Principles of Management Glossary

acceptance theory of management: principle that emphasizes the willingness of subordinates to accept those with authority to act.

accountability: the answering for one's actions and accepting the consequences.

affirmative action: aplanthatrequires employers to make an extra effort to hire and promote people who belong to a protected group.

authority: the formal and legitimate right of a manager to make decisions, issue orders, and allocate resources to achieve organizational goals.

behavioral management theory: a method that focuses on people as individuals with needs (also known as the human relations movement).

body language: see nonverbal communication.

boundary spanning: the process of gathering information from the external environment to identify current or likely events and determine how those events will affect the organization.

brainstorming: an idea-generating process that encourages the development of alternatives while withholding criticism of those alternatives.

bureaucracy: a form of organization based on logic, order, and legitimate use of formal authority.

centralized organization: authority is concentrated at the top of the organization.

chain of command: a line of authority that links all persons in an organization and defines who reports to whom.

charismatic power: see referent power.

classical adminsitrative: the branch of classical management theory that emphasizes the flow of information in organizations.

classical management theory: a theory, developed during the Industrial Revolution, that proposes "one best way" to perform tasks. Classical management theory developed into two separate branches: the classical scientific school and the classical administrative school.

classical scientific: a branch of the school of classical management theory, whose emphasis is on increasing productivity and efficiency.

closed system: an organization that interacts little with its external or outside environment.

coercive power: authority to punish or recommend punishment.

communication: the exchange of ideas, messages, or information, by speech, signals, or writing.

compensation: all work-related payments, including wages, commissions, insurance, and other benefits.

competitive advantage: any aspect of an organization that distinguishes it from its competitors in a positive way.

condition of certainty: situation that occurs when the decision maker has perfect knowledge of all the information needed to make a decision.

content theory: identifies physical or psychological conditions that act as stimuli for human behavior.

contingency planning: development of alternative courses of action that can be implemented if and when the original plan proves inadequate because of changing circumstances.

contingency theory: this principle examines the fit between the leader and the situation and provides guidelines for managers to achieve an effective fit (also known as situational theory).

continuous process: a system thatproduces goods by continuously feeding raw materials through highly automated technology.

control: the systematic process of regulating organization activities to make them consistent with the expectations established in plans, targets, and standards of performance.

concurrent control: method of regulation applied to processes as they are happening.

cost-leadership strategy: system that focuses on keeping costs as low as possible through efficient operations and tight controls.

crisis problem: an unexpected problem that has the potential to lead to disaster if not resolved quickly and appropriately.

cross-functional teams: groups of experts in various specialties (or functions) who work together on solutions to organizational problems.

decentralized organizations: firms that consciously attempt to spread authority to the lowest possible levels.

decision tree: a diagram that analyzes hiring, marketing, investment, equipment purchases, pricing, and similar decisions. Decision trees assign probabilities to each possible outcome and calculate payoffs for each decision path.

delegation: the downward transfer of authority from a manager to a subordinate.

demographics: measurements of various characteristics of the people and social groups who make up a society.

development plans: a series of steps that can help employees acquire skills to reach long-term goals, such as job promotions.

differentiation strategy: a plan whereby a company attempts to set the organization's products or services apart form those of other companies.

division of labor: see work specialization.

embargo: a prohibition on trade in a particular area.

employee benefits: legally required or voluntary compensation provided to employees in addition to their salaries.

empowerment: giving individuals an organization autonomy.

expectancy theory: a motivational theory stating that the three factors that influence behavior are the value of the reward, the relationship of the reward to performance, and the effort required for performance

expert power: a leader's special knowledge or skills regarding the tasks performed by followers.

exporting: selling of an organization's products to a foreign broker or agent.

feedforward controls: method used to identify and prevent defects and deviations from standards.

financial audits: formal investigations to ensure that procedures, policies, laws, and ethical guidelines are followed in the handling and reporting of financial activities.

financial ratio analysis: the relationship between specific figures on an organization's financial statements; helps explain the significance of those figures.

financial statements: reports thatprovide management with information to monitor financial resources.

first-line management: the lowest level of management.

flexiplace: see telecommuting.

flextime: an employment alternative that allows employees to decide, within a certain range, when to begin and end each work day.

force-field analysis: a technique to implement change by determining which forces drive change and which forces resist it.

formal structure: the hierarchical arrangement of tasks and people within an organization.

functional authority: authority to make decisions about specific activities undertaken by personnel in other departments.

functional structure: an organizational design that groups positions into departments on the basis of the specialized activities of the business.

functional teams: work groups that perform specific organizational functions with members from several vertical levels of the hierarchy.

grapevine: the informal communications network within an organization (also known as social network and informal channels).

horizontal job loading: see job enlargement.

human relations movement: see behavioral management theory.

incentive pay: links compensation and performance by paying employees for actual results, not for seniority or hours worked.

income statement: a report that presents the difference between an organization's income and expenses to determine whether the firm operated at a profit or loss over a specified time.

informal channels: see grapevine.

informal organization: the pattern, behavior, and interaction that stems from personal rather than official relationships.

interpersonal communication: real-time, face-to-face, or voice-to-voice conversation that allows immediate feedback.

intrapreneurship: organizational culture that allows employees flexibility and authority in pursuing and developing new ideas.

job analysis: a study that determines all tasks and qualifications needed for each position.

job description: a written statement of a job's requirements, processes, and rationale.

job enlargement: a type of job re-design that increases the variety of tasks a position includes (also known as horizontal job loading).

job enrichment: a type of job re-design that not only includes an increased variety of tasks, but also provides the employee with more responsibility and authority (also known as vertical job loading).

job rotation: temporarily assigning employees to different job, or tasks to different people, on a rotating basis.

job sharing: process in which one full-time job is split between two or more persons (also known as twinning).

joint venture: a business relationship formed between a domestic and foreign firm.

kaizen: a Japanese term used in the business setting to mean incremental, continuous improvement.

leading: establishing and influencing others to follow a specific direction.

learning organizations: firms thatutilize people, values, and systems to continuously change and improve performance based on the lessons of experience.

legitimate power: vested authority stemming from a formal management position in an organization.

licensure agreement: contractthatgrants onefirm the right to make or sell another company's products.

line authority: a manager's right to direct the work of his or her employees and make decisions without consulting others.

liquidity ratios: measurements of an organization's ability to generate cash.

management: the process of administering and coordinating resources effectively, efficiently, and in an effort to achieve the goals of the organization.

management information systems: (MIS)collects, organizes, and distributes data in such a way that the information meets managers' needs.

manager: a person responsible for the work performance of one or more other persons.

mass production: a system used to manufacture a large number of uniform products in an assembly line.

means-end chain: the effective design of organizational goals that encourages the accomplishment of low-level goals as a way of achieving high-level goals.

mechanistic structure: a highly bureaucratic organizational method, with centralized authority, detailed rules and procedures, a clear-cut division of labor, narrow span of controls, and formal coordination.

mission statement: a document that describes what an organization stands for and why it exists.

motion study: research designed to isolate the best possible method of performing a given job.

multinational corporations (MNC) : organizations operating facilities in one or more countries.

need theory: a construct of motivation based upon physical or psychological conditions that act as stimuli for human behavior.

network structure: an operating process that relies on other organizations to perform critical functions on a contractual basis.

nonverbal communication: actions, gestures, and other aspects of physical appearance that can be a powerful means of transmitting messages (also known as body language).

ongoing plans: see continuing plans.

open system: a method in which an individual or organization must interact with various and constantly changing components in both the external and internal environments.

operational goals: specific, measurable results expected from first-level managers, work groups, and individuals.

operational plan: developed by a first level supervisor as the means to achieve operational objectives in support of tactical plans.

organic structure: a management system founded on cooperation and knowledge-based authority.

organization: a group of individuals who work together to accomplish a common goal.

organizational change: a significant change that affects an entire company.

organizational chart: a pictorial display of the official lines of authority and communication within an organization.

organizational climate: the byproduct of organizational culture; it is the barometer for determining the morale of the employees.

organizational culture: an organization's personality.

organizational design: the creation or change of an organization's structure, the configuration and interrelationships of positions and departments.

organizational development (OD): a plan that focuses on changing an entire organization by changing processes and organizational culture.

organizing: the process of establishing the orderly use of resources by assigning and coordinating tasks.

orientation: a socialization process designed to provide necessary information to new employees and welcome them into the organization.

performance appraisal: a formal, structured system designed to measure an employee's job performance against designated standards.

philosophy of management: amanager's set of personal beliefs and values about people and work.

plan: a blueprint for goal achievement that specifies the necessary resource allocations, schedules, tasks, and other actions.

planned change: the deliberate structuring of operations and behaviors in anticipation of environmental forces.

planning: the act of determining the organization's goals and defining the means for achieving them.

privacy laws: legal rights of employees regarding who has access to information about their work history and job performance.

procedure: a set of step-by-step directions that explain how activities or tasks are to be carried out.

process theories: rationalesthat attempt to explain how workers select behavioral actions to meet their needs and determine their choices.

profitability ratios: measurements of an organization's ability to generate profits.

quality: reflects the degree to which a goods or services meet the demands and requirements of the marketplace.

quantitative approach: using quantitative techniques, such as statistics, information models, and computer simulations, to improve decision making.

queuing theory: a rationale that helps allocate services or workstations to minimize customer waiting and service cost.

quotas: government regulations that limit the import of specific products within the year.

recruitment: activities an organization uses to attract a pool of viable candidates.

reengineering: redesigning processes requiring input from every employee in the company to achieve dramatic improvements in cost, quality, service, and speed.

referent power: influence that results from leadership characteristics that command identification, respect, and admiration from subordinates (also known as charismatic power).

resources: the people, information, facilities, infrastructure, machinery, equipment, supplies, and finances at an organization's disposal.

reward power: the authority to reward others.

risk: the environment that exists when a manager must make a decision without complete information.

rule: an explicit statement that tells a supervisor what he or she can and cannot do.

satisfice: the making of the best decision possible with the information, resources, and time available.

scalar principle: a system that demonstrates a clearly defined line of authority in the organization that includes all employees.

selective perception: the tendency to single out for attention those aspects of a situation or person that reinforce or appear consistent with one's existing beliefs, values, or needs.

self-fulfilling prophecy: a belief that a manager can, through his or her behavior, create a situation where subordinates act in ways that confirm his or her original expectations.

simulation: a broad term indicating any type of activity that attempts to imitate an existing system or situation in a simplified manner.

situational theory: see contingency theory.

small-batch production: manufacturing of a variety of custom, made-to-order products.

social network: see grapevine.

strategic change: revision that takes place when a company changes its tactics (strategy) - possibly even its mission statement - to achieve current goals.

strategic plan: an outline of steps designed with the goals of the entire organization as a whole in mind, rather than with the goals of specific divisions or departments.

structural change: variation that occurs when a company changes its procedures, policies, and rules, and as a result, its organizational structure.

structured problems: familiar, straightforward, and clear difficulties with respect to the information needed to resolve them.

tactical plan: steps detailing the actions needed to achieve the organization's larger strategic plan.

tariffs: taxes placed on imports and/or exports in response to a political event.

team structure: organizational design that places separate functions into a group according to one overall objective.

technology: the knowledge, machinery, work procedures, and materials that transform inputs into outputs.

telecommuting: a work arrangement that allows at least a portion of scheduled work hours to be completed outside of the office, with work at home as one of the options (also known as flexiplace).

Total Quality Management (TQM): a philosophy that states that uniform commitment to quality in all areas of the organization promotes a culture that meets consumers' perceptions of quality.

twinning: see job sharing.

unity of command: principle that states that an employee should have one and only one supervisor to whom he or she is directly responsible.

unstructured problems: difficulties that involve ambiguities and information deficiencies and often occur as new or unexpected situations.

validity: proof that the relationship between a selection device and some relevant job criterion exists.

vertical job loading: see job enrichment.

vision: the ability of the leader to bind people together with an idea.

wholly-owned subsidiary: a foreign firm owned outright, or with a controlling interest, by an out-of-country firm.

work specialization: the degree to which organizational tasks are divided into separate jobs (also known as the division of labor).

zero defects: a program that emphasizes doing it right the first time.