or business unable to meet financial obligations can seek court protection under these laws and can be relieved of those debts by a court
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Business
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Is a person, partnership, or corporation that seeks to provide goods and services to others at a profit
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Goods
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Tangible products, such as cameras, food, computers, clothing, an cars
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Services
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Intangible products such as education, insurance, and travel
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Entrepreneur
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A person who risks time and money to start and manage business
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Return on Investment (ROI)
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The money gained from taking on a business risk
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Revenue
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The total amount of money a business takes in during a given period as a result of selling its goods or service
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Expenses
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The costs of purchasing the goods and service that are needed to operate a business
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Profit
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The amount of money a business earns above and beyond what is spends for goods, services, salaries, and other expenses
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Loss
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When a business’s expenses are more than its revenues
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Risk
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The chance an individual or organization takes of losing time and money on a business that may not prove profitabe
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Outsourcing
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Assigning various function, such as accounting, production, security, maintenance, and legal work, to outside organizations
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Small and medium-sized enterpises
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Small enterprises employ 50 or fewer people and are managed by their owners on a day-to-day basis, and medium-sized enterprises have 51 to 500 employees
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For-profit organizations
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Organizations that are motivated to earn profits
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Nonprofit orgaizations
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Organizations that are not driven to garner profit
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Stakeholders
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Any people or organizations who stand to gain or lose from the activities of a business
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Contract
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A legally enforceable agreement between two or more parties
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Database
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An electronic storage file for information
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Tradeable Currency
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One country’s money that is allowed to be exchanged for another country’s money
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Capitalist system
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A system in which cmpanies and businesses are are owned by citizens instead of the government
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Effectiveness
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Producing the desired results
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Efficieny
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Producing goods using the least amount of resources
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Resource
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An input used to produce a good
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Productivity
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The amount of output generated given a particular amount of an input
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E-commerce
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The buying and selling of goods over the internet
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Business-to-consumer
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A business that produces products to sell directly to the consumer
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Busines-to-busniess
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A business that produces products to sell to another business
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Value
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Good quality at a fair price
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Empowerment
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Giving frontline workers the responsibility, authority, and freedom to respond quickly to customer requests
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Diversity
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Board differences among a group of people, including their ethnicity, sex, color, sexual orientation, body size, age and so on
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Demographics
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Statistics about the human population with regard to its size, density, and other characteristics
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Free Trade
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The movement of goods and services among nations without political or economics barriers
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Globalization
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The worldwide integration of government policies, cultures, social movement, and finanical markets through trade and exchange of ideas
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Factor of production
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The resources used to create wealth: land, labor, capital, entrepreneurship,and knowledge
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Standard of living
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The amount of goods and services people can buy with the money they have
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Ethics
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the standards of moral behavior; that is,behavior that is accepted society as right verus wrong
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Illegal
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an act for which you could be fined or imprisoned
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Compliance- based ethics codes
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prevent unlawful behavior by increasing control and penalizing violations
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Integrity-based ethics code
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define the organization’s quideing values and create an enivronment that supports ethically sound behavior
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Whistleblower
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insiders who reports illegal or unethical behavior
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Th Sarbanes-Oxley Act
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legislation passed in 2002 that set new standards for ethical codes of conduct within organizaton
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Corporate philanthropy
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an individual society responsibility that includes charitable donations
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Corporate responsibility
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an indicator of social responsibility that includes the actions the company takes that could affect others
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Corporate policy
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the position a firm takes on social and political issues
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Insider trading
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insiders of company (such as employees) using private company information to further their own finanical situation
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Pension
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a promise made by a company to pay a monthly dollar amount to employees who have worked a minimum number of years
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Social audit
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a systematic evaluation of a company’s progress toward implementing programs that are socially responsible
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Management
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the process of planning, organizing,leading,and controlling,people other available resources to accomplish organizational goals and objectives
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Planning
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a management function that includes anticipating trends and determining the best stratgies and tactics to achieve organiztional goals and objectives
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Organizing
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a management function that includes designing the structures of the organizational and creating conditions and systems in which everyone and everything works together to achieve the organization’ goal and objectives
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Leading
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creating a vision for an ogranization and guiding,training, coaching, and motivating others to work effectiviely to achieve the organization’s goals and objectives
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Empowerment
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givin frontline workers the responsibility, authority, freedom, training, and equipment they need to respond quickly to customer requests
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Controlling
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a management function that involves establishing clear standards to determine whether or not a organization is progressing toward its goals and objectives, rewarding people for doing a good job and taking corrective action if they not
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Vision
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an encompassing explanation of why the organization exists and the direction its trying to go
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Mission statement
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an outline of the fundamental purpose of an organization
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Goals
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the broad,long-term accomplishments an organzation wishes to attain
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Objective
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specific statements that detail how to achieve an organization’s goals in th short term
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SWOT analysis
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a planning tool used to analyze an organization’s strengths,weakness,opportunities,and threats
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PEST analysis
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an analysis of outside factors that could affect a business: poltical, economic,social and technological
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Strategic planning
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the process of determinig the major long-term goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals
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Tactical planning
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the process of developing detailed, short-term statements abou what is to b done, who is to do it and how it is done
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Operational planning
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the process of setting work standards and schedules necessary to implement the company’s tactical objectives
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Contingency planning
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the process of preparing alternative courses of action that may be used if the primary plans don’t achieve the organization’s objectives
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Organization chart
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a visual device that shows relationships among people and divide the organization’s work; it shows who reports to whom
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Span of control
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the optimal number of subordinates(employees) a manager supervises
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Top management
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the highest level of management, consisting of the president and other key company executives who develop stragtegic plans
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Middle management
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the level of management that includes general managers, division managers, and branch and plant managers who are responsible fo tactial planning and controlling
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Supervisory(first line) management
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managers who are directly responsible for supervising workers and evaluating their daily performance
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Technical skills
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skills that involve the ability to perform tasks in a specific discipline of department
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Human relation skills
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skill that involve communication and motivation; they enable managers to work through and with people
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Conceptual skills
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skills that inolves the ability to picture the organization as a whole and the relationship among its various parts
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Staffing
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a management function that includes hiring, motivating, and retaining the best people avaiable to accomplish a company’s objectives
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Transparency
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the presentation of a company’s facts and figure in a way that is clear and apparent to all stakeholder
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Work-life balance
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a person’s control over the interactions between his or her work life and family and personal life
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Total quality management (tqm)
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a management strategy whereby quality goods are ensured at every phase of the production process
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Autocratic leadership
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a leadership style that involves making managerial decisions without consulting others
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Participative (democratic) leadership
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a leadership style that consists of managers and employees working together to make decision
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Free-rein leadership
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a leadership style that involves managers setting objectives and employees being relatively free to do whatever it take to accomplish those objective
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Theory X
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managers who believe the average person disikes work, has relatively little ambition, and wishes to aviod responsibility, so workers must be forcefully directed or threatened to punishment
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Theory Y
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managers who believe most people like work and naturally work toward goals to which they committed. People are capable of using imagination and creativity solve problems.Each worker is stimualted by rewards unique to that worker
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Downsizing
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the elimination of many management jobs, and other types of jobs, by using cost-cutting methods and technology, such as computer
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Rightsizing
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Downsizing that takes place with careful matching of resources to needs
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Theory Z
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a management theory that forcuses on trust and intamacy within the work group
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Theory Z
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a management theory that forcuses on trust and intamacy within the work group
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Theory Z
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a management theory that forcuses on trust and intamacy within the work group

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