Business Dictionary – F

Factory Floor

    The area of a factory where the goods are made. Also the collective name of the ordinary workers in a factory, rather than management.

Factory Gate Price

    Manufacturing cost of goods the actual cost of manufacturing goods before any additional charges are added to give a profit. The factory gate price includes direct costs such as labor, raw materials, and energy, and indirect costs such as interest on loans, plant maintenance, or rent.

Factory Price

    The price charged for goods direct from the factory, not including transport costs, etc. Factory Price is often quoted by retailers or in advertisements to show that products are for sale at a very low price.

Failure Mode and Effects Analysis

    Way of identifying and dealing with potential failures a method for identifying and ranking the seriousness of ways in which a product, process, or service could fail, and finding ways in which to minimize the risk of those potential failures.

Fairy Dust

    A term often used in the entertainment business. The final enhancement or touch on a project. The unknown factor which turns something great into something fantastic.

Fannie Mae

    US institution financing housing the largest source of financing for housing in the United States, which funds mortgages by issuing debt securities in US and international securities markets. Fannie Mae was created in 1938 as a federal agency and chartered in 1968 by the US Congress as a stockholder-owned private company. On September 7, 2008, after Fannie Mae reported billions of dollars in losses from subprime loans, its government regulatory agency, the Federal Housing Finance Agency put Fannie Mae under its conservatorship. In addition, the US Treasury agreed to provide up to $100 billion of capital as needed to ensure Fannie Mae’s continued operation.

FAQ

    Commonest questions about something FAQ pages are often included on websites to provide first-time visitors with answers to the most likely questions they may have. FAQ pages are also used in newsgroups and software applications.

Fast Moving Consumer Goods (FMCG)

    Products (and the related industry) which are sold in big volumes by big retailers at low profit margins, at keen prices, to domestic consumers – traditionally foods and groceries, household consumables, etc., and nowadays extending to any products of short life and disposable/consumable nature.

Fast Track

    Quick route in a career to success and promotion, associated with high ambition.

Fat Cat

    A wealthy person living off investments or dividends, or a chief executive of a large company or organisation who is on a very large salary, huge pension, etc.

Fault Tolerance

    Enables a system, especially in computing, to continue to operate properly even though a component in the system has failed.

Feasibility Study

    A preliminary assessment of a new project, including costs, risks, etc., to determine whether the project will be successful and practical.

Feather-Bedding

    A term often used in industry describing the practice of hiring more workers than is necessary to carry out a job, often because of a contract with a union.

Fidelity Bond

    Also known as Fidelity Insurance. Protects an employer against any losses incurred because of dishonesty, or damage caused, by an employee.

Fiduciary

    Describes an organisation or individual who manages money or property for a beneficiary.

Figurehead

    In business, organizations, politics, etc., a person who holds an important position or office but lacks real power or authority; a ‘front man’. Derived from the carved painted figurehead models which traditionally were fixed to the front of sailing ships.

Filibuster

    A person who attempts to delay or obstruct legislation by giving long speeches, but does not contravene rules concerning proceedings.

Fill or Kill

    Also FOK, on the stock exchange, an instruction received by a broker from a client to buy or sell specified shares immediately or not at all.

Filofax

    A personal organiser (and the name of the company which makes it), which was very popular in the 1980s, with pages which can be easily removed or added. This product was associated with ‘Yuppies’.

Financial Engineering

    The practice of solving financial problems or creating financial opportunities in a company, by changing the way money is borrowed, debts paid, etc.

Financial Equity

    The ownership of interest in a company, usually in the form of shares.

Finite Capacity Scheduling

    A process in which a computer program organises tasks, matching the resources available to the most efficient way of production.

Firepower

    The amount of power, money and/or influence that is available to a business or organisation.

Fire Sale

    Sale of anything at a large discount a sale of anything at a very low price, usually because the seller is facing bankruptcy.

Firewall

    A system in a computer which prevents unwanted or unauthorised access, but allows the authorised user to receive information.

Firmware

    Describes the fixed programs, which cannot be lost or changed, in electronic devices such as digital cameras, calculators, remote controls, etc.

First In First Out (FIFO)

    Inventory control system a method of inventory management in which the stock of a given product first placed in store is used before more recently produced or acquired goods or materials.

First Mover

    A business that gains an advantage by being the first to establish itself in a specific market by producing a new product or offering a new service, or by being the first to use new technology.

First Order Of Business

    The most important task to be dealt with.

Fiscal Drag

    A situation in which wages rise because of inflation but income tax thresholds are not increased, which can push people into higher tax brackets and therefore makes them pay an increased proportion of their wages in tax.

Five Nines

    Refers to the 99.999% of the time that some companies claim their computer systems work properly.

Fixed Interval Re-Order System

    Means of regularly re-ordering inventory a system for placing orders of varying sizes at regular intervals to replenish inventory up to a specified or target inventory level. A fixed interval re-order system sets a specific re-order period, but the re-order quantity can vary according to need. The quantity re-ordered is calculated by subtracting existing inventory and on-order inventory from the target inventory level.

Fixed-Price Agreement

    Contract setting prices for period of time an agreement whereby a company provides a service or a product at a price that stays the same for the whole period of the agreement.

Fixed Term Contract

    Also known as Temporary Contract. A contract of employment which ends on a specific date, or on completion of a task or project. Fixed term employees have the rights to the same pay, conditions and benefits as full-time employees.

Fixer

    A person who makes arrangements for someone else, usually for a fee, by using their influence and often underhand, illegal methods.

Fixtures and Fittings

    Items sold along with property the objects in a property that are sold with the property, both those which cannot be removed and those which can. Fixtures and fittings are a category of fixed assets.

Flame

    To send a rude or unacceptable message by e-mail, or to post a message on an Internet forum which is offensive or inciteful.

Flash Drive

    A small portable device such as a ‘pen drive’ which connects to a USB port on a computer and is used to store data which can then be transferred to another computer. The term flash drive derives from ‘flash’ memory, invented by Dr Fujio Masuoka of Toshiba around 1980. The name flash (apparently, according to Wikipedia, 2010) was suggested by Masuoka’s colleague, Shoji Ariizumi, who likened the memory erasure function to a camera flash.

Flash Mob

    A secretly-planned (usually via modern computerised social networking technology), quickly-formed, organized group of people, assembled to engage in a quirky activity, typically for the amusement and entertainment of the participants. Potentially the term may be applied to similar gatherings organized for more conventional promotional, protest or other publicity/pressure purposes, although this strays somewhat from the usual concept, in which the flash mob event is an aim in itself, rather than part of a wider campaign with a specific purpose.

    The expression is not new. It originated in the 1940s US underworld when it referred to a gang of thieves or confidence tricksters. The word flash has been used in various criminal contexts since the 1600s and in the original 1940s phrase flash mob, flash literally meant criminal. The modern use of the flash mob expression naturally fits the notion of flash photography, a fast or fleeting appearance, a ‘flash of inspiration’, and especially the recent understanding of flash in relation to quick technology such as flash memory and flash drives.

Flexecutive

    A manager who works flexible hours, often from home using the Internet. A multi-skilled executive who can change tasks or jobs with ease.

Flexitime

    A work system in which employees work a set number of hours each week or month, but they decide when they are going to start and finish each day, usually between a range of given working hours.

Flight Capital

    The movement of large sums of money from one of investment to another, or from one country to another, to avoid high taxes or financial instability due to political unrest.

Flighting

    A cost effective method of advertising. A commercial is scheduled to appear on TV, usually when viewing figures are high (flight). There are periods in between the flights when the commercial does not appear on TV (hiatus). During the TV hiatus the product being advertised will often appear in newspapers or magazines, so the public is continually aware of it.

Floor Limit

    In retailing, the highest amount of money for a sale for which a debit or credit card can be used by a customer without authorisation from the customer’s bank.

Floor Trader

    Also known as a Local. An investor who is allowed on the trading floor of a stock exchange, to buy and sell shares, etc., for their own account.

Flotation

    The process of financing a company by selling shares on the stock exchange for the first time.

Flow Chart

    Diagrammatic representation of stages a graphic representation of the stages in a process or system, or of the steps required to solve a problem. A flow chart is commonly used to represent the sequence of functions in a computer program or to model the movement of materials, money, or people in a complex process. Two primary symbols used in flow charts are the process box, indicating a process or action taking place, and the decision lozenge, indicating the need for a decision.

Flow Line Production

    Processing in stages in single direction a production method in which successive operations are carried out on a product in such a way that it moves through the factory in a single direction. Flow line production is most widely used in mass production on production lines.

    More recently, it has been linked with batch production. Under flow line production, inventory is often kept to the minimum necessary to ensure continued activity. Stoppages and interruptions to the flow indicate a fault, and corrective action can be taken. Assembly line production is an extreme version of flow line production.

Flyback

    Also known as a Callback. A series of screening interviews for a job during which a person, usually a student, is interviewed several times, often on the same same day, by the prospective employer.

Flynn Effect

    Research showing that the results of IQ (Intelligence Quotient) tests in various countries (i.e. internationally) have risen consistently over several decades, (after political scientist James R Flynn).

Focus List

    A list of companies, recommended by an investment firm, whose shares are worth buying or selling.

Footfall

    The extent or measure of numbers of people who visit a business or shop or other retail/leisure/entertainment venue during a given period of time. Footfall is a crucial factor in retailing methods, and also in promotion and advertising which focuses on the physical presence – on foot – of consumers at a particular location.

Force Field Analysis

    A technique developed by Kurt Lewin to support positive factors and decrease negative factors, as the result of a change in an organisation.

Force Majeure

    A clause in a contract which exempts the contracting party (e.g., insurer) from liability in the event of an unforeseen intervention or catastrophe which prevents fulfilment of contractual obligations, such as war, act of God, etc. The term force majeure is French, meaning loosely ‘superior strength’.

Foreclosure

    Legal process by which a lender cancels (forecloses) a borrower’s right of redemption of the mortgaged property through a court order (called foreclosure order). The court sets a date up to which the borrower can redeem the property by paying off the entire loan balance (including foreclosing expenses).

Forex

    Also called FX, refers to Foreign Exchange, in which foreign currencies are bought and sold.

Forfaiting

    Purchase of exporter’s goods by third party the purchase of an exporter’s goods by a third party at a discount. This party then collects payment from the importer with the shipped goods serving as collateral.

Forfeiture

    Punitive loss of property or right loss of property or the right to something, usually because of an unlawful act.

Fortune 500

    Published by Fortune magazine, an annual list of the 500 US corporations with the largest revenue.

Form Letter

    Identical letter sent to different people a letter that can be sent without any change to several correspondents.

Forwarding Company

    Also called a ‘freight forwarder’, a company specialising in transfer of freight from businesses or individuals by finding an appropriate transporter of the goods.

Forward Integration

    A business strategy whereby a company takes control of its distributors, therefore guaranteeing the distribution of the controlling company’s products.

Four-Colour Process

    In printing, the use of four ink colours – yellow, magenta, cyan and black – which are combined together to produce the whole spectrum of colours.

Fourth Level of Service

    High level of increased value a very high rating in a system of measuring the value added to a product or service.

Fractional Ownership

    An arrangement where a number of people or companies each buy a percentage of an expensive asset, such as a property. The individual owners then share the asset, and when it is sold the profits are distributed back to the owners.

Franchise

    An authorisation or licence – effectively a business, which can be bought – enabling someone (franchisee) to use the franchisor’s company name and trademarks to sell their products services, etc., and usually to receive certain support, in a particular area of a country. A franchise for a whole country is typically called a master franchise.

Freddie Mac

    US institution financing housing a stockholder-owned private company chartered in 1970 by the US Congress to fund home mortgages by issuing debt securities in US and international securities markets. On September 7, 2008, after Freddie Mac reported more than $2 billion in losses from subprime loans, its government regulatory agency, the Federal Housing Finance Agency, put Freddie Mac under its conservatorship.

Free Collective Bargaining

    A situation in which workers and union members meet with employers to discuss working conditions, pay, etc., in talks that are not limited by law or government.

Freeconomics

    A situation in which companies provide certain goods and services for free, and those businesses who don’t follow suit are likely to fail.

Freedom Of Association

    The right of individuals to join together to form, or join an existing, group or organisation, including a union.

Free Enterprise

    An economic system in which private businesses have the freedom to compete with each other for profit, with minimal interference from the government.

Free Market

    A market in which prices of goods and services are affected by supply and demand, rather than government regulation.

Free On Board (FOB

    Maritime trade term. The supplier delivers the goods to a ship at a specified port. The supplier then pays the shipping costs after obtaining official clearance. Once they have been put on board, the buyer is then responsible for the goods.

Free Port

    A port where goods can be brought and stored temporarily, without custom duties having to be paid, before being shipped to another country.

Free Rider

    A person or organisation that enjoys benefits and services provided by others, and doesn’t pay their fair share of the costs.

Free Trade Zone

    Group of countries trading without restrictions a group of countries engaged in trading between themselves without restrictions or customs barriers.

Freeware

    Computer software that is copyrighted by the author and offered, usually on the Internet, free of charge.

Free Zone

    An area in a country where importers can store foreign goods, prior to further transportation, without having to pay customs duties or taxes on them.

Frictional Unemployment

    Unemployment of people who are temporarily between jobs, changing careers, changing location, etc.

Fringe Benefit

    A benefit given to employees in addition to their salary, such as a company car, pension scheme, paid holidays, etc.

Front Company

    Firm hiding illegal activities of controlling firm a company established as a legitimate business to conceal the illegal activities of the business controlling it.

Front End

    Section of firm dealing directly with customers the part of an organization that deals with customers on a face-to-face basis.

Front-End Load

    A fee charged for an investment, for example an insurance policy, limited partnership, mutual fund, etc. The fee is made with the initial payment, and subsequent payments are therefore lower.

Front Office

    Staff that interacts with customers and clients the members of staff in a financial institution or brokerage who deal directly with customers and clients.

Fulfillment/fulfilment

    In the context of business and retailing, fulfilment refers to the processing of a (consumer or commercial) customer’s purchase/order – i.e., a ‘sale’. Fulfilment is generally considered to happen after the order is placed and usually payment is made, completing on confirmation of safe and correct delivery to the customer.

    Payment/invoicing is generally separate from the fulfilment process/provider. In most cases fulfilment entails the warehousing, stock management, product ‘picking’, order assembly/compiling, packaging and delivery, then confirmation of safe delivery, of products/orders for which payment has already been made.

    Fulfilment may be an internal activity of the selling organization, or may instead be contracted to an external provider of fulfilment services. Fulfilment has an entirely different meaning in the context of human emotional wellbeing, in which it refers to feelings/situations of personal happiness and life-balance, achievement and wellbeing itself, without stress, pressure or other negative effects.

Fulfilment House

    A provider of order-processing fulfilment services to a ‘selling’ company, typically processing sales/orders of the selling company, through to the delivery of products to the purchaser. Specific activities of a fulfilment house generally include warehousing, stock control, order picking, packaging, distribution/delivery to the customer (and confirmation thereof), and typically a degree of direct customer communications, and potentially handling returns.

Fungible

    Describes goods or commodities which can be exchanged for something of the same kind, of equal value and quality.

Funny Money

    Forged currency money that is counterfeit or forged.
    Questionable money money obtained from a legally or morally suspect source.