Business Dictionary – P

Paced Line

    A production line that moves at a constant speed.

Paid-Up Capital

    The total amount of money which has actually been paid in full by shareholders for their shares.

Paid-Up Policy

    An insurance policy on which no more premiums are required, and the policy is considered paid in full and still remains in force.

Paid-Up Share

    A share for which the shareholder has paid the full amount, as stated in the contract.

Package Deal

    A set of several products which are offered for sale and must be bought in a combined package.

Packaging

    Materials used to wrap a product. The way in which something, such as a product, person, proposal, etc., is presented, usually to the public.

Page Break

    On a computer screen, a mark which indicates where a new page will be printed in a document.

Page Traffic

    In computing, the number of times a web page has been visited.

Palm Top

    A small computer which fits into the palm of the hand.

P and P (P&P)

    Postage and Packing. In the UK, The cost of packing and sending goods, usually added to the price of mail-order goods.

Pan-European

    Relating to all, or most of, the countries in Europe.

Pants

    Street slang now mainstream, referring to anything of very poor quality. Interestingly the term first appeared in the late 1800s, based on the word ‘knickers’ an expression of contempt or ridicule.

Paper Loss

    In business, a loss which has occurred and appears in a company’s accounts, but has not yet been realised until a transaction has been made, e.g. the sale of an asset which has lost value.

Paper Profit

    A profit which has been made but has not yet been realised until a share, etc., has been sold.

Paper-Pusher

    An office worker who has a boring job dealing with paperwork all day.

Paradigm

    Intellectual perception or view, accepted by an individual or a society as a clear example, model, or pattern of how things work in the world. This term was used first by the US science theorist & historian Thomas Kuhn (1922-96) in his 1962 book ‘The Structure Of Scientific Revolution’ to refer to theoretical frameworks within which all scientific thinking and practices operate.

Paradigm Shift

    Term first used by Thomas Kuhn in 1962 to describe when an important or significant change occurs in the perception of things. A sudden change in point of view.

Paralegal

    A legal assistant who is not a qualified lawyer, but who is trained to work in or with the law.

Parallel Engineering

    A means of reducing product development time and cost by managing development processes so that they can be implemented simultaneously, rather than sequentially

Parallel Market

    A country’s separate market which deals in goods and currencies outside the country’s normal official government controls.

Parallel Pricing

    The practice of varying prices in a similar way and at the same time as competitors.

Paralysis by Analysis

    The inability of managers to make decisions as a result of a preoccupation with attending meetings, writing reports, and collecting statistics and analyses. Paralysis of effective decision making in organizations can occur in situations where there is horizontal conflict, disagreement between different hierarchical levels, or unclear objectives.

Parastatal

    In certain countries, a company or organisation which is partially or fully owned and controlled by the government.

Pari Passu

    A Latin phrase that means being of equal rank

Parent Company

    A company or organisation which owns more than 50% of the voting shares in another company, therefore the Parent Company controls management and operations in the other (subsidiary) company.

Pareto Principle

    Also known as the 80-20 Rule, e.g., 20% of employees perform 80% of the work. Or 20% of customers produce 80% of revenue. Or more generally, often situations whereby 80% of the consequences result from 20% of the causes. Commonly the ratio is (surprisingly) even more extreme.

Parkinson’s Law

    A humorous and generally true observation by Cyril Northcote Parkinson (British historian 1909-1993) that capacity or time is inevitably filled, for example: ‘Work will expand so as to fill the time available for its completion’. See Parkinson’s Law and examples, and also Parkinson’s Law of Triviality, also known as the Bikeshed Colour effect.

Part Exchange

    Known in the US as Trade-In. A payment method, usually when purchasing a car, in which the buyer gives something they own, for example a car, as part payment to the vendor for the more expensive item. The balance is usually paid in cash or with a loan.

Participating Performance Share

    A type of share/stock which gives a company’s shareholder the right to receive dividends and also extra payments relating to the company’s profits.

Partnership

    A business which is owned by two or more people, all sharing the profits and responsibility for managing the business.

Partnership Agreement

    the document that establishes a partnership, detailing the capital contributed by each partner; whether an individual partner’s liability is limited; the apportionment of the profit; salaries; and possibly procedures to be followed, for example, in the event of a partner retiring or a new partner joining.

Part-Time Worker

    Someone who works less hours than a full time employee on a permanent basis for a company, usually for a set number of hours a week.

Party Plan

    Also called Party Selling. A method of marketing in which agents host parties, usually at someone’s home, to demonstrate and sell products to invited potential customers.

Pascal

    A computer language which is used to write programs, also used in teaching programming.

Passing Trade

    Describes customers who go into a shop, public house, etc., because they notice it as they are passing by.

Patent

    An official document which grants an inventor or manufacturer sole rights to an invention or product.

Patent Pending

    A phrase sometimes printed on goods to show that a patent has been applied for but not yet granted.

Paternity Leave

    The right of employees, male or female, to take time off from their job following the birth of their partner’s baby. Entitlement to Paternity Leave depends on how long they have been with their employer.

Paternity Pay

    An employee benefit paid to partners of pregnant women so they can take time off from their job after the birth of the baby to give support to the mother. Entitlement to Paternity Pay depends on how long the partner has been with their employer.

Patron

    A person who purchases goods or services, often on a regular basis, from a shop or company. A benefactor or sponsor who supports and/or gives money to an individual or an organisation, such as a charity.

Patronage

    Power to confer favors, give support and protection, or to appoint to office or position. Providers of patronage (patrons) and receivers (clients) form a network through which access to various resources is obtained. It originates from unequal distribution of power and, since ancient times, is closely linked with corruption.

Pawnbroker

    A money lender who lends cash at a high rate of interest in exchange for the borrowers personal possessions, such as jewellery, as security, which is returned when the loan is fully paid. If the loan is not repaid the Pawnbroker sells the item.

Payable To Bearer

    A cheque, security, etc., which can be exchanged for money by the person in possession.

Pay-As-You-Go

    Refers to a method of paying for a service as you use it, such as mobile phone credit. Also can be used to pay debts as they are incurred.

PAYE

    Pay As You Earn. In the UK, a system of paying income tax, which is deducted from an employees salary by an employer and paid to the government.

Paying Agent

    An agent, usually a bank, that makes dividend payments to shareholders on behalf of the issuing company.

Payload

    The amount of cargo that a form of transport can carry.

Payment By Results

    A system of paying employees according to the amount of work they do. Therefore, the bigger the volume of work output, the bigger the salary.

Payout Ratio

    Also known as Dividend Payout Ratio. The percentage of a company’s net earnings paid to shareholders in dividends.

PDA

    Personal Digital Assistant. A small hand-held electronic device that is used for storing information and can serve as a telephone, diary, alarm clock, fax, etc.

Pecking Order

    The hierarchy in businesses, organisations, etc, i.e., the order of people at different ranks.

Pecuniary

    Relating to, or involving money.

Peer Group

    A social group of equals, for example, in age, social class, education, etc. A group of products or businesses which are similar.

Peer-To-Peer – P2P.

    Computer systems which act as servers and are connected to each other via the Internet, allowing people to share share files, so there is no need for a central computer.

Pen Portrait

    A description of a person, a ‘character sketch in words’, now commonly a person-profile used for audience targeting purposes (marketing, recruitment, etc), although the expression dates back to the 1800s, originally referring to a description of a person, so as to produce a picture in the mind. ‘Pen Picture’ was an early alternative term.

Penalty Clause

    A clause in a contract which states that a specified sum of money must be paid by the party who breaks the contract.

Penetration Pricing

    The practice of charging a low price for a new product for a short period of time in order to establish a market share and attract customers.

Penny Share

    Describes shares which have a very low value and therefore appeal to speculators.

Pen-Pusher

    An employee with a boring job whose work consists of dealing with unimportant documents, paperwork, etc.

Pension

    A private or government fund from which regular payments are made to a person who has retired from work, or who is considered too ill to carry on working.

Pension Fund

    A fund set up to collect money on a regular basis from employers and employees, which pays the employees pension when they retire from work.

Peppercorn Rent

    In the UK, a very low or nominal payment, which was originally a single peppercorn, made to secure a lease.

Per Capita

    For each person in the population.

Perception of Risk

    The way in which people and organizations view risk, based on their concerns and experiences, but not necessarily on objective data. Risk perceptions can influence such things as business policies and investment decisions.

Per Diem

    Latin for ‘Per Day’. Often refers to money paid to employees for daily expenses or reimbursements.

Perfect Competition

    Describes a market in which no one can influence prices because there is enough information about a product to prevent control by an individual or a single organisation.

Perfect Storm

    Coincidentally arising circumstances combining to produce a disastrous effect. This is an allusion to weather factors, commonly applied to economic or trading situations, but applicable to any disaster or chaotic outcome resulting from forces or effects whose combination and timing has not been thought likely or anticipated at all.

Performance Criteria

    The standards used to evaluate a product, service, or employee.

Performance Indicator

    A key measure designed to assess an aspect of the qualitative or quantitative performance of a company. Performance indicators can relate to operational, strategic, confidence, behavioral, and ethical aspects of a company’s operation and can help to pinpoint its strengths and weaknesses. They are periodically onitored to ensure the company’s long-term success.

Performance Management

    The facilitation of high achievement by employees. Performance management involves enabling people to perform their work to the best of their ability, meeting and perhaps exceeding targets and standards. For successful performance management, a culture of collective and individual responsibility for the continuing improvement of business processes needs to be established, and individual skills and contributions need to be encouraged and nurtured Where organizations are concerned, performance management is usually known as company performance and is monitored through
    business appraisal.

Performance-Related Pay

    A scheme set up in the workplace in which the employees get paid according to how well they perform in their job..

Periodic Inventory Review System

    A system for placing orders of varying sizes at regular intervals to replenish inventory up to a specified or target level. A periodic inventory review 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 level.

Period of Qualification

    The time that has to pass before somebody becomes eligible or suitable for something.

Peripatetic

    Working or travelling from place to place, staying at different locations for a short period, such as, and especially as a teacher does, in working at more than one school. The teacher analogy is apt since the word derives from the Greek peripatetikos, and the earlier peripatein, which referred specifically to the teaching style of Aristotle (384-322 BC, Greek philosopher, student of Plato, teacher of Alexander the Great), who walked about while he talked. The ancient Greek prefix peri means around, or round, and patein means to tread.

Perishables

    Describes food, such as fruit, meat, fish, dairy products, etc., which will decay or spoil rapidly.

Perjury

    The criminal offence of knowingly telling a lie (with intent to influence the outcome of the hearing) in a court of law after having taken an oath or affirmation. It closely relates to and is often implicit within the offence of perverting the course of justice, which in the UK technically carries a maximum penalty of life imprisonment. The word perjury derives from Latin perjurium, meaning false oath, similar to jury which comes from jurare, meaning to swear.

Perk

    A minor benefit that an employee receives in addition to pay, such as the opportunity to buy products cheaply or an interest-free loan for a season ticket.

Permatemp

    A person who works for an organisation on a long-term contractual basis, but who is not a permanent employee.

Permission Marketing

    A term used for the advertising of products or services on the Internet, for which the marketing company obtain the consent of prospective customers to send them information about certain products or services.

Perpetual Inventory

    The daily tracking of inventory in order to keep its recorded amount and value up to date.

Perquisites

    Rewards given or offered to employees in addition to their wages or salaries and included in their employment contract.

Per se

    A Latin phrase meaning by itself or in itself.

Personal Action

    A type of court case in which an individual claims damages for personal injury, damage to his property, etc.

Personal Allowance

    Known as Personal Exemption in the US. The amount of income an individual can earn in a year before paying tax.

Personal Assistant

    PA. A person who works for one person, often an executive, in an organisation, performing secretarial and administrative duties.

Personal Brand

    The public expression and projection of a person’s identity, personality, values, skills, and abilities. It aims to influence the perceptions of others, emphasizing personal strengths and differentiating the individual from others.

Personal Contract

    A contract of employment that is negotiated on an employee by employee basis, rather than using a traditional structured system that gives identical contracts to groups of workers.

Personal Day

    When an employee is permitted to have time off work to deal with personal matters.

Personal Development

    Also called Self-Development. Acquiring abilities, skills, knowledge, etc., in order to enhance one’s performance and self-perception.

Personal Information Manager

    PIM. Computer software which handles personal information, such as names, addresses, memos, lists, e-mails, etc.

Personal Liability

    An individual’s legal responsibility in the event of injury to someone, damage to property and/or the debts of their own company.

Personnel

    The people who work for a business or organisation. An administrative department in an organisation which deals with employees and often liaises between departments.

Personnel Management

    The part of management that is concerned with people and their relationships at work. Personnel management is the responsibility of all those who manage people, as well as a description of the work of specialists. Personnel managers advise on, formulate, and implement personnel policies such as recruitment, conditions of employment, performance appraisal, training, industrial relations, and health and safety. There are various models of personnel management, of which human resource management is the most recent.

Performance (Project/Program) Evaluation on Review Technique – PERT.

    A management scheduling tool which charts the tasks involved in a project, showing the sequence of the work, the time needed for each task, etc.

Per Se

    Intrinsically, by itself, not requiring any supporting facts or ideas, standing alone. Latin for, by itself or in itself.

Per Stirpes

    A method of distributing the assets of an estate, in which the share of assets that would have gone to an heir who predeceases the maker of the will are divided equally among that heir’s descendants.

PEST Analysis – Political Economical Social and Technological Analysis.

    A business tool which is used in strategic planning and helps to understand the environmental influences on a business or orgasnisation.

Peter Principle

    Formulated by Canadian author Laurence J Peter (1919-1990): ‘In a hierarchy, every employee tends to rise to his level of incompetence’. The theory that employees rise in rank in an organisation until they are finally promoted to a level, and remain there, at which they do not have the ability to do their job.

Petrodollar

    Term coined by professor of economics Ibrahim Oweiss in the 1970s which describes the large amounts of money earned by oil production in OPEC (Organisation of the Petroleum Exporting Countries) countries.

Petty Cash

    A small amount of cash kept by a business to pay for small purchases.

Phantom Bid

    A reported but nonexistent attempt to buy a company.

Pharmaceutical

    Relating to or engaged in the process of making and selling medicinal drugs.

Philanthropy/Philanthropist

    Promotion of the welfare of others, typically through financial provision (a philanthorpist is one who does this). From the Greek philanthropos, meaning man-loving.

Philology

    The branch of knowledge which deals with the study of the history of language and literature. Historical linguistics.

Phishing

    A type of fraud carried out on the internet by sending people legitimate-looking e-mails asking for their personal information, such as bank account details, passwords, etc., and using them to steal their money.

Phoenix Activity

    Evasion of official responsibilities by the directors of a company that has had to cease doing business, by leaving liabilities in the liquidated business so that the underlying business activity can be immediately resumed under another name free of such liabilities.

Phoenix Company

    A company formed by the directors of a company that has gone into receivership, trading in the same way as the first company and, except in name, appearing to be exactly the same.

Photocall

    A planned and announced occasion during which celebrities, politicians, products launches, etc., have photographs taken by the press and other media for publicity purposes.

Physical Capital

    Refers to a company’s assets which are used in a production process, such as machinery, buildings, materials, etc.

Picket

    A person, or persons, posted at the entrance of a place of work which is affected by a strike, in order to stop people entering the premises.

Pictogram

    Also called a Pictograph. A graphic symbol or diagram which represents a concept, an amount, an activity, etc., in pictures.

Piece Rate

    A payment system in which employees are paid a fixed rate for each item they produce.

Piecework

    Work in which payment is based on the amount of work done regardless of the time it takes to do it.

Pie Chart

    A chart or graph which is circular in shape and divided into triangular sections (like slices of a pie), the sizes of which are relative to the quantities represented.

Piggyback

    A system which rides on the back of an existing system, e.g. a loan or mortgage or an advertising campaign.

PIN

    Personal Identification Number. A number given by a bank to a customer so the customer can access their bank account using an ATM (cash machine), or use their credit/debit card in retail outlets.

Ping

    Packet INternet Groper. An Internet program which is used to check if another computer on a network is working. To contact someone on a computer.

Pink Collar

    Describes jobs which were once traditionally done by women, such as nursing, secretarial, teaching, etc.

Pink Sheets

    Formally known as Pink Quote. In the US, a system displaying over-the-counter shares, which is published every day. Most companies listed on the Pink Sheets are very small and do not meet the minimum requirements for trading on the Stock Exchange.

Pink Slip

    In the US, an official notice of job termination given to an employee.

Piracy

    The unauthorised copying of CDs, DVDs, computer programs, etc., in order to sell them or give them away.

Pixel

    Short for Picture Element. The smallest element of an image displayed on a computer screen. The quality of the image depends on the number of pixels per square inch, i.e., the more pixels the higher the resolution.

Plain Language

    Represented notably by the Plain Language Movement, and the Plain Language Information and Action Network (PLAIN), in the late 1900s Plain Language became a generally recognized technical term for the advocation and use of clear explanations, descriptions, instructions, etc., in official documents and other communications, which frequently use goobledegook or ‘officialese’, i.e., language which is overly complex and/or containing confusing jargon and abbreviations, etc. See gobbledegook.

Plaintiff

    A person who brings a lawsuit against someone else in a court of law.

Plank

    To dismiss somebody from employment.

Planned Economy

    A country’s economic system controlled by the government, which makes all the decisions about production, distribution and consumption of goods and services.

Planned Obsolescence

    A policy of designing products to have a limited life span so that customers will have to buy replacements regularly.

Planogram

    In retailing, a drawing or diagram which shows when and how products should be displayed in a store.

Plasma

    Interestingly, in physics, plasma is the often overlooked fourth state of matter, aside from solid, liquid and gas. Plasma is ionized gas containing free electrons, making it responsive to electromagnetism, and conductive of electricity, in turn enabling it to take a very visible physical shape unlike other forms of gas. The stars are made of plasma; so is lightening and the Northen Lights (Aurora Borealis). Plasma display screens also basically employ this effect.

Platform

    A product used as a basis for building more complex products or delivering services, for example, a communications network is a platform for delivering knowledge or data.

PLC

    Public Limited Company. In the UK, a company with limited liability, whose shares can be purchased by the public.

Plenary

    Describes a meeting which should be attended by everyone who is qualified to attend, e.g., company directors, officials, etc. A diplomat who has full and complete power.

Plimsoll

    Named after merchant Samuel Plimsoll. International Load line or Waterline on the hull of every cargo ship, which indicates the maximum depth to which a ship can be safely loaded with cargo.

Plutocracy

    A government which is controlled by wealthy people.

PMI

    Purchasing Managers Index. Published every month, an economic measure relating to manufacturing. A PMI over 50 indicates industry is expanding.

Poisoned Chalice

    A job or situation which seems good at first but soon becomes unpleasant or harmful.

Poison Pill

    A business strategy used by a company to avoid being taken over by another company, e.g., the selling of assets, shares, etc., to make the company look less attractive to the potential buyer.

Polimath

    A person of great knowledge and varied learning. Loosely from Greek poly, many, and manthano, learn.

Political Correctness – PC.

    The practice of not using words, expressions, actions, etc., which could cause offence to minority groups. PC could also stand for Political Claptrappers – People who insist on political correctness from everyone at all times, even in their private lives.

Ponzi Scheme

    Named after Charles Ponzi, a fraudulent investment scheme, similar to a Pyramid Scheme, in which people are offered high returns, while their money is used to pay earlier investors, so that later investors often end up with little or no return because new investors can’t be found.

Pop-Under

    On a computer, an advertisement, etc., which comes up on the screen behind the web page which is being viewed, and does not appear until the page is closed.

Pop-Up

    On a computer screen, a small window containing an advertisement, etc., which appears on a page on top of the content which is being viewed.

Poorgeoisie

    People who are rich but pretend they don’t have much money.

Pork Barrel

    A US political term for when government funds are used for projects which benefit certain local groups or constituents, and show their political representative in a good light.

Portal

    On the Internet, a website, usually a search engine, which is the point of entry to other websites, and offers services such as e-mail, news, shopping, etc.

Porter’s Generic Strategies

    Named after economist Michael Porter. Describes strategies used by companies to achieve a strong advantage against competitors.

Portfolio

    A collection of investments, such as shares, bonds, etc., which are owned by an individual or organisation.

Portfolio Career

    Concept attributed to guru Charles Handy in the 1990s. A career in which a person pursues several jobs at the same time, rather than working full-time for one particular company.

Port Of Entry

    A place in a country where people and/or goods can officially leave or enter.

Portmanteau Word

    A word formed from parts of two separate words, whose combination generally produces the meaning also. Many new management and business words, especially slang and jargon, enter the language in this way, and some become popular and well-established. See portmanteau words in the cliches and expressions origins page.

Positioning

    Term used to describe the way a company, product, service, etc., is marketed in order to make it stand out from the competition by choosing a niche according to brand, price, packaging, etc.

Positive Discrimination

    A company’s policy of favouring a disadvantaged (because of race, sex, etc.,) group by making sure that jobs are given to people in these groups.

Positive Sum Game

    A win-win situation in which both sides involved in a business transaction, etc., can profit.

Postage And Packing

    Called Postage and Handling in the US. The cost of wrapping an item and sending it by post. Often used for mail order goods.

Post-Completion Audit

    An objective and independent appraisal of the measure of success of a capital expenditure project in progressing the business as planned. The ppraisal should cover the implementation of the project from authorization to commissioning and its technical and commercial performance after commissioning. The information provided is also used by management as feedback, which helps the implementation and control of future projects.

Post-Date

    To insert a future date on a cheque or document at the time of writing, so it becomes effective at that later date.

Post-Fordism

    Also called Flexible Modernity. An industrial production system which has changed from mass production in large factories, such as Ford Motors, and moved towards smaller flexible, more specialised manufacturing systems.

Power Brand

    A brand of goods, etc., which is well known and has a large share of the consumer market for a long period of time.

Power Lunch

    A business meeting held over lunch in which important decisions may be made, or high level discussions carried out.

Power Nap

    A short nap. usually lasting about 20 minutes, taken during the day, that refreshes a person so they can carry on working.

Power of Appointment

    The power of a trustee to dispose of interests in real estate to another person.

Power of Attorney

    A legal document granting one person the right to act on behalf of another in legal and financial matters.

Power Structure

    The way in which power is distributed among different groups or individuals in an organization.

PP

    Derived from the Latin "per pro," used beside a signature at the end of a letter, meaning "on behalf of".

Prairie Dogging

    This occurs when someone who works in an open office, which is divided into cubicles, drops something or shouts and everyone else pops their heads above the dividing walls to see what is happening.

Preamble

    Introductory part (recital) of a bill, constitution, or statute that sets out in detail the underlying facts and assumptions, and explains its intent and objectives. Its objective is to clarify the meaning or purpose of the operative part of the text in case of an ambiguity or dispute. However, preamble prevails only where it provides a clear and definite interpretation whereas the meaning of the enacting words is indefinite or unclear.

Prebilling

    The practice of submitting a bill for a product or service before it has actually been delivered.

Precedent

    A past act or decision which is used as an example to decide the outcome of similar subsequent acts.

Predate

    1. To put an earlier date than the current date on a document.

    2. To make something effective from an earlier date than the current date.

Predatory Lending

    The often illegal practice of lending money to people who the lender knows are unable to pay back the loan, such as low-income house-owners, who subsequently may lose their homes which they have used as security against the loan.

Predatory Pricing

    Also known as Destroyer Pricing. A situation where a company charges very low prices for goods or services in order to put its competitors out of business, after which prices will be raised.

Preference Share

    Also called Preferred Shares. A type of share which pays the owner a fixed dividend before other share owners are paid their dividends. Preference Shareholders do not usually have the right to vote at shareholders meetings.

Preferential Creditor

    A creditor who has the right to receive payment of debts, before other creditors, from a bankrupt company.

Pre-Market

    On the Stock Market, trading which takes place between members before the official opening time.

Premises

    1. Issues or matters raised or referred to in the earlier part of an argument or document.

    2. A building or facility, including the fenced or walled (or demarcated or segregated) space surrounding it.

Premium Income

    The revenue recieved by an insurance company from its customers.

Presenteeism

    The opposite of Absenteeism. A situation where employees work very long hours or come to work when they are ill and their performance is below standard, which can have a negative effect on the business.

Press Agent

    A person employed to arrange publicity for an individual or organisation, for example in newspapers, on television, etc.

Press Conference

    Called A News Conference in the US. A meeting held by a business, organisation, individual, etc., to which journalists are invited to hear a public announcement, and usually to ask questions.

Pressure Group

    An organised group of people, or lobbyists, who campaign to influence businesses, governments, etc., to change their policies, e.g. regarding the environment, or to change laws.

Price

    The amount of money required to purchase something or to bribe someone. The amount agreed upon between the buyer and seller in a commercial transaction.

Price Cartel

    A group of businesses who make an agreement, often illegally, to maintain prices for a product at a specific level.

Price Ceiling

    The highest price that a buyer is willing to pay.

Price Competition

    A form of competition that is based only on price rather than factors such as quality or design.

Price Control

    Maximum and minimum price limitations, often during periods of inflation, which a government puts on essential goods and/or services.

Price Cutting

    A sudden lowering of prices below normal levels in order to boost sales and outsell competitors.

Price Differential

    A difference in price between products in a range. A basic digital camera, for example, will have a relatively low price compared to the same camera with additional features.

Price Differentiation

    A pricing strategy in which a company sells the same product at different prices in different markets.

Price Discrimination

    The practice of a provider to charge different prices for the same product to different customers.

Price Escalation Clause

    A contract provision that permits the seller to raise prices in response to increased costs.

Price Fixing

    The, often illegal, practice of prices being fixed, by agreement, by competing companies who provide the same goods or services as each other.

Price Floor

    The lowest price at which a seller is prepared to do business..

Price Leadership

    The establishment of price levels in a market by a dominant company or brand..

Price Mechanism

    Describes the way prices for goods and services are influenced by the changes in supply and demand. Shortages cause a rise in prices, surpluses cause a fall in prices..

Price Ring

    A group of individual traders who make an agreement, often illegally, to maintain the price of a product at a specific level..

Price Slashing

    Sudden extreme lowering of a price in order to boost sales.

Price Support

    A system in which a minimum price is set by a government, and sometimes subsidised, for a product or commodity.

Price War

    A situation in which two or more companies each try to increase their own share of the market by lowering prices. A price war involves companies undercutting each other in an attempt to encourage more customers to buy their goods or services. In the long term, this can devalue a market and lead to loss of profits, but it can sometimes have short-term success.

Pricing

    To evaluate the price of a product by taking into account the cost of production, the price of similar competing products, market situation, etc..

Pricing Model

    A computerized system for calculating prices, based on a variety of factors including costs and anticipated margins..

Pricing Policy

    The method of decision making used for setting the prices for a company’s products or services. A pricing policy is usually based on the costs of production or provision with a margin for profit, for example, cost-plus pricing.

Primary Data

    Data which is collected by a company, business, etc., itself for its own use, using questionnaires, case studies, interviews, etc., rather than using other sources to collect the data.

Primary Demand

    Consumers demand for a generic product rather than a particular brand.

Primary Industry

    An industry that deals with obtaining basic raw materials such as coal, wood, or farm products.

Primary Market

    On the Stock Exchange, when shares, securities, etc., are issued for the first time.

Primary Research

    Also called Field Research. The collection of new or primary data through questionnaires, telephone interviews, etc., for a specific purpose.

Prime Cost

    In manufacturing, etc., the cost of direct materials and labour required to make a product.

Principal

    In finance, principal (the principal, or the principal sum/amount) refers to an amount of money loaned or borrowed. The term is used particularly when differentiating or clarifying an amount of money (loaned/borrowed/invested) excluding interest payments. Separately, more generally, in business the term ‘the principal’ refers to the owner of a business or brand, as distinct from an agent or representative, such as a franchisee.

Private Brand

    Also called House Brand. A product which is owned by a retailer, and therefore has its own brand label on it, rather than the manufacturer or producer.

Private Company

    Called A Private Corporation in the US. A company whose shares are not offered to the general public on the open market.

Private Equity

    Describes companies shares which are not available for investors to buy and sell on the Stock Market, because the company is unlisted.

Private Ownership

    A situation in which a company is owned by private stockholders, as opposed to being owned by a government.

Private Sector

    The part of a country’s economy which is owned and run for profit by private businesses rather than being government controlled.

Privatise/Privatize

    (UK/US English spelling) To change or sell a government controlled business or industry to privately owned companies.

Privity

    A legal relationship between two parties in a contract.

PRO

    Public Relations Officer. Also known as a Chief Communications Officer. A person whose job is to promote and establish a good relationship between their client – an organisation or an individual – and the public.

Probate

    The legal process by which a will is accepted as valid.

Probation

    A trial period during which an individual’s suitability for a job or membership to a club, etc., is tested.

Probity

    Complete integrity. Having strong moral principals and total honesty.

Problem Solving

    A systematic approach to overcoming obstacles or problems in the management process. Problems occur when something is not behaving as it should, when something deviates from the norm, or when something goes wrong. A number of problem-solving methodologies exist, but the most widely used includes these steps: recognizing a problem exists and defining it; generating a variety of solutions; evaluating the possible solutions and choosing the best one; implementing the solution and evaluating its effectiveness in solving the problem.

Pro Bono

    Short for Pro Bono Publico (Latin for ‘The Public Good’). Work carried out in the public interest for no fee or compensation, e.g. by a lawyer.

Process Box

    A primary symbol used in a flow chart that indicates a process or action taking place.

Process Costing

    A method of costing something that is manufactured from a series of continuous processes, where the total costs of those processes are divided by the number of units produced.

Proctor

    Someone who supervises students, etc., taking exams to prevent cheating. Also a person or agent employed to manage the affairs of another person.

Procurement

    The acquisition of goods and services needed to support the various activities of an organization, at the optimum cost and from reliable suppliers. Procurement involves defining the need for goods and services; identifying and comparing available supplies and suppliers; negotiating terms for price, quantity, and delivery; agreeing contracts and placing orders; receiving and accepting delivery; and authorizing the payment for goods and services.

Procyclical

    1. Tending to increase and decrease in tandem with another factor.

    2. Likely to increase instability or fluctuation.

Product

    The result of a manufacturing or natural process (such as food) which is offered for sale to the general public, usually by a retailer.

Product Abandonment

    The ending of the manufacture and sale of a product. Products are abandoned for many reasons. The market may be saturated or declining, the product may be superseded by another, costs of production may become too high, or a product may simply become unprofitable. Product abandonment usually occurs during the decline phase of the product life cycle.

Product Assortment

    The variety of product lines that a company produces, or that a retailer stocks. Product assortment usually refers to the length (the number of products in the product line), breadth (the number of product lines that a company offers), depth (the different varieties of product in the product line), a and consistency (the relationship between products in their final destination) of product lines.

Product Churning

    The flooding of a market with new products in the hope that one of them will become successful. Product churning is especially prevalent in Japan, where prelaunch test marketing is often replaced by multiple product launches. Most of these products will decline and disappear, but one or more of the new products churned out may become profitable.

Product Development Cycle

    The processes involved in getting a new product or service to market. The traditional stage-gate model, embraces the conception, generation, analysis, development, testing, marketing, and commercialization of new products or services.

Product Evangelist

    A person who is committed to a promoting a product through demonstrations, talks, blogging, etc.

Production versus Purchasing

    A decision on whether to produce goods internally or to buy them in from outside the organization. The goal of production versus purchasing is to secure needed items at the best possible cost, while making optimum use of the resources of the organization. Factors influencing the decision may include: cost, spare capacity within the organization, the need for tight quality and scheduling control, flexibility, the enhancement of skills
    that can then be used in other ways, volume and economies of scale, utilization of existing personnel, the need for secrecy, capital and financing requirements, and the potential reliability of supply.

Productive Capacity

    The maximum amount of output that an organization or company can generate at any one time.

Productivity

    The rate at which goods are produced based on how long it takes, how many workers are required, how much capital and equipment is needed, etc.

Product Liability

    Area of the law in which a manufacturer or retailer is legally responsible for any damage or injury caused by a defective product.

Product Life Cycle

    The normal stages that a product passes through from development to decline until it becomes obsolete, usually because it has saturated the market because everyone who wants it has purchased it.

Product Line

    A family of related products. Products within a line may be the same type of product, they may be sold to the same type of customer or through similar outlets, or they may all be within a specific price range.

Product Management

    The process of producing a specification or chart of the manufacturing operations to be carried out by different functions and workstations over a specific time period. Production scheduling takes account of factors such as the availability of plant and materials, customer delivery requirements, and maintenance schedules.

Product Market

    The market in which products are sold to companies rather than directly to consumers. The product market is concerned with purchasing by organizations for their own use, and includes such items as raw materials, machinery, and equipment, which may in turn be used to manufacture items for the consumer market.

Product Mix

    The variety of product lines that a company produces, or that a retailer stocks. Product mix usually refers to the length (the number of products in the product line), breadth (the number of product lines that a company offers), depth (the different varieties of product in the product line), and consistency (the relationship between products in their final destination) of product lines.

Product Placement

    Also called Embedded Marketing. A type of advertising where a company pays a fee to have one or more of its products used as props in a film or television show.

Product Portfolio

    A variety of products which are manufactured or distributed by a company or organisation.

Product Range

    All of the types of products made by one company.

Product Recall

    The removal from sale of products that may constitute a risk to consumers because of contamination, sabotage, or faults in the production process. A product recall usually originates from the product manufacturer but retailers may act autonomously, especially if they believe their outlets are at risk.

Professional Liability

    The legal liability of a professional, such as a doctor, accountant, lawyer, etc., who causes loss, harm or injury to their clients while performing their professional duties.

Profile

    A description of the activities of a company, including information on its products or business activities and its finances.

Profitability Index

    The present value of the amount of money an investment will earn divided by the amount of the original investment.

Profiteer

    An organisation or individual who makes excessive profits by charging very high prices for goods which are in short supply.

Profit-Centre

    A business division or department or unit which is responsible for producing a profit, for example a shop unit within a chain of shops, or a branch within a network dealerships. Significantly a Profit-centre business unit will use a ‘Profit and Loss Account’ as a means of managing and reporting the business. A profit centre is involved in selling to customers. See Cost-centre, which tends only to be responsible for internal services and supply to other departments.

Profit Sharing

    An incentive scheme in which a business shares some of its profit , usually in cash or shares, with its employees.

Profit Squeeze

    A situation in which a company or business makes less profit over a period of time because of rising costs and/or falling prices.

Pro-Forma

    A document issued before all relevant details are known, usually followed by a final version.

Pro Forma Invoice

    An invoice prepared by a supplier describing goods, price, quantity, etc., which is sent to the buyer before the goods are supplied.

Programme Evaluation and Review Technique

    A way of planning and controlling a large project, concentrating on scheduling individual activities and completing the project on time.

Program Trading

    On the Stock Market, the buying and selling of large amounts of shares by computer, the program of which is triggered when trading reaches a certain level of volume.

Prohibitive

    Preventing or discouraging something, for example people are discouraged from buying a product because the price is prohibitive, i.e., too high.

Project Creep

    The gradual alteration of deadlines and expansion of targets as a project progresses.

Project Management

    The process of managing and planning a successful project from start to finish, which includes controlling, organising, managing resources, etc.

Project Risk Analysis

    The identification of risks to which a project is exposed, and the assessment of the potential impact of those risks on the project. Project risk analysis forms part of the process of project management and is a specialized type of risk analysis.

PROM

    Programmable Read Only Memory. In a computer, a permanent memory chip which can only be recorded on once, by the computer user, not the manufacturer, after which the data is stored and cannot be changed.

Promo

    A promotional broadcast on television, radio, etc., advertising a product, TV show, film, etc.

Promotion

    The use of marketing and/or advertising to bring attention to a product, brand, service, company, etc., usually in order to increase sales. The raising of an employee to a higher rank in an organisation.

Prompt Note

    A document sent to someone to remind them when a payment is due on a purchase.

Proof Copy

    The printed pages of a book, magazine, etc., which is read and corrected (e.g. spelling mistakes) by a Proof Reader before the final printing of all the copies.

Propaganda

    Politically motivated publication or writing designed to influence thinking or action, usually in a misleading way. When carried out by a government or other authority this may also be referred to in more modern terms as ‘spin’. The word derives from the Latin name of a Roman Catholic committee responsible for ‘propagation of the faith’ in the 1600s.

Proprietary

    Made, offered, or sold only under the exclusive rights of the property ownership (governed by copyright, patent, and trade secret laws) of a manufacturer, offeror, or seller. Proprietary items usually have distinctive characteristics or features, and are often incompatible with competing items.

Proprietary Trading

    The buying and selling of shares, bonds, etc., by a securities firm with its own money for its own profit, rather than for its customers.

Pro Rata

    In proportion to. Refers to the division of costs, profits, income, etc., depending on the size of each persons share in the whole amount.

Prosecute

    To bring a criminal charge against someone in a court of law.

Prospect Theory

    A branch of decision theory that attempts to explain why individuals make decisions that deviate from rational decision making by examining how the expected outcomes of alternative choices are perceived. The theory is based on the premise that people treat risks associated with perceived losses differently from risks associated with perceived gains. Prospect theory has applications in a wide range of fields, including marketing management, where it is relevant to the way in which choices are presented to the consumer.

Prospectus

    A document published by a company which is offering its shares for sale, disclosing information such as the company’s activities, objectives, finances, etc. A book published by a university or school containing information about courses, etc.

Prosumer

    Profession/Producer Consumer. A consumer who is involved in the specification of products, or has professional tools and is involved in the the design and manufacture of products.

Protectionism

    The policy of a country protecting its own industries against foreign competition by imposing taxes, etc., on imported goods.

Pro Tem

    Temporarily. For the time being.

Protocol

    1. In computing, a set of rules which determine the way data is transmitted between computers.
    2. General: Unwritten rules or guidelines that are peculiar to every culture or organization, and are supposed to be observed by all parties in the conduct of business, entertaining, negotiating, politics, etc.
    3. Product development: statement of attributes (features and benefits) that a new product must be designed to have.

Proptype

    An original design or working model of something, often used in demonstrations.

Provident Fund

    A form of retirement savings. An employer and employee pay regular, usually equal, amounts into an investment fund, which is then paid to the employee upon retirement, often in a lump sum.

Provison

    A clause in a contract which makes a condition or stipulation.

Proxy

    Written authorization from an absent member (or a shareholder, called the ‘principal’) that confers a limited power of attorney on another person, member, or management of the firm (called ‘agent’ or ‘proxy’) to vote on behalf of, and in accordance with the directions of, the principal.

Prudence

    Aside from its usual general meaning of carefulness in judgment and decision-making, prudence particularly refers to caution in commercial/financial/economic risk-taking, and to the typically great caution exercised by financial folk (accountants and bankers notably) in planning, budgeting, forecasting, granting loans, extending credit, defining standards and policies, and accounting practice as a whole, etc.

Pseudo

    Pronounced ‘sudo’, this is a prefix which can be put before many different words to represent a fake or false quality which often attempts to imitate or behave as the real thing. From Greek pseudos, meaning falsehood.

Pseudonym

    A false name, commonly adopted by a writer seeking to hide their true identity.

Psychological Contract

    Usually expressed as ‘the Psychological Contract’, this is the understanding between employee(s) and employer as to their mutual expectations arising from the employment relationship. The expectations involve a complex balance of inputs and rewards, including contractually clear elements such as hours and pay, and extend to implications and assumptions about security, loyalty, and other highly subjective factors. The Psychological Contract is a two-way notional agreement between employee and employer, typically analysed from the employee perspective. Psychological Contract theory potentially extends to relationships between suppliers and customers, and between the state and its people.

Psychographics

    Used in marketing, the analysis of peoples characters, lifestyles, attitudes, purchasing habits, etc.

Psychographic Segmentation

    The process of identifying and dividing consumers into groups according to their interests, attitudes, social class, values, personality, etc.

Psychometric Test

    A test which measures a person’s personality, mental ability, knowledge, etc., often used to ascertain whether a potential employee is suitable for a job.

Public Company

    A company whose shares are traded on the Stock Market.

Public Debt

    Also known as National Debt. The total amount of money owed by a country’s national and local governments.

Public Domain

    Something that is not protected by copyright and is openly available for anyone to use, look at, etc.

Public Employee

    A person employed by the government.

Public Enterprise

    A business or economic activity owned and controlled by the government.

Public Issue

    When a company offers shares for sale to the public for the first time.

Publicist

    A publicity or press agent who publicises organisations, people, etc.

Public Liability

    When the owner of a business, etc., is responsible for any injury or harm inflicted on a member of the public because of negligence or unsafe products, etc., against which an insurance policy can be obtained by the business.

Public Relations

    PR. The promotion of an organisation or person with the aim of creating a favourable relationship with the public.

Public Works

    Buildings and structures constructed by the government for public use, such as roads, bridges, schools, hospitals, etc.

Puff

    In advertising, to exaggerate the qualities of a product, etc., without actually breaking the law.

Pull Strategy

    Used in marketing to create a demand for a product by means of advertising and promoting to the end consumer, rather than through the marketing channel. To ‘pull’ the product through from distributor to final consumer.

Pump And Dump

    The illegal practice of artificially boosting share prices by false and misleading statements in order to sell the originally cheap shares at much higher prices.

Punitive

    Inflicting or concerned with punishment, for example punitive taxes, punitive justice.

Punitive Damages

    Damages awarded, over and above general damages, by a court of law against a defendant who has committed a malicious act which has resulted in injury to a person or damage to property, in order to deter the defendant from committing similar acts in future.

Purchase Ledger

    A record of a company’s accounts which shows amounts owed to suppliers for items purchased on credit.

Purchasing Officer

    A company employee who is responsible for the purchasing of equipment, materials and services from suppliers and contractors.

Purchasing Power

    Also called spending power, the amount of goods or services which can be purchased with a particular currency, or more generally, the amount of money a person or group has available to spend on goods and services. The term may also emphasise a group or organization’s ability to achieve heavily discounted prices or rates due to the high buying volumes.

Pure Play

    Term that relates to a company which deals in one specific line of business, rather than a range of products, services, etc.

Purveyor

    A company or person who supplies provisions, especially food.

Push System

    In production, a system in which the demand for goods is predicted by the company, so more goods are made to keep up with pre-set levels rather than customer demand.

Put Option

    An option in a contract giving the holder the right to sell shares, materials, etc., at a specified price at, or up to, a fixed date.

Pyramid Selling

    A system in which people buy the rights (often a franchise) to sell a company’s products to other distributors who have been recruited, who then sell the products on to other recruits. This type of selling often ends up with no final buyer for the products. The few people at the top of the pyramid commonly make a lot more money than the many people at the bottom.

Pyramid Scheme

    Illegal in several countries, a scheme in which people are paid for recruiting others who pay a fee, part of which goes to the person who recruited them as a commission. In order to get their payment the recruits then have to find new recruits to pay a fee. This goes on until there is no one left to recruit and the people who come into the scheme last end up losing their money. The difference between Pyramid Selling and a Pyramid Scheme is that is that the latter has no product. (See Ponzi Scheme)