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FGCU Management 2
Principles of Management Exam 2
| Term | Definition |
|---|---|
| Organizational Environment | Includes all elements existing outside the boundary of the organization that have the potential to affect the organization. Includes competitors, resources, technology, and economic conditions that influence the organization. |
| General Environment | Affects organizations indirectly. Includes social, economic, legal/political, international, natural and technological factors that influence all organizations about equally. |
| Task Environment | Includes the sectors that conduct day-to-day transactions with the organization and directly influence its basic operations and performance. Includes customers, competitors, suppliers, and labor market. |
| Internal Environment | Which includes the elements within the organization's boundaries. Which consist of employees, management, and especially corporate culture. |
| Boundary-Spanning Roles | Link and coordinate the organization with key elements in the external environment. |
| Merger | When two or more organizations combine to become one. |
| Joint Venture | A strategic alliance or program by two or more organizations. |
| Adaptability Culture | Emerges in an environment that requires fast response and high-risk decision making. |
| Achievement Culture | Suited to organizations concerned with serving specific customers in the external environment but without the intense need for flexibility and rapid change. |
| Involvement Culture | Emphasizes an internal focus on the involvement and participation of employees to adapt rapidly to changing needs from the environment. |
| Consistency Culture | Uses an internal focus and a consistency orientation for a stable environment. |
| Cultural Leader | Defines and uses signals and symbols to influence corporate culture. |
| International Dimension | Represents events originating in foreign countries as well as opportunities for US companies in other countries |
| Technological Dimension | Includes scientific and technological advancements in a specific industry as well as in society at large |
| Sociocultural Dimension | Represents the demographic characteristics as well as the norms, customs, and values of the general population |
| Economic Dimension | Represents the general economic health of the country or region in which the organization operates. Consumer purchasing power, the unemployment rate, and interest rates are part of an organization's economic environment |
| Legal-political Dimension | Includes government regulations at the local, state, and federal levels, as well as political activities designed to influence company behavior |
| High-performance culture | Based on a solid organizational mission or purpose, embodies shared adaptive values that guide decisions and business practices and encourages individual employee ownership of both bottom-line results and the organization's cultural back bone |
| Goal | A desired future state that the organization attempts to realize |
| Plan | A blueprint for goal achievement and specifies the necessary resource allocations, schedules, tasks, and other actions |
| Planning | Determining the organization's goals and defining the means for achieving them |
| Strategic Goals | Broad statements describing where the organization wants to be in the future |
| Strategic Plans | The blueprint that defines the activities and resources allocations- cash, personnel, space, facilities- required for meeting targets |
| Tactical Goals | The results that major divisions and departments within the organization intend to achieve |
| Tactical Plans | Designed to help execute the major strategic plans and to accomplish a specific part of a company's strategy. Short time span, usually less than a year |
| Operational Goals | Results expected from departments, work groups, and individuals |
| Operational Plans | Developed at the lower levels of the organization to specify action steps toward achieving operational goals and to support tactical plans |
| Strategy Map | A visual representation of the key drivers of an organization |
| Single-use Plans | Developed to achieve a set of goals that are not likely to be repeated in the future |
| Standing Plans | Ongoing plans that provide guidance for tasks or situations that occur repeatedly within the organization |
| Contingency Plans | Define company responses to be taken in the case of emergencies, setbacks, or unexpected conditions. |
| Scenario Building | Involves looking at current trends and discontinuities and visualizing future possibilities |
| Crisis Prevention | Involves activities managers undertake to try to prevent crisis from occurring and to detect warning signs of potential crises |
| Crisis Preparation | Includes all the detailed planning to handle a crisis when it occurs |
| Decentralized Planning | Means that planning experts work with managers in major divisions or departments to develop their own goals and plans |
| Stretch Goals | Reasonable but yet highly ambitious goals that are so clear, compelling, and imaginative that they fire up employees and engender excellence |
| BHAG | Big, Hairy, Audacious Goals |
| Business Performance Dashboards | A way for executives to keep track of key performance metrics such as sales in relation to targets |
| Intelligence Teams | A cross-functional group of managers and employees, usually led by a competitive intelligence professional, who work to gain an understanding of a specific business issue with the aim to create goals and plans related to that issue |
| Organizational Control | Refers to the systematic process of regulating organizational activities to make them consistent with the expectations established in plans, targets, and standards of performance |
| Balanced Scorecard | A comprehensive management control system that balances traditional financial measures with operational measures relating to a company's critical success factors |
| Four Perspectives of a balanced scorecard | financial performance, customer service, internal business processes and the organization's capacity for learning and growth |
| Budgetary Control | the process of setting targets for an organization's expenditures, monitoring results and comparing them to the budget, and making changes as needed |
| Responsibility Center | Any organizational department or unit under the supervision of a single person who is responsible for its activity |
| Expense Budget | Includes anticipated and actual expenses for each responsibility center and for the total organization |
| Revenue Budget | Lists forecasted and actual revenues of the organization |
| Cash Budget | Estimates receipts and expenditures of money on a daily or weekly basis to ensure that an organization has sufficient cash to meet its obligations |
| Capital Budget | Lists planned investments in major assets such as buildings, heavy machinery, or complex information technology systems, often involving expenditures over more than one year |
| Top-Down Budgeting | The budgeted amounts for the coming year are literally imposed on middle and lower level managers |
| Bottom-Up Budgeting | A process in which lower level managers anticipate their departments' resource needs and pass them up to top management for approval |
| Balance Sheet | Shows the firm's financial position with respect to assets and liabilities at a specific point in time |
| Income Statement | Sometimes called the profit and loss statement, summarizes the firm's financial performance for a given time interval, usually one year |
| Liquidity Ratios | Indicates an organization's ability to meet its current debt obligations |
| Current Ratio | Tells whether the company has sufficient assets to convert into cash to pay off its debts. Current assets/current liabilities |
| Activity Ratio | Measures internal performance with respect to key activities defined by management. |
| Inventory Turnover | Tells how many times the inventory is used up to meet the total sales figure. Total sales/average inventory |
| Profitability Ratios | State profits relative to a source of profits, such as sales or assets |
| Profit Margin on Sales | Net Income/Sales |
| Gross Margin | Gross profit/Total Sales |
| Return on total Assets | A percentage representing what a company earned from its assets, computed as net income/assets |
| Leverage | Refers to funding activities with borrowed money |
| Debt Ratio | Total Debt/Total Assets |
| Hierarchical Control | Involves monitoring and influencing employee behavior through extensive use of rules, policies, hierarchy of authority, written documentation, reward systems, and other formal mechanisms |
| Decentralized Control | Based on values and assumptions that are almost opposite to those of hierarchical control. Rules and procedures are used only when necessary. Managers instead rely on shared goals and values to control employee behavior |
| Open-book Management | Allows employees to see for themselves, through charts, computer printouts, meetings and so forth, the financial condition of the company. Shows employees how their job fits into the big picture and affects the financial future of the organization |
| Total Quality Management | An organization wide effort to infuse quality into every activity in a company through continuous improvement |
| Quality Circle | A group of six to twelve volunteer employees who meet regularly to discuss and solve problems affecting the quality of their work. At a set time during the work week, the members meet, identify problems and try to find solutions |
| Benchmarking | The continuous process of measuring products, services, and practices against the toughest competitors or those companies recognized as industry leaders to identify areas of improvment |
| Six Sigma | A highly ambitious quality standard that specifies a goal of no more than 3.4 defects per million parts. Essentially be 99.9997 defect-free |
| Cycle Time | The steps taken to complete a company process |
| Continuous Improvement | Kaizen, the implementation of a large number of small, incremental improvements in all areas of the organization on an ongoing basis |
| Economic Value-added (EVA) | A company's net operating profit minus the cost of capital invested in the company's tangible assests |
| Market Value-added (MVA) | Measures the stock market's estimate of the value of a company's past and projected capital investment projects |
| Activity-based Costing | Allocates costs across business processes. Attempts to identify all the carious activities needed to provide a product of service and allocate costs accordingly |
| Corporate Governance | The framework of systems, rules, and practices by which an organization ensures accountability, fairness, and transparency in its relationship with all stakeholders, including investors, employees, customers and the general public |
| Strategic Management | The set of decisions and actions used to formulate and execute strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals |
| Strategy | The plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage and attaining the organizational goals |
| Competitive Advantage | What sets the organization apart from others and provides it with a distinctive edge for meeting customer or client needs in the market place |
| Core Competence | Something the organization does especially well in comparison to its competitors |
| Synergy | When organizational parts interact to produce a joint effect that is greater than the sum of the parts acting alone |
| Corporate-level Strategy | Pertains to the organization as a whole and the combination of business units and product lines that make up the corporate entity. Strategic actions at this level usually relate to the acquisition of of new businesses, joint ventures, etc. |
| Business-level Strategy | Pertains to each business unit or product line. Strategic decisions at this level concern amount of advertising, direction and extent of research and development, product changes, new product development, equipment and facilities. |
| Functional-level Strategy | Pertains to the major functional departments within the business unit. Strategies involve all the major functions including finance, marketing, etc. |
| Strategy Formulation | Includes the planning and decision making that lead to the establishment of the firm's goals and the development of a specific strategic plan. Includes assessing the external and internal problems and integrating the results into goals and strategy |
| Strategy Execution | The use of managerial and organizational tools to direct resources toward accomplishing strategic results |
| SWOT Analysis | A careful assessment of strengths, weaknesses, opportunities, and threats that affect organizational performance |
| BCG Matrix | Organizes businesses along two dimensions, business growth rate and market share |
| Diversification | Strategy of moving into new lines of business |
| Related Diversification | When new business is is related to the company's existing business activities |
| Unrelated Diversification | Occurs when an organization expands into a totally new line of business |
| Vertical Integration | The company expands into businesses that either produce the supplies needed to make products and services or that distribute and sell those products and services to customers |
| Differentiation Strategy | Involves an attempt to distinguish the firm's products or services from others in the industry |
| Cost Leadership Strategy | The organization aggressively seeks efficient facilities, pursues cost reductions, and uses tight cost controls to produce products more efficiently than competitors |
| Focus Strategy | The organization concentrates on a specific regional market of buyer group. |
| Globalization Strategy | Means that the product design and advertising strategies are standardized throughout the world |
| Multi-domestic Strategy | Means the competition in each country is handled independently of industry competition in other countries thus marketing, advertising, and product design is modified and adapted depending on the country |
| Transnational Strategy | Combines global coordination to attain efficiency with local flexibility to meet needs in different countries |
| Organizational Structure | The set of formal tasks assigned to individuals and departments, formal relationships including lines of authority, the design of systems to ensure effective coordination of employees across departments |
| Organization Chart | A visual representation of an organization's structure |
| Work Specialization | Sometimes called division of labor, is the degree to which organizational tasks are subdivided into separate jobs |
| Chain of Command | An unbroken line of authority that links all employees in an organization and shows who reports to whom |
| Unity of Command | Means that each employee is held accountable to only one supervisor |
| Scalar Principle | Refers to a clearly defined line of authority in the organization that includes all employees |
| Authority | The formal and legitimate right of a manager to make decisions, issue orders, and allocate resources to achieve organizationally desired outcomes |
| Acceptance Theory of Authority | Argues that a manager has authority only if subordinates choose to accept their commands |
| Responsibility | The duty to perform the task or activity as assigned |
| Accountability | Means that the people with authority and responsibility are subject to reporting and justifying task outcomes to those above them in the chain of command |
| Delegation | The process managers use to transfer authority and responsibility to positions below them in the hierarchy |
| Line Departments | Perform tasks that reflect the organization's primary goal and mission |
| Staff Departments | Include all those that provide specialized skills in support of line departments |
| Line Authority | Means that people in management positions have formal authority to direct and control immediate subordinates |
| Staff Authority | Includes the right to advise, recommend, and counsel in the staffs specialists' area of expertise |
| Span of Management | The number of employees reporting to a supervisor. Determines how closely a supervisor monitors their subordinates |
| Tall Structure | An overall narrow span and more hierarchical levels |
| Flat Structure | Has a wide span, is horizontally dispersed, and has fewer hierarchical levels |
| Centralization | Means that decision authority is located near the top of the organization |
| Decentralization | Decision authority is pushed downward to lower organizational levels |
| Departmentalization | Which is the basis for grouping positions into departments into the total organization |
| Functional Structure | The grouping of positions into departments based on similar skills, expertise, work activities, and resource use |
| Divisional Structure | Occurs when departments are grouped together based on similar organizational outputs |
| Matrix Approach | Combines aspects of both functional and divisional structures simultaneously in the same part of the organization |
| Two-boss Employees | Those who report to two supervisors simultaneously, must resolve conflicting demands from the matrix bosses. |
| Matrix Boss | The product or functional boss, who is responsible for one side of the matrix |
| Top Leader | Oversees both the product and functional chains of command. Their responsibility is to maintain a power balance between the two sides of the matrix |
| Cross-functional Team | Consist of employees from various functional departments who are responsible to meet as a team to resolve a mutual problem |
| Permanent Teams | Groups of employees who are organized in a way similar to a formal department |
| Team-based Structure | The entire organization is made up of horizontal teams that coordinate their work and work directly with customers to accomplish the organization's goals |
| Outsourcing | Farming out certain activities, such as manufacturing or credit processing |
| Virtual Network Structure | The firm subcontracts most of its major functions to separate companies and coordinates their activities from a small head quarters organization |
| Modular Approach | A manufacturing company uses outside suppliers to provide entire chunks of a product, which are then assembled into a final product by a handful of workers |
| Functional Approach | Grouping employees by common task permits economies of scale and efficient resource use |
| Divisional Approach | By dividing employees and resources along divisional lines, the organization will be flexible and responsive to change because each unit is small and tuned to its environment |
| Matrix Approach | An approach that is highly effective in a complex, rapidly changing environment in which the organization needs to be flexible, innovative, and adaptable |
| Team Approach | Breaks down barriers across departments and improves coordination and cooperation |
| Virtual Network Approach | The organization subcontracts most of its major functions to separate companies and coordinates their activities from a small headquarters organization |
| Re-engineering | Refers to the radical redesign of business processes to achieve dramatic improvements in cost, quality, services and speed |
| Task Force | A temporary team or committee designed to solve a short-term problem involving several departments |
| Project Manager | A person who is responsible for coordinating the activities of several departments for the completion of a specific project |
| Coordination | Refers to the quality of collaboration across departments |
| Small-batch Production | Firms produce goods in batches of one or a few products designed to customer specification |
| Mass Production | Technology is distinguished by standardized production runs |
| Continuous Process Production | The entire work flow is mechanized in a sophisticated and complex form of production technology |
| Technical Complexity | The degree to which machinery is involved in the production to the exclusion of people |
| Service Technology | Characterized by intangible outputs and direct contact between employees and customers |
| Digital Technology | Characterized by use of the Internet and other digital processes to conduct or support business operations |
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