Fashion Business Practices

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Arbitration

Back 1

settlement of a labor/management dispute by a third party whose solution is legally binding and enforceable.

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Job Sharing

Back 2

performance of one full time job by 2 people on part time hours.

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Controlling

Back 3

the process of evaluating and correcting activities to keep the organization on course.

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Discount Rate

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the rate of interest the Fed charges to loan money to any banking institution to meet reserve requirements.
-if raised- interest rates are increased and money supply is reduced
-if lowered- IR decrease, money supply is increased

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Collective Bargaining

Back 5

the negotiation process through which management and unions reach a an agreement about compensation, working hours & working conditions for the bargaining unit.

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Staffing

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the hiring of people to carry out the work of the organization.

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Human Relations

Back 7

the study of the behavior of individuals and groups in organizational settings.

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Commercial Bank

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the largest and oldest of all financial institutions, relying mainly on checking and savings accounts as sources of funds for loans to businesses and individuals.

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Unsecured Loans

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loans backed only by the borrowers' good reputation and previous credit rating.

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Labor Union

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employee organizations formed to deal with employers for achieving better pay, hours and working conditions.

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Job Enlargement

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the addition of more tasks to a job instead of treating each task as separate.

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Line of Credit

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an arrangement by which a bank agrees to lend a specified amount of money to an organization upon request.

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Job Rotation

Back 13

movement of employees from one job to another in an effort to relieve the boredom often associated with job specialization.

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Trade Credit

Back 14

credit extended by suppliers for the purchase of their goods and services.

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Motivation

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an inner drive that directs a person's behavior toward goals.

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Morale

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an employee's attitude toward his or her job, employer, and colleagues.

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Open Market Operations

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the buying and selling of US gov't securities by the Federal Reserve to control the money supply.
- buys treasury bills- Money supply increases, economic activity increases
- sells treasury bills- MS deceases, economic activity slows down

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Treasury Bills

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short term debt obligations the U.S. government sells to raise money

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Boycott

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an attempt to keep people from purchasing the products of a company

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Gross Domestic Product (GDP)

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the sum of all goods and services produced in a country during a year.

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Comparative Advantage

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the basis of most international trade, when a country specializes in products that it can supply more efficiently or at a lower cost than it can produce other items.

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Absolute Advantage

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a monopoly that exists when a country is the only source of an item, the only producer of an item, or the most efficient producer of an item.

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Conceptual Skills

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the ability to think in abstract terms and to see how parts fit together to form the whole.

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Job Analysis

Back 24

the determination, through observation and study, or pertinent information about a job- including specific tasks, and necessary abilities, knowledge and skills.

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Code of Ethics

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formalized rules and standards that that describe what a company expects of its employees.

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Franchising

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a form of licensing in which a company- the franchiser- agrees to provide a franchisee a name, logo, methods of operation, advertising, products, and other elements associated with a franchiser's business in return for a financial commitment and the agreement to conduct business in accordance with the franchiser's standard of operations.

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Joint Venture

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a partnership established for a specific project or for a limited time.

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Job Specification

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a description of the qualifications necessary for a specific job, in terms of education, experience, and personal and physical characteristics.

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Mediation

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a method of outside resolution of labor and management differences in which the third party's role is to suggest or propose a solution to the problem.

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Direct Investment

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the ownership of overseas facilities.

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Monetary Policy

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means by which the Fed controls the amount of money available in the economy.

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Balance of Payments

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the difference between the flow of money into and out of a country.

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Licensing

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a trade agreement in which one company - the licensor- allows another company- the licensee- to use its company name, products, patents, brands, trademarks, raw materials, and/or production processes in exchange for a fee or royalty.

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Factoring

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a finance company to which businesses see their accounts receivable - usually for a percentage of the total face value.

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Balance of Trade

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the difference in value between a nations exports ad imports.

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Retained Earnings

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earnings after expenses and taxes that are reinvested in the assets of the firm and belong to the owners in the form of equity.

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Economic System

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-a description of how a particular society distributes its resources to produce goods and services.
- the combination of policies and choices made by a nation regarding ownership of capital and where economic decisions are made.

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Capitalism (Market Economy)

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an economic system in which individuals own and operate the majority of businesses that provide goods and services.
-Laissez faire
-Free Market: economy where individuals make decisions about what to produce, what to market, and what the price points should be.

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Planned Economies (Command Economies)

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-Communism: economic system where private property is eliminated and gov't owns all the major forms of production and makes all economic decisions.
-Socialism: economic system where gov't owns and operates major industries or sectors in the economy.

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Mixed Economy

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- blend characteristics of planned and market
- private enterprise and gov't involvement
- U.S and UK

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Business Cycle

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Prosperity/Expansion
Recession
Depression
Recovery

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Economic Expansion

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the situation that occurs when an economy is growing and people are spending more money; their purchases stimulate the production of goods and services, which in turn stimulate employment.

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Pure Competition

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Many buyers and sellers.
No product differentiation
No effect on pricing

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Monopolistic

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Many Buyers and Sellers
Product differentiation-
Apparel, furniture

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Oligopoly

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Few sellers
Barriers to entry (Auto, airlines industry, cereal)

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Monopoly

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One seller
No close substitute
Barriers to entry, public utilities

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Ethics

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the study of right and wrong; and the morality of the choices people make.

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Business Ethics

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The application of moral standards to business situations

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Whistle Blowing

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the act of an employee exposing an employer's wrongdoing to outsiders, such as the media or gov't regulatory agencies.

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Social Responsilbility

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a business's obligation to maximize its positive impact and minimize its negative impact on society.

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Sustainability

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conducting activities in a way that allows for the long- term well being of the natural environment, including all biological entities; involves the assessment and improvement of business strategies, economic sectors, work practices, technologies, and lifestyles so that they maintain the health of the natural environment.

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Bankruptcy CHAPTER 7

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requires that businesses be dissolved and its assets liquidated, or sold to pay off debts.
Retain a limited amount of exempt benefits
Usually allow individuals to keep cars, household goods, clothing, furnishings.
All nonexempt assets must be sold to pay debts.

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Bankruptcy CHAPTER 11

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Temporarily frees a business from its financial obligations while it reorganizes and works out a payment plan with its creditors.
COntinues to operate through bankruptcy
Often the business sells off assets and less profitable subsidiaries to raise cash to pay off its immediate obligations

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Trade Surplus

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value of exports exceeds the value of imports

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Trade Defecit

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a negative balance of trade exists when the value of imports exceeds the value of exports

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Quota

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limit on the amount of a particular good that may be imported during a specific period of time

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Tariff

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a tax levied on a particular foreign product entering a country

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Embargo

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A complete halt to trading with a nation or in a particular product . Cuban Cigars

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General Agreement on Tariffs and Trade (GATT)

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international organization of 153 nations dedicated to reducing or eliminating tariffs and other trade barriers.

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World Trade Organization (WTO)

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oversees GATT provisions and has judicial powers to mediate trade disputes arising from GATT rules

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Contract Manufacuring

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the hiring of a foreign country to produce a specified volume of the initiating company's product to specification; the final product carries the domestic firm's name.

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Merger

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the combination of 2 companies (usually corps) to form a new company.

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Sole Proprietorship

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owned and operated by one person
72% of all businesses are

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partnership

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voluntary association of 2 or more persons to act as co owners of a business for profit.
9% of all are

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general partner

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assumes full or shred responsibility for operating the business
unlimited liability
EVERY PARTNERSHIP MUST HAVE ONE

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Limited Partner

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Contributes capital to business
no management responsibility
liable for the amount of money invested in the business

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corporation

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a legal entity created by the state
assets and liabilities of a corp are separate from its owners

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Private Corp (closed)

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a corp whose stock is owned by relatively few people and is not available to the general public

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Public Corp (Open)

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a corp whose stock is bought and sold on security exchanges and can be purchased by any individual

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Board of Directors

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-top governing body of a corp elected by the stockholders
-set corporate goals, develop strategic plans and oversee firm's operations

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Preferred Stock

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a special type of stock, whose owners, though not generally having a say in running the company, have a claim to profits before other stockholders do.

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Common Stock

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stock whose owners have voting rights in the corp, yet do not receive preferential treatment regarding dividends.

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S Corp

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corp taxed as though it were a partnership with restrictions on share holders

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LLC (Limited Liability Corp)

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form of ownership that provides liability and taxation like a partnership but places fewer restrictions on its members.

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Acquisition

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the purchase of one company by another, usually buying its stock

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management

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the process of coordinating people and other resources to achieve the goals of an organization

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strategic plans

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plans that establish the long -range objectives and overall strategy or course of action by which a firm fulfills its mission

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crisis management

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system for minimizing the harm that might result from unusually threatening situations

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behavior modification

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a systematic program of reinforcement to encourage desirable behavior

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flextime

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employees set own work hours within certain limits determined by employer

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the apllication

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the most important instrument in the hiring process
allows HR to select those most qualified for the position

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profit sharing

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percentage of the company profits is distributed to employees via ESOPs employee stock ownership plans or stock investments through 401k plans

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separations

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employment changes involving resignation, retirement or layoff

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lockout

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strikebreakers are hired by management to replace striking employees.

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concilliation

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a third party is brought in to keep the 2 sides talking

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finance

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the study of money, how its made, how its spent, and how its managed

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money

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anything a society uses to purchase products or resources
accepted in exchange for goods/services

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functions of money

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medium of exchange

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measure of value

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the prices of all product services and resources are stated in terms of money

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store of value

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means of retaining and accumulating wealth

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checking account (demand deposit)

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money held in a bank that can be withdrawn without advance notice

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Savings account (time deposit)

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accounts with funds that usually cannot be withdrawn without advance notice
a NOW account is an interest bearing savings account

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The Federal Reserve System

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-independent agency formed in 1913
-central bank of the U.S. responsible for regulating the banking and financial industry
-controls the flow of money throughout the U.S. economy.
-Goal is to maintain a healthy economy and promote long term economic growth
-sets monetary policy
-the "bankers bank"
-goals of monetary policy are continued economic growth, full employment and stable prices

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reserve requirement

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the percentage of its deposits that a bank must hold in reserve- on its own premises or with its Federal Reserve district bank
-increased RR- money supply is reduced, economic activity decreases, banks have less money to loan.
-decreased RR- MS is increased, MS is increased and more money to loan

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savings and loan (thrifts)

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-financial institutions that offer savings and make long term loans for residential mortgages
- many of the largest savings and loans have merged with commercial banks

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FDIC- Federal Deposit Insurance Corp

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-insures individual bank accounts for up to $250,000
-all national banks must be insured by FDIC
-state banks may be insured by state insurance funds or private insurance companies

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Pension Fund

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managed investment pools set aside by individuals, corps, unions, and some non profit organizations to provide retirement income for members.

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-IRA- Individual retirement account-

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personal choice of investment based on risk tolerance. interest earned can be tax deferred.

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Roth IRA

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is an after tax contribution. at retirement taxes have already been paid

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Mutual funds

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an investment company that pools individual investor dollars and invests then in large numbers of well diversified services.
-fidelity, Pimco, Van Guard. T. Rowe Price

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Electronic Funds Transfer

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move funds via electronic terminal, telephone, computer,or magnetic tape
ATM,& ACH - (automatic clearing house)

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Financial Management

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- is about the sources and uses of funds
- obtaining money and using it effectively

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commercial paper

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a written promise from one company to another to pay a specific amount of money

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trade credit

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credit extended by suppliers for the purchase of their goods and services

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prime rate

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the interest rate that commercial banks charge their best customers (usually large corps) for short term loans.

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secured loan

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loans backed by collateral that the bank can claim if the borrowers do not repay them.

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unsecured loans

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loans backed only by the borrowers good reputation and previous credit rating

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unsecured bond

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debentures, or bonds that are not backed by specific collateral

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secured bond

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bonds that are backed by specific collateral that must be forfeited in the event that the issuing firm defaults.

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secondary markets

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stock exchanges and over the counter markets where investors can trade their securities with others.