Self control is the ability to control one's emotions and desires, is the capacity of efficient management to the future. In psychology it is sometimes called self-regulation, and exerting self-control through the executive functions in decision making is thought to deplete a resource in the ego. Human self-control research is typically modeled by using a token economy system in which human participants choose between tokens for one choice and usually more tokens for a delayed choice. Different results were being obtained for humans and non-humans, with the latter appearing to maximize their overall reinforcement despite delays, with the former being sensitive to changes in delay.
The difference in research methodologies with humans - using tokens or conditioned reinforcers - and non-humans using sub-primary reinforcers suggested procedural artifacts as a possible suspect. One aspect of these procedural differences was the delay to the exchange period (Hyten et al. 1994). Non-human subjects can, and would, access their reinforcement immediately. The human subjects had to wait for an "exchange period" in which they could exchange their tokens for money, usually at the end of the experiment. When this was done with pigeons they responded much like humans in which males have less control than females (Jackson & Hackenberg 1996). However, Logue, (1995), who is discussed more below, points out that in her study done on self-control it was male children that responded with less self control than female children. She then states, that in adulthood, for the most part, the sexes equalize on their ability to exhibit self control. This could suggest a human being's ability to exert more self control as they mature and become more aware of the consequences associated with impulsivity. This suggestion is furthered examined below.
Most of the research in the field of self control assumes that self control is in general better than impulsiveness. Some developmental psychologists argue that this is normal, and people age from infants, who have no ability to think of the future, and hence no self control or delayed gratification, to adults. As a result almost all research done on this topic is from this standpoint and very rarely is impulsiveness the more adaptive response in experimental design.
More recently some in the field of developmental psychology have begun to think of self control in a more complicated way that takes into account that sometimes impulsiveness is the more adaptive response. In their view, a normal individual should have the capacity to be either impulsive or controlled depending on which is the most adaptive. However, this is a recent shift in paradigm and there is little research conducted along these lines
Sunday, May 31, 2009
LEADERSHIP
Leadership is one of the most salient aspects of the organizational context. However, defining leadership has been challenging. The following sections discuss several important aspects of leadership including a description of what leadership is and a description of several popular theories and styles of leadership. This page also dives into topics such as the role of emotions and vision, as well leadership effectiveness and performance. Finally, this page discusses leadership in different contexts, how it may differ from related concepts (i.e., management), and some critiques that have been raised about leadership
Leadership has been described as the “process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task” A definition more inclusive of followers comes from Alan Keith of Genentech who said "Leadership is ultimately about creating a way for people to contribute to making something extraordinary happen." Students of leadership have produced theories involving traits situational interaction, function, behavior, power, vision and values charisma, and intelligence among others. Situational theory also appeared as a reaction to the trait theory of leadership. Social scientists argued that history was more than the result of intervention of great men as Carlyle suggested. Herbert Spencer (1884) said that the times produce the person and not the other way around. This theory assumes that different situations call for different characteristics; according to this group of theories, no single optimal psychographic profile of a leader exists. According to the theory, "what an individual actually does when acting as a leader is in large part dependent upon characteristics of the situation in which he functions."
Some theorists started to synthesize the trait and situational approaches. Building upon the research of Lewin et al., academics began to normatize the descriptive models of leadership climates, defining three leadership styles and identifying in which situations each style works better. The authoritarian leadership style, for example, is approved in periods of crisis but fails to win the "hearts and minds" of their followers in the day-to-day management; the democratic leadership style is more adequate in situations that require consensus building; finally, the laissez faire leadership style is appreciated by the degree of freedom it provides, but as the leader does not "take charge", he can be perceived as a failure in protracted or thorny organizational problems. Thus, theorists defined the style of leadership as contingent to the situation, which is sometimes classified as contingency theory. Four contingency leadership theories appear more prominently in the recent years: Fiedler contingency model, Vroom-Yetton decision model, the path-goal theory, and the Hersey-Blanchard situational theory.
The Fiedler contingency model bases the leader’s effectiveness on what Fred Fiedler called situational contingency. This results from the interaction of leadership style and situational favorableness (later called "situational control"). The theory defined two types of leader: those who tend to accomplish the task by developing good-relationships with the group (relationship-oriented), and those who have as their prime concern carrying out the task itself
Leadership has been described as the “process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task” A definition more inclusive of followers comes from Alan Keith of Genentech who said "Leadership is ultimately about creating a way for people to contribute to making something extraordinary happen." Students of leadership have produced theories involving traits situational interaction, function, behavior, power, vision and values charisma, and intelligence among others. Situational theory also appeared as a reaction to the trait theory of leadership. Social scientists argued that history was more than the result of intervention of great men as Carlyle suggested. Herbert Spencer (1884) said that the times produce the person and not the other way around. This theory assumes that different situations call for different characteristics; according to this group of theories, no single optimal psychographic profile of a leader exists. According to the theory, "what an individual actually does when acting as a leader is in large part dependent upon characteristics of the situation in which he functions."
Some theorists started to synthesize the trait and situational approaches. Building upon the research of Lewin et al., academics began to normatize the descriptive models of leadership climates, defining three leadership styles and identifying in which situations each style works better. The authoritarian leadership style, for example, is approved in periods of crisis but fails to win the "hearts and minds" of their followers in the day-to-day management; the democratic leadership style is more adequate in situations that require consensus building; finally, the laissez faire leadership style is appreciated by the degree of freedom it provides, but as the leader does not "take charge", he can be perceived as a failure in protracted or thorny organizational problems. Thus, theorists defined the style of leadership as contingent to the situation, which is sometimes classified as contingency theory. Four contingency leadership theories appear more prominently in the recent years: Fiedler contingency model, Vroom-Yetton decision model, the path-goal theory, and the Hersey-Blanchard situational theory.
The Fiedler contingency model bases the leader’s effectiveness on what Fred Fiedler called situational contingency. This results from the interaction of leadership style and situational favorableness (later called "situational control"). The theory defined two types of leader: those who tend to accomplish the task by developing good-relationships with the group (relationship-oriented), and those who have as their prime concern carrying out the task itself
GROUP DECISION MAKING
Groups decision making is decision making in groups consisting of multiple members/entities. The challenge of group decision is deciding what action a group should take. There are various systems designed to solve this problem. Decision making in groups is sometimes examined separately as process and outcome. Process refers to the group interactions. Some relevant ideas include coalitions among participants as well as influence and persuasion. The use of politics is often judged negatively, but it is a useful way to approach problems when preferences among actors are in conflict, when dependencies exist that cannot be avoided, when there are no super-ordinate authorities, and when the technical or scientific merit of the options is ambiguous.
In addition to the different processes involved in making decisions, group decision support systems (GDSS) may have different decision rules. A decision rule is the GDSS protocol a group uses to choose among scenario planning alternatives. Plurality and dictatorship are less desirable as decision rules because they do not require the involvement of the broader group to determine a choice. Thus, they do not engender commitment to the course of action chosen. An absence of commitment from individuals in the group can be problematic during the implementation phase of a decision.There are no perfect decision making rules. Depending on how the rules are implemented in practice and the situation, all of these can lead to situations where either no decision is made, or to situations where decisions made are inconsistent with one another over time.
There are many decision making levels having a participation element. A common example is that of institutions making decisions that affect those for whom they provide. In such cases an understanding of what participation level is involved becomes crucial to understand the process and power structures dynamics.
Control-Ethics. When organisations/institutions make decisions it is important to find the balance between the parameters of control mechanisms and the ethical principles which ensure 'best' outcome for individuals and communities impacted on by the decision.
Controls may be set by elements such as Legislation, historical precedents, available resources, Standards, policies, procedures and practices. Ethical elements may include equity, fairness, transparency, social justice, choice, least restrictive alternative, empowerment. In the context of marketing, there is much theory, and even more opinion, expressed about how the various 'decision-makers' and 'influencers' (those who can only influence, not decide, the final decision) interact. Large purchasing decisions are frequently taken by groups, rather than individuals, and the official buyer often does not have authority to make the decision.
In addition to the different processes involved in making decisions, group decision support systems (GDSS) may have different decision rules. A decision rule is the GDSS protocol a group uses to choose among scenario planning alternatives. Plurality and dictatorship are less desirable as decision rules because they do not require the involvement of the broader group to determine a choice. Thus, they do not engender commitment to the course of action chosen. An absence of commitment from individuals in the group can be problematic during the implementation phase of a decision.There are no perfect decision making rules. Depending on how the rules are implemented in practice and the situation, all of these can lead to situations where either no decision is made, or to situations where decisions made are inconsistent with one another over time.
There are many decision making levels having a participation element. A common example is that of institutions making decisions that affect those for whom they provide. In such cases an understanding of what participation level is involved becomes crucial to understand the process and power structures dynamics.
Control-Ethics. When organisations/institutions make decisions it is important to find the balance between the parameters of control mechanisms and the ethical principles which ensure 'best' outcome for individuals and communities impacted on by the decision.
Controls may be set by elements such as Legislation, historical precedents, available resources, Standards, policies, procedures and practices. Ethical elements may include equity, fairness, transparency, social justice, choice, least restrictive alternative, empowerment. In the context of marketing, there is much theory, and even more opinion, expressed about how the various 'decision-makers' and 'influencers' (those who can only influence, not decide, the final decision) interact. Large purchasing decisions are frequently taken by groups, rather than individuals, and the official buyer often does not have authority to make the decision.
BUSINESS OPPORTUNITY
business opportunity , or bizopp , involves the sale or lease of any product, service, equipment, etc. that will enable the purchaser-licensee to begin a business. The licensor or seller of a business opportunity usually declares that it will secure or assist the buyer in finding a suitable location or provide the product to the purchaser-licensee. This is different from the sale of an independent business, in which there is no continued relationship required by the seller. The use of a toll-free telephone number makes it difficult for customers to immediately identify the company's geographical location. Moreover, a company can own many 1-800 numbers, using a different one for each area in which it advertises. In the event of consumer complaints, this thwarts investigators from recognizing the connection between biz-ops listings in various newspapers.
A common type of business opportunity involves a company that sells bulk vending machines and promises to secure suitable locations for the machines. The purchaser is counting on the company to find locations where sales will be high enough to enable him to recoup his expenses and make a profit. Because of the many cases of fraudulent biz-ops in which companies have not followed through on their promises, or in which profits were much less than what the company led the investor to believe, governments closely regulate these operations.
Multi-level marketing is often presented as a business opportunity, such as the phrase, "Let me tell you about an incredible ground-level business opportunity."In the United States, the Federal Trade Commission receives complaints and helps coordinate enforcement action against fraudulent business opportunities
A business opportunity consists of four integrated elements all of which are to be present within the same timeframe (window of opportunity) and most often within the same domain or geographical location, before it can be claimed as a business opportunityWith anyone of the elements missing, a business opportunity may be developed, by finding the missing element. The more unique the combination of the elements, the more unique the business opportunity. The more control an insititution (or individual) has over the elements, the better they are positioned to exploit the opportunity and become a niche market leader.
A common type of business opportunity involves a company that sells bulk vending machines and promises to secure suitable locations for the machines. The purchaser is counting on the company to find locations where sales will be high enough to enable him to recoup his expenses and make a profit. Because of the many cases of fraudulent biz-ops in which companies have not followed through on their promises, or in which profits were much less than what the company led the investor to believe, governments closely regulate these operations.
Multi-level marketing is often presented as a business opportunity, such as the phrase, "Let me tell you about an incredible ground-level business opportunity."In the United States, the Federal Trade Commission receives complaints and helps coordinate enforcement action against fraudulent business opportunities
A business opportunity consists of four integrated elements all of which are to be present within the same timeframe (window of opportunity) and most often within the same domain or geographical location, before it can be claimed as a business opportunityWith anyone of the elements missing, a business opportunity may be developed, by finding the missing element. The more unique the combination of the elements, the more unique the business opportunity. The more control an insititution (or individual) has over the elements, the better they are positioned to exploit the opportunity and become a niche market leader.
EXCHANGE VALUE
In political economy and especially Marxian economics, exchange value refers to one of four major attributes of a commodity, i.e., an item or service produced for, and sold on the market. The other three aspects are use value, value and price. Strictly speaking, the exchange value of a commodity is for Marx not identical to its price, but represents rather what (quantity of) other commodities it will exchange for, if traded.
Exchange-value does not need to be expressed in money-prices necessarily (for example, in countertrade where x amount of goods p are worth y amounts of goods q). Karl Marx makes this abundantly clear in his dialectical derivation of the forms of value in the first chapters of Das Kapital.
Actually, the word "price" came into use in Western Europe only in the 13th century AD, the Latin root meaning being "pretium" meaning "reward, prize, value, worth," referring back to the notion of "recompense", or what was given in return, the expense, wager or cost incurred when a good changed hands (nowadays called "opportunity cost"). The verb meaning "to set the price of" was used only from the 14th century onwards.
The evolving linguistic meanings reflect the early history of the growing cash economy, and the evolution of commercial trade. Nowadays what "price" means is obvious and self-evident, and it is assumed that prices are all one of a kind. That is because money has become universally used. But in fact there are many different kinds of prices, some of which are actually charged, and some of which are only 'notional prices.' Even although a particular price may not refer to any real transaction, it can nevertheless influence economic behavior, because people have become so used to valuing and calculating exchange-value in terms of prices, using money. In the first chapters of Das Kapital, Marx traces out a brief logical summary of the development of the forms of trade, beginning with barter and simple exchange, and ending with a capitalistically produced commodity. This sketch of the process of "marketisation" shows that the commodity form is not fixed once and for all, but in fact undergoes a development as trade becomes more sophisticated, with the end result being that a commodity's exchange-value can be expressed simply in a (notional) quantity of money (a money price).
Exchange-value does not need to be expressed in money-prices necessarily (for example, in countertrade where x amount of goods p are worth y amounts of goods q). Karl Marx makes this abundantly clear in his dialectical derivation of the forms of value in the first chapters of Das Kapital.
Actually, the word "price" came into use in Western Europe only in the 13th century AD, the Latin root meaning being "pretium" meaning "reward, prize, value, worth," referring back to the notion of "recompense", or what was given in return, the expense, wager or cost incurred when a good changed hands (nowadays called "opportunity cost"). The verb meaning "to set the price of" was used only from the 14th century onwards.
The evolving linguistic meanings reflect the early history of the growing cash economy, and the evolution of commercial trade. Nowadays what "price" means is obvious and self-evident, and it is assumed that prices are all one of a kind. That is because money has become universally used. But in fact there are many different kinds of prices, some of which are actually charged, and some of which are only 'notional prices.' Even although a particular price may not refer to any real transaction, it can nevertheless influence economic behavior, because people have become so used to valuing and calculating exchange-value in terms of prices, using money. In the first chapters of Das Kapital, Marx traces out a brief logical summary of the development of the forms of trade, beginning with barter and simple exchange, and ending with a capitalistically produced commodity. This sketch of the process of "marketisation" shows that the commodity form is not fixed once and for all, but in fact undergoes a development as trade becomes more sophisticated, with the end result being that a commodity's exchange-value can be expressed simply in a (notional) quantity of money (a money price).
ECONOMIC GROWTH
Economic growth is the increase in the amount of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP. Growth is usually calculated in real terms, i.e. inflation-adjusted terms, in order to net out the effect of inflation on the price of the goods and services produced. In economics, "economic growth" or "economic growth theory" typically refers to growth of potential output, i.e., production at "full employment," which is caused by growth in aggregate demand or observed output.As an area of study, economic growth is generally distinguished from development economics. The former is primarily the study of how countries can advance their economies. The latter is the study of the economic aspects of the development process in low-income countries. As economic growth is measured as the annual percent change of gross domestic product (GDP), it has all the advantages and drawbacks of that measure.
GDP per capita is not the same thing as earnings per worker since GDP measures only monetary transactions for all final goods and services in country without regard to who receives that money. For example, in the US from 1990 to 2006 the earnings (adjusted for inflation) of individual workers, in private industry and services, increased by less than 0.5% per year while GDP (adjusted for inflation) increased about 3.6% per year over the same period. Economists draw a distinction between short-term economic stabilization and long-term economic growth. The topic of economic growth is primarily concerned with the long run.
The short-run variation of economic growth is termed the business cycle, and almost all economies experience periodical recessions. The cycle can be a misnomer as the fluctuations are not always regular. Explaining these fluctuations is one of the main focuses of macroeconomics. There are different schools of thought as to the causes of recessions but some consensus- see Keynesianism, Austrian Business Cycle Theory, Monetarism, New classical economics and New Keynesian economics. Oil shocks, war and harvest failure are obvious causes of recession. Short-run variation in growth has generally dampened in higher income countries since the early 1990s and this has been attributed, in part, to changes in macroeconomic management...
The long-run path of economic growth is one of the central questions of economics; in spite of the problems of measurement, an increase in GDP of a country is generally taken as an increase in the standard of living of its inhabitants. Over long periods of time, even small rates of annual growth can have large effects through compounding (see exponential growth).
GDP per capita is not the same thing as earnings per worker since GDP measures only monetary transactions for all final goods and services in country without regard to who receives that money. For example, in the US from 1990 to 2006 the earnings (adjusted for inflation) of individual workers, in private industry and services, increased by less than 0.5% per year while GDP (adjusted for inflation) increased about 3.6% per year over the same period. Economists draw a distinction between short-term economic stabilization and long-term economic growth. The topic of economic growth is primarily concerned with the long run.
The short-run variation of economic growth is termed the business cycle, and almost all economies experience periodical recessions. The cycle can be a misnomer as the fluctuations are not always regular. Explaining these fluctuations is one of the main focuses of macroeconomics. There are different schools of thought as to the causes of recessions but some consensus- see Keynesianism, Austrian Business Cycle Theory, Monetarism, New classical economics and New Keynesian economics. Oil shocks, war and harvest failure are obvious causes of recession. Short-run variation in growth has generally dampened in higher income countries since the early 1990s and this has been attributed, in part, to changes in macroeconomic management...
The long-run path of economic growth is one of the central questions of economics; in spite of the problems of measurement, an increase in GDP of a country is generally taken as an increase in the standard of living of its inhabitants. Over long periods of time, even small rates of annual growth can have large effects through compounding (see exponential growth).
RISK
Risk is a concept that denotes the precise probability of specific eventualities. Technically, the notion of risk is independent from the notion of value and, as such, eventualities may have both beneficial and adverse consequences. However, in general usage the convention is to focus only on potential negative impact to some characteristic of value that may arise from a future event.
RISK can be defined as “the threat or probability that an action or event, will adversely or beneficially affect an organisation's ability to achieve its objectives”[1]. In simple terms risk is ‘Uncertainty of Outcome’, either from pursuing a future positive opportunity, or an existing negative threat in trying to achieve a current objective.There are many definitions of risk that vary by specific application and situational context. The widely inconsistent and ambiguous use of the word is one of several current criticisms of the methods to manage risk. One is that risk is an issue, which can be avoided or mitigated (wherein an issue is a potential problem that has to be fixed now.) Risk is described both qualitatively and quantitatively. In some texts risk is described as a situation which would lead to negative consequences.
Qualitatively, risk is proportional to both the expected losses which may be caused by an event and to the probability of this event. Greater loss and greater event likelihood result in a greater overall risk.Frequently in the subject matter literature, risk is defined in pseudo-formal forms where the components of the definition are vague and ill-defined, for example, risk is considered as an indicator of threat, or depends on threats, vulnerability, impact and uncertainty.
There are more sophisticated definitions, however. Measuring engineering risk is often difficult, especially in potentially dangerous industries such as nuclear energy. Often, the probability of a negative event is estimated by using the frequency of past similar events or by event-tree methods, but probabilities for rare failures may be difficult to estimate if an event tree cannot be formulated. Methods to calculate the cost of the loss of human life vary depending on the purpose of the calculation. Specific methods include what people are willing to pay to insure against death, and radiological release (e.g., GBq of radio-iodine. Financial risk is often defined as the unexpected variability or volatility of returns and thus includes both potential worse-than-expected as well as better-than-expected returns. References to negative risk below should be read as applying to positive impacts or opportunity (e.g., for "loss" read "loss or gain") unless the context precludes. Risks in personal health may be reduced by primary prevention actions that decrease early causes of illness or by secondary prevention actions after a person has clearly measured clinical signs or symptoms recognized as risk factors. Tertiary prevention (medical) reduces the negative impact of an already established disease by restoring function and reducing disease-related complications.
RISK can be defined as “the threat or probability that an action or event, will adversely or beneficially affect an organisation's ability to achieve its objectives”[1]. In simple terms risk is ‘Uncertainty of Outcome’, either from pursuing a future positive opportunity, or an existing negative threat in trying to achieve a current objective.There are many definitions of risk that vary by specific application and situational context. The widely inconsistent and ambiguous use of the word is one of several current criticisms of the methods to manage risk. One is that risk is an issue, which can be avoided or mitigated (wherein an issue is a potential problem that has to be fixed now.) Risk is described both qualitatively and quantitatively. In some texts risk is described as a situation which would lead to negative consequences.
Qualitatively, risk is proportional to both the expected losses which may be caused by an event and to the probability of this event. Greater loss and greater event likelihood result in a greater overall risk.Frequently in the subject matter literature, risk is defined in pseudo-formal forms where the components of the definition are vague and ill-defined, for example, risk is considered as an indicator of threat, or depends on threats, vulnerability, impact and uncertainty.
There are more sophisticated definitions, however. Measuring engineering risk is often difficult, especially in potentially dangerous industries such as nuclear energy. Often, the probability of a negative event is estimated by using the frequency of past similar events or by event-tree methods, but probabilities for rare failures may be difficult to estimate if an event tree cannot be formulated. Methods to calculate the cost of the loss of human life vary depending on the purpose of the calculation. Specific methods include what people are willing to pay to insure against death, and radiological release (e.g., GBq of radio-iodine. Financial risk is often defined as the unexpected variability or volatility of returns and thus includes both potential worse-than-expected as well as better-than-expected returns. References to negative risk below should be read as applying to positive impacts or opportunity (e.g., for "loss" read "loss or gain") unless the context precludes. Risks in personal health may be reduced by primary prevention actions that decrease early causes of illness or by secondary prevention actions after a person has clearly measured clinical signs or symptoms recognized as risk factors. Tertiary prevention (medical) reduces the negative impact of an already established disease by restoring function and reducing disease-related complications.
TRADE
Trade is the voluntary exchange of goods, services, or both. Trade is also called commerce. A mechanism that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and services. Later one side of the barter were the metals, precious metals (poles, coins), bill, paper money. Modern traders instead generally negotiate through a medium of exchange, such as money. As a result, buying can be separated from selling, or earning. The invention of money (and later credit, paper money and non-physical money) greatly simplified and promoted trade. Trade between two traders is called bilateral trade, while trade between more than two traders is called multilateral trade.
Trade exists for man due to specialization and division of labor, most people concentrate on a small aspect of production, trading for other products. Trade exists between regions because different regions have a comparative advantage in the production of some tradable commodity, or because different regions' size allows for the benefits of mass production. As such, trade at market prices between locations benefits both locations. The first instances of money were objects with intrinsic value. This is called commodity money and includes any commonly-available commodity that has intrinsic value; historical examples include pigs, rare seashells, whale's teeth, and (often) cattle. In medieval Iraq, bread was used as an early form of money. In Mexico under Montezuma cocoa beans were money.
International trade is the exchange of goods and services across national borders. In most countries, it represents a significant part of GDP. While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance have increased in recent centuries, mainly because of Industrialisation, advanced transportation, globalisation, multinational corporations, and outsourcing. In fact, it is probably the increasing prevalence of international trade that is usually meant by the term "globalisation".
Trade sanctions against a specific country are sometimes imposed, in order to punish that country for some action. An embargo, a severe form of externally imposed isolation, is a blockade of all trade by one country on another. For example, the United States has had an embargo against Cuba for over 40 years.Although there are usually few trade restrictions within countries, international trade is usually regulated by governmental quotas and restrictions, and often taxed by tariffs. Tariffs are usually on imports, but sometimes countries may impose export tariffs or subsidies. All of these are called trade barriers. If a government removes all trade barriers, a condition of free trade exists. A government that implements a protectionist policy establishes trade barriers.
Trade exists for man due to specialization and division of labor, most people concentrate on a small aspect of production, trading for other products. Trade exists between regions because different regions have a comparative advantage in the production of some tradable commodity, or because different regions' size allows for the benefits of mass production. As such, trade at market prices between locations benefits both locations. The first instances of money were objects with intrinsic value. This is called commodity money and includes any commonly-available commodity that has intrinsic value; historical examples include pigs, rare seashells, whale's teeth, and (often) cattle. In medieval Iraq, bread was used as an early form of money. In Mexico under Montezuma cocoa beans were money.
International trade is the exchange of goods and services across national borders. In most countries, it represents a significant part of GDP. While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance have increased in recent centuries, mainly because of Industrialisation, advanced transportation, globalisation, multinational corporations, and outsourcing. In fact, it is probably the increasing prevalence of international trade that is usually meant by the term "globalisation".
Trade sanctions against a specific country are sometimes imposed, in order to punish that country for some action. An embargo, a severe form of externally imposed isolation, is a blockade of all trade by one country on another. For example, the United States has had an embargo against Cuba for over 40 years.Although there are usually few trade restrictions within countries, international trade is usually regulated by governmental quotas and restrictions, and often taxed by tariffs. Tariffs are usually on imports, but sometimes countries may impose export tariffs or subsidies. All of these are called trade barriers. If a government removes all trade barriers, a condition of free trade exists. A government that implements a protectionist policy establishes trade barriers.
SWING TRADING
Swing trading is commonly defined as a stock, index, or commodities trading practice whereby a traded instrument is bought at or near opposite cycle swings cause by daily or weekly price volatility (finance). A swing trade is open longer than a day, (day trading), but shorter than trend following trades or buy and hold investment strategies. Swing traders prospect changes in stock price caused by, or occurring with oscillations between its price bid up by optimism and alternatively down by pessimism over a period of a few days, weeks, or months. A Predictive market trading algorithm is defined as a mathematically calculable set of trade rules which results in entry, exit and stop loss trade points. Investment in researching trading algorithms has skyrocketed, particularly by investment banking firms like Goldman Sachs which spends tens of millions on trading algorithm research, and which staffs its trading algorithm team more heavily than even its trading desk.
Trading algorithms can be as esoteric as extrapolated biology theories like neutral networks applied to derivatives trading by Rutgers University's Gang Nathan Dong, or based purely on recent market pricing by the doctorate researched The Market Code. Even more simple is Alexander Elder's strategy measuring the behavior of a stock above and below a baseline where a moving average identifies the typical baseline on a stock chart. The stock is to be invested long at the baseline when the stock is heading up, and short at the baseline when the stock is headed down.
Trading algorithms may loose their profit potential when their trading strategies obtain enough of a mass following to curtail their effectiveness: "Now it's an arms race. Everyone is building more sophisticated algorithms, and the more competition exists, the smaller the profits," observes Andrew Lo, the Director of the Laboratory For Financial Engineering, for the Massachusetts Institute of Technology. Swing traders do not need perfect timing - to buy at the bottom, and sell at the top. Small consistent earnings will compound returns significantly. Most important is to have or develop a trading algorithm that is mathematical certain and successfully tested on historical prices of the time dimension a swing trader is trading, be it by the minute, hour, day, week, or month. Swing trading may have unique challenges in a market trading flat or sideways, than in a bull market or bear market. In a market trending in a definite direction the most active stocks tend not to exhibit the up-and-down oscillation amplitude that they would when the markets are relatively stable for a few weeks or months. In trending markets (either a bear market or a bull market), momentum may carry stocks for a much longer than usual time in one direction only, making swing trading strategies that do not incorporate this trending, less profitable than trend following strategies.
Identifying whether a market is currently trending higher or lower, or trading sideways is a challenge for many swing trading and long-term trend following trading strategies.As with all financial instruments risk of loss in trading is considerable, and only mitigated by the trading strategy that is back tested on any particular equity, index, or commodity, and continues to prove its worth with successful trades.
Trading algorithms can be as esoteric as extrapolated biology theories like neutral networks applied to derivatives trading by Rutgers University's Gang Nathan Dong, or based purely on recent market pricing by the doctorate researched The Market Code. Even more simple is Alexander Elder's strategy measuring the behavior of a stock above and below a baseline where a moving average identifies the typical baseline on a stock chart. The stock is to be invested long at the baseline when the stock is heading up, and short at the baseline when the stock is headed down.
Trading algorithms may loose their profit potential when their trading strategies obtain enough of a mass following to curtail their effectiveness: "Now it's an arms race. Everyone is building more sophisticated algorithms, and the more competition exists, the smaller the profits," observes Andrew Lo, the Director of the Laboratory For Financial Engineering, for the Massachusetts Institute of Technology. Swing traders do not need perfect timing - to buy at the bottom, and sell at the top. Small consistent earnings will compound returns significantly. Most important is to have or develop a trading algorithm that is mathematical certain and successfully tested on historical prices of the time dimension a swing trader is trading, be it by the minute, hour, day, week, or month. Swing trading may have unique challenges in a market trading flat or sideways, than in a bull market or bear market. In a market trending in a definite direction the most active stocks tend not to exhibit the up-and-down oscillation amplitude that they would when the markets are relatively stable for a few weeks or months. In trending markets (either a bear market or a bull market), momentum may carry stocks for a much longer than usual time in one direction only, making swing trading strategies that do not incorporate this trending, less profitable than trend following strategies.
Identifying whether a market is currently trending higher or lower, or trading sideways is a challenge for many swing trading and long-term trend following trading strategies.As with all financial instruments risk of loss in trading is considerable, and only mitigated by the trading strategy that is back tested on any particular equity, index, or commodity, and continues to prove its worth with successful trades.
STOCK BROKER
A stock broker or stockbroker is a regulated professional who buys and sells shares and other securities through market makers or Agency Only Firms on behalf of investors. While the term stockbroker is still in use, it is more commonly referred to as simply "broker", "registered rep" or simply "rep"-- shortened versions of the official FINRA (pronounced "FIN-ra") designation "Registered Representative". This designation is obtained by an individual passing the FINRA General Securities Representative Examination (also known as the "Series 7 exam") and being employed ("associated with") a registered Broker-dealer also called a brokerage firm; the firm is typically a FINRA "member" firm.
More restrictive FINRA licenses or series exams exist for brokers or reps who do not need the full array of capabilities with the Series 7. See the FINRA List of Securities Examinations. And variable products such as a variable annuity contract or variable universal life insurance policy typically require the broker to also have one or another state insurance department licenses. A transaction on a stock exchange must be made between two members of the exchange — an ordinary person may not walk into the New York Stock Exchange (for example), and ask to trade stock. Such an exchange must be done through a broker.There are three types of stockbroking service. Execution-only, which means that the broker will only carry out the client's instructions to buy or sell. Advisory dealing, where the broker advises the client on which shares to buy and sell, but leaves the final decision to the investor.
Discretionary dealing, where the stockbroker ascertains the client's investment objectives and then makes all dealing decisions on the client's behalf. With the advent of automated stockbroking/trading systems on the Internet, the investor often has no personal contact with his/her brokerage firm. The stockbroker's system performs all the stockbroking functions: it obtains the best price from the market, executes and settles the trade.
Today, most of the once well-known corporate brand names including mid-sized firms such as Smith Barney (which was acquired by banking giant Citigroup) have been swallowed up by global financial conglomerates. Only a few firms remain independent, such as Edward Jones Investments, Stifel Nicolaus, Oppenheimer & Co, JP Turner & Company and Raymond James. Discount brokers (such as E*TRADE, Scottrade, TD Ameritrade, and Charles Schwab) have taken a large share of the business by offering highly discounted commissions and online/self serve accounts. Discount brokers may offer limited advisory services, but their primary focus tends to be servicing self directed retail accounts.Despite many retail investors going online with self-serve choices, brokers still handle a lot of individual and institutional investor trading. Institutional clients are typically investment advisers (and their mutual fund units and private accounts), insurance companies, pension plans, endowment funds, and high net worth individuals.
More restrictive FINRA licenses or series exams exist for brokers or reps who do not need the full array of capabilities with the Series 7. See the FINRA List of Securities Examinations. And variable products such as a variable annuity contract or variable universal life insurance policy typically require the broker to also have one or another state insurance department licenses. A transaction on a stock exchange must be made between two members of the exchange — an ordinary person may not walk into the New York Stock Exchange (for example), and ask to trade stock. Such an exchange must be done through a broker.There are three types of stockbroking service. Execution-only, which means that the broker will only carry out the client's instructions to buy or sell. Advisory dealing, where the broker advises the client on which shares to buy and sell, but leaves the final decision to the investor.
Discretionary dealing, where the stockbroker ascertains the client's investment objectives and then makes all dealing decisions on the client's behalf. With the advent of automated stockbroking/trading systems on the Internet, the investor often has no personal contact with his/her brokerage firm. The stockbroker's system performs all the stockbroking functions: it obtains the best price from the market, executes and settles the trade.
Today, most of the once well-known corporate brand names including mid-sized firms such as Smith Barney (which was acquired by banking giant Citigroup) have been swallowed up by global financial conglomerates. Only a few firms remain independent, such as Edward Jones Investments, Stifel Nicolaus, Oppenheimer & Co, JP Turner & Company and Raymond James. Discount brokers (such as E*TRADE, Scottrade, TD Ameritrade, and Charles Schwab) have taken a large share of the business by offering highly discounted commissions and online/self serve accounts. Discount brokers may offer limited advisory services, but their primary focus tends to be servicing self directed retail accounts.Despite many retail investors going online with self-serve choices, brokers still handle a lot of individual and institutional investor trading. Institutional clients are typically investment advisers (and their mutual fund units and private accounts), insurance companies, pension plans, endowment funds, and high net worth individuals.
CASH FLOW
Cash flow refers to the movement of cash into or out of a business, or project, or financial product. It is usually measured during a specified, finite period of time. Measurement of cash flow can be usedto determine a project's rate of return or value. The time of cash flows into and out of projects are used as inputs in financial models such as internal rate of return, and net present value. to determine problems with a business's liquidity. Being profitable does not necessarily mean being liquid.
A company can fail because of a shortage of cash, even while profitable. as an alternate measure of a business's profits when it is believed that accrual accounting concepts do not represent economic realities. For example, a company may be notionally profitable but generating little operational cash (as may be the case for a company that barters its products rather than selling for cash). In such a case, the company may be deriving additional operating cash by issuing shares, or raising additional debt finance. cash flow can be used to evaluate the 'quality' of Income generated by accrual accounting. When Net Income is composed of large non-cash items it is considered low quality. to evaluate the risks within a financial product. E.g. matching cash requirements, evaluating default risk, re-investment requirements, etc.
Cash flow is a generic term used differently depending on the context. It may be defined by users for their own purposes. It can refer to actual past flows, or to projected future flows. It can refer to the total of all the flows involved or to only a subset of those flows. Subset terms include 'net cash flow', operating cash flow and free cash flow. Cash flows are classified into:Operational cash flows: Cash received or expended as a result of the company's internal business activities. It includes cash earnings plus changes to working capital. Over the medium term this must be net positive if the company is to remain solvent. Investment cash flows: Cash received from the sale of long-life assets, or spent on capital expenditure (investments, acquisitions and long-life assets). Financing cash flows: Cash received from the issue of debt and equity, or paid out as dividends, share repurchases or debt repayments
All three together - the net cash flow - are necessary to reconcile the beginning cash balance to the ending cash balance. Common methods include: Sales - Sell the receivables to a factor for instant cash. (leading) Inventory - Don't pay your suppliers for an additional few weeks at period end. (lagging) Sales Commissions - Management can form a separate (but unrelated) company act as its agent. The book of business can then be purchased quarterly as an investment. Wages - Remunerate with stock options. Maintenance - Contract with the predecessor company that you prepay five years worth for them to continue doing the work Equipment Leases - Buy it Rent - Buy the property (sale and lease back, for example.
A company can fail because of a shortage of cash, even while profitable. as an alternate measure of a business's profits when it is believed that accrual accounting concepts do not represent economic realities. For example, a company may be notionally profitable but generating little operational cash (as may be the case for a company that barters its products rather than selling for cash). In such a case, the company may be deriving additional operating cash by issuing shares, or raising additional debt finance. cash flow can be used to evaluate the 'quality' of Income generated by accrual accounting. When Net Income is composed of large non-cash items it is considered low quality. to evaluate the risks within a financial product. E.g. matching cash requirements, evaluating default risk, re-investment requirements, etc.
Cash flow is a generic term used differently depending on the context. It may be defined by users for their own purposes. It can refer to actual past flows, or to projected future flows. It can refer to the total of all the flows involved or to only a subset of those flows. Subset terms include 'net cash flow', operating cash flow and free cash flow. Cash flows are classified into:Operational cash flows: Cash received or expended as a result of the company's internal business activities. It includes cash earnings plus changes to working capital. Over the medium term this must be net positive if the company is to remain solvent. Investment cash flows: Cash received from the sale of long-life assets, or spent on capital expenditure (investments, acquisitions and long-life assets). Financing cash flows: Cash received from the issue of debt and equity, or paid out as dividends, share repurchases or debt repayments
All three together - the net cash flow - are necessary to reconcile the beginning cash balance to the ending cash balance. Common methods include: Sales - Sell the receivables to a factor for instant cash. (leading) Inventory - Don't pay your suppliers for an additional few weeks at period end. (lagging) Sales Commissions - Management can form a separate (but unrelated) company act as its agent. The book of business can then be purchased quarterly as an investment. Wages - Remunerate with stock options. Maintenance - Contract with the predecessor company that you prepay five years worth for them to continue doing the work Equipment Leases - Buy it Rent - Buy the property (sale and lease back, for example.
BUSINESS CYCLE
The term business cycle (or economic cycle) refers to economy-wide fluctuations in production or economic activity over several months or years. These fluctuations occur around a long-term growth trend, and typically involve shifts over time between periods of relatively rapid economic growth (expansion or boom), and periods of relative stagnation or decline (contraction or recession).
These fluctuations are often measured using the growth rate of real gross domestic product. Despite being termed cycles, these fluctuations in economic activity do not follow a mechanical or predictable periodic pattern. Business cycles are not merely fluctuations in aggregate economic activity. The critical feature that distinguishes them from the commercial convulsions of earlier centuries or from the seasonal and other short term variations of our own age is that the fluctuations are widely diffused over the economy--its industry, its commercial dealings, and its tangles of finance. The economy of the western world is a system of closely interrelated parts. He who would understand business cycles must master the workings of an economic system organized largely in a network of free enterprises searching for profit. The problem of how business cycles come about is therefore inseparable from the problem of how a capitalist economy functions. The explanation of fluctuations in aggregate economic activity is one of the primary concerns of macroeconomics. The most commonly used framework for explaining such fluctuations is Keynesian economics. In the Keynesian view, business cycles reflect the possibility that the economy may reach short-run equilibrium at levels below or above full employment. If the economy is operating with less than full employment, i.e., with high unemployment, then in theory monetary policy and fiscal policy can have a positive role to play rather than simply causing inflation or diverting funds to inefficient uses.
Keynesian models do not necessarily imply periodic business cycles. However, simple Keynesian models involving the interaction of the Keynesian multiplier and accelerator give rise to cyclical responses to initial shocks. Paul Samuelson's "oscillator model" is supposed to account for business cycles thanks to the multiplier and the accelerator. The amplitude of the variations in economic output depends on the level of the investment, for investment determines the level of aggregate output (multiplier), and is determined by aggregate demand (accelerator).
In the Keynesian tradition, Richard Goodwin accounts for cycles in output by the distribution of income between business profits and workers wages. The fluctuations in wages are the same as in the level of employment, for when the economy is at full-employment, workers are able to demand rises in wages, whereas in periods of high unemployment, wages tend to fall. According to Goodwin, when unemployment and business profits rise, the output rises.Keynesian economist Hyman Minski has proposed a explanation of cycles founded on fluctuations in credit, interest rates and financial frailty. In an expansion period, interest rates are low and companies easily borrow money from banks to invest
These fluctuations are often measured using the growth rate of real gross domestic product. Despite being termed cycles, these fluctuations in economic activity do not follow a mechanical or predictable periodic pattern. Business cycles are not merely fluctuations in aggregate economic activity. The critical feature that distinguishes them from the commercial convulsions of earlier centuries or from the seasonal and other short term variations of our own age is that the fluctuations are widely diffused over the economy--its industry, its commercial dealings, and its tangles of finance. The economy of the western world is a system of closely interrelated parts. He who would understand business cycles must master the workings of an economic system organized largely in a network of free enterprises searching for profit. The problem of how business cycles come about is therefore inseparable from the problem of how a capitalist economy functions. The explanation of fluctuations in aggregate economic activity is one of the primary concerns of macroeconomics. The most commonly used framework for explaining such fluctuations is Keynesian economics. In the Keynesian view, business cycles reflect the possibility that the economy may reach short-run equilibrium at levels below or above full employment. If the economy is operating with less than full employment, i.e., with high unemployment, then in theory monetary policy and fiscal policy can have a positive role to play rather than simply causing inflation or diverting funds to inefficient uses.
Keynesian models do not necessarily imply periodic business cycles. However, simple Keynesian models involving the interaction of the Keynesian multiplier and accelerator give rise to cyclical responses to initial shocks. Paul Samuelson's "oscillator model" is supposed to account for business cycles thanks to the multiplier and the accelerator. The amplitude of the variations in economic output depends on the level of the investment, for investment determines the level of aggregate output (multiplier), and is determined by aggregate demand (accelerator).
In the Keynesian tradition, Richard Goodwin accounts for cycles in output by the distribution of income between business profits and workers wages. The fluctuations in wages are the same as in the level of employment, for when the economy is at full-employment, workers are able to demand rises in wages, whereas in periods of high unemployment, wages tend to fall. According to Goodwin, when unemployment and business profits rise, the output rises.Keynesian economist Hyman Minski has proposed a explanation of cycles founded on fluctuations in credit, interest rates and financial frailty. In an expansion period, interest rates are low and companies easily borrow money from banks to invest
BANK NOTE
A banknote (often known as a bill, paper money or simply a note) is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. Along with coins, banknotes make up the cash or bearer forms of all modern money. With the exception of non-circulating high-value or precious metal commemorative issues, coins are generally used for lower valued monetary units, while banknotes are used for higher valuesOriginally, precious and semi-precious metals were made into coins and were used to negotiate and settle trades
. Banknotes offer an alternative bearer form of money, but the advantages and disadvantages between the two forms of bearer money are complex and so in different circumstances the overall advantage can lie with either form.The costs of using bearer money include:Manufacturing or issue costs. Coins are produced by industrial manufacturing methods that process the precious or semi-precious metals, and require additions of alloy for hardness and wear resistance. By contrast bank notes are printed paper (or polymer), and typically have a lower cost of issue, especially in larger denominations, compared to coin of the same value. Wear costs. Coins wear and lose mass over their economic life, and eventually are scrapped.
Banknotes do not lose economic value by wear, since, even if they are in poor condition, they are still a legally valid claim on the issuing bank. However, banks of issue do have to pay the cost of replacing banknotes in poor condition. Opportunity cost of capital. Coins have economic value and are a form of non-financial capital, however they do not pay interest. Banknotes have economic value but are a form of financial capital, a loan to the issuing bank. The issuing bank invests its assets primarily in interest bearing loans and securities, but also needs to hold metallic reserves. Thus banknotes indirectly earn interest through the investments made by the issuing bank, but coins do not pay interest to anyone. This foregone interest is the most important economic advantage of banknotes over coins. Cost of transport. Coins can be expensive to transport for high value transactions, but banknotes can be issued in large denominations that are lighter than the equivalent value in coins. Cost of acceptance. Coins can be checked for authenticity by weighing and other forms of examination and testing. These costs can be significant, but good quality coin design and manufacturing can help reduce these costs. Banknotes also have an acceptance cost, the costs of checking the banknote's security features and confirming acceptability of the issuing bank.
The different advantages and disadvantages between coins and banknotes imply that there may be an ongoing role for both forms of bearer money, each being used where its advantages outweigh its disadvantages. The ability to exchange a note for some other kind of value is called "convertibility". For example a US silver certificate was "payable in silver on demand" from the treasury until 1965. If a note is payable on demand for a fixed unit, it is said to be fully convertible to that unit
. Banknotes offer an alternative bearer form of money, but the advantages and disadvantages between the two forms of bearer money are complex and so in different circumstances the overall advantage can lie with either form.The costs of using bearer money include:Manufacturing or issue costs. Coins are produced by industrial manufacturing methods that process the precious or semi-precious metals, and require additions of alloy for hardness and wear resistance. By contrast bank notes are printed paper (or polymer), and typically have a lower cost of issue, especially in larger denominations, compared to coin of the same value. Wear costs. Coins wear and lose mass over their economic life, and eventually are scrapped.
Banknotes do not lose economic value by wear, since, even if they are in poor condition, they are still a legally valid claim on the issuing bank. However, banks of issue do have to pay the cost of replacing banknotes in poor condition. Opportunity cost of capital. Coins have economic value and are a form of non-financial capital, however they do not pay interest. Banknotes have economic value but are a form of financial capital, a loan to the issuing bank. The issuing bank invests its assets primarily in interest bearing loans and securities, but also needs to hold metallic reserves. Thus banknotes indirectly earn interest through the investments made by the issuing bank, but coins do not pay interest to anyone. This foregone interest is the most important economic advantage of banknotes over coins. Cost of transport. Coins can be expensive to transport for high value transactions, but banknotes can be issued in large denominations that are lighter than the equivalent value in coins. Cost of acceptance. Coins can be checked for authenticity by weighing and other forms of examination and testing. These costs can be significant, but good quality coin design and manufacturing can help reduce these costs. Banknotes also have an acceptance cost, the costs of checking the banknote's security features and confirming acceptability of the issuing bank.
The different advantages and disadvantages between coins and banknotes imply that there may be an ongoing role for both forms of bearer money, each being used where its advantages outweigh its disadvantages. The ability to exchange a note for some other kind of value is called "convertibility". For example a US silver certificate was "payable in silver on demand" from the treasury until 1965. If a note is payable on demand for a fixed unit, it is said to be fully convertible to that unit
ENTREPRENEUR
An entrepreneur is a person who has possession of an enterprise, or venture, and assumes significant accountability for the inherent risks and the outcome. It is an ambitious leader who combines land, labor, and capital to create and market new goods or services. The term is a loanword from French and was first defined by the Irish economist Richard Cantillon. Entrepreneur in English is a term applied to the type of personality who is willing to take upon herself or himself a new venture or enterprise and accepts full responsibility for the outcome. Jean-Baptiste Say, a french economist, believed to be coined the word Entrepreneur first in about at 1800. He said an entrepreneur is "one who undertakes an enterprise, especially a contractor, acting as intermediatory between capital and labour".
Entrepreneurship is often difficult and tricky, resulting in many new ventures failing. The word entrepreneur is often synonymous with founder. Most commonly, the term entrepreneur applies to someone who creates value by offering a product or service, by carving out a niche in the market that may not exist currently. Entrepreneurs tend to identify a market opportunity and exploit it by organizing their resources effectively to accomplish an outcome that changes existing interactions within a given sector.Observers see them as being willing to accept a high level of personal, professional or financial risk to pursue opportunity.
Business entrepreneurs are viewed as fundamentally important in the capitalistic society. Some distinguish business entrepreneurs as either "political entrepreneurs" or "market entrepreneurs," while social entrepreneurs' principal objectives include the creation of a social and/or environmental benefit. Credit for coining the word "entrepreneur" goes to Jean-Baptiste Say, a nineteenth century economist..
The word "entrepreneur" is a loanword from French. In French the verb "entreprendre" means "to undertake," with "entre" coming from the Latin word meaning "between," and "prendre" meaning "to take." In French a person who performs a verb, has the ending of the verb changed to "eur," comparable to the "er" ending in English. "Unternehmer" (lit. "undertaker" in the literal sense of the word) is the high German equivalent and curiously, "Unternehmensforschung" is the German equivalent of Operations Research although the Anglo-Saxon model of the firm is fairly anti-thetical to the notion of management as a science.Enterprise is similar to and has roots in, the French word "entreprise," which is the past participle of "entreprendre." A more generally held theory is that entrepreneurs emerge from the population on demand, from the combination of opportunities and people well-positioned to take advantage of them.
An entrepreneur may perceive that they are among the few to recognize or be able to solve a problem. In this view, one studies on one side the distribution of information available to would-be entrepreneurs (see Austrian School economics) and on the other, how environmental factors (access to capital, competition, etc.) change the rate of a society's production of entrepreneurs.
Entrepreneurship is often difficult and tricky, resulting in many new ventures failing. The word entrepreneur is often synonymous with founder. Most commonly, the term entrepreneur applies to someone who creates value by offering a product or service, by carving out a niche in the market that may not exist currently. Entrepreneurs tend to identify a market opportunity and exploit it by organizing their resources effectively to accomplish an outcome that changes existing interactions within a given sector.Observers see them as being willing to accept a high level of personal, professional or financial risk to pursue opportunity.
Business entrepreneurs are viewed as fundamentally important in the capitalistic society. Some distinguish business entrepreneurs as either "political entrepreneurs" or "market entrepreneurs," while social entrepreneurs' principal objectives include the creation of a social and/or environmental benefit. Credit for coining the word "entrepreneur" goes to Jean-Baptiste Say, a nineteenth century economist..
The word "entrepreneur" is a loanword from French. In French the verb "entreprendre" means "to undertake," with "entre" coming from the Latin word meaning "between," and "prendre" meaning "to take." In French a person who performs a verb, has the ending of the verb changed to "eur," comparable to the "er" ending in English. "Unternehmer" (lit. "undertaker" in the literal sense of the word) is the high German equivalent and curiously, "Unternehmensforschung" is the German equivalent of Operations Research although the Anglo-Saxon model of the firm is fairly anti-thetical to the notion of management as a science.Enterprise is similar to and has roots in, the French word "entreprise," which is the past participle of "entreprendre." A more generally held theory is that entrepreneurs emerge from the population on demand, from the combination of opportunities and people well-positioned to take advantage of them.
An entrepreneur may perceive that they are among the few to recognize or be able to solve a problem. In this view, one studies on one side the distribution of information available to would-be entrepreneurs (see Austrian School economics) and on the other, how environmental factors (access to capital, competition, etc.) change the rate of a society's production of entrepreneurs.
CAPITAL ASSET
The term capital asset has three unrelated technical definitions, and is also used in a variety of non-technical ways.In financial economics, it refers to any asset used to make money, as opposed to assets used for personal enjoyment or consumption. This is an important distinction because two people can disagree sharply about the value of personal assets, one person might think a sports car is more valuable than a pickup truck, another person might have the opposite taste. But if an asset is held for the purpose of making money, taste has nothing to do with it, only differences of opinion about how much money the asset will produce.
With the further assumption that people agree on the probability distribution of future cash flows, it is possible to have an objective Capital asset pricing model. Even without the assumption of agreement, it is possible to set rational limits on capital asset value. In governmental accounting, it is defined as any asset used in operations with an initial useful life extending beyond one reporting period. Generally, government managers have a "stewardship" duty to maintain capital assets under their control. See International Public Sector Accounting Standards for details. In US tax accounting, it is defined as any property other than a list of exceptions.
The main exceptions are anything held for sale, and any real estate or depreciable property used in business. Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. If something is a capital asset for tax purposes, gains or losses on sale or disposition are capital gains or capital losses. For individuals, however, capital losses on property held for personal use are generally not deductible. See the IRS publication Tax Facts about Capital Gains and Losses for details. A well-known financial accounting textbookadvises that the term be avoided except in tax accounting because it is used in so many different senses, not all of them well-defined. For example it is often used as a synonym for fixed assets or for investments in securities.
A common non-technical usage occurs when people ask that employees or the environment or something else be treated as a capital asset. In this context it means something managers have a responsibility to maintain, and to report changes in value as gains or lossesCapital assets should not be confused with the capital a financial institution is required to hold. This capital is computed from the right-hand side of the balance sheet while assets are found on the left-hand side.
With the further assumption that people agree on the probability distribution of future cash flows, it is possible to have an objective Capital asset pricing model. Even without the assumption of agreement, it is possible to set rational limits on capital asset value. In governmental accounting, it is defined as any asset used in operations with an initial useful life extending beyond one reporting period. Generally, government managers have a "stewardship" duty to maintain capital assets under their control. See International Public Sector Accounting Standards for details. In US tax accounting, it is defined as any property other than a list of exceptions.
The main exceptions are anything held for sale, and any real estate or depreciable property used in business. Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. If something is a capital asset for tax purposes, gains or losses on sale or disposition are capital gains or capital losses. For individuals, however, capital losses on property held for personal use are generally not deductible. See the IRS publication Tax Facts about Capital Gains and Losses for details. A well-known financial accounting textbookadvises that the term be avoided except in tax accounting because it is used in so many different senses, not all of them well-defined. For example it is often used as a synonym for fixed assets or for investments in securities.
A common non-technical usage occurs when people ask that employees or the environment or something else be treated as a capital asset. In this context it means something managers have a responsibility to maintain, and to report changes in value as gains or lossesCapital assets should not be confused with the capital a financial institution is required to hold. This capital is computed from the right-hand side of the balance sheet while assets are found on the left-hand side.
MONEY MARKET
In finance, the money market is the global financial market for short-term borrowing and lending. It provides short-term liquidity funding for the global financial system. The money market is where short-term obligations such as Treasury bills, commercial paper and bankers' acceptances are bought and sold. The money market consists of financial institutions and dealers in money or credit who wish to either borrow or lend. Participants borrow and lend for short periods of time, typically up to thirteen months. Money market trades in short-term financial instruments commonly called "paper." This contrasts with the capital market for longer-term funding, which is supplied by bonds and equity.
The core of the money market consists of banks borrowing and lending to each other, using commercial paper, repurchase agreements and similar instruments. These instruments are often benchmarked to (i.e. priced by reference to) the London Interbank Offered Rate (LIBOR) for the appropriate term and currency.
Finance companies, such as GMAC, typically fund themselves by issuing large amounts of asset-backed commercial paper (ABCP) which is secured by the pledge of eligible assets into an ABCP conduit. Examples of eligible assets include auto loans, credit card receivables, residential/commercial mortgage loans, mortgage-backed securities and similar financial assets. Certain large corporations with strong credit ratings, such as General Electric, issue commercial paper on their own credit. Other large corporations arrange for banks to issue commercial paper on their behalf via commercial paper lines.
In the United States, federal, state and local governments all issue paper to meet funding needs. States and local governments issue municipal paper, while the US Treasury issues Treasury bills to fund the US public debt.Trading companies often purchase bankers' acceptances to be tendered for payment to overseas suppliers. Retail and institutional money market funds Banks Central banks Cash management programs Arbitrage ABCP conduits, which seek to buy higher yielding paper, while themselves selling cheaper paper.
The core of the money market consists of banks borrowing and lending to each other, using commercial paper, repurchase agreements and similar instruments. These instruments are often benchmarked to (i.e. priced by reference to) the London Interbank Offered Rate (LIBOR) for the appropriate term and currency.
Finance companies, such as GMAC, typically fund themselves by issuing large amounts of asset-backed commercial paper (ABCP) which is secured by the pledge of eligible assets into an ABCP conduit. Examples of eligible assets include auto loans, credit card receivables, residential/commercial mortgage loans, mortgage-backed securities and similar financial assets. Certain large corporations with strong credit ratings, such as General Electric, issue commercial paper on their own credit. Other large corporations arrange for banks to issue commercial paper on their behalf via commercial paper lines.
In the United States, federal, state and local governments all issue paper to meet funding needs. States and local governments issue municipal paper, while the US Treasury issues Treasury bills to fund the US public debt.Trading companies often purchase bankers' acceptances to be tendered for payment to overseas suppliers. Retail and institutional money market funds Banks Central banks Cash management programs Arbitrage ABCP conduits, which seek to buy higher yielding paper, while themselves selling cheaper paper.
ECONOMY SECTOR
The tertiary sector of economy (also known as the service sector or the service industry) is one of the three economic sectors, the others being the secondary sector (approximately manufacturing) and the primary sector (extraction such as mining, agriculture and fishing). The general definition of the Tertiary sector is producing a service instead of just a end product, in the case of the secondary sector. Sometimes an additional sector, the "quaternary sector", is defined for the sharing of information (which normally belongs to the tertiary sector). The tertiary sector is defined by exclusion of the two other sectors. Services are defined in conventional economic literature as "intangible goods".
The tertiary sector of economy involves the provision of services to businesses as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to a consumer as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment. Goods may be transformed in the process of providing a service, as happens in the restaurant industry or in equipment repair. However, the focus is on people interacting with people and serving the customer rather than transforming physical goods. The service sector consists of the "soft" parts of the economy such as insurance, government, tourism, banking, retail, education, and social services. In soft-sector employment, people use time to deploy knowledge assets, collaboration assets, and process-engagement to create productivity (effectiveness), performance improvement potential (potential) and sustainability. The tertiary sector is the most common workplace.
Typically the output of this sector is content (information), service, attention, advice, experiences, and/or discussion (also known as "intangible goods"). Public utilities are often considered part of the tertiary sector as they provide services to people, while creating the utility's infrastructure is often considered part of the secondary sector, even though the same business may be involved in both aspects of the operation.
To do fact-based work in this area it is necessary to utilize the extensive data collection that takes place using classification systems such as the United Nations's International Standard Industrial Classification standard, the United States' Standard Industrial Classification (SIC) code system and its new replacement, the North American Industrial Classification System (NAICS), and similar systems in the EU and elsewhere.The term service economy, in contrast, refers to a model wherein as much economic activity as possible is treated as a service. For example IBM treats its business as a service business. Although it still manufactures high-end computers, it sees the physical goods as a small part of the "business solutions" industry. They have found that the price elasticity of demand for "business solutions" is much less than that for hardware. There has been a corresponding shift to a subscription pricing model.
The tertiary sector of economy involves the provision of services to businesses as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to a consumer as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment. Goods may be transformed in the process of providing a service, as happens in the restaurant industry or in equipment repair. However, the focus is on people interacting with people and serving the customer rather than transforming physical goods. The service sector consists of the "soft" parts of the economy such as insurance, government, tourism, banking, retail, education, and social services. In soft-sector employment, people use time to deploy knowledge assets, collaboration assets, and process-engagement to create productivity (effectiveness), performance improvement potential (potential) and sustainability. The tertiary sector is the most common workplace.
Typically the output of this sector is content (information), service, attention, advice, experiences, and/or discussion (also known as "intangible goods"). Public utilities are often considered part of the tertiary sector as they provide services to people, while creating the utility's infrastructure is often considered part of the secondary sector, even though the same business may be involved in both aspects of the operation.
To do fact-based work in this area it is necessary to utilize the extensive data collection that takes place using classification systems such as the United Nations's International Standard Industrial Classification standard, the United States' Standard Industrial Classification (SIC) code system and its new replacement, the North American Industrial Classification System (NAICS), and similar systems in the EU and elsewhere.The term service economy, in contrast, refers to a model wherein as much economic activity as possible is treated as a service. For example IBM treats its business as a service business. Although it still manufactures high-end computers, it sees the physical goods as a small part of the "business solutions" industry. They have found that the price elasticity of demand for "business solutions" is much less than that for hardware. There has been a corresponding shift to a subscription pricing model.
REAL ESTATE BUSINESS
Real estate is a legal term (in some jurisdictions, notably in the USA, United Kingdom, Canada, and Australia) that encompasses land along with anything permanently affixed to the land, such as buildings, specifically property that is fixed in location. Real estate law is the body of regulations and legal codes which pertain to such matters under a particular jurisdiction. Real estate is often considered synonymous with real property (also sometimes called realty), in contrast with personal property (also sometimes called chattel or personalty under chattel law or personal property law).
However, in some situations the term "real estate" refers to the land and fixtures together, as distinguished from "real property," referring to ownership rights of the land itself. The terms real estate and real property are used primarily in common law, while civil law jurisdictions refer instead to immovable property. With the development of private property ownership, real estate has become a major area of business.
Purchasing real estate requires a significant investment, and each parcel of land has unique characteristics, so the real estate industry has evolved into several distinct fields. Specialists are often called on to valuate real estate and facilitate transactions. Some kinds of real estate businesses include:Appraisal: Professional valuation services Brokerages: A fee charged by the mediator who facilitates a real estate transaction between the two parties. Development: Improving land for use by adding or replacing buildings Property management: Managing a property for its owner(s) Real estate marketing: Managing the sales side of the property business Real estate investing: Managing the investment of real estate Relocation services: Relocating people or business to a different country Corporate Real Estate: Managing the real estate held by a corporation to support its core business—unlike managing the real estate held by and investor to generate income Within each field, a business may specialize in a particular type of real estate, such as residential, commercial, or industrial property. In addition, almost all construction business effectively has a connection to real estate."Internet real estate" is a term coined by the internet investment community relating to ownership of domain names and the similarities between high quality internet domain names and real-world, prime real estate.
The legal arrangement for the right to occupy a dwelling is known as the housing tenure. Types of housing tenure include owner occupancy, Tenancy, housing cooperative, condominiums (individually parceled properties in a single building), public housing, squatting, and cohousing.Residences can be classified by, if, and how they are connected to neighboring residences and land. Different types of housing tenure can be used for the same physical type. For example, connected residents might be owned by a single entity and leased out, or owned separately with an agreement covering the relationship between units and common areas and concerns.
However, in some situations the term "real estate" refers to the land and fixtures together, as distinguished from "real property," referring to ownership rights of the land itself. The terms real estate and real property are used primarily in common law, while civil law jurisdictions refer instead to immovable property. With the development of private property ownership, real estate has become a major area of business.
Purchasing real estate requires a significant investment, and each parcel of land has unique characteristics, so the real estate industry has evolved into several distinct fields. Specialists are often called on to valuate real estate and facilitate transactions. Some kinds of real estate businesses include:Appraisal: Professional valuation services Brokerages: A fee charged by the mediator who facilitates a real estate transaction between the two parties. Development: Improving land for use by adding or replacing buildings Property management: Managing a property for its owner(s) Real estate marketing: Managing the sales side of the property business Real estate investing: Managing the investment of real estate Relocation services: Relocating people or business to a different country Corporate Real Estate: Managing the real estate held by a corporation to support its core business—unlike managing the real estate held by and investor to generate income Within each field, a business may specialize in a particular type of real estate, such as residential, commercial, or industrial property. In addition, almost all construction business effectively has a connection to real estate."Internet real estate" is a term coined by the internet investment community relating to ownership of domain names and the similarities between high quality internet domain names and real-world, prime real estate.
The legal arrangement for the right to occupy a dwelling is known as the housing tenure. Types of housing tenure include owner occupancy, Tenancy, housing cooperative, condominiums (individually parceled properties in a single building), public housing, squatting, and cohousing.Residences can be classified by, if, and how they are connected to neighboring residences and land. Different types of housing tenure can be used for the same physical type. For example, connected residents might be owned by a single entity and leased out, or owned separately with an agreement covering the relationship between units and common areas and concerns.
STOCK TRADER
Individuals or firms trading equity (stock) on the stock markets as their principal capacity are called stock traders. Stock traders usually try to profit from short-term price volatility with trades lasting anywhere from several seconds to several weeks. The stock trader is usually a professional. A person can call themself a full or part-time stock trader/investor while maintaining other professions. When a stock trader/investor has clients, and acts as a money manager or adviser with the intention of adding value to their clients finances, they are also called a financial advisor or manager. In this case, the financial manager could be an independent professional or a large bank corporation employee.
This may include managers dealing with investment funds, hedge funds, mutual funds, and pension funds, or other professionals in equity investment, fund management, and wealth management. Several different types of stock trading exist including day trading, swing trading, market making, scalping (trading), momentum trading, trading the news, and arbitrage. On the other hand, stock investors purchase stocks with the intention of holding for an extended period of time, usually several months to years. They rely primarily on fundamental analysis for their investment decisions and fully recognize stock shares as part-ownership in the company.
Many investors believe in the buy and hold strategy, which as the name suggests, implies that investors will hold stocks for the very long term, generally measured in years. This strategy was made popular in the equity bull market of the 1980s and 90s where buy-and-hold investors rode out short-term market declines and continued to hold as the market returned to its previous highs and beyond. However, during the 2001-2003 equity bear market, the buy-and-hold strategy lost some followers as broader market indexes like the NASDAQ saw their values decline by over 60%.Stock traders/investors usually need a stock broker such as a bank or a brokerage firm to access the stock market. Since the advent of Internet banking, an Internet connection is commonly used to manage positions. Using the Internet, specialized software, and a personal computer, stock traders/investors make use of technical analysis and fundamental analysis to help them in the decision-making process. They may use several information resources. Some of these resources are strictly technical. Using the pivot points calculated from a previous day trading, traders are able to predict the buy and sell points of the current day trading session. This pivot points give a cue to traders as to where price will head for the day; signalling the trader where to enter his trade, and where to exit. There are criticism on the validity of these technical indicators used in technical analysis, and many professional stock traders do not use them.
Many full-time stock traders and stock investors have a formal education of some sort in fields like economics, mathematics and computer science, which are, in general, particularly relevant for this occupation. Although many companies offer courses in stock picking, and numerous experts report success through Technical Analysis and Fundamental Analysis, many economists and academics state that because of Efficient market theory .
This may include managers dealing with investment funds, hedge funds, mutual funds, and pension funds, or other professionals in equity investment, fund management, and wealth management. Several different types of stock trading exist including day trading, swing trading, market making, scalping (trading), momentum trading, trading the news, and arbitrage. On the other hand, stock investors purchase stocks with the intention of holding for an extended period of time, usually several months to years. They rely primarily on fundamental analysis for their investment decisions and fully recognize stock shares as part-ownership in the company.
Many investors believe in the buy and hold strategy, which as the name suggests, implies that investors will hold stocks for the very long term, generally measured in years. This strategy was made popular in the equity bull market of the 1980s and 90s where buy-and-hold investors rode out short-term market declines and continued to hold as the market returned to its previous highs and beyond. However, during the 2001-2003 equity bear market, the buy-and-hold strategy lost some followers as broader market indexes like the NASDAQ saw their values decline by over 60%.Stock traders/investors usually need a stock broker such as a bank or a brokerage firm to access the stock market. Since the advent of Internet banking, an Internet connection is commonly used to manage positions. Using the Internet, specialized software, and a personal computer, stock traders/investors make use of technical analysis and fundamental analysis to help them in the decision-making process. They may use several information resources. Some of these resources are strictly technical. Using the pivot points calculated from a previous day trading, traders are able to predict the buy and sell points of the current day trading session. This pivot points give a cue to traders as to where price will head for the day; signalling the trader where to enter his trade, and where to exit. There are criticism on the validity of these technical indicators used in technical analysis, and many professional stock traders do not use them.
Many full-time stock traders and stock investors have a formal education of some sort in fields like economics, mathematics and computer science, which are, in general, particularly relevant for this occupation. Although many companies offer courses in stock picking, and numerous experts report success through Technical Analysis and Fundamental Analysis, many economists and academics state that because of Efficient market theory .
SHARE HOLDER
A mutual shareholder or stockholder is an individual or company (including a corporation) that legally owns one or more shares of stock in a joint stock company. A company's shareholders collectively own that company. Thus, the typical goal of such companies is to enhance shareholder value.
Stockholders are granted special privileges depending on the class of stock. These rights may include:The right to vote on matters such as elections to the board of directors. Usually, stockholders have one vote per share owned, but sometimes this is not the case The right to propose . The right to share in distributions of the company's income. The right to purchase new shares issued by the company. The right to a company's assets during a liquidation of the company. However, stockholder's rights to a company's assets are subordinate to the rights of the company's creditors. This means that stockholders typically receive nothing if a company is liquidated after bankruptcy (if the company had had enough to pay its creditors, it would not have entered bankruptcy), although a stock may have value after a bankruptcy if there is the possibility that the debts of the company will be restructured.
Stockholders or shareholders are considered by some to be a partial subset of stakeholders, which may include anyone who has a direct or indirect equity interest in the business entity or someone with even a non-pecuniary interest in a non-profit organization. Thus it might be common to call volunteer contributors to an association stakeholders, even though they are not shareholders.Although directors and officers of a company are bound by fiduciary duties to act in the best interest of the shareholders, the shareholders themselves normally do not have such duties towards each other.However, in a few unusual cases, some courts have been willing to imply such a duty between shareholders. For example, in California, majority shareholders of closely held corporations have a duty to not destroy the value of the shares held by minority shareholders.The largest shareholders (in terms of percentage owned of companies) are often mutual funds, especially passively managed exchange-traded funds
Shareholders play an important role in raising capital for organizations. So these figures pose a great opportunity for all those who are looking for a lucrative option to invest money. Companies typically provide all the necessary proofs to shareholders to show that they are investing at a right place. For example, fair and reliable audit figures from income statement and balance sheet are used as evidence of overall performance for the benefit of shareholders.
Stockholders are granted special privileges depending on the class of stock. These rights may include:The right to vote on matters such as elections to the board of directors. Usually, stockholders have one vote per share owned, but sometimes this is not the case The right to propose . The right to share in distributions of the company's income. The right to purchase new shares issued by the company. The right to a company's assets during a liquidation of the company. However, stockholder's rights to a company's assets are subordinate to the rights of the company's creditors. This means that stockholders typically receive nothing if a company is liquidated after bankruptcy (if the company had had enough to pay its creditors, it would not have entered bankruptcy), although a stock may have value after a bankruptcy if there is the possibility that the debts of the company will be restructured.
Stockholders or shareholders are considered by some to be a partial subset of stakeholders, which may include anyone who has a direct or indirect equity interest in the business entity or someone with even a non-pecuniary interest in a non-profit organization. Thus it might be common to call volunteer contributors to an association stakeholders, even though they are not shareholders.Although directors and officers of a company are bound by fiduciary duties to act in the best interest of the shareholders, the shareholders themselves normally do not have such duties towards each other.However, in a few unusual cases, some courts have been willing to imply such a duty between shareholders. For example, in California, majority shareholders of closely held corporations have a duty to not destroy the value of the shares held by minority shareholders.The largest shareholders (in terms of percentage owned of companies) are often mutual funds, especially passively managed exchange-traded funds
Shareholders play an important role in raising capital for organizations. So these figures pose a great opportunity for all those who are looking for a lucrative option to invest money. Companies typically provide all the necessary proofs to shareholders to show that they are investing at a right place. For example, fair and reliable audit figures from income statement and balance sheet are used as evidence of overall performance for the benefit of shareholders.
Subscribe to:
Posts (Atom)
