Business in action

Sponsoring Fdito!J: Edward Byers, Phyllis Kurzer, and Lawrence E,'diting Supervisor: Nicola von Schreiber Desi/!,JIand Art Supervisor and (,'over Designer.' Nancy Axelrod Produ(lion Supetvison: Priscilla Taguer and Mirabel Flores Photo Fditor: Rosemarie Rossi Text Designer: Gail Schneider Cover Photographer: Wolfson Photography, Inc Library of Congress Cataloging-in-Publication Wexler Data Bittel, Lester R Business in action Includes index Business emerprises-U nited States Industrial managementUnited States I Burke, Ronald S II Bilbrey, Charles P III Title HF5343.B57 1988 658 87-3134 ISBN 0-07-005565-3 PHOTO CREDITS Page 3: Mel DiGicomo/lmage Bank; page 6: Morton Beebe/Image Bank; page 30: Grafton Marshall Smith/Image Bank; page 56: Peter Arnold, Inc.; page 74: PepsiCo, Inc.; page 97: Arthur d'Arazien/lmage Bank; page 100: International Stock Photo; page 118: Hank Morgan/Rainbow; page 139: The Bravo Group, Young & Rubicam, Inc.; page 142: Will Faller; page 166: D McDonald/The Stock Shop; page 190: Jules Allen; page 216: Ford Motor Co.; page 235: Steve Dunwell/lmage Bank; page 238: Burt Glinn/Magnum; page 264: Ted Kawaleski/lmage Bank; page 290: Walter Bibikon/lmage Bank; page 314: Jules Allen; page 333: Stan Pakllnternational Stock Photo; page 336: Richard Hackett; page 356: Richard Hackett; page 382: Bruce Davidson/Magnum; page 405: Michael K Nichols/Magnum; page 408: Richard Hackett; page 432: Burt Glinn/Magnum; page 460: Kilian/Image Bank; page 483: Frank Whitney/Image Bank; page 486: Alex Webb/ Magnum; page 508: Marvin E Neuman/Image Bank; page 530: Richard Hackett; page 556: Eli Reed/Magnum Imprint 1996 Copyright © 1989 by Glencoe/McGraw-Hill All rights reserved Copyright © 1988, 1984, 1980 by McGraw-Hill, Inc All rights reserved Printed in the United States of America Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher Send all inquiries to: Glencoe/McGraw-Hill, 936 Eastwind Drive, Westerville, Ohio 43081 56789 IO 11 12 13 14 15 VH ISBN 0-07-005565-3 04 03 02 01 00 99 98 97 96 This third edition of Business in Action further refines its uniquely flexible, adaptive approach to the study of business The textbook has been expanded and enhanced for its use as a fully com prehensive, independent study resource It now can be supplemented by adopting either a traditional student Activity and Study Guide or an experiential business model and student activity guide entitled SSweetco: Business Model and Activity File This has as its core element a simulated model of a realistic company (SSweetco, the Shenandoah Sweets Company) A comprehensive package of instructional resources is also available to help the instructor achieve his or her course objectives THE TEXTBOOK The uniquely designed textbook is especially easy to read and comprehend Each chapter systematically enumerates and links its learning objectives and chapter overviews with its major descriptive sections and summary highlights These are arranged in an easy-to-follow outlining structure to help students in their study Extensive business examples, case studies, news reports, role models, and end-ofchapter review questions make this textbook, by itself, a complete and well-rounded teaching and learning resource Organization and Contents The textbook has been carefully reorganized into major units and 24 chapters Each unit is an independent entity Therefore an instructor can tailor the sequence of units and contents to match his or her own course of study The textbook has been substantially revised and updated Chapter 4, on small business, has been expanded, providing more in-depth coverage of entrepreneurship and franchising Unit 3, "Marketing of Products and Services," now includes a separate 10) on "Pricing Strategies for chapter (Chapter Profit." The importance of computers and technology in our rapidly changing information economy is recognized in Chapter 12 titled "Information and Compurer Systems " Chapter 15 dealing with human relations now includes an expanded discussion of productivity Textbook Features Each chapter of the textbook integrates a set of learning devices that promote an understanding of how business operates PICTOGRAPHS Pictographs are previews, or advance summaries, of the chapter presented in pictures and words They are used to simplify and speed up the absorption of complex ideas Similar illustrations are widely used in news magazines, such as U.S News and World Report, to convey ideas readily and save readers precious time LEAD ARTICLES AND PHOTOGRAPHS Each chapter is introduced by an article and related color photograph dealing with an issue, trend, company practice, or development in business Each article, rewritten from popular business sources, serves as a springboard and dramatic lead-in to the subject matter and issues raised in a chapter KEY TERMS Significant terms are highlighted in bold type at their point of definition in the textbook They are also listed in the Review Questions at the end of each chapter with convenient cross-referencing to the pages on which they are defined TABLES AND FIGURES Tables presenting arrays of data, and figures that illustrate concepts and ideas, are widely used throughout the text ACTION BRIEFS Short anecdotes are interspersed in the margins of the text, providing a representative sampling of business practices, commendable or otherwise There are over a hundred Action Briefs throughout the text; most are new to this edition BILLBOARDS These features are found in specially chosen chapters of the text Billboards are divided into two parts: readings that focus on business vi issues, and Profiles The readings are based mainly on current events They focus primarily on thoughtprovoking, business-related social issues and aim to stimulate students to form their own opinions about those issues Profiles are vignettes that highlight the role, characteristics, and contributions of men and women who are succeeding in the business world KEY CONCEPTS At the end of each chapter, the ideas presented in the pictographs and main headings are summarized The concepts are keyed by number to the pictographs, objectives, and the major text headings-a system that helps link all major learning elements together REVIEW QUESTIONS Each chapter concludes with a list of questions testing students' understanding of text material CASE CRITIQUES Each chapter is supplemented with two documented and/or hypothetical case studies illustrating practical applications of key concepts and key terms These case studies are designed to encourage students to develop critical judgments in assessing business actions TECHNOLOGY IN THE WORKPLACE Also, at the end of each unit is another special feature: Technology in the Workplace provides a sampling of how careers and work are changing because of the development of new technologies, such as robotics, electronic mail, compact disks, and, of course, computers SUPPLEMENTS AND INSTRUCTIONAL -RESOURCES The following ancillaries are available with Business in A{tion, Third Edition SSweetco: Business Model and Activity File Using this simulation and practicum, students can become involved in the creation, operation, and growth of Shenandoah Sweets Company (SSweetco), a candy manufacturer and retailer Assignments in the practicum-which are completely correlated with the textbook-enable students to experience firsthand how the concepts presented in the text are put to work in the real world Students assume 32 career roles for the simulated business Assigned activities require students to answer questions, solve problems, make calculations, complete typical business forms, and analyze and make deci- Preface sions in case studies involving SSweetco and Valleyville, its associated business community Activity and Study Guide For instructors who favor traditional teaching approaches, this self-study guide offers chapter-bychapter learning objectives, summaries of key concepts, and vocabulary and concept review questions It also includes cases for analysis and interpretation, and supplementary readings Self-check answer keys are provided for the student Computer Applications for Introduction to Business, IBM PC These are easy-to-use, easy-to-operate, computerbased applications Students assume the roles of employees and managers for SSweetco and help it solve typical business problems At a basic, easy-tofollow level they learn to use modern productivity tools-spreadsheet and database programs-to make decisions in such areas as marketing, production, finance, and human resources management No previous background in computers is needed A booklet containing the narrative and background information for the computer activities is available for the student This single IBM disk program includes all the spreadsheet and database files needed to operate the software and the "data" files students use and manipulate in order to help solve the four decision-making applications (The spreadsheet and database programs are derived from the McGrawHill Integrated Software Series.) An Instructor's Manual and Key provides useful teaching guidelines Instructors who use either experiential or traditional approaches can make effective use of these applications Computerized Test Bank, IBM PC This microcomputer test bank with over 1,400 objective questions provides a quick and easy means of generating tests Instructors have the option of adding or deleting questions to the test bank Thus the test bank can be tailored to the instructor's particular classroom needs Course Management Kit This boxed set of instructional resources provides course management materials in a "unitized" format that makes them easy to use An introductory booklet includes suggestions for teaching the course, Preface course schedules, a bibliography, and a list of suggested audiovisual materials Seven additional booklets-one for each unit of the text-offer textmanagement and enrichment suggestions, printed tests, readings, and strategies for integrating text chapters with the student study supplements A set vi i of overhead transparencies ther aid to instruction is also provided as a fur- Lester R Bittel Ronald S Burke Charles P Bilbrey The authors acknowledge the invaluable advice and guidance provided by those people in the academic ranks who served as reviewers or consultants for this and other editions of the work Their ideas and suggestions have profoundly shaped the pedagogy, format, features, and content of the text and the various components of the Business in Action teaching and learning system Special thanks are extended to Professor Abu Selimuddin of Berkshire Community College for any number of his creative ideas that have found their way into the text; Professor A H Friedman of J Sargeant Reynolds Community College for his considerable advice on economics a coauthor of the second edition of this program Perhaps most important of all was the contribution of MurielAlbers Bittel, who served all three authors so well as the coordinating editor for the massive flow of manuscript as this project evolved List of Reviewers/Consultants James Alston Rappanock Community College Richard M Kotz, Jr American Institute of Business Teresa Kay Avila College of Business Ball State University Andrew M McKee North Country Community College Dr Robert S Bulls J Sargeant Reynolds Community College Dr Helen Diamond Citrus College Frieda Ford Indiana Vocational Technical College Marvin Keefer Academic Dean, Commonwealth College Margaret Knight Dean, Rutledge College content; Gregory C Dellinger for his library search for techno logical and computer-related materials; Professor W L Safford of Rowan Technical College; and R Lawrence LaForge, who contributed so much as Donald Park American Institute of Commerce Glenn S Smith Eastern Arizona College Charles Trester Northeast Wisconsin Technical Institute William J VanDeVeer Mohave Community College Kenneth D Wagner The Bradford School Guidelines for Study With Business tn Action The following steps constitute an effective way to study the materials in each chapter The key to effective study is making maximum use of the numbers that identify each pictograph, objective, major text heading, and key concept If you are not already familiar with these features, you should read the discussion of "Textbook Features" starting on page v of the Preface STEP , Study the pictograph Spend two or three minutes to be sure you get the whole picture Then read the learning objectives that precede each chapter STEP Now skim through the entire chapter reading only the main headings and subheadings These headings provide an outlining structure for each chapter They reinforce and extend the ideas presented in the pictograph (These headings also may be used as your outline structure for notetaking from the text.) STEP Read the Key Concept summaries and glance at the list of key terms at the end of the chapter Be alert for definitions of these terms as you read the chapter These first three steps, which make up a "three-part linked learning system," will help you quickly summarize the basic concepts in a chapter by skimming it in about 10 to 15 minutes You are now prepared to read the chapter for details that will help you flesh out the Key Concepts STEP Read the chapter carefully for detail Devote an hour or more to this Keep notes of important facts Write down the definition of any terms that are necessary for understanding the topics under discussion Key terms are in bold type for ease of identification As you read each chapter for detail, be certain to study each table and figure to be sure of its meaning Also read the Action Briefs in the margins of the text to get a feel for what actually occurs in business opposed to what ought to happen as STEP Answer the Review Questions It is a good idea to make a note of the pages on which the answer appears STEP Read each of the Case Critiques Try to make a connection between what has occurred in the cases and what you have just read in the text Answer the questions associated with each case If your instructor has assigned the Activity and Study Guide, move to the corresponding chapter in that supplement and complete the assignments provided there Be sure to self-check your answers to identify content areas that require further study Only if your instructor has assigned material from the student supplement, SSweetco: Business Model and Activity File for Business in Action, Third Edition, should you continue with Steps and in the study plan as described below STEP If your instructor has included the SSweetco supplement in your course materials, move to the corresponding chapter in the activities section of SSweetco: Business Model and Activity File Read the performance objectives that precede the two levels of achievement Then complete the exercises and activities for the first level of achievement, the "Application Level." STEP Proceed to the next, higher level of achievement, "Analysis and Interpretation," by completing the decision-making and case problem assignments Rigorous follow-through on these study procedures will lead to good study habits that can have a positive effect on what you learn in this introductory business course and may, as a result, help to improve your grades 583 Glossary centralized organization An organization in which almost all authority is concentrated in a few positions at the top (6) chain of command The downward flow of authority, responsibility, and channels of communications within an organization See also Scalar principle (6) chain store One of a group of stores which are associated under a common management or common ownership and follow a common policy Chain store operation is usually characterized by central purchasing and warehousing f products before they are distributed to local retail outlets (8) charter (articles of incorporation) A state-issued document legally recognizing the existence of a new corporation The charter states the name and purpose of the corporation as well as stock authorization and other fundamental information (21) classical school of management The belief that worker and equipment productivity and profits can be increased by applying rational analysis to the production and management functions of a business (5) close corporation A corporation, usually small, whose ownership is closely held and not traded or offered as stock to the public The owners are usually directly involved in the management of the business (21) coinsurance provision A common provision in fire insurance policies which states that if property is insured for less than its total value and it suffers damage that is less than total, the insurance company will pay only a specified portion of the loss (20) collective bargaining The process of negotiation by a union with the management of a company This type of bargaining is called "collective" because the negotiators represent all the memberworkers as a group (17) command economy An economic system in which the government plans and controls economic activity by assessing available resources and social needs and then directing the manufacturing and distribution facilities of the countty toward certain goals See also Communism; Socialism (2) commercial bank In the United States, a privately owned business that provides financial services to customers but which must obtain a government charter in order to operate (19) commercial paper A short-term promissoty note that does not have any security (18) committee A group of people within an organization formally assigned the responsibility to discuss, or deal directly, with a well-defined matter (6) common carrier Any organization engaged in transporting goods or passengers for hire by land, water, or air (8) Common Market (European Economic Community) A cooperative trade community of nine European nations acting together to further common interests by promoting the free movement of labor, capital goods, and so on among members (22) common stock Stock issued by evety corporation to its owners in order to provide permanent risk capital (18) Communism An economic system in which central government control and planning have almost entirely replaced the free market, eliminating private ownership and profit and competition comparable equating the organization contribution worth A methodology for worth of various jobs in the according to their to the organization (16) comparative advantage A theoty for determining which kinds of production will be most advantageous for a countty in international trade: (a) A countty with multiple absolute advantages should concentrate on the products in which its advantage is greatest (b) A countty with no absolute advantages should concentrate on products in which its disadvantage is the smallest See also absolute advantage (22) conglomerate combination The joining together into one company of various companies that produce different, generally unrelated goods and services (21) consideration In law, "something of value." Consideration may be money, personal or intangible property, a promise to perform work, and so on In contract law, consideration is the impelling influence or "thing of value" that causes a contracting party to enter a contract (23) contingency approach Uses various aspects of other approaches based upon the situation faced (5) continuous process Production operations which run for long periods of time with few pauses or changes (11) contract In law, a voluntaty agreement in which two or more parties (individuals or corporations) bind themselves to act or not to act in a certain way A contract may be written or oral (23) conversion process In business, the process of creating or adding value or usefulness to available resources by changing them into an end product or service for which there is a demand (1) cooperative A form of business ownership in which production, marketing, or purchasing facilities are jointly owned by a group and are operated mainly to provide a service to members of the group rather than to make a profit (3) corporation An association of individuals, created under the authority of law, which exists and has powers and liabilities independent of its members (3) current assets Working capital, or the assets used to support the day-to-day operations of a company Typically, current assets are cash, accounts receivable, negotiable securities, and inventories (18) I) data processing All of the operations involved in collecting, organizing, analyzing, and presenting data, or information Data processing may be, but need not be, associated with the use of computers (12) database Interrelated data stored in a compu ter file for easy access, retrieval, and updating (2) debt financing Funds raised by a business through borrowing, principally in the form of a bank loan or the sale of bonds (18) decentralized organization An organization in which much authority is delegated to managers who are close to the actual operations In this type of organization, top management does not usually concern itself with lower-level operating decisions (6) delegation Assigning specific responsibilities along with related rights and authority to individuals and groups A function of authority (6) demand The quantity of an economic good or service that will be bought at a specific price (2) demand pricing When prices are set in response to shifts in consumer demand (1) depreciation A loss in value of equipment, buildings, or other fairly permanent assets caused by normal wear and aging (13) 584 Glossary differential pricing for various segments Sets different prices of the market (10) differentiation A promotional technique which points out the unique features of a product that will make it appeal to the chosen market (9) discretionary income The amount of money left over after the basic needs of life have been paid for (7) disposable income Take-home pay, that is, the amount of money available for spending after all taxes and fixed deductions are taken out The amount of disposable income is a measure of the standard of living (2) distribution All those activities involved in moving goods from their point of production to consumers or from the seller to the buyer (4) distribution channels The routes products follow as they are bought and sold on their way to ultimate markets (8) dividend A portion of the surplus profits of a corporation divided among its owners, or stockholders (18) division of labor (1) Dividing up all activities, tasks, and responsibilities of a business into specific jobs and then grouping them into departments (2) Breaking down production processes into separate tasks and assigning one or more tasks to individual workers (6) dumping Selling surplus goods overseas at less than their market price at home (22) E economic indicator A measure of economic activity which can be used to judge the direction in which the national economy is moving Examples of economic indicators are employment statistics, consumer spending, the money supply, and interest rates (14) economic order quantity (EOQ) amount to order when replenishing inventory levels (11) Best embargo A legal prohibition by a country against trade in certain goods or with certain countries (22) Employee Stock Ownership Plan (ESOP) Under the terms of this plan, employees, as stockholders in the firm, share in both the profits and the losses (17) entrepreneur An individual who uses personal initiative to organize a new business (2) equity (financial) Money invested in a business See a/so capital (13) equity (human resources) Conditions under which employees believe their rewards are fair (15) equity financing Funds raised by a business by selling shares in its ownership (18) exchange rate The amount of currency of one country that is equal to a given amount of the currency of another country (22) expense budget A forecast in numerical terms showing total amounts planned to be spent for specified purposes during a budget period (14) exporting Selling goods or merchandise to a company or government in another country (22) express warranty A statement madc by a seller, often in a written form, rhat the article being sold is of a specified quality and type The warranty may also state that the seller will repair or replace the merchandise if defects are found (23) F Factoring Providing money in return for accounts receivable, either by discounting or by buying the accounts outright Factoring is performed by a company (18) FIFO First in, first out; an inventory accounting system that assumes that the cost at which an inventory was accumulated will be charged to the finished goods when sold See a/50 LIFO (13) financial accounting The maintaining by an organization of financial information which must be reported to, and used in dealing with, the "outside world" -investors, banks, regulatory government agencies, and so on See a/so accounting (13) fixed cost Operating costs which not vary according to the amount or type of goods produced or services provided, but remain relatively stable, for example, rent and utilities (10) flexible budget A budget that is capable of responding to the changing conditions of a business while still fulfilling its purpose A flexible budget is usually achieved by the adoption of alternate budgets as conditions require (14) FOB (free on board) destination A term applying to the situation when the seller pays all transportation costs, except for the unloading of the goods at their destination (8) FOB (free on board) factory A situation when the buyer pavs all shipping costs, except for the loading of rhe goods at their point of origin (8) follow-the-Ieader pricing Setting prices very close to those already esrablished for similar products of competing lirms (10) franchise An independenrly owned company that pays a parent company a fee for the right to sell a certain product or to use certain methods or brand names (3 4) (, general partnership Co-ownership of a business by two or more people who contribute their private capital, share all profits, and accept individually and as a group all responsibility for satisfying the debts of the business (3) going public The act of making the first public offering of a corporation's stock (21) grievance procedure An orderly procedure spelling out thc steps by which claims of wrongful treatment of workers by management can be appealed through various levels of union and company management A grievance proccdure is usually included in a labor contract (17) gross national product (GNP) The total market price of all the goods and services created by an economy, usually measured over a period of one year (2) II historical trend forecast A business forecasting techniquc based on finding out what consistent trends have occurred in the past and assuming that the ones identilied will continue in the future (14) horizontal combination The joining together of more than one company operating at the same level of production or distribution of the same kind of goods or services, for cxample, two pharmaceutical manufacturers (21) I implied warranty A warranty, implied by law even when it is not expressed by the seller, that in most sales the buyer is receiving clear ownership of the property and the scller is authorized ro sell it, and that the goods arc as represented and can be used for their intended purpose (23) importing Buying goods or merchandise from a company or government in another country (22) 585 Glossary income statement (operating statement; profit and loss statement) An accounting report thar shows the revenue received and rhe expenses paid by a company during a cerrain period of operations (13) indirect distribution channel The path to markets followed by goods which pass rhrough intermediaries (wholesalers, disrributors, assemblers, brokers, agents, retailers, and so on) to rhe ultimare consumers of rhose goods (8) industrial goods (a) Goods used to make other products (b) Goods used in rhe general operation of a business or an instirution (7) informal organization The internal strucrure of rei arion ships wirhin a business which is assumed by workers and managers to exist withour specific planning (6) institutional advertising Advertising which presenrs messages from a company, a group of companies, or other instirutions withour the intent to sell specific products bur usually to promote a good repurarion or goodwill (9) insurance A means of protecting businesses from various kinds of loss by sharing the risks Each participant contribures regularly ro a fund which is used to reimburse any contriburor who suffers a specified type of loss (20) intensive distribution Placement of products in as many outlets as possible (8) interlocking directorate A directorare linked to rhat of another corporarion by placing the samc people or some of the same people on the boards of directors of differenr companies Establishing an interlocking directorship is a means of controlling comperirion (23) intermediary An individual or business rhar performs some markering funcrions in rerurn for discounts from rhe producer or for markups when rhe goods are resold (S) intrapreneurship The innovarion and creariviry of enrrepreneurship wirhin, and with the support of, the formal corporate structure (21) J job analysis The systematic study of the characterisrics and acriviries required by specific jobs (16) job enlargement The process of increasing rhc number and kinds of activiries performed by a single worker in order ro make his or her job more inreresring (15) job enhancement; job enrichment The process of making a job more satisfying for a worker by increasing his or her involvemenr in ir through any of a variety of means, such as encouraging the worker to improve job rechniques or to rrain orhers (15) joint venture A form of business ownership ser up by rwo or more companies to carry our a one-rime, shortlived business project, at the completion of which it ceases to exist (3) just-in-time inventory control Materials arrive just as needed, rather than being held in company inventory organizing, directing, and controlling the usc of a firm's resources to effectively and economically attain its objectives (11) management by objectives (MBO) An arrangement between superiors and subordinates that enables subordinates to participate in establishing performance goals in such a way as to motivate and guide the subordinates' progress toward these goals (15) manager A person who performs the unique work of management-planning, organizing, directing, and controlling; an individual who works through the efforts of other people in an organization to enable the organization to meet its objectives (5) managerial accounting A system which provides managers with information on costs and revenues This information is used internally in running tbe company See also accounting (13) market A means by which buyers and sellers exchange goods and services at mutually agreed prices (7) market segmentation The breaking down of a market into subgroups that arc homogeneous in some way (7) marketing concept A concept tbat rests on the belief that profits can be maximized by concentrating on the needs and wants of consumers and by creating products for which there is consumer demand (7) marketing mix The four main ingredients of the marketing proccss, which are product planning, product placement, producr promorion, and product pricing (7) markup An indicator of a company's profirabiliry Ir is rhe difference berween whar a retailer pays for merchandise and rhe price a cusromer is charged Compurarion of markup varies; ir is derermined by subtracring rhc cosr of goods sold from rhe ner sales and dividing rhe result by the cosr of rhe goods sold, or by dividing rhe difference berween rhe cosr of goods sold and rhe ner sales by the ner sales (10) mediation A process in which a third party not directly involved in a labormanagement dispute rries to facilitate a L labor-intensive process A production process in which workers make a more significant contribution to the value of the output than does any other element in the production process, such as equipment (11) law of supply and demand Supply and demand interacting to determine price and amount of goods and services that will be exchanged (2) leverage The abiliry of the owners of a business to control and use the profits from the total amount of capital when part of the capital is borrowed (18) liabilities Money owed by a company for any reason, for example, borrowing or purchasing on credit (13) LIFO Last in, first out; an inventory accounting system that charges the latest cost of accumulating inventories to the cost of goods sold See also FIFO (13) limited liability The restriction of the responsibility of an individual owner of a corporation to the amount of money which he or she has invested in the corporation (3) limited partnership A form of business ownership in which one or more partners are granted limited liability, provided there is always at least one partner with unlimited liability (3) line organization An internal business strucrure in which every employee is a member of a direct chain of command from the top executives down through the levels of management (6) liquidity The ease with which a possession can be rurned into cash (19) \1 make-or-buy decision The decision process of comparing the total cost of manufacruring a product internally with the price of purchasing the product (11) management The process of planning, (5) management information system (MIS) A set of interrelated procedures for collecring, analyzing, and reporting information (past, present, and projected) organized in sucb a way that rhe informarion is directly usable by managers for decision making and planning and controlling operarions The system is closely related to accounting (12) 586 Glossary settlement by clarifying issues, bringing in new information, inducing compromise, and so on Negotiators are not required to comply with a mediator's suggestions See a/so arbitration (17) merger The joining together of two or more companies, either by the pooling of their resources and assets or by outright purchase, with the result that only one company exists (21) money market mutual funds Speculative investments (from which investors can buy shares) made up exclusively of interest-bearing, shortterm borrowing instruments See a/so mutual funds (19) monopoly A company that operates with no competition in producing or marketing particular goods (2) multinational corporation A corporation that carries on operations in a number of different countries (22) mutual funds Investment companies in which individual investors pool their money to buy stocks, bonds, and other securities (19) mutual insurance company An insurance company owned exclusively by policyholders (those insured) and, like a cooperative, operates as a nonprofit organization (20) mutual savings bank A cooperative bank which maintains savings accounts for depositors and uses part of the deposits for making mortgage loans and other investments This type of bank may distribute earnings to depositors (19) () oligopoly An economic situation in which only a few competitive businesses supply the same goods or services to the same market, usually without strong competition (2) open corporation A corporation which offers its stock for sale to the general public (21) open shop A company or industry that has no officially recognized union Workers are free to join the union of their choice, and management makes no formal effort to avoid unionization (I7) operations The term generally used for all business processes except those that create physical goods, which are generally called "production processes." (11) organization All the people, their roles, and relationships, that make up the human resources of an enterprise (6) overhead Expenses that not add visible value to a product or service during its manufacture or provision (4) p participative management (system 4) One of four styles of management identified and described by Rensis Likert Highly motivating, it stresses the active participation of employees in the management process (15) penetration pricing Setting as Iowa price for a product as possible, with the expectation of achieving profits through volume sales Penetration pricing is used when new products are introduced (10) performance appraisal An attempt to judge the quality of the work of the employees of an organization with the intention of keeping general productivity as high as possible (16) plans, strategic Plans, policies, and procedures for attaining the overall, or long-term, goals of a business (5) plans, tactical Plans and procedures for attaining the short-term goals of a business that are a year or less away (5) policy A general guide as to how managers and workers are to decide issues that may occur in the future Establishing a policy provides a way of shaping the deciding process while allowing discretion to the decision maker (5, 20) positioning Aiming a product at the specific market segments that would be most likely to buy it (9) preferred stock Stock which has priority over common stock when the profits of a company are distributed to stockholders (18) prime rate The interest charged by major banks for short-term loans to their large commercial customers with the best credit standings (19) private nonprofit organization An organization whose primary goal is to meet needs that cannot or are not effectively or fully satisfied by business Although financed, established, and operated much like a business, it does not intend to make a profit Examples of private nonprofit organizations are hospitals and museums (1) product life cycle The set of stages through which most finished products move, usually identified as introduction, growth, maturity, and decline (7) product line A group of similar or related products that can be sold by using the same kind of distribution and promotion methods (7) production The manufacture of physical materials or goods Production ranges from basic resource extraction, such as mining, through the use of already manufactured materials to produce other manufactured goods, such as television sets Production comprises all those activities which create goods or services to be sold, including manufacturing, purchasing of raw materials, and supervising production workers The term is generally used for business processes in which the physical form of materials is changed (1) productivity The amount of goods or services produced from a given amount of resources Productivity is a measure of production efficiency (2) profit The amount of money left from income made by selling goods and services after all the costs of producing the goods and services have been paid for (1) program evaluation and review technique (PERT) A planning technique for scheduling activities and allocating resources; especially useful for one-of-a-kind projects, such as building a bridge (11) protective tariff A tax levied on imported goods by a country in order to discourage the importation of certain products or to raise the price of these products so that they compete less effectively with domestic goods of the same type (22) proxy A legal statement empowering someone else to cast one's own vote (21) public enterprise An organization, not intended to make a profit, operated by a unit of government and financed by taxes or service charges paid by the public, which produces goods or renders services deemed essential for the public good (1) pulling strategy A technique used in promoting a product in which attempts are made to stimulate a strong consumer demand, usually by advertising (9) pure risk A type of business risk Pure risk refers to the possibility of loss caused by accidental fire, injury, or other damage to property or life (20) pushing strategy A technique used in promoting a product in which strong promotional efforts are directed toward wholesalers and retailers in an attempt to persuade them to sell the product aggressively (9) () quality circles Small groups of employees who acknowledge a mutual dependency for quality and productivity and who meet regularly to identify and resolve operating problems (11) quality control Inspection of products 587 Glossary and services to insure that they meet their designed specifications (11) quantitative approach A modern theory of management which emphasizes thc overall system in which work is done and uses the statistical study of groups of operations, workers, consumers, and so on to permit prediction and to guide decision making It is derived from systems theory (5) quick ratio (acid-test ratio) Quick assets (assets that can be used very quickly to pay bills, that is, cash, marketable securities, accounts receivable) divided by current liabilities The quick ratio is a sensitive indicator of liquidity (13) R ratio analysis A technique for interpreting financial statements in which certain categories of assets, earnings, expenses, liabilities, and equity are compared Ratio analysis permits a comparison of the performancc and condition of a company with its own standards or with those of other companies (13) retailer A company or an individual who buys products for resale to ultimate consumers (8) retunl on investment A measure of how much income has been produced from the capital invested in a business by its owners Return on investmcnt is calculated by dividing net income by owners' equity (13) return on sales (nct profit margin: ratio of nct income to sales) An indicator of the profitability of a company Return on sales is determined by dividing net incomc before taxes by net sales (13) revenuc budget A budgct that attempts to forecast, in numerical form, the total income from all sources that will be available during an upcoming budget period Among these sources are sales revenues as well as all others, such as dividends and interest from savings accounts (14) robotics A form of automation in which mechanical devices duplicate the motions of the human hand (11) S safety stock A minimum supply of materials or goods or an inventory, for example, for one-week's use This srock is kept on hand in case regular deliveries arc delayed (11) sales promotion The category of promotion that includes all promotional activities except actual selling and advertising (9) Scalar principle The concept that authority and responsibility should flow in an unbroken line from the top to the bottom of an organization See also chain of command (6) self-insurance The practice, followed by some businesses (usually large ones), of maintaining a reserve fund to be used if a major loss occurs (20) services Personal, professional, or financial activities that help people or organizations The creation of a physical product is not a direct outcome of these activities (1) shopping goods Regularly purchased but comparatively expensive goods for which buyers are willing to "shop around" before making a selection (7) sinking fund A fund to which a company contributes annually so that, by the maturity date of a bond issue, the fund will contain enough money to retire the issue (18) skimming The practice of setting the highest price consumers are likely to accept when introducing a new product, with the intent to reduce prices later, when competition is felt (10) Socialism An economic system in which the government owns and operates the major industries of production and distribution and plays a hcavy regulative role in all other business activity, but permits certain freedoms of capitalism to exist in a modified form See al.w command economy; Communism (2) software In computer technology, (a) the collection of instructions, readable by a computer, that tells the computer what to (for example, computer programs); or (b) the procedures for gathering, preparing, checking, and distributing data and output (12) sole proprietorship A form of business ownership in which a single individual assumes the risk of operating the business, owns its assets, and controls and uses its profits (3) span of control The number of employecs or activities directly supervised by onc manager (6) specialty goods Products with unique characteristics-especially a brand name-that make consumers willing to exert considerable effort to locate and buy them (7) standard industrial classification (SIC) A numerical system which groups specific industries into comprehensive categorics The system was devised by the Office of Management and thc Budget (1) standard metropolitan statistical area (SMSA) A concentrated population of 50,000 or more people that has been designated a SMSA by the federal government for census and statistical purposes (7) statement of changes in financial position (funds statement; sources and uses statement) An accounting report in summary form showing the sources of funds a business has used during an accounting pcriod and the uses to which the funds were put (13) stock dividend A dividend paid to the stockholders of a corporation in the form of new shares of stock rather than cash (18) stock split The procedurc of dividing each share of the existing stock of a corporation into two or more ncw shares in order to rcduce the price of single shares (18) strategic plans Overall guides to longrange courses of action to be taken to meet objectives (5) Subchapter S corporation A legal form of small business that combines the limited liability of a corporation with the tax advantages of a singlc proprietorship (3) subsidiary A company that has merged with one or more other companies and whose assets are mainly or entirely owncd by another company (21) system An organizational form or set of interrelated rules, procedures, and the like A systcm can be economic, social, political, physical, and so on (1) systems theory A group of verbal and mathematical principles that describe how the related parts of a system may be organized (5) T tariff A special tax on imported goods, usually imposed to protect domestic producers from lower priced foreign products (22, 23) technology The collection of methods a society uses to provide itself with the material needs of life The processes, methods, and knowledge used to produce goods and services (2) Theory X and Theory Y Two common managerial views of people and their motivation, descrihed hy Douglas McGrcgor Theory X: The average worker inherently dislikes work and responsihility, must be forced and directed Thcory Y: Work is natural; employees will readily accept 588 Glossary responsibility and work toward goals that provide self-respect and fulfillment (15) trade credit A purchase made on credit from the vendor (18) trademark A brand that is protected by law (23) trust (a) Any business combination that limits or eliminates competition (b) Literally, a scheme by which a company gives dividend-paying trust certificates in return for voting control of the stock of another company (23) l underwriter In business finance, an intermediary (such as an investment bank or banker) who buys all or a large part of an issue of the stock of a corporation and resells it to investors, receiving a commission for services rendered (21) UniEonn Commercial Code A large body of commercial laws, written by legal experts, covering every major area of business law that falls under state jurisdiction and designed to make the laws governing business transactions more uniform in application Of itself, the code has no legal force, but much of it has been made enforceable law by most state legislatures (23) Union shop An industry or company that requires all employees to join a recognized union within a specified time after they are hired (17) unity of command The principle that each person in an organization should have only one immediate superior (6) unlimited liability The responsibility of the proprietor of a business for paying all debts and charges that may arise from its operation Characteristic of small businesses and farms (3) utility of place The value or usefulness of a resource or product which is determined by its location-its availability for immediate use by the consumer (1) \' value analysis An analysis carried out jointly by the engineers and purchasing agents of a company to examine every part of a product to determine whether less expensive substitutes can be used without impairing its function Value analysis is a means of reducing the costs of materials and production (11) variable costs or expenses Costs which rise and fall according to changes in production activity or volume of output Examples are expenses for materials, labor, and other resources whose use depends on production (10) vertical combination A method of joining together into one large company a number of smaller companies, all of which contribute at some level to producing and selling a singlc kind of product, such as gasoline (21) W warranty A guarantec, implied or explicit, of the integrity of a product usually specifying that the manufacturer will be responsible for the replacement of defective parts for a certain period of time (23) wholesalers Intermediaries who sell goods to buyers who arc not the final users (8) word processing The production of writtcn communications through the combined use of systems management procedures, automated and/or computer technology, and skilled personnel (12) worker's compensation insurance Insurance carried by businesses to compensate employces for losses caused by physical injury or illncss suffered because of thcir jobs Worker's compensation insurance is required by law in all 50 states (20) Z zero-based budgeting A budgeting and planning system that requires managers to justify their annual budget requests as if the associated expenses had nevcr occurred before (14) Absences, employee, 370 Absentee owners, 395 Accident prevention, 371-372 Accountability, 123 Accounting audit, 297 balance sheet, 298-300 certified public accountant (CPA), 296-297 changes in financial position, 302 collection pcriod, 306 controls, 288-311 daily journal, 291 defined, 291 depreciation, 299-300 double-entrY method, 294-296 equation, 292 FIFO and LIFO, 297-298 financial, 291 fiscal year, 296 goodwill, 300 income statement, 300-302 inflation, 297-298 ledger, 291 managerial, 292 period, 296 practices, 296-298 principles, 292-296 process, 291-293 recordkeeping, 291 retained earnings, 300 standards, 296-298 transactions, 291, 294-296 trial balance, 291 true, 291 work sheet analysis, 291 Accounts receivable, 409 Acid-test ratio, 306 Acquisition, corporate, 493 Addressograph-Multigraph, IS Administration, defined, 101 Advertising contests, 208 cooperative, 192 coupons, 208 differentiation, 193 direct and indirect, 199-200 expenditures, 208-209 informative, 194 institutional, 200 media, 201-205 objectives, 197-198 persuasive, 194 point-of-purchase, 205 positioning, 193 premiums, 208 process, 198-199 product, 200 Advertising (continued) promotion campaign, 193, 200 pulling strategy, 192 pushing strategy, 192 regulation, 208 reminder, 194, 199 samples, 205 social issues, 206, 208-213 specialty, 205 strategy, 192-194 testimonials, 213 Advertising Council, Inc., 564 AFL (American Federation of Labor), 385 AFL-CIO, 385, 387, 388 Africa, South, 501 Agency shop union, 389 Agents legal, 535 manufacturer's, 173 selling, 173 AM International, 71 American Law Institute, 531 American Management Association, 564 American Stock Exchangc (AM EX), 446, 45 I Amtrak, 52 Antitrust laws, 541 Apparel Mart, The, 186 Apple Computers, 15, 76, 114 Appraisal, performance (see Performance appraisals) Arbitration, of labor disputes, 396 Assemblers, wholesale, 173 Assets current, 298-299 defined, 409 defined, 409 fixed, 299-300 defined, 410 property, 58 AT&T, 68, 125, 498, 540 Atkins, Nancy and Timothy, 408 Audit, financial, 297 Authority, 122 Automation, 242 inspection, 247 office, 281, 573 Avis Rent-A-Car Company, 357 Avon Products, Inc., 520 Bad debts, 410, 411 Bait-and-switch pricing, 229 Balance of payments, 518 Balance of trade, 518 Balance sheet entries, 298-300 Bank examiner, 443 589 Bank failures, 442-443 Bankers, investment, 490 Banking system, 437-443 automated teller machine (ATM), 441 check processing, 440 commercial banks, 439-440 discount rate, 439 electronic funds transfer (E F'1'), 435 exchange rate, 517 Export-Import Bank, 523 FDIC and FSLIC, 442-443 Federal Reserve Svstcm, 437-439 investment banks, '440-441 mutual savings banks, 441 prime rate, 439 regulation, 442-443 reserves, 438 savings and loans, 441 World Bank, 523 Bankruptcy, 538 Chapter 7, 462 Chapter II, 463 Chapter 13, 462, 463 commercial, 461-462 insolvent, 461 personal, 462 receiver, 461 regulation, 462-464 Bartering, 433 BASIC, 277 Bear Necessities, 408 Beckner, Rhea, 56, 59 Behavior goal-oriented, 342 in work groups, 343-344 Bchavior modification, 342 Behavioral management, 103 Bethlehcm Steel Corporation, 387, 388 Better Business Bureaus, Council of, 229 Big business, scope, 78 (see olIO Corporations) Binary numbcr system, defined, 272 Boards of dircctors, 488-489, 498 ethics, 560 interlocking, 540 Bockley, Paul w., 393 Bonafide occupational qualifications (BOQ), 363 Bond bearer, 420 callable, 422 convertible, 420 coupon, 420 debenture, 420 590 Bond (continued) defined, 419 discount price, 449, 452 face value, 452 federal government, 422 fund, 421 indenture, 420 junk, 417 maturity date, 419 mortgage, 420 premium price, 449 principal, 419 put, 421 redeemable, 422 registered, 420 retirement methods, 420-421 serial, 420 tax-exempt, 422 trustee, 420 variation of, 421 zero coupon, 421 Bonuses, defined, 374 Borrowing, debt financing, 414 Boycott, labor, 395 Brand defined, 156 licensing, 177 Break even, 85-86 calculations, 218-221 Bribery, 568 Brokers, wholesale, 173 Budget, defined, 108 Budget variance report, 326-327 Budgeting model, 320 Budgeting, zero-based, 324 Budgets, 320-327 capital expenditures, 322-323 cash, 322 expense, 320, 322 fixed, 324-325 flexible, 325-326, 329 overhead, 320 revenues, 321 sales, 321 Bulls and bears, 448 Business classifications, 13-14 cycle, 19, 46 growth, historical, 16 plan, 86 system, defined, 17 small (see Small business) Business Roundtable, 562 Buying and selling, Buying function, 145-146 Cafeteria benefit plan, 376 Capital defined, 32 working, 409 Capital expenditures budget, 322-323 Capital supply, 45 Capital uses, 409 Capitalism modified, 40 pure, 38 Capitalization ratios, 307 Careers (see appendix, Profiles, Technology in workplace) Index Carriers common, 183 tract, 183 private, 183 Cash budgets, 322, 323 Cash flow, 84, 410-412 Catalog showroom, 176 Celler-Kefauver Act, 540 Central American Common Market, 522 Centralization, organization, 125 Chain of command, 124 Chain stores, 174 Chains, voluntary, 174 Charter, corporate, 487 Check endorsement, 536 Check-kiting, corporate, 557 Chesebrough-Ponds, 142 Chrysler Corporation, 86, 202 CIGNA Corporation, 100 CIO (Congress of Industrial Organizations), 385 Civil Rights Act of 1968, 397, 398 Classical management, 103 Clayton Antitrust Act, 541 Coaching, in supervisory training, 368 COBOL, 277 Cola market, 154 Collateral, financial, 415 Collective bargaining, 388-393 Commercial paper, 418 Commissions, sales, 374 Committees, 133 Common Market (see European Economic Community) Communism, defined, 42 Community relations, 246, 248 Comparable worth, compensation, 372-373 Compensation benefits, 375-376 defined, 372 job evaluation, 372-373 job pricing, 373-374 labor negotiations, 388 regulation of, 375 terms, 374 two-tier system, 374-375 Compensation programs, employee, 372-376 Competition free, 39-40 illegal, 540 Component parts, 150 Computer analog, 282 applications, 280-283 audit, 304 central processing unit (CPU), 274 classifications, 274 decision-support systems, 282 defined, 272 hardware, 272-273 languages, 276-280 memory unit, 274 networks, 275 peripheral devices, 273 personal workstations, 282 processing devices, 274 program flowchart, 275 programs, 275 services, 275 Computer (continued) social impact of, 278, 283-284 software, 275-276 systems, 272-287 Computer-assisted design (CAD), 242 Computer-assisted manufacturing (CAM), 242 Computers pro and con, 283 in workplace, 95, 137, 231, 242, 331, 403, 573 Conformity, 500 Conrail, 52 Consolidated Edison Corp., 561 Consumer, 23, 33, 559 Consumer behavior, 151-152 Consumer credit, 542-543 Consumer Credit Counselling Service, 463 Consumer Credit Protection Act, 229, 542 Consumer goods, 12 classes, 148-150 defined, 147 Consumer Goods Pricing Act of 1975, 229 Consumer needs, Consumer Product Safety Act, 537 Consumer Product Safety Commission, 532 Consumer test panels, 160 Consumers, and pricing, 228-229 Containerization, 179 Contingency management, 106 Contract manufacturing, abroad, 516 Contracts competency, 534 consideration, 534 legal, 534-535 Controlling, defined, 111 Convenience goods, 149 Convenience stores, 149, 176 Conversion process, 11-12, 111 Cooperative, defined, 68 Cooperative advertising allowances, 192 Cooperative chain, 174 Coordination, 110 Copyright defined, 156 law, 539 Corporate combinations conglomerate, 493 horizontal, 493 vertical, 493 Corporate divestiture, 494 Corporations, 63-66, 484-505 advantages and disadvantages, 64-65 alien, 488 article of incorporation, 487 board of directors, 488-489, 498 bylaws, 488 charter, 487 close, 489 cumulative voting, 491 diversification, 492-493 domestic, 487 employment in, 494-495 and environment, 498-502 executive compensations, 500 foreign, 487 Index Corporations (continued) formation of, 487-488 going public, 490 golden parachutes, 500 growth, 491-494 international trade, 511 limited liability, 64 multinational, 568-569 open, 489 prospectus, 490 registration of, 490 shortcoming, 495-496 stock ownership, 64 stockholders, 488 structure of, 488 subchapter S, 65-66 tax aspects, 65 tax evasion, 499 taxes, 65, 546 Cost forecasts, 318 Cost variance report, 326 Costs fixed, 218 variable, 218 Credit accounting entry, 295 Cs of, 477 line of, 416 trade, 415-416 Credit cards, 416 Credit investigation, 477, Chapter 23 Credit management, 476-477 Credit unions, 441, 442 Critical path, PERT, 250 CRT (cathode ray tube), 273 Cultural factors, 516 Current ratio, 303 Customer layout, 244, 245 Data classes of, 266-267 defined, 267 primary, 266 secondary, 267 Data bank (see Data bases) Data bases, 267 Data collection, 266 Data processing batch, 270 modes, 270-271 point-of-sale, 270 real-time, 271 transactional, 270 Day-care centers, 339 Debit, accounting entry, 295 Debt financing, 410, 414-422, 425 Debt ratio, 414 Debt-to-equity, or-assets, ratios, 307 Decentralization, organization, 125 Decision making, defined, 112 Decision-making process, 112-113 Decision-support systems, 282 Deep discount store, 176 Deflation, 435 Delegation, 121-123 Demand, defined, 38 Demand forecasts, 153-154 Demand pricing, 223 Demography, 157 Departmentalization, 120-121 Department store, 175 591 Depreciation, 547-548 accounting for, 299-300 Deregulation, 544 Direct mail, 83 Directing, defined, 110 Discounting, in pricing, 226 Discrimination, in pricing, 229 Dispatching, 251 Distributed data processing (DDP), 275 Distribution physical, 178-184 transportation modes, 179-184 Distribution channels, 166-172 agricultural products, 172 consumer, 169-171 direct, 169-170 indirect, 170, 172 industrial, 171-172 intermediaries, 168 international, 516 networks, 168 retailers, 174-177 wholesalers, 173-174 Distribution enterprises, 13 Divestiture, corporate, 494 Dividends, 411 Division of labor, 120, 128 Divisional organization, defined, 131 Dow-Jones Industrial Average, 450-451 Dudley, George, 197 Dun and Bradstreet, Inc., 76 Du Pont Company, 487 Dust Buster, 144 Earnings, retained, 300, 302, 413 Ease of entry, 80-81 Economic environment, 18-19 Economic indicators, 316, 317 Economic order quantity (EOQ), 255-256 Economic svstems, 28-53 (see a/so Econ~mics) capitalism, 38-40 common features of, 31-33 communism, 42 comparisons, 41, 43-50 constraints, 31 consumers, 33 demand, 37 exchange system, 33, 34 gross national product, 44-45 market economv, 37 private enterpri~e, 37-40 producers, 33 resources, 32-33 socialism, 40-42 unplanned, 37 Economics (see a/so Economic systems) absolute advantage, 514 business cycle, 19 capital-intensive, 241 comparative advantage, 514 deflation, 435 industrial policy USA, 501-502 inflation, 435 interest, 435-437 labor-intensive, 241 Economics (continued) money supply, 433-434 supply and demand, 221-224 Economies of scale, 492 Economy, "hamburg," 20 EEO (see Equal Employment Opportunity Act) EEOC (see Equal Employment Opportunity Commission) Electronic data processing (EDP), 269 Embargo, 517 Employee benefits, 375-376 Employee orientation, 366 Employee Retirement Income Security Act (ERISA), 398 Employee stock ownership plans (ESOPs), 399 Employee training and development, 366-367 Employment, 10-11, 46-47 (see a/so Unemployment) franchising, 90-91 and small business, 75 Employment agencies, 364 Employment process, 363-366 Employment testing, 363 Energy problems, 23-24 Enlightened self-interest, defined, 564 Enterprise, private (see Private enterprise) Enterprises, classifications, 13 private, private nonprofit, public, Entrepreneur defined, 38 profile, 76 Entrepreneurship, 75-77 Environment of business, 17-25 Environmental abuse, 498-499, 566-568 hazardous wastes, 567 regulation of, 544 Environmental Protection Agency (EPA), 532, 542 Equal Employment Opportunity Act, 337, 495 Equal Employment Opportunity Commission (EEOC), 360, 363, 365, 369, 372, 375, 532 Equity balance sheet, 300 financial, 292 Equity financing, 410, 422-426 Equity theory, in motivation, 347 Ethics boards of directors, 560 business, 557 codes of, 564 defined, 557 managerial, 558 European Economic Community (EEC), 522 Evans, Jane, 21 Exchange process, 9-10 Exchange rate, 517 Executive recruiting, 364 Expectancy theory, 342 Expenses, income statement, 301 Export-Import Bank, 523 592 Facilities location, 244-247 Fair Credit Reporting Act, 542 Fair Debt Collection Practices Act, 542 Fair Employment Practices Act, 397 Fair Labor Standards Act, 375, 397, 398 Family Dollar Stores, 15 Fayol, Henri, 103 Federal Agencies, 563 Federal Aviation Administration (FAA), 532 Federal Communications Commission (FCC), 544 Federal Deposit Insurance Company (FDIC), 432, 442, 455 Federal Drug Administration (FDA), 562 Federal Mediation and Conciliation Service, 396 Federal Power Commission (FPC), 544 Federal Reserve Board, 532 Federal Reserve System, 432, 434, 437~439 discount rate, 439 government securities, 438 reserves, 438 Federal Savings and Loan Insurance Corpora-tion (FSLIC), 443 Federal Trade Commission (FTC), 49, 208, 501, 532, 539 Federal Trade Commission Act, 541 FIFO and LIFO inventory accounting, 297-298 Finance company, sales, 417 Financial Accounting Standards Board (FASB), 297 Financial analvsis, 303-308 Financial conditions, statement of changes, 302 Financial literacy, 84-86 Financial management, 406-427 cash flow, 410-412 commercial paper, 418 corporate bonds, 319-421 current and fixed assets, 409-410 debt financing, 410, 411, 414 debt ratio, 414 equity financing, 410, 411, 413 exchange rate, 517 leverage, 414, 415 loans, 415-417 long-term debt financing, 414-422 long-term equity financing, 422-426 short- and long-term funds, 412-413 sources of funds, 412-426 stocks issues, 422-426 Financial news, stock and bond reports, 451-452 Financial ratios, 303-308 Financing, in marketing, 145-146 Fiss, Barbara L., 339 Flexitime, 339 Floppy-disk drive, 273 FOB destination, 184 FOB factory, 183 Food and Drug Administration (FDA), 532 Index Forecasting techniques, 318-320 historical trends, 318-319 statistical relationships, 319 techniques, surveys, and estimates, 320 Forecasts background, 315 business, 315-320 defined, 315 demand and revenue, 317 Foreign Corrupt Practices Act, 569 Foreign trade (see International business) FORTRAN, 277 Franchise, defined, 69, 88 Franchisee, defined, 69, 88 Franchises, advantages and disadvantages, 91 Franchising, 88-91 growth of, 89 Franchisor, defined, 69, 88 Free speech, 558 Functional organization structure, 127-131 Funds, sources of (see Financial management) -~._ -_._ -_._ -~ - Gantt chart, 249-250, 258 Gantt, Henry L., 249 General Agreement on Tariffs and Trade (GATT), 523 General Electric Company, 65, 238, 400, 499 General Motors Corp., 68, 95, 118, 356, 492 General partnership (see Partnership, general) Generally accepted accounting practices (GAAP), 297 Generic products, 163 Giscombe, Bernice, 473 Givebacks, 382 Goal, defined, 107 Golden parachutes, 500 Goldsberrv, Ronald, 105 Goods ' consumer, defined, industrial, S Goodyear Tire and Rubber Company, 511 Government advertising expenditures, 200 and human relations, 337-338 international assistance, 523-524 Government regulations (see Regulation) Grading and labeling, 146 Grievance procedure, 393, 394 Grolier, Incorporated, 511 Gross national product (GNP), 44-45 Group dynamics, 343 Guaranteed annual wage, 376 Gulf Oil Corporation, 505 -~ ' - Hawthorne Hazardous Headhunter Herzberg, History of experiment, 336, 343 wastes, 567 agencies, 364 Frederick, 345, 346, 347 business, 15-17 Hitachi Ltd of Japan, 162 Holding company, 493 Honeywell, Inc., 26-27 Human relations, 337-351 Human relations management, 103 Human resources management, 354-379 databases, 403 functions of, 358-359 record keeping, 370-372 regulation, 370-372 Human resources manager, 357 Human resources planning, 359-363 Hygiene factors, 345 ~-_._,-_._._ ~~ lacocca, Lee A., 86, 202 Income accounting, 302 discretionary, 152 disposable, 43, 152 Income statement, 300-302 Individual Retirement Accounts (lRAs), 436-437 Industrial engineering, 103 Industrial goods, defined, 147 Industrial markets, 148 Industry, 17-18 defined, 13 Industry association, 395 Inflation, 45, 435 Information, defined, 265 Information processing, 269-271 (see also Data processing) Information systems, 262-287 MIS, 268-269 Injunction, court, in labor dispute, 395 Input units, computer, 273 Inputs, business, 11 Inputs and outputs, data processing, 269-270 Inspection (see Quality control) Institute of Certified Public Accountants (lCPA), 297 Instrument, financial, 414 Insurance accident and health, 474-475 automobile, 470 Blue Cross and Blue Shield, 474-475 burglary and theft, 471 business interruption, 468 casualty, 469 claims, 471, 472 cost, 460 defined, 464 endowment, 475 fidelity and surety bonds, 471 fire and allied loss, 467-468 group, 474 Health Maintenance Organizations (HMOs), 474 inland marine, 469 law of large numbers, 465 life, 475-476 no-fault, 470 ocean marine, 46S policy, 465 pooled fund, 465 premium, 464 Index Insurance (continued) public liability, 470 self-insurance, 464 title, 471 Insurance companies mutual, 466 stock, 466 Insurance coverage cash surrender, 475 co-insurance provision, 468 consequential losses, 468 deductible, 470 direct, 468 term, 476 Insurers, public, 466 Interest, 410, 411 compound, 436 prime rate, 439 Interest rates, 435-437 Intermediaries, 82 Internal Revenue Service (IRS), 533, 548 International business, 506-527 balance of payments, 518 balance of trade, 518 defined,510 dumping, 519 forms, 515-516 government assistance, 523-524 imbalances, 519 Japanese, 512-513 obstacles to, 516-520 operational problems, 519-520 International Telephone and Telegraph Co (11'1'), 521-522 International trade, defined, 510 Interstate Commerce Act, 16 Interstate Commerce Commission (ICC), 184, 532, 544 Interviews, job, 365 Inventories, periodic, 256 Inventory finished products, 254 merchandise, 254 raw materials, 254 safety stock, 255 warehouse, 178 Inventory accounting, 297-298 Inventory control, 253-256 just-in-time (lIT), 256 perpetual, 256 Inventory levels, 254-256 Inventory turnover ratios, 306 Inventory valuation, 298 Investments (see Securities exchanges) Investor defined, 448 institutional, 448 IOU, 414 Iowa Packing, 15 IUE (International Union of Electronic Workers), 401 Jackson, Michael, 30 Japan, business culture, 512-513 Japanese Ministry of International Trade and Industry, 420 Jenness, John S., 403 ]IT (job instruction training), 367 ]IT (just-in-time) inventories, 256 Job analysis, 360 593 Job Job Job Job Job Job Job Job Job Job changes, 370 description, 360, 361 enlargement, 348 enrichment, 349 evaluation, 372-373 Instruction Training (lIT), 367 rotation, 368 security, 558 specification, 360 Training Partnership Act (lTPA), 367 Jobs, Steve, 114 Joint ownership, abroad, 515 Joint venture, 68, 493 Kanban, 256, 260 Kantor, Rosabeth Moss, 350 Kay, (Ash), Mary, 345 Kellogg, W K., 49 Kelvin, Lord, 24 Kiam, Victor, 190 Kickbacks, 568, 571 Knights of Labor, 395 Knox, Donna, 129 Kodak Company, Eastman, 498 Kroger Co., 186 Kroll, Alexander, 207 -~~ _._- Labeling, 157 Labor, defined, 32 Labor contract, 392 Labor force defined, 32 makeup of, 383-384 Labor negotiations, 388-392 Labor unions, 337 and blacks, 385 and compensation, 374 craft, 387 history, 16, 384-387 independent, 388 industrial, 387 jurisdictional disputes, 396 local, 387-388 membership, 385-387 national, 388 shop steward, 392 social responsibility, 563 types of recognition, 389 Labor-management laws, 396-399 Labor-management relations, 393-403 collective bargaining, 388-393 contract administration, 392 cooperation, 390 disputes, 393-396 grievance procedure, 393, 394 work rules, 392 Labor-management teams, joint, 350 LaBrecque, Fran, 70 LaMothe, William, 49 Land use, 568, 572 Landrum-Griffin Act, 397 Law (see also Legislation, Regulation) administrative, 531 agency, 535 bankruptcy, 538 (see also Bankruptcy) business, 534-539 codes, 531 commercial, 533-539 Law (continued) contract, 534-535 copyright, 539 criminal, 533 defined, 531 leases, 535 licenses, 545 negotiable instruments, 536 ordinance, 531 patent, 539 personal property, 535 precedent, 531 real propcrty, 535 sales, 535 statutory, 531 tort, 533 Uniform Commercial Code, 536-537 warranty, 537-538 zoning, 545 Lead time, purchasing, 255 Lease versus buy, 548-549 Leases, 535 Legal environment, 531-550 (see also Law, Lcgislation, Regulation) Legal services, 533 Legal-political environment, 19-22 L'eggs, 144 Lcgislation, 16, 22 (see al.w Law, Legal Environment, Regulation) government, 40 Leonard, Stewart, 181 Leverage, financial, 414, 415 Liabilities, balance sheet, 300 Liability financial, 292 limited, 64 unlimited, 59 Licensing, 545 foreign, 515 Life cycle market, 156 product, 155-156, 194, 195 Life styles, contemporary, 338-339 Likert, Rensis, 345, 346 Line-and-staff, defined, 127 Line organization, defined, 126 Liquidity, financial, 303, 445 Litigation, 532 Liz Claiborne, Inc., 18 Lloyds of London, 467, 469 Loan bank term, 418 secured and unsecured, 415-417 Lobbying, in labor disputes, 395 Local area networks (LANs), 275 Lockout, strike, 395 Louis Rich Corporation, 15 LyphoMed Inc., 356 - ". . Ml, M2, money supply, 434 Madlin, Nancy, 76 Mail-order ho~ses, 175 Maintenance factor, 345 Make-or-buv, 253 Managemen't as art and science, 102 in business, 100-113 compensation, 104 594 Management (continued) cycle, 106, 107 defined, 100-101 development, 367-368 functions, 106-112 levels of, 101-102 Management by objectives (MBO), 348 Management information system (MIS), 268-269, 315 Management "schools," 103-106 Manager, defined, 101 Manufacturing (see Production) Manufacturing industries, 82 Manville Company, Johns, 371, 468 Market commercial, 147-148 defined, 147 free, 37 government, 148 institutional, 148 international, 148 original equipment manufacturer (OEM), 150 economy, 37 life cycle, 156 positioning, 160 research, 160 survey questionnaire, 160 test panels, 160 segmentation, 159-160 share, 155 Market classifications, 147-151 consumer goods, 148-150 industrial goods, 150 Marketing branding, 156, 158 demographics, 157-159 distribution systems, 164-187 packaging, 157 pricing, 214-232 concept, 142-144 emphasis, 16-17 functions, 145-147 information, 145-147 management, 145 mix, 144 promotion, 188-213 Markets, analysis of, 140-163 Markup, in pricing, 227-228 Marriott, J Willard, Jr., 497 Maslow, Abraham H., 340, 346, 347 Mass discount retailer, 176 Materialism, 338 and advertising, 210 defined, 22 Materials handling, 179 Materials inventorv, 254 Matrix organizatio~, 132-133 Mayer, Gloria Gilbert, 63 MBO (see Management by objectives) McClelland, David C., 341 McDonald's, 20 McGill, Archie, 125 McGregor, Douglas, 345, 346 Media Institute, 562 Media mix, 202 Mediation, of labor disputes, 396 Melville Corporation, 311 Mergers and acquisitions, 493-494, 496 Mickey Mouse brand license, 177 Index Minorities, 569 (see a/so Equal Employment Opportunity Commission) employment practices, 363 Minority Enterprise Small Business Investment Company (MESBIC), 87 MIS (see Management information system) Missionary selling, 196 Mobile Oil, 494 Modem, defined, 273 Money characteristics of, 433 plastic, 435 supply and demand, 434 time value of, 436-437 Money market mutual funds, 434, 442 Money substitutes, 435 Money supply, 433-443 (see a/so Banking Systems) basic, 434 checks, 434 currency, 434 demand deposits, 434 FED classifications, 434 inflation, 435 time deposits, 434 Monopoly, 39 corporate, 499 public utilities, 543 Morale, employee, 344 Morals (see Ethics) Mortgage, 418 Motivating factors, 345 Motivation process, 340-342 affiliation need, 341-342 equity theory, 347 expectancy, 342 goal-oriented, 342 hierarchy of needs, 340-341 job enlargement, 348-349 job enrichment, 349 and management, 344-348 and MVO, 348 participation, 345-346 quality of work life, 349-350 reward systems, 347 system 4, 345 two-factor theory, 345 work itself, 348 Motives, for buying emotional, 151 patronage, 152 rational, 151 Multinational corporations, 520-522 Multinational operations, 568-569 Mutual fund, 447 Mutual investment funds, 450 Nabisco Brands Inc., 494 Nader, Ralph, 564 NASDAQ (National Association of Securities Dealers Automated Quotation System), 447, 451 National Alliance of Businessmen, 565 National Association of Manufacturers (NAM), 508 National Association of Working Women, 391 National Labor Relations Act (Wagner Act), 397, 398 National Labor Relations Board (NLRB), 389, 396, 397, 532 Nestle, S A., 486, 488 Nevin, Christine, 561 New York Stock Exchange, 432, 446, 490, 451 Nike, Inc., 52 Nonprofit enterprises, Norms, group, 343 NOW accounts, 434, 442 Nussbaum, Karen, 391 Objective, defined, 107 Occupational Safety and Health Act (OSHA), 337, 372 Occupational Safety and Health Administration (OSHA), 532, 567 Office automation, 281, 573 Office of Business Women's Ownership, 97 Offshore manufacturing, 516 Oligopoly, 39 On-line data processing, 270 Open shop union, 389 Operations, defined, 238 Operations management, 236-261 Operations research, 106 Option, securities buying, 447 Options market, 447 Organization authority and responsibility, 121-123 behavior, 343-344 centralization and decentralization, 125 chain of command, 124 committee, 133 defined, 119 delegation, 121-123 departmentalization, 120 division of labor, 120-121 divisional, 131 formal, 119-120 functional, 127-131 informal, 120 internal, 118-137 line, 126 line-and-staff, 127-128 matrix, 132-133 principles, 123-125 span of control, 124-125 staff positions, 126 structure, 125-132 unity of command, 124 Organization of Petroleum Exporting Countries (OPEC), 522 Organizing, defined, 110 Organizing process, 119 Otis Elevator Corporation, 504 Output units, computer, 274 Outputs, business, 11 Overhead budget, 320 defined, 80 Over-the-counter (OTC) trading, 446-447 Index Ownership choice factors, 66-67 cooperative, 67 corporation, 63-66 forms, comparisons, 67 forms of, 54-71 franchise, 68 general partnership, 61-63 joint venture, 68 limited partnership 68 private vs public, 57-58 sole proprietorship, 58-61 Participative management, 345-346 Partnership formation guidelines, 62-63 general, 61-63 limited, 68 Patent, defined, 539 Paul, Rainer, 279 Penney, J C., stores, 231 Pension funds, 441 Pensions, employee, 375-376 Performance appraisal, 368, 379 criteria, 368 critical incidents, 369 forced-choice, 369 Personnel administration (see Human resources management) PERT (Program Evaluation Review Technique), 250-251, 258 activities, 250 critical path, 250 event, 250 Physical environment, defined, 23 Pickens, 1' Boone, 30 Picketing, union, 395 Piece rates, defined, 374 Plan defined, 107 operating, 109 short- and long-range, 108 Planning, 107-110 and organizations, 123-124 for production, 247-251 Plans, forecasting for, 315-320 Point-of-purchase advertising (POP), 205 Point-of-sale data processing, 270 Point-of-use manufacturing, 238 Polaris missile, 250 Policy, defined, 108 Political Action Committee (PAC), 395, 565-566 Pollution air, 566 land, 566 water, 566 Positioning, 193, 194 market, 160 Price equilibrium, 35 exercise, 447 negotiated, 226 purchase order, 252 Price fixing, 540 Price leader, 224 Price lining, 226 Pricing bait-and-switch, 229 break-even point, 217-221 595 Pricing (continued) cost-plus, 225 demand, 223 differential, 226 discounting, 226 follow-the-leader, 225 gross margin, 227 markdown, 228 markup, 227 of jobs, 373-374 penetration, 225 practices, 226-228 predatory, 229 prestige, 226 psychological, 226 regulation, 228-229 skimming, 225 strategies, 214-232 supply and demand, 221-224 unit, 228 Prime rate, interest, 439 Prince Matchabelli, 142 Principal, legal, 535 Privacy, right to, 558 Private automatic branch exchange (PABX), 275 Private enterprise system, 37-40 Private ownership, 38, 57-58 Problem solving, and productivity, 350 Procedure, defined, 108 Process layouts, 242-245, 260-261 defined, 243 Processes analytical, 240 capital-intensive, 241 computer-assisted, 242 continuous, 241 extractive, 239 fabrication, 240 industrial, 239-240 intermittent, 241 labor-intensive, 241 nonindustrial, 240-241 remanufacturing, 240 service, 240-241 synthetic, 240 Producer, defined, 33 Product layout, defined, 244 liabiliry, 537 life cycle, 155-156 line, 153 planning, 152-157 Production controls, 253-258 defined, 239 enterprises, 13 management 236-261 Productivity, 45, 46 and human relations, 337-351 Japanese, 512 and jobs, 48 and quality of work life, 350 Products custom, 241 generic, 163 standard, 241 Profiles, career Evans, Jane, 21 Giscombe, Bernice, 473 Profiles, career (continued) Goldsberry, Ronald, 105 Knox, Donna, 129 Kroll, Alexander, 207 LaMothe, William A., 49 Leonard, Stewart, 181 Marriott, J Willard, Jr., 497 Nevin, Christine, 561 Nussbaum, Karen, 391 Paul, Rainer, 279 Wyman, Irma, 305 Profit defined, forecasts, 318 motive, private, 8-9, 38 Profit and loss, Profit sharing, 375-376 Profit-and-loss statement, 300-302 Profit-on-sales ratio, 306-307 Profitability, financial indicators, 306-307 Profits pricing strategies, 216-221 small business, 84 source of, 410, 411 Program computer, 276 defined, 108 Progress control, 258 (see a/so PERT, Scheduling) Promissory note, 416, 536 Promotion, employee, 370 Promotional mix, 190-192 push-pull, 192 Property, personal, 535 Proprietorship, sole, 58-61 unlimited liability, 59 Prospectus, 490 defined, 452 Public enterprises, Purchase order, 252 Purchase requisition, 252 Purchasing, 145-146 industrial, 252-253 lead time, 255 mercantile buying, 252 Purchasing motives, 151-152 Purchasing power, 152 Puts and calls, 447 -_ _ _._ _-_._~- Quality circles (QCs), 257, 350 Quality control, 256-257 scrap reports, 258 Quality of life, 47-50 Quality of work life, 349, 558 and productivity, 350 Quantitative management, 106 Quick ratio, 306 Quota, trade, 517 - Rambush Company, The, 428 Ratio analysis, 303-308 Raw materials, defined, 150 RCA, 494 Real-time data processing, 271 Receivables turnover ratios, 306 Red Arrow Freight Lines, 166 Regulated industries, 543-544 596 Index Regulation (see also Law, Legal Environment, Legislation) advertising, 208 antitrust laws, 541 banking, 442-443 bankruptcy, 462-464 of capitalism, 40 of compensation, 375 consumer credit, 542-543 contracts, 534-535 of corporations, 501-502 deregulation, 544 employee privacy, 398 employee rights laws, 398 employment, 362-363 federal agencies, 532 foreign business, 569 hazardous materials, 544 insurance claims, 471 of labor-management relations, 396-399 laissez-faire, 539 local zoning, 545 minimum wage laws, 398 product dating, 551 right-to-know laws, 398 safety and health, 371-372, 398 sales, 535 social responsibility, 563-564 srock and bond sales, 452-453 taxation, 545 transportation, 184, 186 zoning, 246 Responsibilities, defined, 121 Retailers, 174-177 Retailing, 81, 240 layouts, 242, 245 licensing, 177 sources of funds, 412 trends in, 175-177 wheel of, 180 Retirement plans, 375 Return on Investment (equity), 415 Return on Investment (ROI), 307 Revenues, income statement, 301 Revere Coppcr and Brass Corp., 432, 461 Reward systems, as motivation, 347 Reynolds Industries, R ]., 486, 494, 511 Right-to-work laws, 397 Risk in business, 15 insurable, 463-464 pure, 464 speculative, 461-462 Risk-bearing, marketing, 145-146 Risk management, 461-477 Robinson-Patman Act, 229 Robotics, 242 Roles, group, 343 Romney, George, 151 Routing, defined, 249 Rule, defined, 108 Safety, employee, 371-372 Safety srock, inventory, 255 Salary, defined, 374 Sales closing, 196 contract, 535 Sales (continued) cost of, accounting, 301 house-to-house, 196 intangibles, 196 law of, 535 missionarv, 196 nonselling functions, 196 personal, 195-196 profession, 196 prospecting, 196-197 Sales process, 195-196 Sales promotion, 204-208 San Francisco Bay Area Rapid Transit District, 562 Satisfaction, job, 344 Satisfying factors, 345 Saturn Project, 118 SBA (see Small Business Administration) Scalar principle, 123 Schedule performance reports, 258 Schedules, tlexitime, 339 Scheduling, defined, 249 Schick, 525 Scully, John, 115 Sears Roebuck and Co., 511 Securities American Stock Exchange, 446 bond transactions, 449 commodity, 447 exchanges', 444-447 government, 438 information sources, 450-453 mutual funds, 450 New York Stock Exchange, 446 operation of, 447-450 options market, 447 GTC, 446 regulation, 452-453 shorts and longs, 449-450 srock and bond reports, 451-452 stock indexes, 451 stock transactions, 448-449 stockbrokers, 448 Securities and Exchange Commission (SEC), 291, 432, 452-453, 490, 501, 532, 569 Securities markets, 443-453 Segmentation, market, 159-160 Selling function, 145-146 Separation, employee, 370 Service enterprises, 13 Service industries, 82 Service operations, direct, 240 Services, defmed, Sex discrimination laws, 398 Sexism, in advertising, 210-211 Sherman Antitrust Act, 16, 541 Shopping goods, 149 Shopping malls, 177 SIC (Standard Industrial Classification), 13-14 Sierra Club, 564 Single-line store, 175 Site selection factors, 244-247 Situational management, 106 Skimming, in pricing, 225 Slowdown, union, 395 Small business, 72-94 business plan, 86 characteristics, 77-78 Small business (continued) defined, 78 ease of entrv, 80-81 finances, 79~80, 82 financial literacy, 84-86 four common fields, 81-82 government, 87 marketing, 83-84 resources, 78 Small Business Administration (SBA), 87 Small Business Investment Corporation (SBIC), 87 Smiddy, Harold, 569 Smith, Adam, 128 Smith, Roger B., 95,118 Social changes, forecasts of, 316 Social concerns, for computers, 278, 283-284 Social responsibility, 557-572 community, 559-562 land use, 68 minorities, 569 power groups, 563-564 whistle-blower, 562 women, 569 Socialism, defined, 41 Software, computer (see Computer software) Sole proprietorship (see Proprietorship, sole) Span of control, 124-125 Specialty goods, 149 Specialty shop, 175 Speculator, defined, 448 Spending, personal, 43-44 Standard Industrial Classification (SIC), 13-14 Standard Metropolitan Statistical Area (SMSA), 148 Standard of living, 43-44 Standardization, international, 520 Standardizing, function in marketing, 145-146 Standards, defined, 111 Statistical forecasts, 319 Statistical quality control (SQC), 256-257 Statistics, 106 Steckmest, Francis W., 562-563 Stevenson, Dick, 155 Stock callable, 424 common, 424-426 convertible, 424 corporate, 427 cumulative preferred 423 cumulative voting, 491 dividends, 423, 425 noncumulative voting, 491 nonparticipating preferred, 423 no-par value, 423 par value, 423 participating preferred, 423 passed dividend, 423 preferred, 423-424 prospectus, 490 splits, 425 trading, 426 (see aLIO Security exchanges) voting, 424 Index Stock transactions, 448-449 ask price, 449 bid price, 449 limit order, 449 market order, 449 odd lot, 448 quotations, 448 round lot, 448 Stockholder's rights, 490-491 Stone, Justice Harlan, 531 Stores, types of, 174-175, 176-177 Storing, function in marketing, 145-146 Strategy, 108-109 promotion, 193-194 Strike, defined, 394 Strikebreaking, 392, 395 Subchapter S corporation, 65-66 Subcontracting, 82-83, 92 Subsidiary, 493 Supervisors, and labor unions, 392 Supply, defined, 34 Supply and demand equilibrium point, 35 equilibrium price, 35 government's role, 36 law of, 33-37 of money, 434 Syndicate, 493 System, defined, 17 Systems theory 106 Taft-Hartley Act, 397 Takeover, corporate, 65 Tandy Corporation, 511 Tariff defined, 517 protective, 517 revenue, 517 Tariffs, 547 Taxation progressive, 545 proportional, 545 regressiv~, 545 Taxes communications, 547 corporate, 65, 499, 546 custom, 547 depreciation, 547-548 excise, 547 factor in site selection, 248 income, 546 payroll, 546 property, 546 revenue, 546 sales, 546 transfer, 546 transportation, 547 Taylor, Frederick w., 103, 336 597 Team building, 350 Teamsters, International Brotherhood of .188, 401 Technology defined, 32 and environment, 24-25 forecasts of, 316 in workplace, 95, 137, 331, 403, 573 Temporary employees, 362 Termination, employee, 370 Texaco, 486, 487 Texas Instruments Corp., 324 Theory X and Theory Y, 345, 346 Third-world countries, 520 Townsend, Robert, 357, 358 Trade exporting, 509-510 importing, 509-510 Trade advantages and disadvantages, 510-515 Trade associations, 563 Trade barriers, 517-520 Trade process, 10 Trademark, defined, 156, 538 Transfer, employee, 370 Transportation, 246, 248 Transportation services, 240 Transporting, function in marketing, 145-146 Treasury bills, U.S., 442 Trouble code list, 256, 257 Trust, illegal, 540 Turnkey arrangement, 88 Turnover, employee, 360 Two-factor theory, 245 UAW (International Union of United Auto, Agricultural, and Aerospace Workers), 387 Underwriter, investment, 490 Unemployment, 10-11, 46-47, 384 (see also Employment) Uniform Commercial Code (UCC), 531, 536-537 Union Carbide Corp., India, 567 Union shop, 389 Unions (see Labor unions) U.S Department of Commerce, 153, 160, 523 U.S Department of Labor, 339, 367 U.S Department of Labor Statistics, 370, 387 U.S Overseas Investment Corp., 523 U.S Patent and Trademark Office, 538 Unity of command, 124 User-friendly computer languages, 277 Utilllies, public, 543 Utility of form, 12, 144 of place, 12, 144 of possession, 12, 144 of time, 12, 144 Value analvsis, 253 Values, business, 9-10, 22-23 Venture, joiut, 68, 493 Venture capitalist, 77 Vestibule training, 367 Wage incentives, 374 Wages, defined, 374 Wages and Hours Law, 375 Wages and hours policies, 388 Wall Street Journal, The, 447 Walsh-Healy Public Contracts Act, 375 Warehousing, 240, 247 Warranties, 537 Water consumption, 23-24 Wealth, defined, 10 Westinghouse Electric Corporation, 400 Wheeler-Lea Act, 541 Whistle-hlower, 562 Wholesalmg, 82, 146, 240 Women, 569 compensation, 373 employment practices, 363 in work force, 338-339 Word processing, 280-281 Work force blue collar, 384 minorities, 384 service workers, 384 white collar, 384 Work force planning, 359-363 (see also Human resources management) legal aspects, 362-363 retirements, 362 temporary employees, 362 turnover, 360, 362 World Bank, 523 Wyle Laboratories, 408 Wyman, Irma, 305 Xerox Corporation, - 511 Zero defects (ZD), 257 Zoning, 246, 545 ordinance, 568 ._- ... Wolfson Photography, Inc Library of Congress Cataloging -in- Publication Wexler Data Bittel, Lester R Business in action Includes index Business emerprises-U nited States Industrial managementUnited... jobs in business involved making goods; today most jobs in business are concerned with providing services (See Figure 1-1.) THE BUSINESS PROCESS Converts resources to useful goods and services Business. .. employment, and financial data with that of others in the same industry THE DYNAMICS OF BUSINESS Business is dominated by uncertainty and change The activities of business take place in a turbulent,