Objective Setting (Traditional) Objectives are set at the top and then broken down into subgoals for each level in an organization. The top imposes its standards on everyone below.
Objectives Broad statements of direction which are externally focused. Usually stated in terms of image, style, and self-perception. Quantitative measures are stated relative to other corporations.
Obligee A creditor or promisee.
Obligor A debtor or promisor.
Obsolescence A decline in the value of an asset due to decreased demand, becoming outdated, competition, style changes, altered manufacturing processes, new inventions or other technical or legal changes.
Occupational Safety and Health Act (OSHA) A federal law that requires most employers to create and maintain safe, healthful working conditions.
Ocean Marine Insurance Insurance that protects a cargo against loss on the high seas.
Odd Lot Less than 100 shares of a stock.
Offer and Acceptance A binding contract comes into effect when there is an offer made by one of the parties to the contract and acceptance of this offer by the party to whom it is communicated.
Offset/Setoff Under most state laws, a creditor has the right to offset mutual debts it owes the debtor against the debtor’s liability to it. The Bankruptcy Code does not alter the state law rights. However, if you owe the debtor money, you may not offset that against any claim you hold against the debtor without relief from the automatic stay. If you hold a claim against the debtor and also owe the debtor money, you should act promptly to obtain relief from the stay to make the offset. As an unsecured creditor, you may also be concerned with prepetition setoffs by banks and other lending institutions. Under 11 U.S.C. Š 553 and 11 U.S.C. Š 547, offsets within ninety days of bankruptcy may create a preference.
Oligopoly 1. A market structure characterized by a small number of firms whose behavior is interdependent;
2. Control of a commodity or service in a given market by a small number of companies or suppliers.
On Account Generally describes a partial payment made towards settlement of an unpaid balance.
On-Sight Inspection The buyer’s inspectors examine purchased items throughout the supplier’s manufacturing operations.
Open Corporation A corporation whose stock can be purchased by anyone who can afford the price.
Open Market Operations An activity in which the Fed buys and sells billions of dollars of U.S. Government Securities daily through securities dealers in New York City.
Open Shop Workers have not elected a union to represent them in dealing with management.
Open Systems Dynamic systems that interact with and respond to their environment.
Open Terms Selling on credit terms as opposed to having the customer pay cash.
Open-Account Terms The practice in business for manufacturers and other suppliers to make necessary inventories available to their customers in the form of accounts receivable on an unsecured basis.
Open-Book Accounts Business charge accounts that a selling firm gives buying firms.
Open-Market Operations Purchases and sales of government securities by the Federal Reserve in an effort to change the money supply.
Operating Cycle The process of funds flowing from inventory to receivables to payables.
Operating Expense 1. An expense that cannot be traced directly to operations;
2. The value of items or services used or consumed in normal company operations during an accounting period.
Operating Income Revenues less operating expenses for a profit center.
Operating Lease Leases that do not meet the criteria for capital leases and thus are accounted for as operating expenses.
Operating Leverage A measure of the relative mix of a business’s variable costs and fixed costs, computed as contribution margin divided by operating income.
Operating Margin Operating profit (before interest and taxes) divided by sales.
Operating Ratios Ratios commonly used to measure the profitability or financial soundness of a business.
Operating System The set of programs that control a computer system by controlling the execution of other programs and the use of resources such as disk space.
Operational Plans Plans that specify details on how overall objectives are to be achieved.
Operations Management The design, operation, and control of the transformation process that converts resources into finished goods and services.
Operations Manual A document specifying when and how data processing jobs should be done in a computer system.
Opportunity Costs The benefit expected from the best alternative forgone when an item or an activity is chosen.
Optical Character Recognition (OCR) Data input technology for capturing numbers or text by digitizing an image and identifying specific characters.
Optimization Model A mathematical model that uses search techniques or other mathematical methods to identify an optimal solution consistent with criteria supplied by the user.
Option A right secured by a contract to accept or reject an offer to purchase property at a fixed price within a fixed time.
Order Under Article 3 Commercial Paper, order is a direction to pay and must be more than an authorization or request.
Order Processing The grouping of the products specified by the customer and the accompanying paperwork or electronic transmission (EDI) creating the process of the order entry transaction.
Order to Order An agreement for payment to be made for prior shipment before the next shipment will be made.
Ordinance The legislative act of a municipality.
Ordinary Care Care that a prudent person would take under the circumstances of the particular case.
Organization A systematic arrangement of people that exist and operate to achieve clearly stated and commonly held objectives.
Organizational Chart The visual representation of the way an entire organization and each of its parts fit together.
Organizational Climate A composite view of the characteristics of an organization as seen by employees.
Organizational Culture A system of shared meaning within an organization that determines, in large degree, how employees act.
Organizational Goals Approach Appraising an organization’s effectiveness according to whether it accomplishes its goals.
Organizational Inertia The tendency of organizations to continue doing things in the same way, and therefore, resist change.
Organizing The management function concerned with assembling the resources necessary to achieve the organizations objectives and establishing activity/authority relationships of the organization.
Other Income Revenue from sources other than the primary activity of a business.
Out of Court Settlement A settlement initiated by a debtor outside the court system to discharge a debt.
Outsourcing Subcontracting work to contractors outside the firm.
Outstanding Stock The stock that is in the hands of stockholders.
Over Applied Factory Overhead The amount of factory overhead applied in excess of the actual factory overhead incurred for a production period.
Overbuy A variation of bustout. A business that buys more than it needs.
Overdue Accounts Accounts that have not been paid in the normal course of business pursuant to the terms of sale.
Overhead Expenses not charged to a specific product but vary directly with sales.
Overnight Float Rate Debt Banking and borrowing term used to describe borrowings where the rate is not fixed. The rate is set on a daily basis. Thus, there is no set maturity date for the borrowings as they can be paid down at any time.
Owner’s Equity The owner’s right to the assets of the business after the total liabilities are deducted.

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