Terms for MSOM 301 Midterm

CH.1

Management – A form of work that involves deciding the best way to use an organizations resources to produce goods or services.

Top or senior Management- Establishes the objectives of the organization, formulates the actions necessary for them to achieve them, and allocates the resources of the organization to achieve the objectives.

Middle Management- Responsible for implementing and achieving organizational objectives; also responsible for departmental objectives and actions

Supervisory Management – Manages operative employees; generally considered the first level of management

Role – Set of behaviors associated with a particular job

Planning – Deciding what objectives to pursue during a future period and what to do to achieve those objectives

Organizing – Grouping activities, assigning activities, and providing the authority necessary to carry out the activities

Staffing – Determining human resource needs and recruiting, selecting, training, and developing human resources

Leading – Directing and channeling human behavior toward the accomplishment of objectives.

Controlling – Measuring performance against objectives, determining the causes of deviations and taking corrective action where necessary

Conceptual Skills – Involve understanding the relationship part of a business to one another and to the business as a whole. Decision making, planning, and organizing are specific managerial activities that require conceptual skills

Human Relations Skills – Involve understanding people and being able to work well with them

Technical Skills – Involve being able to perform the mechanics of a particular job.

Principle – A basic truth or law.

Glass ceiling – Refers to a level within the managerial hierarchy beyond which very few women and minorities advance

Diversity – Including people of different genders, races, religions, nationalities, ethnic groups, age groups, and physical abilities.

Professional Manager – An individual who performs the basic management functions for the ongoing organization

Entrepreneur – An individual who conceives the idea of what product or service to produce, starts the organization, and builds it to the point where additional people are needed.

Small business – A company that is independently owned and operated and is not dominant in its field; generally has fewer than 100 employees

Intrapreneurship – Entrepreneurship within a large or medium-sized company

CH. 2 Terms

Soldiering – Describes the actions of employees who intentionally restrict output.

Scientific Management – Philosophy of Fredrick W. Taylor that sought to increase productivity and make work easier by scientifically studying work methods and establishing standards.

Period of Solidification – A period in the 1920’s and 1930’s in which management become recognized as a discipline.

Hawthorne Studies – Series of experiments conducted in the 1921 at the Hawthorne plant of Wester Electric in Cicero, Illinois; production increased in relationship to physiological and social conditions rather than to the environment.

McCormick multiple management Plan – Developed by Charles McCormick, a plan that uses participation as a training and motivational tool b selecting promising young employees from various company departments to form a junior board of directors

Bottom-up Management – Philosophy popularized by William B. Given that encouraged widespread delegation of authority to solicit the participation of all employees from the bottom to the top of the organization

Scanlon Plan – Incentive plan developed in 1938 by Joseph Scanlon to give workers a bonus for tangible savings in labor cost

Process approach to Management – Focuses on the management functions of planning, controlling, organizing, staffing, and leading.

Management Theory Jungle – Term developed by Harold Koontze referring to the division of thought that resulted from the multiple approaches to studying the management process

Systems approach to Management – A way of thinking about the job of managing that provides a framework for visualizing internal and external environmental factors as an integrated whole

Contingency approach to Management – Theorizes that different situations and conditions require different management approaches.

Theory Z – A theory developed by William Ouchi that attempts to integrate American and Japanese management practices by combing the American emphasis on individual responsibility with the Japanese emphasis on collective decision making, slow evaluation and promotion, and holistic concern for employees.

In Search of Excellence – Book by Thomas J. Peters and Robert H. Waterman Jr, that identifies 36 companies with an excellent 20-year performance record. The authors identified eight characteristics of excellence after interviewing managers in each company.

CH. 3 TERMS

Communication – The act of Exchanging information

Interpersonal Communication – An interactive process between individuals that involves sending and receiving verbal and nonverbal messages.

Semantics – The science or study of the meaning of words and symbols

Perception – The mental and sensory processes an individual uses in interpreting information received

Active listening – Absorbing what another person is saying and responding to the persons concerns

Feedback – The flow of information from the receiver to the sender

Paralanguage – A form of nonverbal communication that includes the pitch, tempo, loudness, and hesitation in the verbal communication

Grapevine – Informal channels of communication within an organization

Internet – A global collective of independently operating, but interconnected computers

Intranet - A private, corporate computer network that uses internet products and technologies to provide multimedia applications within an organization

CH.4 TERMS

Decision Process – Process that involves 3 stages; intelligence, design and choice. Intelligence is searching the environment for conditions requiring a decision Design is inventing, developing and analyzing possible courses of action. Choice is the actual selection of a course and action.

Decision Making – In its narrowest sense, the process of choosing from among various alternatives.

Problem Solving – Process of determining the appropriate responses or actions necessary to alleviate a problem.

Programmed decisions – decisions that are reached by following an established or systematic procedure.

Non-programmed decisions – Decision that have little or no precedent; they are relatively unstructured and generally require a creative approach by the decision maker.

Intuitive approach – approach used when managers make decisions based largely on hunches and intuition

Optimizing approach – Includes the following steps: recognize the need for a decision; establish, rank, and weigh criteria; gather available information and data; identify possible alternative; evaluate each alternative with respect to all criteria; and select the best alternative.

Principle of bounded rationality – Assumes people have the time and cognitive ability to process only a limited amount of information on which to base decisions.

Optimizing – Selecting the best possible alternative.

Satisficing – Selecting the first alternative that meets the decision makers minimum standard or satisfaction

Level of aspiration – Level of performance that a person expects to attain; determined by the persons prior successes and failures

Situation of Certainty – Situation that occurs when a decision maker knows exactly what will happen and can often calculate the precise outcome for each alternative.

Situation of risk – Situation that occurs when a decision maker is aware of the relative probabilities of occurrence associated with each alternative

Situation of Uncertainty- When decision maker has very little or no reliable information in which to evaluate the different possible outcomes

Maximax Approach – Selecting the alternative whose best possible outcome is the best of all possible outcomes for all alternative; sometimes called the optimistic or gambling approach to decision making

Maximin Approach – Comparing the worst possible outcomes for each alternative and selecting the one that is least undesirable; sometimes called the pessimistic approach to decision making.

Risk-Averting Approach – Choosing the alternative with the least variation among its possible outcomes

Value – A conception, explicit or implicit, that defines what an individual or a group regards as desirable, people are not born with values rather they acquire and develop them early in life

Ethics – A set of moral principles or values that govern behavior

Creativity – Coming up with an idea that is new, original, useful, or satisfying to its creator or to someone else.

Innovation – Process of applying a new and creative idea to a product, service, or method of operation.

Brainstorming – Presenting a problem to a group and allowing group members to produce a large quantity of ideas for its solution; no criticism are allowed initially

Gordon Technique – Differs from brainstorming in that no one but the group leader knows the exact nature of the real problem under consideration. A key word used to describe a problem area.

Normal Group Technique (NGT) – Highly structured technique for solving group tasks; minimizes personal interactions to encourage activity and reduce pressure towards conformity

Brainwriting – A technique in which a group is being presented with a problem situation and members anonymously write down ideas, then exchange papers with others, who build on the ideas and pass them on until all members have participated

Synectics – Creative problem solving technique that uses metaphorical thinking to “make the familiar strange, and the strange familiar.”

Management Information System (MIS) – An info sys used by managers to support the day-to-day operational and tactical decision making needs of managers.

Data Processing – Capture, processing, and storage of data

Transaction-Processing System – Substituting computer processing for manual recordkeeping procedures.

CH. 5 TERMS

Intellectual property – Ownership of ideas; gives creators of the intellectual property the exclusive right to market and sell their work

Social Responsibility – The obligation that individuals or business have to help solve social problems

Stakeholders – The people---employees, customers, suppliers and the community--- who are affected by the actions of a business.

Social Audit – A method used by management to evaluate the success or lack of success of programs designed to improve the social performance of the organization

Regulations – Rules that the government agencies issue to implement laws

Sole Proprietorship – A business owned by a single individual, or proprietor

Partnership – An association of two or more persons who jointly own a for profit business

Limited liability partnership (LLP) – A partnership where liability is limited to the amount of money invested in a business or any guarantee given

Corporation – A business formed under state or deferral statues that is authorized to act as a legal person

Limited Liability Company (LLC) – Similar to a corporation, owners have limited personal liability for the debts and actions of the LLC.

Income Tax – A tax levied against a business’s profits

Property Tax – Ta levied against property, buildings, and land owned by a business.

Patent – The document the federal government issues to inventors and companies that gives them the exclusive right to their inventions for 17 yeas

Trademark – A word, name, symbol, or slogan a business uses to identify its own goods

Copyright – The protection provided to a creative work

Contract – An agreement between two parties to carry out a transaction

CH. 6 TERMS

International Trade – The exchange of goods and services by different countries

Absolute Advantage – The ability to produce more of a good than another producer

Law of comparative advantage – Producers should produce the goods they are most efficient at producing and purchase from others the goods they are less efficient at producing

Exports – Goods and services that are sold abroad

Imports – Goods and services purchased abroad

Balance of trade – Difference between the values of the goods a country exports and the value of the goods it imports

Tariffs – Government imposed taxes charged on goods imported into a country

Quota – Establishes the maximum quantify of a product that can be imported or exported during a given period

Embargo – Involves stopping the flow of exports to or imports from a foreign country

Global Economy – Economy in which companies compete actively with businesses from around the world

Free trade area – A region within which trade restrictions are reduced or eliminated

North American Free Trade Agreement (NAFTA) – NAFTA allows business in the US, Mexico and Canada to sell their products anywhere in North American without facing major trade restrictions

Multinational Corporation (MNC) – Business that maintains a presence in two or more countries, has a considerable portion of its assets invested in and derives a substantial portion of its sales and profits from international activities, considers opportunities throughout the world, and has a worldwide perspective and orientation.

CH.7 TERMS

Planning – Process of deciding what objectives to pursue during a future time period and what to do to achieve those objectives

Formal Plan – Written, documented plan developed trough an identifiable process.

Functional Plans – Originate from the functional areas of an organization such as production, marketing, finance and personnel

Short Range Plans – Generally cover up to one year

Long range Plans – Typically span 3-5 years, but can extend to as far as 20 years

Strategic planning – Analogous to top-level long range planning; covers a long period; affects many parts of the organization

Operations or Tactical Planning – Short range planning; done primarily by middle to lower level managers, it concentrates on the formulation of function plans

Contingency plans – Address the what-ifs of the manager’s job; gets the manager in the habit of being prepared and knowing what to do if something does go wrong

Objectives – Statements outlining what the organization is trying to achieve; give an organization and its member’s direction

Long-Range Objectives – Go beyond the current fiscal year; must support and not conflict with the organizational mission

Short-Range Objectives – Generally tied to a specific time period of a year or less and are derived from and in depth evaluation of long range objectives

Management by Objectives (MBO) – Management by objectives is a philosophy based on converting organizational objectives into personal objectives. MBO works best when the objectives of each organizational unit are derived from the objectives of the next higher unit in the organization.

Policies – Broad, general guides to action that constrain or direct the attainment of objectives

Procedure – Series of related steps r tasks expressed in chronological order for a specific purpose

Rules – Require specific and definite actions to be taken in a given situation

Strategy – Outlines the basic steps management plans to take to reach an objective or a set of objects; outlines how management intends to achieve its objectives

Corporate (grand) Strategies – Address which businesses an organization will be in and how resources will be allocated among those businesses

Growth Strategy – Used when the organization tries to expand, as measure by sales, product line, number of employees, or similar measures.

Stability Strategy – Used when the organization is satisfied with its present course (status quo strategy).

Business Strategies – Focus on how to compete in a given business.

Functional Strategies – Concerned with the activities of the different functional areas of the business

Formulation phase – First phase in strategic management, in which the initial strategic plan is developed

Implementation phase – Second phase in strategic management, in which the strategic plan is put into effect

Evaluation phase – 3rd phase in strategic management, in which the implemented strategic plan is monitored, evaluated and updated.

Mission – Defines the basic purpose(s) of an organization; why the organization exists

External Environment – Consist of everything outside of the organization.

Strategic Business Unit (SBU) – Distinct businesses that has its own set of competitors and can be managed reasonable independently of other businesses within the organization.

CH. 8 TERMS

Organization – Group of people working together in some concerted or coordinated effort to attain objectives

Organizing – Grouping of activities necessary to attain common objectives and the assignment of each grouping to a manager who has the authority necessary to supervise the people performing the activities

Informal organization – Aggregate of the personal contacts and interactions and the associated groupings of people working within the formal organization

Job scope – Refers to the number of different types of operations performed on the job

Job Depth – Refers to the freedom of employees to plan and organize their own work, work at their own pace, and move around and communicate as desired

Power – Ability to influence, command, or apply force

Authority – Legitimate exercise of power; the right to issue directives and expend resources; related to power but narrower in scope

Responsibility – Accountability for the attainment of objectives, the use of resources and adherence to organizational policy

Parity Principle – States that authority and responsibility must coincide

Exception Principle – States that managers should concentrate on matters that deviate significantly from normal and let subordinates handle routine matters; also called management by exception

Unity of Command Principle – States that an employee should have one, and only one, intermediate manager

Scalar Principle – States that authority in the organization flows through the chain of managers on link at a time ranging from the highest to the lowest ranks; also called chain of command.

Span of Management – Number of subordinates a manager can effectively manage; also called span of control

Centralization – Little authority is delegated to lower levels of management

Decentralization – A great deal of authority is delegated to lower levels of management

Empowerment – Form of decentralization in which subordinates have authority to make decisions