According to Kenneth C. Laudon and Jane Price Laudon in their book Management Information Systems: A Contemporary Perspective, an information system is "a set of procedures that collects (or retrieves), processes, stores, and disseminates information to support decision making and control." In most cases, information systems are formal, computerbased systems that play an integral role in organizations.
Management by Objectives (MBO) is a process in which a manager and an employee agree upon a set of specific performance goals, or objectives, and jointly develop a plan for reaching them. The objectives must be clear and achievable, and the plan must include a time frame and evaluation criteria.
Nearly every successful small business starts out the same way—with a hardworking business owner who has a dream that he or she believes in and the work ethic to make that dream become a reality. If everything goes according to plan, that owner founds a business, the business grows, and new employees are hired.
Organizational change occurs when a company makes a transition from its current state to some desired future state. Managing organizational change is the process of planning and implementing change in organizations in such a way as to minimize employee resistance and cost to the organization, while also maximizing the effectiveness of the change effort.
Manufacturers' agents or representatives are independent contractors who work on commission to sell products for more than one manufacturer. They are not under the immediate supervision of the manufacturers—typically called principals—that they sell for, so their relationship generally falls into client-customer patterns.
Market analysis is a tool companies use in order to better understand the environment in which they operate. It is one of the main steps in the development of a marketing plan.
Market questionnaires are a form of quantitative, primary market research that can provide small business owners with specific information about their customers' needs. Whether conducted over the telephone, through the mail, over the Internet, or in person, market questionnaires are designed to survey a sample group of respondents whose opinions reflect those of the business's target customers.
The term market research encompasses a number of activities that are designed to connect marketers to consumers through information gathering and evaluation. Market research provides businesses with information about their customers, their competitors, and their overall industry.
Market segmentation is the science of dividing an overall market into key customer subsets, or segments, whose members share similar characteristics and needs. Because it involves significant market research, market segmentation can be costly.
Market share refers to the percentage of the overall volume of business in a given market that is controlled by one company in relation to its competitors. For example, if the total sales of a certain product in a market is $100, 000, and the company in question sold $20, 000 worth of that product, then the company had 20 percent market share.
Marketing is a general term used to describe all the various activities involved in transferring goods and services from producers to consumers. In addition to the functions commonly associated with it, such as advertising and sales promotion, marketing also encompasses product development, packaging, distribution channels, pricing, and many other functions.
Markup is the amount that a seller of goods or services charges over and above the total cost of delivering its product or service in order to make a desired profit. For example, if the total cost of a manufacturer's product is $20, but its selling price is $29, then the extra $9 is understood to be the "markup." Markup is utilized by wholesalers, retailers, and manufacturers alike.
Material requirements planning (MRP) is a computer-based inventory management system designed to assist production managers in scheduling and placing orders for dependent demand items. Dependent demand items are components of finished goods—such as raw materials, component parts, and subassemblies—for which the amount of inventory needed depends on the level of production of the final product.
Medicare and Medicaid are health insurance programs sponsored by the federal government that cover medical expenses for elderly, disabled, and low-in-come Americans. Both programs took effect in 1965 and are administered by the Health Care Finance Administration (HCFA) of the Department of Health and Human Services.
Meetings, while disliked by many, are an essential part of myriad business operations. They are often the best venue for communications to take place, for issues to be discussed, for priorities to be set, and for decisions to be made in various realms of business management.
Mentoring denotes a relationship between a more experienced person—the mentor—and a less experienced person—the protégé. The mentor's role is to guide, instruct, encourage, and correct the protégé.
Merchandise displays are special presentations of a store's products or services to the buying public. The nature of these displays may range somewhat from industry to industry, but all merchandise displays are predicated on basic principles designed to increase product purchases.
A merger occurs when one firm assumes all the assets and all the liabilities of another. The acquiring firm retains its identity, while the acquired firm ceases to exist.
A Metropolitan Statistical Area (MSA) is a designation the U.S. government uses to refer to a region that, broadly speaking, consists of a city and its suburbs, plus any surrounding communities that are closely linked to the city because of social and/or economical factors.
Mezzanine financing, also sometimes referred to as subordinated debt or financing, is a rarely used but viable financing option for small businesses in search of capital for rapid growth. Under this arrangement, an entrepreneur borrows some of the money that he or she requires to execute the next stage of company growth (whether through acquisition, expansion of existing operations, etc.), then raises additional funds by selling stock in the company to the same lenders.
Minimum wage regulations, enacted by the federal government, set the lowest level at which workers may be compensated by their employers. For small business owners employing people other than themselves, compensation can be a complex issue.
Established in 1969 by executive order, the Minority Business Development Agency (MBDA) works to foster the creation, growth, and expansion of minority-owned businesses in the United States as a part of the Department of Commerce. The agency was originally called the Office of Minority Business Enterprise (OMBE), but its name was changed to its current incarnation in 1979.
Minority-owned businesses are among the most important elements in the unprecedented growth, in both number and stature, of small business enterprises in the United during the 1980s and 1990s. The African-American, Hispanic, Asian, and Native American communities all saw significant surges in small business start-ups and growth during this period.
Mission statements are documents that are intended to serve as a summary of a business's goals and values. Their contents often reflect the fact that they are utilized both as an internal performance enhancer and as a public relations tool.
Advances in communication technology, entrepreneurial creativity, and the ever-more-hectic pace of modern life have all combined to encourage the development and refinement of mobile business offices. Indeed, entrepreneurs have been a driving force in the creation of computers, telephones, and other office equipment that are both effective and portable.
Modem, an acronym for modulator/demodulator, is a device that allows one computer to "talk" with another one over a standard telephone line. Modems act as a kind of interpreter between a computer and the telephone line.
The money market is the arena in which financial institutions make available to a broad range of borrowers and investors the opportunity to buy and sell various forms of short-term securities. The money market is not a physical place, but an informal network of banks and traders linked by telephones, fax machines, and computers.
A multicultural work force is one wherein a company's employees include members of a variety of ethnic, racial, religious, and gender backgrounds. Whereas past eras in American business saw few examples of multiculturalism, most of today's small business owners and corporate executives recognize that attention to the challenges and opportunities associated with the growing trend toward culturally diverse work forces can be a key factor in overall business success.
Multilevel marketing (MLM) describes a type of business in which sales representatives not only sell products, but also attempt to recruit new sales representatives. Existing salespeople usually have a financial incentive to expand the sales force.
A Multiple Employer Trust (MET) is a group of ten or more employers who form a trust in order to minimize the tax implications of providing certain types of benefits for their employees, particularly life insurance. The U.S.
Multitasking refers to the ability of an individual or machine to perform more than one task, or multiple tasks, at the same time. In the field of human resources, multitasking is a popular term that is often used to describe how busy managers or business practitioners are able to accomplish a growing amount of work in a limited time period.
The Meyers-Briggs Type Indicator (MBTI) is an instrument designed to evaluate people and provide descriptive profiles of their personality types. Based on the theories of psychologist Carl Jung, it is widely used in the fields of business, education, and psychology.
Mystery shopping is a term that describes a field based research technique of using independent auditors posing as customers to gather information about product quality and service delivery by a retail firm. The "mystery shopper" poses as a customer in order to objectively gather information on the business being studied.
The National Association of Small Business Investment Companies (NASBIC) is an organization of companies (SBICs) that have been specially licensed under the Small Business Investment Act of 1958, overseen by the Small Business Administration (SBA), to provide funding to start-up companies. NASBIC's primary concern, however, is with providing representation before government on behalf of the SBIC industry.
As of 1996, there were nearly 8 million women-owned businesses in the United States. As the number of women-owned businesses grows, representation and support for this group becomes more and more critical.
The National Business Incubation Association (NBIA), founded in 1985, is a nonprofit organization comprising incubator developers and managers, corporate joint venture partners, venture capital investors, and economic development professionals. The association seeks to promote the growth of new business and educate the business and investor community about the benefits of incubators.
The National Labor Relations Board (NLRB) is a federal organization that oversees the establishment and conduct of union organizations as well as the conduct of businesses involved with unions. Its national headquarters are located in Washington, DC, and the organization maintains an informational Web site at www.nlrb.gov.
The National Venture Capital Association (NVCA), founded in 1973, is an organization of venture capital firms, corporate backers, and individuals dedicated to professionally investing private capital in new companies. In their own words, they exist to "define, serve, and represent the interests of the venture capital and private equity industries" by, among other things, promoting the public policy interests of the venture capital and entrepreneurial communities.
Negotiation describes any communication process between individuals that is intended to reach a compromise or agreement to the satisfaction of both parties. Negotiation involves examining the facts of a situation, exposing the both the common and opposing interests of the parties involved, and bargaining to resolve as many issues as possible.
In the business world, nepotism is the practice of showing favoritism toward one's family members or friends in economic or employment terms. For example, granting favors or jobs to friends and relatives, without regard to merit, might be considered nepotism.
Net income is an accounting term that can be defined as the difference between a company's total revenues (money earned from sales or investments) and total expenses (money paid to produce goods or services, plus salaries, rent, depreciation, etc.) for a given period of time. Also known as net earnings, after-tax income, or profit, net income is the "bottom line" of the formal accounting report known as the income statement.
Net worth is a basic measure of the value of a business. It can be defined as the difference between a company's assets and liabilities, as they are recorded on the balance sheet.
Networking is the process of intentionally meeting people, making contacts, and forming relationships in hopes of gaining access to such business-related benefits as career advice, job leads, business referrals, useful information and ideas, and emotional support. For example, a small business owner's network might include clients, vendors, fellow members of trade or professional associations, bankers, accountants, professors at a local business school, friends who are employed in similar industries, and other small business owners.
New economy is a term often used in the media to describe the changes that have taken place in the world of business since the widespread adoption of Internet technology. It has been applied to a wide range of situations and issues, most notably the rise and fall of high-tech and Internet startup companies.
Newsgroups are online discussion groups on a variety of topics. A common analogy used to describe newsgroups is "online bulletin boards." All newsgroups were originally part of a worldwide network of discussion groups known as Usenet.
Non-competition agreements are restrictive contracts between employers and employees that 1) prohibit workers from revealing proprietary information about the company to competitors or other outsiders, or 2) forbid workers from themselves competing with their ex-employer for a certain period of time after leaving the company. Non-competition agreements are important tools that small business owners may wield to ensure that key personnel do not walk off and establish a competing business on the strength of knowledge and contacts that they gained during their stint at the small business in question.
Nonprofit organizations are institutions that conduct their affairs for the purpose of assisting other individuals, groups, or causes rather than garnering profits for themselves. Nonprofit groups have no shareholders; do not distribute profits in a way that benefits members, directors, or other individuals in their private capacity; and (often) receive exemption from various taxes in recognition of their contributions to bettering the general social fabric of the community.
"An effective non-profit manager must try to get more out of the people he or she has," wrote Peter F. Drucker in Managing the Non-Profit Organization.
In recognition of the "public good"-oriented goals and objectives of nonprofit organizations, U.S. law grants these groups a number of special privileges.
Nonqualified deferred compensation plans are used by businesses to supplement existing qualified plans. As Lawrence Bader and Yale Tauber noted in Compensation & Benefits Management, deferred compensation arrangements are proliferating in today's business and regulatory environment, and they are extending deeper into organizations.
Entrepreneurs can turn to a variety of sources to finance the establishment or expansion of their businesses. Common sources of business capital include personal savings, loans from friends and relatives, loans from financial institutions such as banks or credit unions, loans from commercial finance companies, assistance from venture capital firms or investment clubs, loans from the Small Business Administration and other government agencies, and personal or corporate credit cards.
Nonverbal communication—such as facial expressions, gestures, posture, and tone of voice—is an important component of personal business interactions. Nonverbal communication can help a small business owner to get a message across, or to successfully interpret a message received from another person.
The North American Free Trade Agreement (NAFTA) is a treaty that was signed on August 12, 1991 by the United States, Canada, and Mexico; it went into effect on January 1, 1994. (Free trade had existed between the U.S.
The North American Industry Classification System (NAICS) is a detailed industry coding system designed to facilitate the collection, analysis, and presentation of economic statistical data in the United States, Canada, and Mexico, which comprise the member nations of the North American Free Trade Agreement (NAFTA). First implemented in 1997, the NAICS is the successor to the Standard Industrial Classification (SIC) system, which had been used by U.S.
The Occupational Safety and Health Administration (OSHA) was established by the Williams-Steiger Occupational Safety and Health Act (OSH Act) of 1970, which took effect in 1971. OSHA's mission is to ensure that every working man and woman in the nation is employed under safe and healthful working conditions.
Office automation refers to the varied computer machinery and software used to digitally create, collect, store, manipulate, and relay office information needed for accomplishing basic tasks and goals. Raw data storage, electronic transfer, and the management of electronic business information comprise the basic activities of an office automation system.
Office romances are situations in which two members of a business establishment—whether coworkers in an office or on a shop floor—become romantically linked with one another. For businesses of all sizes, such developments can complicate business operations.
Office security can be broken down into two main areas: 1) protecting your office and employees from vandalism, theft, and personal attacks; and 2) protecting your office from corporate sabotage, both from inside the company and out. The first area deals more with the actual office itself—its layout, the use of security guards, alarm systems, and so on.
Office supplies encompass a wide range of materials that are used on a regular, every-day basis by business owners and/or employees. Staple office supply items that are often utilized by even the smallest company or home office include pens, writing paper, notebooks, Post-It notes, scissors, erasers, computer diskettes, binders, slides, file folders, labels, basic reference materials (dictionaries, etc.), file cabinets, fax paper, envelopes, and a host of other items.
Online auctions are sales transactions involving competitive bidding that are conducted over the Internet. Whether the sales take place between individuals, between consumers and merchants, or between businesses, online auctions have enjoyed a rapid increase in popularity.