Management Glossary

  Terms beginning with d
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dependent demand

Demand for an item that is used to make some other item(s). The demand for the component is, therefore, dependent on demand for the item(s) of which it is a component. There might be instances where an item is used both on its own and as a component in another product. Only the demand for the item as a component would be counted as dependent demand.

Contributed by: Managerwise Staff
See: independent demand

depreciation
An accounting charge recognizing the annual reduction of value of a building, piece of equipment or other product with a long lifespan. Rather than accounting for the entire cost when purchased, depreciation charges a portion of the cost each year such that at the end of the item's life the value recorded on the company's book will equal its expected scrap or resale value.
Contributed by: ManagerWise Staff

deregulation
Elimination of government regulations in a particular industry.
dilution

The issuing of more shares from a company's treasury so that the the ownership of the company is spread across a higher number of shares, i.e., it is diluted, and the fraction of the corporation that each existing shareholder owns is, consequently, reduced unless he or she buys a percentage of the new shares equal to the percentage of the company they owned prior to the dilution. Dilution may be used to bring more funds into the company (i.e., by selling more shares) or to acquire another company by paying for it partially or wholly with shares of the acquiring company.

Contributed by: Managerwise Staff

direct labor
Those employees that are directly involved in the manufacture of the company's products. This would exclude, for example, maintenance, loading dock and other support staff.
Contributed by: ManagerWise Staff
See: indirect labor

discounted cash flow

Abbreviated as DCF, it is a calculation that takes into account the fact that money has a time value, i.e., money that your company has in the bank today can be invested to earn more money or used to pay down debt and, therefore, avoid interest costs, which can't be done with money that the company won't receive until some future date. Likewise, money that your company will get a year from now is better than money it will get two years from now. Etc. The time value of money also means that, assuming there are no penalties imposed for doing so, the company is better off paying a dollar tomorrow than paying a dollar today.

DCF is calculated by selecting an interest rate—typically a company will use the highest rate that the company reasonably thinks it could earn if it had funds to invest, in which case it is referred to as the internal rate of return (IRR)—and applying that rate in order to discount the flow of cash that will be received or paid out sometime in the future. 

Contributed by: Managerwise Staff
See: net present value, internal rate of return

discriminatory pricing

A pricing strategy that charges different prices to different market segments for the same product or service. The objective is to attempt to come closer to obtaining the full value that every customer perceives in a product when different customers value the same product or service differently. A common example is air fares. The airlines try to devise rules that will charge higher prices to business travellers than to pleasure travellers since the former is usually willing to spend more for air travel.

In this case, the word "discriminatory" is descriptive, not a value judgment.

Contributed by: ManagerWise Staff

disintermediation
The removal of a middleman (i.e., intermediary) from the normal flow of business transactions. For example, consumer goods manufacturers that open Web stores to sell directly to end-customers are practicing disintermediation. In doing so, they eliminate at least one intermediary between the manufacturer and the consumer (the retailer) and likely multiple intermediaries (one or more levels of distributors in addition to the retailer).
Contributed by: Managerwise Staff

disjunctive task
A task that requires the efforts of multiple people and for which the level of success will be determined by "the strongest link". I.e., the task result level will be determined by the performance of the best performer in the group that undertakes the task.
Contributed by: ManagerWise
See: conjunctive task

dividend
A payment from a corporation to its shareholders. The payment represents a distribution of the company's profits to its owners and is made with after-tax dollars. (i.e., dividend payments are from profits on which the corporation has already paid taxes. Dividends are, therefore, not deductable from profits when calculating taxable profit.)
Contributed by: ManagerWise staff
See: profit

dividend payout ratio
The percentage of a firms earnings that it pays out in dividends. This is important because dividends should, and in many jurisdictions must, be paid out of current or accumulated past earnings rather than borrowing against future earnings to pay dividends. Some public companies formally state a dividend payout ratio objective and regularly adjust dividends when they fall above or below the value required to meet this objective. Companies are not under any obligation to do so. Whether or not they state such a commitment, the dividend payout ratio is the measure of the actual ratio of dividends to earnings, not the stated objective.
Contributed by: Managerwise Staff

dogs

In a business context, stars are products that have low market share in markets that are declining.

"Dogs" is one of four categories in the "Boston Matrix", a two by two matrix relating market share and market growth. The Boston Matrix was developed by Boston Consulting Group. The other three categories in the matrix are problem children, stars and cash cows.

Contributed by: Managerwise Staff
See: Boston Matrix, stars, problem children, cash cows

doing business as

Usually abbreviated as DBA, it indicates that a name that a company or individual is using when conducting business is not the legal name of that company or individual. For example, if a corporation that is legally registered as "XYZ123 Corp." operates under the business name "SuperMega Widget Company", in legal documents concerning its SuperMega Widget Company business it would say "XYZ123 Corp., DBA SuperMega Widget Company."

Contributed by: Managerwise Staff

downsizing
Firing/laying-off people with the primary objective being to reduce labor costs. The decision of who to fire/lay-off may or may not be based on job performance, however no one individual's job performance is the factor that leads a company to downsize.
Contributed by: ManagerWise Staff
See: lay-off

drop shipment
A shipment that is sent directly from the manufacturer to the end customer.
Contributed by: ManagerWise Staff



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