Glossary for Management
A discrepancy between an existing and a desired state of affairs
Any alterations in people, structure, or technology
A group of people with formally assigned roles who work together to a
chieve the stated
goals of the group.
Management function that involves the process of determining what tasks are to be done,
who is to do them, how the tasks are to be grouped, who reports to whom, and where
decisions are to be made.
A person who plans, organizes, leads, and controls the work of others so that the
organization achieves its goals.
The managers of an organization; or, the study of what managers do.
Refers to the manager’s four basic functi
ons of planning, organizing, leading, and
Managers at the top management level of an organization.
Manger at the bottom management level of an organization, also called a supervisor, who
supervisors as s
The motivation and skills required to gain a management position, including intellectual,
emotional, and interpersonal skills.
A dominant concern or value that directs an individual’s career choices and th
at the person
will not give up if a choice must be made.
Any computerized processes, practices, or systems that facilitate the processing and
transportation of data or information.
The extension of a firm’s sales or m
anufacturing to new markets abroad.
An arrangement whereby a firm (the licensor) grants a foreign firm the right to use
The granting of a right by a parent company to another firm to do business in a prescribed
Operations in one country controlled by entities in a foreign country.
An agreement between potential or actual competitors to achieve common objectives.
The participation of two or more
companies in an enterprise such that each party contributes
assets, owns the entity to some degree, and shares risk.
A firm that is owned 100% by a foreign firm.
Any firm that engages in international trade
or investment; also refers to business activities
that involve the movement of resources, goods, services, and skills across national
The export or import of goods or services to consumers in another country.
The performance of the management process across national boundaries.
An internationally integrated company over which equity
based control is exercised by a
parent corporation that is owned and managed essenti
ally by the nationals of the country in
which it is domiciled.
An economy in which some sectors are left to private ownership and free market
mechanisms, while others are largely owned and managed by the government.
he market value of all goods and services that have been bought for final use during a
period of time, and therefore the basic measure of a nation’s economic activity.
The rate at which one country’s currency can be exchanged for another cou
The unrestricted exchange of goods among participating countries.
The result of two or more nations minimizing trade restrictions to obtain the advantages of
free trade area
A type of economic
integration in which all barriers to trade among members are removed.
A situation in which trade barriers among members are removed and a common trade policy
exists with respect to nonmembers.
A system in which no barriers to
trade exist among member countries, and a common
external trade policy is in force that governs trade with nonmembers; factors of production,
such as labor, capital, and technology, more freely among members.
A governmental influence that i
s usually aimed at reducing the competitiveness of imported
products or services.
Basic beliefs about what is important an unimportant, and what one should and should not
The transfer, often to another country, of systemati
c knowledge for the manufacturing of a
product, for the application a process, or for the rendering of service; it does not extend to
the mere sales or lease of goods.
A tendency to view members of one’s own group as the center of the univer
se and to view
other social groups less favorably than one’s own.
A management philosophy orientated toward pursuing a limited number of individual
A management philosophy oriented toward larger areas, including
the global marketplace.
The process of setting goals and courses of action, developing rules and procedures, and
forecasting future outcomes.
A comparative evaluation stating or implying that something is good or bad, right or
or better or worse.
The study of standards of conduct and moral judgment; also, the standards of right conduct.
A society’s accepted norms of behavior.
The characteristic set of values and ways of behaving
that employees in an organization
The obvious signs and symbols of corporate culture, such as organizational structure,
policies, and dress codes.
In organizational behavior, the ceremonial events, written a
nd spoken comments, and actual
behaviors of an organization’s members that contribute to creating the organizational
values and beliefs
The guiding standards of an organization, such as“the customer is always right” or “don’t be
at should be practiced, as distinct from what is practiced.
signs and symbols
Practices and actions that create and sustain a company’s culture.
The repeated tales and anecdotes that contribute to a company’s culture by illustrating and
ng important company values.
building events or activities that symbolize the firm’s values and help
convert employees to these values.
The extent to which companies should or do channel reso
urces toward improving the quality
of life of one or more segments of society other than the firm’s own stockholders.
Any person or group that is important to the survival and success of the corporation.
The idea that
corporations should be free to strive for profits so long as they commit no
A rating system used to evaluate a corporation’s performance with regard to meeting its
The activities of employe
es who try to report organizational wrongdoing.
Planning and implementing organizational systems and practices to mange people in a way
that maximizes the potential advantages of diversity while minimizing its potential
Describes a workforce composed of two or more groups, each of which can be identified by
demographic or other characteristics.
Attributing specific behavioral traits individuals on the basis of their apparent membership
A bias that results from prejudging someone on the basis of the latter’s particular trait or
A behavioral bias toward or against a person based on the group to which the person
Symbolically appointing a smal
l number of minority
group members to high profile
instead of more aggressively achieving full representation for that group.
Usually, the association of women with certain behaviors and possibly (often lower
A relationship between two people in which the more experienced mentor provides support,
guidance, and counseling to enhance the protégé’s success work and in other areas of life.
A choice made between available alternatives.
e process of developing and analyzing alternatives and choosing from among them.
A discrepancy between a desirable and an actual situation.
A decision that is repetitive and routine and can be made by using a definite systemat
The unique way each person defines stimuli, depending on the influence of past experiences
and the person's present needs and personality.
A rule of thumb or an approximation applied as a shortcut to decision making.
Unconsciously giving disproportionate weight to the first information you hear.
The tendency to rely on a rigid strategy or approach when solving a problem.
The boundaries on rational decision making imposed
by one's values, abilities, and limited
capacity for processing information.
To stop the decision
making process when satisfactory alternatives are found, rather than
reviewing solutions until an optimal alternative is discovered.
Solving problems by thinking through the process involved from beginning to end,
imagining, at each step, what actually would happen.
Two or more persons interacting in such a manner that each person influences and is
influenced by each other p
erson, and who may or may not have unanimity of purpose.
The attraction of the group for its individual members.
The informal rules that groups adopt to regulate and regularize the behavior of group
The mode of thi
nking in a cohesive group in which the desire to achieve group consensus
overrides potentially valuable individual points of view of its members.
stimulating technique in which prior judgments and criticisms are specifically
bidden from being expressed and thus inhibiting the free flow of ideas which are
A method for doing or making something and consisting of a goal and a course of action.
The process of setting goals and courses of action, develop
ing rules and procedures, and
forecasting future outcomes.
A specific result to be achieved; the end result of a plan.
Specific results toward which effort is directed.
A plan that states in words what is to be achieved
A financial plan showing financial expectations for a specific period.
Plans that shows graphically or in charts what is to be achieved and how.
A plan that outlines the course of action a firm plans to pursue
in becoming the sort of
enterprise it wants to be, given the firm's external opportunities and threats and its internal
strengths and weaknesses.
A plan that shows how top management's plans are to be carried out at the departmental,
A tactical short
term plan showing how each department of a business will contribute to top
term plan that shows the detailed daily steps of business operations.
A plan tha
t lays out all the steps in proper sequence to a single
use, often one
A plan established to be used repeatedly, as the need arises.
A standing plan that sets broad guidelines for the enterprise.
lan that specifies how to proceed in specific situations that routinely arise.
A highly specific guide to action.
hierarchy of plans
A set of plans that includes the enterprise
wide plan and the derivative plans of subsidiary
units required to help
achieve the enterprise
A technique in which supervisor and subordinate jointly set goals for the latter and
periodically assess progress toward those goals.
An assumption made about the future.
To estimate or calculate in advance or to predict.
A type of forecasting in which statistical methods are used to examine data and find
underlying patterns and relationships; includes time
series methods and causal models.
Predictive techniques that emphasize logical, unbiased human judgment and may include
both technological and judgmental methods.
A set of observations taken at specific times, usually at equal intervals, to identify
Forecasting techniques that develop projections based on the mathematical relationship
between a certain factor and the variables believed to influence or explain that factor.
Estimating a company factor (su
ch as sales) based on other influencing factors (such as
advertising expenditures or unemployment levels).
jury of executive
A qualitative forecasting technique in which a panel of executives are given pertinent data
and asked to make independent
sales forecasts, which are then reconciled in an executive
meeting or by the company president.
A forecasting technique that gathers and combines the opinions of the sales people on what
they predict sales will be in the forthcoming
The procedures used to develop and analyze current customer
related information to help
managers make decisions.
Information for analyzing a situation that has already been collected or published.
Information specifically collected to address a current problem.
Systematic techniques used to obtain and analyze public information about competitors.
The process of identifying and pursuing the organization
's strategic plan by aligning internal
capabilities with the external demands of its environment, and then ensuring that the plan is
being executed properly.
A general statement of an organization's intended direction that evokes emotional feelings
Broadly outlines the enterprise's purpose and serves to communicate who the organization
is, what it does, and where it's headed.
A course of action that explains how an enterprise will move from the business i
t is in now
to the business it wants to be in.
A plan that identifies the portfolio of businesses that comprise a corporation and how they
relate to each other.
A strategy that identifies how to build and str
engthen the business's long
position in the marketplace.
The overall course or courses of action and basic policies that each department is to follow
in helping the business accomplish its strategic goals.
A growth strategy to boost sales of present products by more aggressively permeating the
organization's current markets.
A strategic growth alternative of aggressively expanding into new domestic and/or overseas
The strategy of improving products for current markets to maintain or boost growth.
Acquiring ownership or control of competitors who are competing in the same or similar
markets with the same or similar products.
A growth strategy in which a company owns or controls its own suppliers and/or distribution
A corporate strategy whereby managers try to better utilize their organizational resources by
developing new products
and new markets.
A strategy of expanding into other industries or markets related to a company's current
Diversifying into other products or markets that are not related to a firm's pr
The reduction of activities or operations to reduce investment.
Selling or liquidating the individual businesses of a larger company.
A temporary network of independent companies linked by in
A competitive strategy by which a company aims to be the low
cost leader in its industry.
A competitive strategy aimed at distinguishing a company from its competitors by focusing
on the attr
ibutes of its products or services that consumers perceive as important.
A strategy in which a business selects a narrow market segment and builds its strategy on
serving those in its target market better or more cheaply than its generalist
The basis for superiority over competitors and thus for hoping to claim certain customers.
An organizational entity that contains several related businesses.
decentralized business units, each with its own products, clients, competitors, and
An organization whose design is not defined by, or limited to, the horizontal, vertical, or
external boundaries imposed by a predef
An organization that has developed the capacity to continuously adapt and change because
all members take an active role in identifying and resolving work
Knowledge that's cre
ated by collaborative information sharing and social interaction that
lead to organizational members taking appropriate actions.
A measure of how appropriate organizational goals are and how well an organization is
A strategic planing tool for analyzing a company's strengths, weaknesses, opportunities, and
The set of forces with which an organization interacts.
A strategic control method
aimed at identifying previously unidentified or undetected
critical events that could influence the company's strategy.
A process through which a company learns how to become the best in one or more areas by
analyzing and comparing the pract
ices of other companies that excel in those areas.
In strategic planning, a business in a high
growth industry, but with low relative market
A business with a high relative market share in a low
growth industry such that min
investments can and need be made to continue to withdraw relatively high quantities of cash.
A business in a low
growth, unattractive industry that also has low relative market share and
thus should usually be divested.
A hypothetical s
equence of events constructed for the purpose of focusing attention on
causal processes and decision points.
To gain a competitive edge by concentrating a company's resources on key strategic goals or
ve learning in an organization, especially the knowledge of how to coordinate
diverse design and production skills and integrate multiple streams of technologies.
A chart that illustrates the organizationwide division of work by chartin
g who is accountable
to whom and who is in charge of what department.
chain of command
The path a directive and/or answer or request should take through each level of an
organization; also called a scalar chain or the line of authority.
unity of command
The management principle that each person should report to only one manager.
The informal contacts, communications, and habitual ways of doing things that employees
The process through which an organizat
ion's activities are grouped together and assigned to
managers; the organizationwide division of work.
A form of organization that groups a company's activities around essential functions such as
manufacturing, sales, or fin
An organizational design with low departmentalization, wide spans of control, centralized
authority, and little formalization.
An organizational design that groups similar or related occupational specialties to
An organizational structure made up of separate, semiautonomous units or divisions.
An organizational structure in which the entire organization is made up of work groups or
A form of organization in which the firm's major departments are organized so that each can
manage all or most of the activities needed to develop, manufacture, and sell a particular
product or product line.
Similar to divisional organization except that generally self
contained departments are
organized to serve the needs of specific groups of customers.
An arrangement in which departments of an organization focu
s on particular marketing
channels, such as drugstores or grocery stores.
The means through which a manufacturer distributes its products to its ultimate customers.
An organization in which one or more forms of depar
tmentalization are imposed on top of
an existing one.
An organizational structure that assigns specialists from different functional departments to
work on one or more projects.
An organizational structure in which empl
oyees continuously work on projects.
The process of achieving unity of action among interdependent activities.
Achieving coordination through personal interactions and communicated responses to a
ight to take action, to make decisions, and to direct the work of others.
A manager authorized to issue orders to subordinates down the chain of command.
A manager without the authority to give orders down the chain of command
(except in his or
her own department); generally can only assist and advise line managers in specialized areas
such as human resources management.
Narrowly limited power to issue orders down the chain of command in a specific function
area such as personnel testing.
Disagreements between a line manager and the staff manager who is giving him or her
The act of passing down authority from supervisor to subordinate.
The act of giving
employees the authority, tools, and information they need to do their jobs
with greater autonomy and confidence.
The degree to which decision making is concentrated at a single point in the organization.
The degree to whi
level employees provide input or actually make decisions.
The degree to which jobs within the organization are standardized and the extent to which
employee behavior is guided by rules and procedures.
organization in which department heads have authority for most decisions in their
divisions, while the company's headquarters office focuses on controlling essential
span of control
The number of subordinates reporting directly to a s
An organizational structure characterized by close adherence to the established chain of
command, highly specialized jobs, and vertical communications.
An organizational structure characterized by
flexible lines of authority, less specialized jobs,
and decentralized decisions.
Dramatically reducing the size of a company's workforce.
A group of people committed to a common purpose, set of performance goals, and approach
for which th
ey hold themselves mutually accountable.
A system of interconnected or cooperating individuals.
A formally assigned, permanent group of managers or other employees drawn from across a
graphic areas, and hierarchical levels to take the initiative in
finding and solving problems.
Cooperating individuals who are interconnected only informally to share information and
help solve each other's problems
Networking through the use of collaborative computing software like Lotus Notes.
An example of e
based communications that allow one or more group members to file
messages on various topics to be pic
ked up by other group members via telecommunications
An organization structure based on electronic networks using the Internet, intranets, and
An organization in which the widespread use of teams
, networks, and similar structural
mechanisms means that the boundaries separating organizational functions and hierarchical
levels are reduced and more permeable.
The boundary represented by differences in organizational level or statu
s across which
communications may be distorted or constrained due to the status difference.
The perceived limited actions of a specific organizational position.
The special interests or agendas within an organization that
may oppose each other.
The boundary caused by identifying with those groups with which one has shared
experiences and with which one believes one shares fundamental values.
A structure that is organized around cu
oriented processes performed by multi
functional teams rather than formal functional departments.
An organization in which power is distributed between a central unit and a number of
constituent units, but th
e central unit's authority is intentionally limited.
An organization composed of small, individual, more
less autonomous and self
Actually filling a firm's open positions; also, the personnel process that
includes six steps:
job analysis, personnel planning; recruiting, interviewing, testing and selection, and training
The procedure used to determine the duties of particular jobs and the kinds of people (in
terms of skills and
experience) who should be hired for them.
A document that identifies a particular job, provides a brief job summary, and lists specific
responsibilities and duties of the job.
The human qualifications in terms of traits
, skills, and experiences required to accomplish a
A form used by managers to determine the duties and functions of a job through a series of
questions that employees answer.
The process of determining t
he organization's future personnel needs, as well as the methods
to be used to fill those needs.
Company records showing present performance and promotability of inside candidates for
the most important positions.
A card prepared for each position in a company to show possible replacement candidates
and their qualifications.
Attracting a pool of viable job applicants.
Publicizing an open job to employees (often by literally pos
ting it on bulletin boards) and
listing its attributes, like qualifications, supervisor, working schedule, and pay rate.
A temporary worker hired by an employer to fill short
term needs; not a permanent, full
time, or part
An agency retained by employers to seek out top management talent.
A form that requests information such as education, work history, and hobbies from a job
candidate as a means of quickly collecting verifiable histor
A development and/or selection device wherein management candidates spend two or three
days performing realistic management tasks under the observation of appraisers.
The process of providing new employ
ees with basic information about the employer, such as
company policies, working hours, or parking arrangements.
The process of providing new employees with information they need to do their jobs
Training in which a person learns a job while he or she is working at it.
A manager's evaluation of and feedback on an employee's work performance.
A performance evaluation method that involves collecting performance inform
ation on an
employee all around that person
for instance, from subordinates, supervisors, peers, and
internal and external customers.
All forms of pay or rewards that go to employees and arise from their employment.
pensation based on an agreed rate for a set period of time.
Compensation based on a set hourly pay rate for work performed.
Any financial reward that is contingent on a worker's performance, such as commissions or
Supplements to wages or pay that employees get as a result of their working for an
Legally mandated insurance that is paid by state agencies to workers who are terminated
through no fault of their
own; the funds come from a tax on the employer's payroll.
A legally mandated benefit that pays income and medical benefits to work
victims or their dependents, regardless of fault.
ultistage displinary technique that uses oral reminders of the violated rule; then written
reminders; followed by mandatory one
day leaves; and finally, if the behavior is not
Alegislated requirement that employers
make an extra effort to hire and promote those in a
protected (women or minority) group.
Leadership is one person influencing another to willingly work toward a predetermined
Trait theory in leadership, is the theory t
hat leaders have basic identifiable traits or
characteristics that contribute to their success as leaders.
oriented leader is a leader who focuses on the needs of employees and
emphasizes building good interpersonal relat
centered leader is a leader who focuses on production and on a job's technical aspects.
Close supervision is a leadership style involving close, hands
on monitoring of subordinates
and their work.
faire leader is a leader who takes a hands
off approach toward supervising
General leader is a leader who takes a middle
ground approach between close supervision
Transactional behaviors are leadership actions that focus on accomplishing the tasks at hand
and on maintaining good working relationships by exchanging promises of rewards for
adership is the leadership process that involves influencing major
changes in the attitudes and assumptions of organization members and building commitment
for the organization's mission, objectives, and strategies.
Framing, in decision
the idea that the way a problem is presented can influence
member exchange (LMX) theory is the theory that leaders may use different
leadership styles with different members of the same workgroup, bas
ed in part on perceived
similarities and differences with the leader.
An organizationwide management system that focuses all functions of the business on
maximizing customer satisfaction at continually lower real costs.
The intensity of a person's desire to engage in some activity.
Motives that lie dormant until the proper conditions arise to bring them forth or make them
A motive that expresses itself in
J. S. Adams's theory that people have a need for, and therefore value and seek, fairness in
In motivation, the probability that a person's efforts will lead to performance.
The perceived correlation between successful performance and obtaining the reward.
In motivation, the perceived value a person ascribes to the reward for certain efforts.
Behavior that appears to operate on or have an influe
nce on the subject's environment.
A reward that is contingent or dependent on performance of a particular behavior.
The technique of changing or modifying behavior through the use of contingent rewards or
The act of rewarding desired behavior; or the actual rewards, such as praise or bonuses,
given each time the desired behavior occurs.
The behavioral modification technique of withholding positive reinforcement so tha
time the undesired behavior disappears.
reinforcing the desirable behavior by removing something undesirable from the situation.
A behavioral modification option that applies penalties for the undesired behavior t
the possibility that it will recur.
Any compensation method based on merit or performance rather than across
variable pay plan
A compensation plan that may reduce or increase some portion of th
e individual employee's
pay, depending on whether the company meets its financial goals.
An incentive plan that engages many or all employees in a common effort to achieve a
company's productivity objectives and in which they share in the
a salary increase
based on individual performance.
A financial reward given to an employee as soon as landable performance is observed.
The number and nature of specific tasks or activities in
An increase in the number of similar tasks assigned to a job.
The systematic movement of a worker from job to job to improve job satisfaction and reduce
The inclusion of opportunities for achie
vement and other motivators in a job by making the
job itself more challenging.
Authorizing and enabling employees to do their jobs with greater autonomy.
The organizational program of providing continuing education
and training to employees
throughout their careers.
The exchange of information and the transmission of meaning.
The vehicle that carries the message in the communication process.
The receiver's response to
the message that was actually received in the communication
Communication that occurs between two individuals.
Communication that occurs among several individuals or groups.
meaning of words.
The nonspoken aspects of communication, such as a person's manner of speaking, facial
expressions, or body posture, that express meaning to others.
Messages that are recognized as official b
y the organization, such as orders from superiors
to subordinates, sales reports, and status reports.
Communication not officially sanctioned by the organization, such as rumors heard through
lectronic transmission of data, text, graphics, voice (audio), or image (video) over any
An information system that assists management in semistructured or unstructured decision
making by combining data, analytical models
, and user
A computerized support system that lets group members work simultaneously on a single
document from a number of interconnected or network computers.
A computerized support
system that allows each group member to put his or her daily
schedule into a shared database so that each can identify the most suitable times to schedule
meetings or to attend currently scheduled meetings.
mail type of sy
stem that automates the flow of paperwork from person to person.
The substitution of telecommunications and computers for the commute to a central office.
Any formal program that lets employees participate in fo
rmulating important work decisions
or in supervising all or part of their own work activities.
The degree of interpersonal attractiveness within a group, dependent on factors like
proximity, attraction among the individual group members
, group size, intergroup
competition, and agreement about goals.
A team formed to work in the short term on a given issue such as increasing productivity.
Team formed to identify and solve work
A team that has considerable input into managing the activities in their own work area but
are still headed by a supervisor.
A highly trained team of employees including 6 to 18 people on average, who are fully
ble for turning out a well
defined segment of finished work. Also called a self
directed work team.
A team of 6 to 12 employees that meets about once per week on company time to solve
problems affecting its work area.
team of people who operate as a semi
autonomous unit to create and develop a new
A work team composed of multinational members whose activities span many countries.
A change in a firm's strategy, mission, or visi
The radical redesign of business processes to cut waste, to improve cost, quality, and
service; and to maximize the benefits of information technology, generally by questioning
how and why things are being done as they are.
A step in psychologist Kurt Lewin's model of change that involves reducing the forces for
the status quo, usually by presenting a provocative problem or event to get people to
recognize the need for change and to search for new solutions.
step in psychologist Kurt Lewin's model of change aimed at using techniques and actually
altering the behaviors, values, and attitudes of the individuals in an organization.
A step in psychologist Kurt Lewin's model of change aimed at preventi
ng a return to old
ways of doing things by instituting new systems and procedures that reinforce the new
A leader who champions organizational change, often by cajoling, inspiring, and negotiating
Guidance from leaders who possess envisioning, energizing, and enabling qualities that
mobilize and sustain activity within an organization.
The managerial role of building and clarifying organizational changes so that em
accomplish their new tasks.
A leadership style characterized by influencing an organization to move toward a vision by
winning the commitment of others who then aid in the process.
oach to organizational change in which the employees themselves formulate the
change that's required and implement it, usually with the aid of a trained consultant.
The process of collecting data from employees about a system in need of ch
ange, and then
feeding that data back to the employees so that they can analyze it, identify problems,
develop solutions, and take action themselves.
Organizational change techniques aimed at enabling employees to develop a bet
understanding of their own and others' behaviors for the purpose of improving that behavior
such that the organization benefits.
Also called laboratory or t
group training, the basic aim of this organizational development
e is to increase participants' insight into their own behavior and that of others by
encouraging an open expression of feelings in a trainer
The process of improving the effectiveness of a team through action research or other
Meeting an organizational meeting aimed at clarifying and revealing intergroup
misperceptions, tensions, and problems so that they can be resolved.
The process of collecting data from attitude surveys filled out
by employees of an
organization, then feeding the data back to workgroups to provide a basis for problem
analysis and action planning.
An intervention technique in which employees collect information on existing formal
nizational structures and analyze it for the purpose of redesigning and implementing
new organizational structures.
An organization development application aimed at effecting a suitable fit among a firm's
strategy, structure, cultur
e, and external environment.
An organizational development program to create or change a company's strategy by
analyzing the current strategy, choosing a desired strategy, designing a strategic change
plan, and implementing
the new plan.
A situation in which an employee has conflicting orders, such that compliance with one
would make it difficult or impossible to comply with the other.
A conflict occurring between individuals or between
individuals and groups.
A disagreement between organizational units such as production and sales departments or
between line and staff units.
Moving away from or refusing to discuss a conflict issue.
In conflict management, diminishing or avoiding a conflict issue.
Giving in to the opponent in an attempt to end a conflict.
An approach to conflict management and negotiating that presumes a win
Settling a conflict through mutual concessions.
management style in which both sides work together to achieve agreement.
Any unauthorized taking of company property by employees for their personal use.
Task of ensuring that activities are getting the desired results.
A type of control that focuses on preventing anticipated problems since it takes place in
advance of the actual work activity.
A type of control tha
t takes place while a work activity is in progress.
A type of control that takes place after a work activity is done
Control that predicts results and takes corrective action before the operation or project is
A control system in which work may not proceed to the next step until it passes an
intermediate checkpoint step.
Any control tool in which the project or operation being controlled is completed first, and
then results a
re measured and compared to the standard.
Control procedures that are based on maintaining control generally through external means,
by setting standards, comparing the actual results to the standard, and then taking corrective
action, and including diagnostic, boundary, and interactive control systems.
An approach to control that emphasizes the use of external market mechanisms to establish
the standards used in the control system.
ach to control that emphasizes organizational authority and relies on administrative
rules, regulations, procedures, and policies.
An approach to control in which employee behavior is regulated by the shared values,
norms, traditions, rituals
, beliefs, and other aspects of the organization's culture.
step process including measuring actual performance, comparing actual
performance against a standard, and taking managerial action to correct deviations or
A term used to describe when a manager is out in the work area, interacting directly with
employees, and exchanging information about what's going on.
A category of control tools
that rely on the employees' self
control and commitment to doing
things right to make sure things stay in control.
A control method, such as a budget, which ensures that standards are being met and that
variances are diagnosed a
Policy, such as a code of conduct, that establishes rules and identifies the actions and pitfalls
that employees must avoid.
Control method that involves direct, face
face interaction wi
th employees so as to
monitor rapidly changing information and respond proactively to changing conditions.
Sometimes called management by exception, this rule holds that employees should be left to
pursue the standards set by manage
ment, and only significant deviations from the standard
should be brought to a manager's attention.
range of variation
The acceptable parameters of variance between actual performance and the standard.
Corrective action that looks
at how and why performance deviated and then proceeds to
correct the source of deviation.
Corrective action that corrects problems at once to get performance back on track.
A financial plan showing financial expectatio
ns for a specific period.
Shows the number of units to be shipped in each period (usually per month) or in general the
sales activity to be achieved and the sales revenue expected from the sales.
Shows the expected sales and
/or expenses for each of the company's departments for the
planning period in question.
Shows what the company plans to spend for materials, labor, and administration in order to
fulfill the requirements of the sales budget
Shows expected sales, expected expenses, and expected income or profit for the year.
Shows, for each month, the amount of cash the company can expect to receive and the
amount it can expect to disperse.
projected statement of the financial position of the firm.
A financial tool for measuring corporate and divisional performance calculated by taking
tax operating profit minus the total annual cost of capital.
A financial tool that measures the stock market's estimate of the value of a firm's past and
expected investment projects.
The difference between budgeted and actual amounts.
A systematic process of objectively obtaining and e
valuating evidence regarding important
aspects of the firm's performance, judging the accuracy and validity of the data, and
communicating the results to interested users.
An arithmetic comparison of one financial measure to another, gener
ally used to monitor
and control financial performance.
The obligation to perform any assigned duties.
The end result of an activity.
The accumulated end results of all the organization's work proces
ses and activities.
The overall output of goods or services produced divided by the inputs needed to generate
The performance characteristics, features and attributes, and any other aspects of goods and
services for which
customers are willing to give up resources.
The entire series of organizational work activities that add value at each step beginning with
the processing of raw materials and ending with finished product in the hands of end users.
The process of managing the entire sequence of integrated activities and information about
product flows along the entire value chain.
A quality standard that establishes a goal of no more than 3.4 defects per million parts or
Proprietary company information that's critical to its efficient and effective functioning and
The process of acquiring, managing, renewing, and disposing of assets as needed, and of
business models to exploit the value from these assets.
individuals or groups who are assigned the responsibility for a particular set of financial
outputs and/or inputs.
Responsibility centers whose manag
ers are held accountable for profit.
Responsibility centers whose managers are held accountable for generating revenues, which
is a financial measure of output.
A management tool, usually a computerized model, that tra
ces a multitude of performance
measures simultaneously and shows their interaction.
A companywide integrated computer system that gives managers real
information regarding the costs and status of ever
y activity and project in the business.
A reaction to being controlled in which employees concentrate too narrowly on the
company's control standards and thereby miss the company's more important objectives.
t actions that try to improve the manager's apparent performance in terms of the
control system without producing any economic benefits for the company.
The relative strength of an individual's identification with and involvement in an
The process of managing the resources that are needed to produce an organization's goods
A resource required for the manufacture of a product or service.
Any production system that conver
ts inputs (material and human resources) into outputs
(products or services); sometimes called the production process or technology.
A direct outcome (actual product or service) or indirect outcome (tax, wage, salary) of a
A system in which production is performed on a start
stop basis, such as for the
manufacture of made
A production process, such as those used by chemical plants or refineries, that runs for a
very long period without the start
stop behavior associated with intermittent production.
The configuration of all the machines, employee work stations, storage areas, internal walls,
and so forth that constitute the facility used to
create a firm's product or service.
A production system design in which similar machines or functions are grouped together.
A production system arrangement in which the product being built or produced stays at one
ation and the machines and tools required to build the product are brought to that location
as needed, as for the building of ships or other bulky products.
Usually a combination of process and product layouts, in which machines and
grouped into cells containing all the tools and operations required to produce a particular
product or family of products.
The process of deciding what products to produce and where, when, and how to produc
A production scheduling chart (named after management pioneer Henry Gantt) that plots
time on a horizontal scale and generally shows, for each order, the start and stop times of
s of planning and controlling projects by graphically representing the projects' steps and
the timing and links between these steps.
The specific accomplishments in a project, represented by circles in a PERT chart.
spects of a project, represented by arrows in a PERT chart.
The sequence of events in a project that in total requires the most time to complete.
The process of ensuring that the firm has adequate inventories of all par
ts and supplies
needed, within the constraint of minimizing total inventory costs.
ordering, or setup,
The costs, usually fixed, of placing an order or setting up machines for a production run.
The total costs of all units bought
to fill an order, usually varying with the size of the order.
All the costs associated with carrying parts or materials in inventory.
The costs associated with running out of raw materials, parts, or finished
An inventory management system based on a simple formula that is used to determine the
most economic quantity to order so that the total of inventory and set
up costs is minimized.
The extent to which a pr
oduct or service is able to meet customer needs and expectations.
The quality standards of the European Union.
An organizationwide management system that focuses all functions of the business on
satisfaction at continually lower real costs.
A prize created in 1987 by the U.S. Department of Commerce to recognize outstanding
achievement in quality control management.
A method of monitoring product qualit
y that requires the inspection of only a small portion
of the produced items.
Designing products with ease of manufacturing and quality in mind.
Designing products in multidisciplinary teams so that
all departments involved in the
product's success contribute to its design.
An organization that can compete successfully based on quality and productivity in an
intensely competitive global environment.
ganization that uses modern production techniques and management systems to boost
manufacturing productivity, quality, and flexibility in an environment of international
A production control method used to attain minimum in
ventory levels by ensuring delivery
of materials and assemblies just when they are to be used; also refers to a philosophy of
manufacturing that aims to optimize production processes by continuously reducing waste.
A management philosop
hy that assumes that any manufacturing process that does not add
value to the product for the customer is wasteful; also called value
A management approach that emphasizes the idea that any manufacturing proc
ess that does
not add value to the product for the customer is wasteful; also called lean manufacturing.
A computerized process for designing new products, modifying existing ones, or simulating
conditions that may affect the d
The total integration of all production
related business activities through the use of computer
systems, usually including automation and automatic guided vehicles.
The automatic operation of a s
ystem, process, or machine.
The organization of groups of production machines that are connected by automated
handling and transfer machines, and integrated into a computer system for the
purpose of combining
the benefits of made
order flexibility and mass
The total integration of all production
related business activities through the use of computer
systems, usually including automation and aut
omatic guided vehicles.
A total organizationwide approach that makes quality of service the business's number one
moment of truth
The instant when the customer comes in contact with any aspect of a business, and based on
that contact forms an opinion about the quality of your service or product.
cycle of service
Includes all the moments of truth experienced by a typical customer, from first to last.
Lists the service attributes for which customers a
re looking, as well as the relative weights
of priorities of each attribute and how the customers score your company on each of them.
The company's plan for achieving superior service.
Data presented in a form that is meaning
ful to the recipient.
Using special computer software to analyze vast amounts of customer data stored in a
company's data bank to obtain information the firm can use to be more competitive.
The task of developing and expl
oiting an organization's tangible and intangible resources.
A set of people, data, and procedures that work together to retrieve, process, store, and
disseminate information to support decision making and control.
An information system designed to help top
level executives acquire, manipulate, and use
the information they need to maintain the company's overall effectiveness.
An information system that provides decision support for
managers by producing
standardized, summarized reports on a regular basis.
An information system that provides detailed information about short
term, daily activities.
A group of interconnected computers, workstation
s, or computer devices such as printers
and data storage systems.
local area network
A communications network that spans a limited distance, such as a building or several
adjacent buildings, using the company's own telecommunications links.
A network that serves microcomputers over large geographic areas, spanning distances from
a few miles to around the globe, and that may use common carrier networks or private
networks that use small local computers to collect, store, and process
information that is sent periodically to headquarters for analysis and review.
only set of activities that has a definite beginning and ending point in time.
The task of getting a project's activities done on time, within budget, and according to
Types of Managers
(Have managers as subordinates)
ice president, production
Vice president, sales
Vice president, HR
Chief financial officer
(Have managers as subordinates)
Managers or directors
ve nonmanagers as subordinates)
Regional sales manager
Assistant HR manager
Fundamental Changes Facing Managers: A series of forces
globalized competition, technology revolution, new
are creating outcomes that include more uncertainty, more choices, and more
complexity. The result is that the organizational winners of today and tomorrow will have to be responsive,
smaller, flatter, and oriented toward adding value thro
Characteristics of More Successful International Managers.
Sensitive to cultural
When working with people from other cultures, works hard to understand
solid understanding of our products and services.
Courage to take a stand
Is willing to take a stand on issues.
Brings out the best in
Has a special talent for dealing with people.
Acts with integrity
Can be depended on to tell the trut
h, regardless of circumstances.
Is good at identifying the most important part of a complex problem or issue.
Is committed to success
Clearly demonstrates commitment to seeing the organization succeed.
Takes personal a
s well as business risks.
Has changed as a result of feedback.
Is culturally adventurous
Enjoys the challenge of working in countries other than his or her own.
Seeks opportunities to learn
Takes advantage of opportunities to do n
Is open to criticism
慳f 捲楴楣ism m楧h琠taus攠him or h敲 瑯 br敡k.*
mursu敳ef敥db慣k 敶en wh敮 o瑨敲s 慲攠r敬e捴cn琠瑯 giv攠楴⸠
䑯敳e'琠g整eso 楮v敳瑥t 楮 th楮gs th慴ah攠or sh攠捡nno琠tha
bv敲ything 䵡nag敲s 䑯 fnvo汶敳⁄e捩s楯ns
What are the organization's long
What strategies will best achieve these objectives?
should the organization's short
term objectives be?
How difficult should individual goals be?
How difficult should individual goals be?
How many subordinates should report directly to me?
How much centralization should there be in the organiza
How should jobs be designed?
When should the organization implement a different structure?
How do I handle employees who appear to be low in motivation? What is the most effective
leadership style in a given situation?
How will a specific c
hange affect worker productivity?
When is the right time to stimulate conflict?
What activities in the organization need to be controlled? How should these activities be
When is a performance deviation significant?
What type of ma
nagement information system should the organization have?
Decisions Business Team Managers Make
What accounting firm should we use?
Who should process our payroll?
Should we give this customer credit?
What bank should we use?
Should we sell bonds or stocks?
Should we buy back some of our company's stock?
Where should we recruit for employees?
Should we set up a testing program?
Should I advise settling the equal employment
Which supplier should we use?
Should we build the new plant?
Should we buy the new machine?
Which sales rep should we use in this district?
Should we start this advertising campaign?
Should we lower prices in
response to our competitor's doing so?
Comparing Programmed and Nonprogrammed Decisions
Type of Decision
Nature of Decision
defined information and decision criteria
incomplete channels of
Reliance on rules and
Reliance on principles;
Contingency Approach to Organizing
Type of Organization
Type of Environment
Behavioral organization emphasis on self
Adherence to Chain of
chain of command often bypassed
Type of Departmentalization
How Specialized Are Jobs?
jobs change daily, with situation
Degree of Decentralization
Decision making decentralized
Span of Control
Type of Coordination
Hierarchy and rules
Committees, liaisons, and special integra
The Motivational Underpinnings of 10 Motivation Methods
of Behavior and Motivation
People seek to fulfill their potential.
People differ in their estimates of how they'll
perform on a task: self
efficacy influences effort.
Maslow's Needs Hierarchy:
level needs are never
totally satisfied and aren't aroused until lower
All needs may be active, to some degree, at the
Ach, Pow, Aff:
Needs for achievement,
power, and affiliation are especially important in the work
Herzberg's Dual Factor:
Extrinsic factors prevent
dissatisfaction; intrinsic factors motivate workers.
Motivation is a function of
expectancy that effort leads to performance, performance
leads to reward, and reward is valued.
Locke's Goal Setting:
People are motivated to achieve
goals they consciously set.
People are motivated to maintain
balance between their perceived inputs and outputs.
People will continue behavior that is
rewarded and cease behavior that is punished.
Six Methods for Dealing w
ith Resistance to Change
Commonly Used in Situations
Where there is a lack of information or
inaccurate information and analysis.
Once persuaded, people will often help
with the implementation of the
Can be very time
consuming if lots of
people are involved.
Where the initiators do not have all the
information they need to design the
change, and where others have
considerable power to resist.
People who participate
committed to implementing change, and
any relevant information they have will
be integrated into the change plan.
Can be very time
Where people are resisting because
fear and anxiety.
No other approach works as well with
employee adjustment problems.
Can be time
expensive, yet still
Where someone or some group will
clearly lose out in a change, and where
that group has c
onsiderable power to
Sometimes it is a relatively easy way to
avoid major resistance.
Can be too
expensive in many
cases if it prompts
others to negotiate.
Where other tactics will not work or
are too expensive.
It can b
e a relatively quick and
inexpensive solution to resistance
Can lead to future
problems if people
Where speed is essential, and the
change initiators possess considerable
It is speedy and can overcome any kind
Can be risky if it
leaves people angry
at the initiators.
Mechanisms for Embedding and Reinforcing Organizational Culture
Primary Embedding Mechanisms
What leaders pay attention to, measure, and control
Leader reactions to critica
l incidents and organizational crises
Deliberate role modeling, teaching, and coaching
Criteria for allocation of rewards and status
Criteria for recruitment, selection, promotion, retirement, and excommunication
Secondary Articulation and Rei
Organization design and structure
Organizational systems and procedures
Design of physical space, facades, buildings
: Reprinted with permission from E. H. Schein, "Organizational Culture and Leadership." Copyright
Bass, Inc. A subsidiary of John Wiley & Sons, Inc. All rights reserved.
Examples of OD Interventions and the Organizational Levels They Affect
Primary Organizational Level Affected
Organizational confrontation meeting
Formal structural change
Differentiation and integration
Total quality management
Human Resource Management
Career planning and development
Managing workforce diversity
Integrated strategic management
the adversary do what you say in a direct way
Demanding attention to the conflict issue
Dominating the conflict
resolution process to one's own advantage
Reconciling the parties' basic interests
Settling through mutual concessions
Giving in to the opponent
Moving away from the conflict issue
: Evert Van De Vliert, Martin C. Euwema, and Sipke E. Huismans, "Managing Conflict with a
Subordinate or a Superior: Eff
ectiveness of Conglomerated Behavior,"
Journal of Applied Psychology
1995, pp. 271
81. Copyright © 1995 by the American Psychological Association. Reprinted by permission.
Components of Some Typical Production Systems
Grain, water, fish meal, personnel,
tools, machines, paper bags, cans,
Converts raw materials into
Pet food products
s, personnel, information,
computers, buildings, office
furniture, machines, utilities
Attracts customers, compiles
data, supplies management
information, computes taxes
tax services, and audited
Students, books, supplies, personnel,
Transmits information and
develops skills and knowledge
Fits a trend line to a mathematical
equation and projects
into the future by means of this equation
Predicting next quarter's sales on the basis
of four years of previous sales data
Predicts one variable on the basis of known or assumed
Seeking factors that
will predict a certain
level of sales (for example, price,
Uses a set of regression equations to simulate segments
of the economy
Predicting change in car sales as a result of
changes in tax laws
Uses one or more economic indicators to predict a future
state of the economy
Using change in GNP to predict
Uses a mathematical formula to predict how, when, and
under what circumstances a new product or t
will replace an existing one
Predicting the effect of DVD players on the
sale of VHS players
Combines and averages the opinions of experts
Polling the company's human resource
managers to predict next year's colleg
Combines estimates from field sales personnel of
customers' expected purchases
Predicting next year's sales of industrial
Combines estimates from established purchases
car dealers by a car
manufacturer to determine types and
quantities of products desired
Most effective structure
Exhibit 10.6 Woodward's Findings on Technology, Structure, and Effectiveness
Careful prehiring screening.
Establish specific policies
defining theft and fraud and
Involve employees in w
Educate and train employees
about the policies.
Have professionals review your
internal security controls.
Treat employees with respect
Openly communicate the costs
Let employees know on a
regular basis about
successes in preventing theft
Use video surveillance
equipment if conditions
out" options on
computers, telephones, and e
Make sure empl
when theft or fraud has
bu琠汥瑴tng é敯é汥lknow this 楳
啳攠瑨攠s敲v楣is of érof敳e楯n慬a
捵汴ur攠慮d 瑨攠r敬慴楯nsh楰s of
s and emé汯y敥s.
Use corporate hot lines for
Set a good example.
Control Measures for Deterring or Reducing Employee Theft or Fraud
Current assets /
Tests the organization's
ability to meet short
Current assets less inventories/
Tests liquidity more
inventories turn over
slowly or are difficult to
Debt to assets
Total debt /
The higher the ratio, the
Profits before interest and taxes/
Measures how far profits
Total interest charges
can decline before the
organization is unable
to meet its interest
er the ratio, the
inventory assets are
Total asset turnover
The fewer assets used to
achieve a given level of
sales, the more
is using the
Net profit after taxes/
Identifies the profits that
various products are
Net profit after taxes/
Measures the efficiency of
assets to generate
Popular Financial Ratios