| S corporation (llc) | An S corporation elects to be taxed as a “pass-through” entity, so profits and losses are passed through directly to the shareholders. This eliminates the double taxation problem associated with C corporations. S corporations are subject to limitations not applicable to regular corporations, including a limit on the number of shareholders and the classes of stock. |
| SAA | System Application Architecture. An IBM term for a system whereby PC’s can be connected to and used to run mainframes by cooperative processing. |
| Salary | The business owner determines a set wage or amount of money for themselves, and then cuts a paycheck for themselves every pay period. |
| Satisfaction Survey | A survey of customers designed as much to learn something about customers for relationship building purposes as it is to learn about good and bad features of your servicing of the customers. |
| Saturated Market | A situation in which everyone has the product, and the market is essentially a replacement market. For example, tires, batteries, room air conditioners, television. |
| Saving | When consumption expenditure is less than net income, saving takes place and wealth rises. See also: wealth. |
| Sawbuck | Slang for a $10 currency note. |
| Say’s law | A good’s availability creates its own demand sufficient to clear the market |
| Scalar principle | The scalar principle means that there should be a clear definition of authority in the organization and that this authority flows, one link at a time, through the chain of command. |
| Scalper | A person who buys an item with the expectation that he will be able to sell it for a large profit in the near future. In many markets, such behavior is illegal. |
| Scarcity | A good that is valued, and for which there is an opportunity cost of acquiring more. |
| Scarcity mindset | A belief centered on the idea that opportunities are limited. Individuals with such beliefs tend to engage in lower levels of risk taking. |
| SCF | Sectional Center Facility. The first three digits of the U. S. Zip Code. |
| Schumpeterian rents | Another, equivalent way to refer to innovation rents. Also known as: innovation rents. |
| Scrip | An alternative currency, often used for employees in remote locations. |
| Search cost | The calculated sum of the resources required in order to find and evaluate a potential purchase. The greater the search cost, the less likely a purchase will be made. |
| Search good | A product or service with a value that can be determined with confidence prior to purchase. |
| Secondary and primary markets | The primary market is where goods or financial assets are sold for the first time. For example, the initial sale of shares by a company to an investor (known as an initial public offering or IPO) is on the primary market. The subsequent trading of those shares on the stock exchange is on the secondary market. The terms are also used to describe the initial sale of tickets (primary market) and the secondary market in which they are traded. |
| Secondary labour market | Workers typically on short-term contracts with limited wages and job security. This might be due to their age, or because they are discriminated against by race or ethnic group. See also: primary labour market, segmented labour market. |
| Securities | Interests in a business such as stock or bonds. |
| Security deposit | Money given by a party to reserve the right to purchase, lease or otherwise utilize a product or service. In some cases a security deposit is considered forfeit if further conditions are not met. |
| Seeds | Names of yourself, friends, relatives, or employees inserted in a direct mail mailout to track delivery and quality, and to safeguard against unauthorized mailings. Also called “decoys”. |
| Segmentation | To divide outgoing direct mail into coded groups for testing or to improve response. Also used to classify customers into groups for varying tactics. |
| Segmented labour market | A labour market whose distinct segments function as separate labour markets with limited mobility of workers from one segment to the other (including for reasons of racial, language, or other forms of discrimination). See also: primary labour market, secondary labour market. |
| Self-awareness | Self-awareness is the ability to focus on yourself and how your actions, thoughts, or emotions do or don’t align with your internal standards. |
| Self-dealing | Situation in which a fiduciary makes a decision on behalf of the corporation that benefits either that fiduciary or a person with whom they have a relationship |
| Self-enhancement bias | Self-enhancement bias has been studied from 2 perspectives: L. Festinger’s (1954) social comparison theory (self-enhancers perceive themselves more positively than they perceive others) and G. W. Allport’s (1937) self-insight theory (self-enhancers perceive themselves more positively than they are perceived by others. |
| Self-insurance | Saving by a household in order to be able to maintain its consumption when there is a temporary fall in income or need for greater expenditure. |
| Self-regulation | Self-regulation is the ability to understand and manage your own behaviour and reactions. Self-regulation helps children and teenagers learn, behave well, get along with others and become independent. |
| Self-starter | A person who begins work or undertakes a project on his or her own initiative, without needing to be told or encouraged to do so. |
| Sell someone a bill of goods | An idiom for convincing another party that a lie is the truth. |
| Separation of ownership and control | The attribute of some firms by which managers are a separate group from the owners. |
| Sequential | The way records are arranged on a tape. The opposite is random order, or a relational database. |
| Sequential game | A game in which all players do not choose their strategies at the same time, and players that choose later can see the strategies already chosen by the other players, for example the ultimatum game. See also: simultaneous game. |
| Share | A part of the assets of a firm that may be traded. It gives the holder a right to receive a proportion of a firm’s profit and to benefit when the firm’s assets become more valuable. Also known as: common stock. |
| Share index | Tracks the value of shares on the exchange to demonstrate their performance. |
| Share options | A right to buy shares in a company in the future, at a favourable price, in addition to a regular salary if the person meets specific performance targets or predetermined criteria. |
| Shareholder | An owner of shares in a company. |
| Shares | Issued as a part of Equity Financing. Refers to a specific form of equity ownership in a company; stock prices refer to the price of an individual share unit. |
| Shill bid | An offer to purchase made without intent to purchase. They are often used to incite willing buyers to make higher offers. |
| Shock | An exogenous change in some of the fundamental data used in a model. |
| Short run (model) | The term does not refer to a period of time, but instead to what is exogenous: prices, wages, the capital stock, technology, institutions. See also: wages, capital, technology, institutions, medium run (model), long run (model). |
| Short selling | The sale of an asset borrowed by the seller, with the intention of buying it back at a lower price. This strategy is adopted by investors expecting the value of an asset to decrease. Also known as: shorting. |
| Short side (of a market) | The side (either supply or demand) on which the number of desired transactions is least (for example, employers are on the short side of the labour market, because typically there are more workers seeking work than there are jobs being offered). The opposite of short side is the long side. See also: supply side, demand side. |
| Short squeeze | In finance, some parties sell stocks prior to purchasing them (shorting the market). Others may attempt to “squeeze” the shorters by buying up many shares of the stocks that were shorted. This causes the price of that stock to rise and forces the shorters to increase the amount of money they must spend to cover their positions. |
| Short term loans | Short term loans relatively small amounts of money that have to be paid back within three to 18 months. They’re often used as a stop-gap when a company is having cashflow problems, for emergencies, or to help companies take advantage of a business opportunity. |
| Short-run equilibrium | An equilibrium that will prevail while certain variables (for example, the number of firms in a market) remain constant, but where we expect these variables to change when people have time to respond to the situation. |
| Short-termism | This subjective term refers to the case when the person making a judgement places too much weight on costs, benefits, and other things occurring in the near future than would be appropriate. |
| Shrinkflation | A method to hide price increases. Rather than changing the retail price of their wares, producers reduce the quantity of goods provided. |
| Sic code | A coding system designed by the U. S. Department of Commerce for classifying the products and services produced by companies. It is a very inadequate system, but it is the only one around. |
| Signal | Evidence (real or faked) used to alter the recipient’s opinion as to the quality, worthiness or appropriateness of a given product or service. For example, an endorsement from a celebrity is often used to increase the perception of quality of a good. |
| Simultaneous game | A game in which players choose strategies simultaneously, for example the prisoners’ dilemma. See also: sequential game. |
| Skinflint | A person who will go to great lengths in order to avoid spending money. |
| SKU | Stock Keeping Unit: a warehouse term for the products that a company produces. Each different product has its own SKU number. |
| Sliding scale fee | A price which is based not upon value provided, but upon the ability of the customer to pay. Depending upon situational specifics, this system may be intended as an act of charity or a means of increasing revenue. |
| Smart money | Investors who are more educated, knowledgeable or sophisticated with respect to the market. These people are often looked to as advanced indicators for future pricing changes in stocks and other other financial instruments. |
| Sme (small or medium sized enterprise) – | Any firm with fewer than 250 employees. |
| Smes | Small and medium-sized enterprises. A small business has fewer than 50 staff and a medium-sized business has fewer than 250 staff. Micro-businesses, with fewer than 10 staff, would also come under the term ‘SME’. |
| Social dilemma | A situation in which actions taken independently by individuals in pursuit of their own private objectives result in an outcome which is inferior to some other feasible outcome that could have occurred if people had acted together, rather than as individuals. |
| Social enterprise | Social mission driven businesses, with social and/or environmental aims, that use market-based strategies to achieve their goals. Social enterprises can be both non-profit and for-profit. |
| Social insurance | Expenditure by the government, financed by taxation, which provides protection against various economic risks (for example, loss of income due to sickness, or unemployment) and enables people to smooth incomes throughout their lifetime. See also: co-insurance. |
| Social interactions | Situations in which the actions taken by each person affect other people’s outcomes as well as their own. |
| Social norm | An understanding that is common to most members of a society about what people should do in a given situation when their actions affect others. |
| Social preferences | Preferences that place a value on what happens to other people, even if it results in lower payoffs for the individual. |
| Soft sell | A weak technique intended to push a buyer into considering action. Such methods are often long term in nature and push for an eventual (rather than immediate) sale. Overly soft pitches risk losing potential sales. |
| Software | Programs that run on computers. Programs tell the computer what to do in a step-by-step fashion. |
| Software as a service | A system of software sales. A vendor hosts a software package on his servers and allows customers to use it for a fee (typically requiring a monthly or yearly payment). |
| Sole proprietorship | This is perhaps the most simplest method chosen when it comes to starting a business. The term refers to an individual business owner who would rather run their company by his/herself than share the responsibilities with someone else. |
| Solvent | A firm or individual for which net worth is positive or zero. For example, a bank whose assets are more than its liabilities (what it owes). See also: insolvent. |
| Source code | A series of letters or numbers affixed to an outgoing advertisement or promotion that identifies the list, the offer, the package, and the segment (as well as the media) in which the promotion was made. Essential to testing the success of any direct marketing effort. The source code must appear on the response device (or in the case of telephone orders, must be asked for by the telemarketers). |
| Sovereign debt crisis | A situation in which government bonds come to be considered so risky that the government may not be able to continue to borrow. If so, the government cannot spend more than the tax revenue they receive. |
| Specialization | This takes place when a country or some other entity produces a more narrow range of goods and services than it consumes, acquiring the goods and services that it does not produce by trade. |
| Speculation | Buying and selling assets in order to profit from an anticipated change in their price. |
| Speculative finance | A strategy used by firms to meet payment commitments on liabilities using cash flow, although the firm cannot repay the principal in this way. Firms in this position need to ‘roll over’ their liabilities, usually by issuing new debt to meet commitments on maturing debt. Term coined by Hyman Minsky in his Financial Instability Hypothesis. See also: hedge finance. |
| Speculator | An individual who takes part in a transaction with the intention of selling the result for a higher sum. |
| Spendthrift | A person who makes purchases far beyond his means of repayment. There is usually a negative connotation suggesting extravagance and pride. A person who spends vast sums of money for antibiotics for poor children, for instance, would not be characterized as such. |
| Spiff | A payment made to a salesman upon the sale of a specific product |
| SQL | A query language used with the IBM software DB2 Often pronounced “sequal”. |
| SRI | Stanford Research Institute. A leading research institution which pioneered Psychographics. |
| Stable equilibrium | An equilibrium in which there is a tendency for the equilibrium to be restored after it is disturbed by a small shock. |
| Stagflation | Persistent high inflation combined with high unemployment in a country’s economy. |
| Stakeholders | Any individual or party that has an interest in or may be affected by a business and/or its activities. This can include anyone, from shareholders to residents of the local community. |
| Statement | Stuffer An offer or newsletter included with a monthly invoice or statement to a customer. |
| Stationary state | In the absence of technological progress, the marginal contribution of additional capital goods to increased production would eventually become so small that the process of growth could cease. John Stuart Mill welcomed this prospect as ‘a very considerable improvement on our present condition’. |
| Statutory minimum wage | A minimum level of pay laid down by law, for workers in general or of some specified type. The intention of a minimum wage is to guarantee living standards for the low-paid. Many countries, including the UK and the US, enforce this with legislation. Also known as: minimum wage. |
| Sticker shock | A negative reaction from a potential customer, after he learns of a product’s unexpectedly high price. |
| Sticky | Something that is apt to remain constant or unlikely to change. Menu prices are often thought of as sticky as changes require an expensive reprinting process. Similarly, demand for a product or service can be sticky, if switching costs are high. |
| Stock | A quantity is measured at a point in time. Its units do not depend on time. |
| Stock exchange | A financial marketplace where shares (or stocks) and other financial assets are traded. It has a list of companies whose shares are traded there. |
| Storage | The capacity which a computer has for storing names addresses and other data. Storage is usually on magnetic disks, and is measured in megabytes (for a PC) or gigabytes (for a mainframe). |
| Strategic complements | For two activities A and B: the more that A is performed, the greater the benefits of performing B, and the more that B is performed the greater the benefits of performing A. |
| Strategic interaction | A social interaction in which the participants are aware of the ways that their actions affect others (and the ways that the actions of others affect them). |
| Strategic substitutes | For two activities A and B: the more that A is performed, the less the benefits of performing B, and the more that B is performed the less the benefits of perfoming A. |
| Strategy | An action (or a course of action) that a person may take when that person is aware of the mutual dependence of the results for herself and for others. The outcomes depend not only on that person’s actions, but also on the actions of others. |
| Stratification | Adding demographics to a name and address file. |
| Straw purchase | A transaction in which one party acts to acquire an offering for a hidden third party. This term is often used when discussing the purchase of firearms. |
| Stress management | Stress management offers a range of strategies to help you better deal with stress and difficulty (adversity) in your life. Managing stress can help you lead a more balanced, healthier life. Stress is an automatic physical, mental and emotional response to a challenging event. |
| Subprime borrower | An individual with a low credit rating and a high risk of default. See also: subprime mortgage. |
| Subprime mortgage | A residential mortgage issued to a high-risk borrower, for example, a borrower with a history of bankruptcy and delayed repayments. See also: subprime borrower. |
| Subsidy | Money or resources given to a producer by a third party (often a government). Subsidies are often intended to increase production or decrease costs to consumers. |
| Subsistence level | The level of living standards (measured by consumption or income) such that the population will not grow or decline. |
| Substantive judgements of fairness | Judgements based on the characteristics of the allocation itself, not how it was determined. See also: procedural judgements of fairness. |
| Substitute good | A good or service that fills the same needs as another good. The closer to being a perfect substitute, the more price will serve as the sole derterminant as to which product is purchased. |
| Substitutes | Two goods for which an increase in the price of one leads to an increase in the quantity demanded of the other. See also: complements. |
| Substitution effect | The effect that is only due to changes in the price or opportunity cost, given the new level of utility. |
| Sucker’s rally | A rapid increase in stock prices due to hype rather than increases in underlying value. In this context, the ‘suckers’ are uninformed buyers. |
| Sunk cost | Money that has already been spent. |
| Sunk cost fallacy | The common, but mistaken, belief that one should take previous money spent into account when considering a decision. This is due to a human tendency toward loss aversion. Previous spending and commitments to spend will be realized whether or not a given decision is made. |
| Supply chain | The different elements making up the process involved in producing and distributing an item or items. |
| Supply curve | The curve that shows the number of units of output that would be produced at any given price. For a market, it shows the total quantity that all firms together would produce at any given price. |
| Supply shock | An unexpected change on the supply side of the economy, such as a rise or fall in oil prices or an improvement in technology. See also: wage-setting curve, price-setting curve, Phillips curve. |
| Supply side | The side of a market on which those participating are offering something in return for money (for example, those selling bread). See also: demand side. |
| Supply side (aggregate economy) | How labour and capital are used to produce goods and services. It uses the labour market model (also referred to as the wage-setting curve and price-setting curve model). See also: demand side (aggregate economy). |
| Supply-side policies | A set of economic policies designed to improve the functioning of the economy by increasing productivity and international competitiveness, and by reducing profits after taxes and costs of production. Policies include cutting taxes on profits, tightening conditions for the receipt of unemployment benefits, changing legislation to make it easier to fire workers, and the reform of competition policy to reduce monopoly power. Also known as: supply-side reforms. |
| Supply-side problem | See also: supply side. |
| Suppression | Using names on one tape (a customer file) to suppress or drop names from another tape (a prospect file). |
| Surge pricing | A strategy that increases prices as demand increases and decreases prices as demand shrinks. Energy companies often use this strategy, as the cost of electricity will vary over the course of a day. |
| Surplus, joint | See: joint surplus. |
| Sustainability | The use of natural resources with a minimal impact on the environment; e.g. no depletion of resources. For example, a company that manufactured paper would be sustainable if it only made 100 percent recycled paper or planted a new tree for each one it cut down. |
| Sweepstakes | An offer promising a randomly drawn prize to all respondents, regardless of whether they buy your product. Those who do not buy, but still respond to the sweepstakes may be valuable names for rental or for other offers. In comparison to buyers, sweepstakes respondents are generally much less valuable. |
| Switching cost | The expense that a consumer will incur if he purchases a different good. |
| SWOT analysis | A method of characterizing an entity by its strengths, opportunities, weaknesses and threats. This methodology is taught in most business schools and is a useful tool to quickly characterize a firm’s competitive advantages and disadvantages. |
| Sympathy | Sympathy is feeling bad for someone else because of something that has happened to them. |
| System Integrator | Someone who can integrate the functions that have been outsourced to several different companies. |
| Systematic risk | A risk that affects all assets in the market, so that it is not possible for investors to reduce their exposure to the risk by holding a combination of different assets. Also known as: undiversifiable risk. |
| Systemic risk | A risk that threatens the financial system itself. |
