Glossary of Business Terms – “O”
Objective – An end toward which effort is directed and on which resources are focused, usually to achieve an organization’s strategy.
Obsolescence – The decline of products in a market due to the introduction of better competitor products or rapid technology developments.
Open-end Credit – A form of credit that does not have an upper limit on the amount that can be borrowed or a time limit before repayment is due.
Open Market – A market that is widely available.
Operating Cash Flow – The amount used to represent the money moving through a company as a result of its operations, as distinct from its purely financial transactions.
Operating Costs – Expenditures arising out of current business activities. The costs incurred to do business such as salaries, electricity, rental. Also may be called “overhead.”
Optimize – To allocate such things as resources or capital as efficiently as possible.
Option – A contract for the right to buy or sell an asset, typically a commodity, under certain terms.
Order – A contract made between a customer and a supplier for the supply of a range of goods or services in a determined quantity and quality, at an agreed price, and for delivery at or by a specified time.
Organizational Market – A marketplace made up of producers, trade industries, governments and institutions.
Original Design Manufacturer (ODM) – Companies which create new product designs and specifications based on the product idea brief provided by the client. In most cases, ODMs also manufacture the product they design and their clients get the products branded in their own name and sell it them in the market. ODMs generally provide outsourced product development services, product manufacturing services, complete product life cycle services, etc based on their own capabilities.
Original Equipment Manufacturer (OEM) – Companies which manufacture products based on product design and specifications provided by their clients. They do not have control over the product design or specifications. All market research, research and development are all done by the clients.
Outsourcing – Term used in business to identify the process of sub-contracting work to outside vendors. The transfer of the provision of services previously carried out by in-house personnel to an external organization, usually under a contract with agreed standards, costs, and conditions.
Overdraft – The amount by which the money withdrawn from a bank account exceeds the balance of the account.
Overdraft Facility – A credit arrangement with a bank, allowing a person or company with an account to use borrowed money up to an agreed limit when nothing is left in the account.
Overdrawn – In debt to a bank because the amount withdrawn from an account exceeds its balance.
Outsourcing = Term used in business to identify the process of sub-contracting work to outside vendors
Overhead – A general term for costs of materials and services not directly adding to or readily identifiable with the product or service being sold.
Overprice – To set the price of a product or service too high, with the result that it is unacceptable to the market.