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ENCYCLOPEDIA OF
BUSINE$$
AND
FINANCE
Editorial Board
EDITOR-IN-CHIEF
Burton S.Kaliski
New Hampshire College
ASSOCIATE EDITORS
Roger Luft
Eastern Illinois University
Dorothy Maxwell
Sacopee Valley High School
Jim Maxwell
San Jose State University (retired)
Mary Ellen Oliverio
Pace University
Allen Truell
Ball State University
ii
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E N C Y C L O P E D I A O F
BUSINE$$
AND
FINANCE
VOLUME 1
BURTON S. KALISKI,
Editor-in-Chief
Encyclopedia ofBusiness and Finance
Copyright © 2001 Macmillan Reference USA
All rights reserved.No part ofthis book may be reproduced or transmitted in any form or by any means,elec-
tronic or mechanical,including photocopying,recording,or by any information storage and retrieval system,
without permission in writing from the Publisher.
Macmillan Reference USA Macmillan Reference USA
An imprint ofthe Gale Group An imprint ofthe Gale Group
27500 Drake Rd. 1633 Broadway
Farmington Hills,MI 48331-3535 New York,NY 10019
Library ofCongress Catalog Card No.: 00-107932
Printing number
1 2 3 4 5 6 7 8 9 10
ISBN 0-02-865065-4 (set).—ISBN 0-02-865066-2 (v.1).—ISBN 0-02-865067-0 (v.2)
Printed in the United States ofAmerica by the Gale Group
Gale Group and Design is a trademark used herein under license.
Contents
Preface . . . . . . . . . . . . . . . . . . .vii
Acknowledgments . . . . . . . . . . . . . .ix
List of Articles . . . . . . . . . . . . . . .xii
List of Contributors . . . . . . . . . . . .xvii
Encyclopedia of Business and Finance . . . . .1
Index . . . . . . . . . . . . . . . . . . .899
v
Editorial and Production Staff
PROJECT EDITORS IMAGING COORDINATOR
Allison McClintic Marion Pamela A.Reed
Brian Rabold
SENIOR IMAGING SPECIALIST
Robert Duncan
CONTRIBUTING PROJECT EDITOR
Nancy Matuszak PRODUCT DESIGN MANAGER
Kenn Zorn
MANAGER,COMPOSITION AND
ELECTRONIC PREPRESS ART DIRECTOR
Mary Beth Trimper Cynthia Baldwin
ASSISTANT MANAGER,COMPOSITION DESIGNER
PURCHASING AND ELECTRONIC PREPRESS Mark Berger
Evi Seoud
INDEXER
BUYER Sylvia Coates
Stacy Melson
MACMILLANREFERENCEUSA
IMAGE DATABASE SUPERVISOR PUBLISHER
Randy A.Bassett Elly Dickason
vi
Preface
Business is the backbone ofAmerican society and ethics.In each case,a lead entry is followed by an
is one of the keys to making our system work as article about that topic in each of the functional
well as it has for more than two hundred years. areas of business. Thus, there are articles about
Yet as a body of knowledge, business is much careers in accounting,economics,finance,infor-
younger.There has been,to this point,no organ- mation systems, law, management, and market-
ized work that has attempted to present the disci- ing,as well as a similar series ofarticles for ethics.
pline of business in a single place. The major There is also a strong emphasis on organiza-
purpose of the Encyclopedia of Business and tions in the field of business and government.
Finance is to summarize the body of knowledge Wherever an organization is discussed,the article
that we know as business in a single place and in provides a Web site for further information.
language accessible to the layperson. Relevant federal legislation is also featured in this
This two-volume collection of more than work. All acts that have had a major impact on
three hundred entries presents a wealth of infor- business are included in the Encyclopedia.
mation about the major functional areas of busi- The entries are arranged in the usual alpha-
ness:accounting,economics,finance,information betical order, with extensive cross-referencing of
systems, law, management, and marketing. The three types.First,there are “See”references,refer-
articles vary in length and in depth, in biblio- ring the reader to an entry by another name.For
graphic support, and in writing style. Thus, the example, under Bait and Switch Advertising one
reader will encounter a variety of approaches and finds the line “See Advertising.”The second type
discern a number of perspectives about business. ofcross-referencing is the “See Also”reference.At
Some articles are quantitative,since some aspects the conclusion of the article on Insurance, for
of business are numerically based. Other articles example, one reads “See Also Personal Financial
tend more toward the qualitative, to accommo- Planning.”The third type of cross-referencing is
date the more descriptive aspects of business. the Related Articles listing. At the conclusion of
Some of the articles present a historical perspec- most articles, there is a list of other articles that
tive,incorporating long-proven knowledge,while may shed more light on the topic just discussed.
others focus more on current concepts and newer Is the knowledge contained in this work the
data. All entries have the same goal: to provide definitive and final word on each topic? The
useful knowledge about the business and financial answer is “most certainly not.”In this day and age
world. of dynamic and rapidly growing knowledge, a
Because of their importance, we have given positive answer would be quite inappropriate.
special treatment to two topics: careers and However, this is not necessarily a negative. The
vii
PREFACE
information contained in this Encyclopedia is summary of existing knowledge or the basis for
valid and reliable and enables readers to do fur- acquiring new knowledge.
ther research by going easily accessible sources. A number of individuals deserve to be men-
Today’s technological environment thus offers a tioned for their contributions to this project.
unique opportunity that was not available to pre- First, I must thank the five associate editors on
vious generations: to extend one’s knowledge on this project: Roger Luft, Dorothy Maxwell, Jim
every topic presented. Maxwell, Mary Ellen Oliverio, and Allen Truell.
This work was designed for different types of Without their tireless efforts at securing contrib-
users.The middle school student may be looking utors ofquality,we would have a very small work.
for a starting point for a paper on careers. The Second,great appreciation goes to Elly Dickason,
high school student may be seeking background Publisher of Macmillan Reference USA, for her
on a major research topic, such as the corporate inspiration in conceiving of this project and get-
form oforganization.The businessperson may be ting it offthe ground.Third,I want to express my
seeking a summary of antitrust laws. The busi- indebtedness to Allison Marion, Editor at the
ness teacher may be preparing a lesson on the his- Gale Group,for her professional work in keeping
tory of computers.The interested layperson may this project running to its conclusion. Fourth, I
simply want to learn about something new,such must thank all the contributors for the best
as government accounting standards or matrix efforts that each put forth. Writing for an ency-
organization. clopedia is not a financially rewarding activity;
The Encyclopedia ofBusiness and Financecan however,it is a contribution to posterity,so what
serve as a survey document for the many aspects each contributor has written is ofgreat intangible
ofbusiness or as a guide to those aspects.It can be value to knowledge and to future scholars.
the beginning point of lengthy secondary Finally, I speak for all of the people involved in
research,the background for primary research,or what has been a lengthy project when I thank our
the ending point for research on a specific item families for their encouragement and support.
covered within its pages.It can be used to help ask
questions or to find answers. It can be used as a BURTONS.KALISKI
viii ENCYCLOPEDIA OF BUSINESS AND FINANCE
Acknowledgments
The editors wish to thank the copyright holders sion.—Allen, Tim, photograph. Associated
ofthe excerpted criticism included in this volume Press/AP.Reproduced by permission.—American
and the permissions managers ofmany book and Electric Power’s Muskingum River Plant, photo-
magazine publishing companies for assisting us graph. Associated Press/AP. Reproduced by per-
in securing reproduction rights. We are also mission.—Andreas, Michael (standing, arms at
grateful to the staffs ofthe Detroit Public Library, sides), Chicago, Illinois, 1998, photograph.
the Library ofCongress,the University ofDetroit AP/Wide World Photos. Reproduced by permis-
Mercy Library, Wayne State University Purdy/ sion. Associated Press/Ford Motor Company.—
Kresge Library Complex, and the University of Berners-Lee, Tim, photograph. Associated
Michigan Libraries for making their resources Press/AP.Reproduced by permission.—Billboard
available to us.Following is a list ofthe copyright displaying a Joe Camel advertisement(Vehicles
holders who have granted us permission to passing by), photograph. Associated Press/AP.
reproduce material in this volume of the Reproduced by permission.—Billboards along
Encyclopedia of Business and Finance Every the Palmetto expressway,photograph.Associated
effort has been made to trace copyright, but if Press/AP. Reproduced by permission.—Bush,
omissions have been made,please let us know. George (center) signing the Americans with
Disabilities Act, Harold Wilke (rear left), Evan
PHOTOGRAPHS AND ILLUSTRATIONS
Kemp (left), Sandra Parrino, and Justin Dart
APPEARING IN THE ENCYCLOPEDIA OF
(right), Jefferson Memorial in the background,
BUSINESS AND FINANCE WERE RECEIVED
photograph.Associated Press/AP.Reproduced by
FROM THE FOLLOWING SOURCES:
permission.—Bush, President George (standing,
89th Annual Chicago Auto Show (workers center),Mexican President Carlos Salinas Gortari
put the final touches on displays), photograph. (left), Canadian Prime Minister Brian Mulroney
Associated Press/AP. Reproduced by permis- (right),Julie Puche (seated,left),Carla Hills (cen-
sion.—Ace Hardware logo (displayed outside the ter), and Michael Wilson (right), photograph.
St. Louis Convention Center) photograph. Bettmann/Corbis. Reproduce—Businesswoman
Associated Press/AP. Reproduced by permis- tele-commuting to her office (laptop on desk),
sion.—Al Lundberg (left), with Terry Brewer photograph.Michael Pole/Corbis.Reproduced by
(center) and Al Anderson (right)(talking about permission.—Camdessus, Michel, photograph.
the tents that will be used for temporary housing AFP/Corbis. Reproduced by permission.—
for migrant farm workers), photograph. Carlson, Chester (standing with first Xerox
Associated Press/AP. Reproduced by permis- copier), photograph. Corbis-Bettmann. Repro-
ix
