Karma means "intentional action" and refers to the universal law of cause and effect. Karma is created not only by physical action but also by thoughts and words.
Just as action causes reaction, karma causes effects that come back to the original actor. Karma also tends to generate more karma that reaches out in all directions. We bear the consequences of the karma we create, but everyone around us is affected by our intentional acts as well, just as we are affected by theirs.
Buddhists do not think of karma as "destiny" or as some kind of cosmic retribution system. Although the fruits of "good" karma might be pleasant and beneficial, all karma keeps one entangled in the cycle of death and rebirth.
Actions free from desire, hate and delusion do not create karma. The enlightened being ceases to create karma and thus is liberated from (re)birth.
"I am the owner of my karma .
I inherit my karma.
I am born of my karma.
I am related to my karma.
I live supported by my karma.
Whatever karma I create, whether good or evil, that I shall inherit."
The Buddha, Anguttara Nikaya - Upajjhatthana Sutta http://www.viewonbuddhism.org/karma.html#2
"Despite the fact that we are a ceaselessly transforming stream, interdependent with other beings and the whole world, we imagine that there exists in us an unchanging entity that characterizes us and that we must protect and please. A thorough analysis of this reveals that it is only a fictitious mental construct".
Shechen Rabjam Rinpoche.