glossary A-E Flashcards
acquisition
The outright purchase of one firm by another. (532
agency theory
A management concept that argues that managers, because they are paid a salary, may not be as committed to the success of the businesses they manage as the owners, who capture the business’ profits. This theory
supports the notion of franchising, because franchisees are, in effect, the owners of the units they manage. (568)
balance sheet
A snapshot of a company’s assets, liabilities,
and owners’ equity at a specific point in time. (309)
barrier to entry
Conditions that create disincentives for a
new firm to enter an industry. (194)
basis of differentiation
What causes consumers to pick one
company’s products over another’s. (158)
bootstrapping
Using creativity, ingenuity, or any means posssible to obtain resources other than borrowing money or raising capital from traditional sources. (377)
brainstorming
A technique used to quickly generate a large
number of ideas and solutions to problems; conducted to generate ideas that might represent product or business opportunities. (89)
brand
The set of attributes—positive or negative—that people associate with a company. (416)
brand equity
The set of assets and liabilities that is linked
to a brand and enables it to raise a firm’s valuation. (420)
Brand managment
A program that protects the image and
value of an organization’s brand in consumers’ minds. (418)
business angels
Individuals who invest their personal capital directly in new ventures. (381)
business model
A company’s plan for how it competes, uses
its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the profits it generates. (53, 148
business plan
A written document describing all the aspects
of a business venture, which is usually necessary to raise money and attract high quality business partners. (53, 222)
corporation
A legal entity that, in the eyes of the law, is
separate from its owners. (281)
code of conduct
A formal statement of an organization’s values on certain ethical and social issues. (265)
concept statement
A preliminary description of a business
that includes descriptions of the product or service being offered, the intended target market, the benefits of the product or service, the product’s position in the market, and how
the product or service will be sold and distributed. (111)
copyright
A form of intellectual property protection that
grants to the owner of a work of authorship the legal right to determine how the work is used and to obtain the economic benefits of the work. (471)
corporate entrepreneurship
Behavioral orientation exhibited by established firms with an entrepreneurial emphasis that is proactive, innovative, and risk taking. (33
creative destruction.
The process by which new products
and technologies developed by entrepreneurs over time make current products and technologies obsolete; stimulus of economic activity. (49)
current assets.
Cash plus items that are readily convertible
to cash, such as accounts receivable, inventories, and marketable securities. (311)
current liabilities.
Obligations that are payable within a year, including accounts payable, accrued expenses, and the current portion of long-term debt. (311)
debt financing.
Getting a loan; most common sources of debt
financing are commercial banks and the Small Business Administration’s (SBA’s) guaranteed loan program. (379)
declining industry
An industry that is experiencing a reduction in demand. (203)
economies of scale
A phenomenon that occurs when mass producing a product results in lower average costs. (194, 495)
