communication

Two-way process of reaching mutual understanding, in which participants not only exchange (encode-decode) information, news, ideas and feelings but also create and share meaning. In general, communication is a means of connecting people or places. In business, it is a key function of management--an organization cannot operate without communication between levels, departments and employees. See also communications.

separation of powers

The constitutional principle that limits the powers vested in any person or institution. It divides governmental authority into three branches: legislative (Parliament or Senate), executive (President or Prime Minister and the Cabinet), and judiciary (Chief Justice and other judges). This principle is expressed fully in the US Constitution, but is used only as a guide in

social contract

Unwritten and tacit agreement said to exist among the members of a community or group that guides individual behavior and establishes personal rights and responsibilities. Social contract is deemed essential for any organized group behavior and, in democratic societies, is embodied in the national constitution.

financial institution

Private (shareholder-owned) or public (government-owned) organizations that, broadly speaking, act as a channel between savers and borrowers of funds (suppliers and consumers of capital). Two main types of financial institutions (with increasingly blurred dividing line) are: (1) Depository banks and credit unions which pay interest on deposits from the interest earned on the loans, and (2) Non-depository insurance companies and mutual funds (unit trusts) which collect funds by selling their policies or shares (units) to the public and provide returns in the form periodic benefits and profit payouts.

meritocracy

Governance by elites who deserve to wield power because they possess merit (defined as 'intelligence plus effort') instead of by those who merely possess wealth or belong to privileged classes. Such a system, in theory, forms the basis of an 'equal opportunity' society. But, in practice, unrestricted meritocracy may result in a society without rules and concentrate power in only a few hands. The term was coined by the UK sociologist Michael Young in 1958 book, 'The Rise Of Meritocracy.'