Glossary of Management Terms

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A
Absenteeism: An individual's not showing up for work.
Accurate information: Information that provides a valid and reliable reflection of reality.
Administrative management: The branch of the classical management perspective that
focuses on managing the total organization.
Administrative model: A decision-making model that argues that decision makers (1) have
incomplete and imperfect information, (2) are constrained by bounded rationality, and (3) tend
to "satisfice" when making decisions.
Adverse impact: A selection standard for employment is aid to have an adverse impact when
minority group members or women pass that standard at a rate less than 80 percent of the pass
rate of majority group members.
Affirmative action: Intentionally seeking and hiring qualified or qualifiable employees from
racial, sexual, and ethnic groups that are underrepresented in the organization.
Age Discrimination in Employment Act: A law that prohibits discrimination against people
older than forty years; passed in 1967, amended in 1978 and 1986.
Agreeableness: In the "Big Five" model of personality, an individual's ability to get along with
others.
Americans with Disabilities Act: A law that prohibits discrimination against people with
disabilities.
Artificial intelligence (AI): The construction of computer systems, both hardware and
software, to imitate human behaviour - that is, to perform physical tasks, use thought processes,
and learn.
Attitudes: Complexes of beliefs and feelings that people have about specific ideas, situations,
or other people.
Attribution: The process of observing behaviour and attributing it to a cause.
Audit: An independent appraisal of an organization's accounting, financial, and operational
systems.
Authoritarianism: The extent to which an individual believes that power and status
differences are appropriate within hierarchical social systems such as organizations.
Authority: Power that has been legitimized by the organization.
Automation: The process of designing work so that it can be completely or almost completely
performed by machines.
Avoidance: A method of strengthening behaviour by making it clear that there will be
unpleasant consequences if the behaviour is not performed
B
Balance sheet: A list of the assets and liabilities of an organization at a specific point in time.
BCG matrix: A method of evaluating businesses relative to the growth rate of their market
and the organization's share of the market.
Behavioural management perspective: An approach to business management that

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 Glossary of Management Terms
emphasizes individual attitudes and behaviours and group processes.
Benchmarking: The process of learning how other firms do things in an exceptionally high-
quality manner.
Benefits: Things of value other than compensation that an organization provides to its workers.
Big Five personality traits: A popular personality framework based on five key traits.
Board of directors: Governing body elected by a corporation's stockholders and charged with
overseeing the general management of the firm to ensure that it is being run in a way that best
serves the stockholders' interests.
Bounded rationality: The concept that decision makers are limited by their values and
unconscious reflexes, skills, and habits.
Budget: A plan expressed in numerical terms.
Bureaucracy: A model of organization design based on a legitimate and formal system of
authority.
Bureaucratic control: A form of organizational control characterized by formal and
mechanistic structural arrangements.
Burnout: A feeling of exhaustion that may develop when someone experiences too much
stress for an extended period of time.
Business plan: A document that summarizes the business strategy and structure.
Business process change (reengineering): The radical redesign of all aspects of a business to
achieve major improvements in cost, service, or time.
Business-level strategy: The set of strategic alternatives from which an organization chooses
as it conducts business in a particular industry or market.
C
Capacity: The amount of products, services, or both that can be produced by an organization.
Cellular layout: A physical configuration of facilities used when families of products can
follow similar flow paths.
Centralization: The process of systematically retaining power and authority in the hands of
higher-level managers.
Chain of command: A clear and distinct line of authority among the positions in an
organization.
Charisma: A form of interpersonal attraction that inspires support and acceptance.
Charismatic leadership: The concept that charisma is an individual characteristic of the
leader.
Classical decision model: A prescriptive approach to decision making that tells managers how
they should make decisions; assumes that managers are logical and rational and that their
decisions will be in the best interests of the organization.
Classical management perspective: An approach to business management that consists of
two distinct branches - scientific management and administrative management.
Closed system: A system that does not interact with its environment.
Coalition: An informal alliance of individuals or groups formed to achieve a common goal.

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Code of ethics: A formal, written statement of the values and ethical standards that guide a
firm's actions.
Coercive power: The power to force compliance by means of psychological, emotional, or
physical threat.
Cognitive dissonance: An uncomfortable feeling that results when an individual has
conflicting attitudes.
Cohesiveness The extent to which members are loyal and committed to the group; the degree
of mutual attractiveness within the group

Collective bargaining The process of agreeing on a satisfactory labour contract between

management and a union

Communication The process of transmitting information from one person to another

Communication network The pattern through which the members of a group communicate

Communication skills The manager's abilities both to convey ideas and information to others
effectively and to receive ideas and information effectively from others

Compensation The financial remuneration given by the organization to its employees in

exchange for their work

Competitor An organization that competes with other organizations for resources

complete information Information that provides the manager with all the information he or
she needs

compressed work schedule A schedule whereby employees work a full forty-hour week in
fewer than the traditional five days

computer-assisted manufacturing A technology that relies on computers to design or

manufacture products

conceptual skills The manager's ability to think in the abstract

concern for people The part of the Leadership Grid that deals with the human aspects of leader
behaviour

concern for production The part of the Leadership Grid that deals with the job and task
aspects of leader behaviour

conflict A disagreement among two or more individuals or groups

conglomerate (H-form) design An organization design used by an organization made up of a

set of unrelated businesses

conscientiousness In the "Big Five" model of personality, the number of goals on which an
individual focuses

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consideration behaviour The behaviour of leaders who show concern for subordinates and
attempt to establish a warm, friendly, and supportive climate

content perspectives Approaches to motivation that try to determine what factor or factors
motivate people.

contingency perspective The point of view that appropriate managerial behaviour in a given
situation depends on, or is contingent on, a wide variety of elements

contingency planning The determination of alternative courses of action to be taken if an

intended plan is unexpectedly disrupted or rendered inappropriate

contributions In the "psychological contract" that governs employment, what the individual
provides to the organization

control The regulation of organizational activities in such a way as to facilitate goal attainment

control standard A target against which subsequent performance will be compared

controller An official in an organization who helps line managers with control activities

controlling Monitoring organizational progress toward goal attainment

coordination The process of linking the activities of the various departments of the
organization

corporate-level strategy The set of strategic alternatives from which an organization chooses
as it manages its operations simultaneously across several industries and several markets

creativity The ability of an individual to generate new ideas or to conceive of new perspectives
on existing ideas

crisis management The set of procedures the organization will use in the event of a disaster
or other unexpected calamity

customer Whoever pays money to acquire an organization's products or services

customer departmentalization Grouping activities to respond to and interact with specific

customers or customer groups

cycle time The time that an organization needs to accomplish activities such as developing,
making, and distributing products or services

data Raw figures and facts reflecting a single aspect of reality

decentralization The process of systematically delegating power and authority throughout the

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organization to middle and lower-level managers

decentralized control An approach to organizational control based on informal and organic

structural arrangements

decision making Part of the planning process that involves selecting a course of action from a
set of alternatives

decision making The act of choosing one alternative from among a set of alternatives

decision support system (DSS) An interactive system that locates and presents information
needed to support the decision-making process

decision-making process Recognizing and defining the nature of a decision situation,

identifying alternatives, choosing the "best" alternative, and putting it into practice

decision-making skills The manager's ability to recognize and correctly define problems and
opportunities and then to select an appropriate course of action to solve problems and capitalize
on opportunities

delegation The process by which a manager assigns a portion of his or her total workload to
others

Delphi group A form of group decision making in which a group is used to achieve a
consensus of expert opinion

departmentalization The process of grouping jobs according to some logical arrangement

development Teaching managers and professionals the skills needed for both present and
future jobs

diagnostic skills The manager's ability to visualize the most appropriate response to a situation

differentiation The extent to which an organization is broken down into subunits

differentiation strategy A strategy in which an organization seeks to distinguish itself from

competitors through the quality of its products or services

direct investment A firm's building or purchasing operating facilities or subsidiaries in a

different country from the one where it has its headquarters

diversification The number of different businesses that an organization is engaged in and the
extent to which these businesses are related to one another

diversity A characteristic of a group or organization whose members differ from one another
along one or more important dimensions, such as age, gender, or ethnicity

divisional (M-form) design An organization design based on multiple businesses in related

areas operating within a larger organizational framework

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dysfunctional behaviours Behaviours that detract from, rather than contribute to,
organizational performance

economic community A set of countries that agree to markedly reduce or eliminate trade
barriers among member nations (a formalized market system)

economy The prevailing and projected health and vitality of the economic system in which the
organization operates.

effective Making the right decisions and successfully implementing them

effective communication The process of sending a message in such a way that the message
received is as close in meaning as possible to the message intended

efficient Using resources wisely and in a cost-effective way

effort-to-performance expectancy The individual's perception of the probability that effort

will lead to high performance

emotional intelligence (EQ) The extent to which people are self-aware, can manage their
emotions, can motivate themselves, express empathy for others, and possess social skills

employee-cantered leader behaviour The behaviour of leaders who develop cohesive work
groups and ensure employee satisfaction

empowerment The process of enabling workers to set their own work goals, make decisions,
and solve problems within their sphere of responsibility and authority

enterprise resource planning (ERP) A large-scale information system for integrating and
synchronizing the many activities in an extended enterprise

entrepreneur Someone who engages in entrepreneurship

entrepreneurship The process of planning, organizing, operating, and assuming the risk of a
business venture

entropy A normal process leading to system decline

Equal Employment Opportunity Commission The body charged with enforcing Title VII of
the Civil Rights act of 1964

Equal Pay Act of 1963 A law that requires that men and women be paid the same amount for
doing the same job

equity theory A process perspective on motivation that suggests that people are motivated to
seek social equity in the rewards they receive for performance

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escalation of commitment A decision maker's staying with a decision even when it appears to
be wrong

established market A market in which several large firms compete according to relatively
well-defined criteria

ethical behaviour Behaviour that conforms to generally accepted social norms

ethical compliance The extent to which an organization and its members follow basic ethical
standards of behaviour

ethics An individual's personal beliefs about whether a behaviour, action, or decision is right
or wrong

European Union (EU) The first and most important international market system

executive support system (ESS) A quick-reference, easy-access application of information

systems specially designed for instant access by upper-level managers

expectancy theory A process perspective on motivation that suggests that motivation depends
on two things - how much we want something and how likely we think we are to get it

expert power The personal power that accrues to someone as a consequence of the information
or expertise that she or he they possesses

export restraint agreements Accords reached by governments in which countries voluntarily

limit the volume or value of goods they export to or import from one another

exporting Making a product in the firm's domestic marketplace and selling it in another
country

external environment Everything outside an organization's boundaries that might affect it

external recruiting Getting people from outside the organization to apply for jobs

extinction A method of weakening undesired behaviours by simply ignoring or not reinforcing

them

extranet A communications network that allows selected outsiders limited access to an

organization's internal information system, or intranet

extraversion In the "Big Five" model of personality, an individual's comfort level with
relationships

facilities The physical locations where products or services are created, stored, and distributed

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 Glossary of Management Terms

Fair Labour Standards Act A law that sets a minimum wage and requires overtime pay for
work in excess of forty hours per week; passed in 1938 and amended frequently since then

Family and Medical Leave Act of 1993 A law that sets standards for pension plan
management and provides federal insurance if pension funds go bankrupt

financial control Control of the organization's financial resources

financial statement A profile of some aspect of an organization's financial circumstances

first-line managers Managers who supervise and coordinate the activities of operating
employees

first-mover advantage Any advantage that comes to a firm because it exploits an opportunity
before any other firm does

fixed-interval schedule Provides reinforcement at fixed intervals of time, such as regular

weekly pay checks

fixed-position layout A physical configuration of facilities arranged around a single work area;
used for the manufacture of large and complex products such as airplanes

focus strategy A strategy in which an organization concentrates on a specific regional market,

product line, or group of buyers

franchising agreement A contract between an entrepreneur (the franchisee) and a parent

company (the franchiser); the entrepreneur pays the parent company for the use of its
trademarks, products, formulas, and business plans

functional (U-form) design An organization design based on the functional approach to

departmentalization

functional departmentalization Grouping jobs that involve the same or similar activities

functional group A permanent group created by the organization to accomplish a number of

organizational purposes with an unspecified time horizon

gainsharing programs Programs designed to share the cost savings from productivity
improvements with employees

GE Business Screen A method of evaluating businesses along two dimensions: (1) industry
attractiveness and (2) competitive position; in general, the more attractive the industry and the
more competitive the position, the more an organization should invest in a business

General Adaptation Syndrome (GAS) General cycle of the stress process

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 Glossary of Management Terms

General Agreement on Tariffs and Trade (GATT) A trade agreement intended to promote
international trade by reducing trade barriers and making it easier for all nations to compete in
international markets

grapevine An informal communication network among people in an organization

grievance procedure The means by which a labor contract is enforced

group Two or more people who interact regularly to accomplish a common purpose or goal

groupthink A situation that occurs when a group or team's desire for consensus and
cohesiveness overwhelms its desire to reach the best possible decision

horizontal communication Communication that flows laterally within the organization;

involves colleagues and peers at the same level of the organization and may involve individuals
from several different organizational units

human capital A term that reflects the organization's investment in attracting, retaining, and
motivating an effective workforce

human relations movement A school of thought that argued that workers respond primarily
to the social context of the workplace

human resource management (HRM) The set of organizational activities directed at

attracting, developing, and maintaining an effective workforce

importing Bringing a good, service, or capital into the home country from abroad

impression management A direct and intentional effort by someone to enhance his or her
image in the eyes of others

income statement A summary of an organization's financial performance over a period of time

incremental innovation A new product, service, or technology that modifies an existing one

individual differences Personal attributes that vary from one person to another

inducements In the "psychological contract" that governs employment, what the organization
provides to the individual

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 Glossary of Management Terms
informal leader A person who engages in leadership activities but whose right to do so has
not been formally recognized by the organization or group

informal or interest group A group created by its members for purposes that may or may not
be relevant to those of the organization

information Data presented in a way or form that has meaning

initiating-structure behaviour The behaviour of leaders who define the leader-subordinate

role in such a way that everyone knows what is expected, establish formal lines of
communication, and determine how tasks will be performed

innovation The managed effort of an organization to develop new products or services or new
uses for existing products or services

integration The degree to which the various subunits in an organization must work together in
a coordinated fashion

interacting group or team A decision-making group or team in which members openly

discuss, argue about, and agree on the best alternative

interest group A group organized by its members to attempt to influence organizations

internal environment The conditions and forces within an organization

internal recruiting Considering current employees as applicants for higher-level jobs in the
organization

interpersonal skills The ability to communicate with, understand, and motivate both
individuals and groups

intranet A communications network similar to the Internet but operating within the boundaries
of a single organization

intrapreneurs Similar to entrepreneurs except that they develop new businesses in the context
of a large organization

intuition An innate belief about something, without conscious consideration

inventory control Managing the organization's raw materials, work in process, finished goods,
and products in transit

ISO 14000 A set of standards for environmental performance

ISO 9000:2000 A set of quality standards created by the International Organization for
Standardization and revised in 2000

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 Glossary of Management Terms
job analysis A systematized procedure for collecting and recording information about jobs
within an organization

job characteristics approach An alternative to job specialization that suggests that jobs
should be diagnosed and improved along five core dimensions, taking into account both the
work system and employee preferences

job enlargement An alternative to job specialization that involves giving the employee more
tasks to perform

job enrichment An alternative to job specialization that involves increasing both the number
of tasks the worker does and the control the worker has over the job

job evaluation An attempt to assess the worth of each job relative to other jobs

job rotation An alternative to job specialization that involves systematically moving

employees from one job to another

job satisfaction or dissatisfaction An attitude that reflects the extent to which an individual
is gratified by or fulfilled in his or her work

job sharing A work arrangement in which two part-time employees share one full-time job

job specialization The degree to which the overall task of the organization is broken down into
smaller component parts

job-centered leader behaviour The behaviour of leaders who pay close attention to the job
and to work procedures involved with that job

joint venture A special type of strategic alliance in which the partners share in the ownership
of an operation on an equity basis

just-in-time (JIT) method An inventory system that has necessary materials arriving as soon
as they are needed (just in time) so that the company's investment in storage space and
inventory is minimized and the production process is not interrupted

knowledge workers Workers whose contributions to an organization are based on what they
know

labour relations The process of dealing with employees who are represented by a union

Labour-Management Relations Act A law passed in 1947 to limit union power; also known

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as the Taft-Hartley Act

layout The physical configuration of facilities, the arrangement of equipment within facilities,
or both

leader-member exchange (LMX) model A model of leadership that stresses that leaders have
different kinds of relationships with different subordinates

leaders People who can influence the behaviours of others without having to rely on force;
those accepted by others as leaders

leadership As a process, the use of noncoercive influence to shape the group's or organization's
goals, motivate behaviour toward the achievement of those goals, and help define group or
organization culture; as a property, the set of characteristics attributed to individuals who are
perceived to be leaders

leading The set of processes used to get members of the organization to work together to
further the interests of the organization

learning organization An organization that works to facilitate the lifelong learning and
personal development of all of its employees, while continuously transforming itself to respond
to changing demands and needs

least-preferred coworker (LPC) measure A measuring scale that asks leaders to describe the
person with whom they are able to work least well

legal compliance The extent to which an organization complies with local, state, federal, and
international laws

legitimate power Power granted through the organizational hierarchy; the power defined by
the organization to be accorded to people occupying particular positions

licensing An arrangement whereby one company allows another company to use its brand
name, trademark, technology, patent, copyright, or other assets in exchange for a royalty based
on sales

location The physical positioning or geographic site of facilities

location departmentalization Grouping jobs on the basis of defined geographic sites or areas

locus of control The degree to which an individual believes that his or her behaviour has a
direct impact on the consequences of that behaviour

LPC theory A theory of leadership that suggests that the appropriate style of leadership varies
with situational favorableness

Machiavellianism Behaviour directed at gaining power and controlling the behaviour of

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others

Malcolm Baldridge Award Award Named after a former secretary of commerce, this
prestigious award is given to firms that achieve major quality improvements

management A set of activities (including planning and decision making, organizing, leading,
and controlling) directed at using an organization's resources (human, financial, physical, and
information) to achieve organizational goals in an efficient and effective manner

management by wandering around An approach to communication that involves the

manager's literally wandering around and having spontaneous conversations with others

management information system (MIS) An information system that supports an

organization's managers by providing daily reports, schedules, plans, and budgets

management science The branch of the quantitative approach to management that focuses
specifically on the development of mathematical models

managerial ethics Standards of behaviour that guide individual managers in their work

managerial innovation A change in the management process in an organization

manufacturing A form of business that combines and transforms resource inputs into tangible
outcomes

maquiladoras Light assembly plants that are built in northern Mexico close to the U.S. border
and are given special tax breaks by the Mexican government

Maslow's hierarchy of needs A content perspective on motivation that suggests that people
must satisfy the following five levels of needs in the following order - physiological, security,
belongingness, esteem, and self-actualization needs

matrix design An organization design based on two overlapping bases of departmentalization

mechanistic organization An organization design that is similar to the bureaucratic model but
is most frequently found in stable environments

merit pay Pay awarded to employees on the basis of the relative value of their contributions
to the organization

merit pay plan Compensation plan that formally bases at least some meaningful portion of
compensation on merit

middle managers The relatively large set of managers responsible for implementing the
policies and plans developed by top managers and for supervising and coordinating the
activities of lower-level managers.

mission A statement of an organization's fundamental purpose

motivation The set of forces that cause people to behave in certain ways

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National Labour Relations Board (NLRB) A body established by the Wagner Act to enforce
its provisions

need for achievement The desire to accomplish a goal or task more effectively than in the past

need for affiliation The desire for human companionship and acceptance

need for power The desire to be influential in a group and to control one's environment

negative affectivity A tendency to be generally downbeat and pessimistic, to see things in a

negative way, and to seem to be in a bad mood

negative emotionality In the "Big Five" model of personality, a measure of the extent to which
an individual is poised, calm, resilient, and secure

niche A segment of a market not currently being exploited

nominal group A structured technique used to generate creative and innovative alternatives or
ideas

nonprogrammed decision A decision that is relatively unstructured and occurs much less
often than a programmed decision

nonverbal communication Any communication exchange that does not use words or that
amplifies the meanings of words to convey more than the strict definition of the words
themselves

norms Standards of behaviour that the group accepts for its members and to which it expects
them to adhere

North American Free Trade Agreement (NAFTA) An agreement between the United States,
Canada, and Mexico to promote trade with one another

open system A system that interacts with its environment

openness In the "Big Five" model of personality, a measure of an individual's rigidity of beliefs
and range of interests

operational goal A goal set by and for lower-level managers of the organization

operations control Control of the processes the organization uses to transform resources into
products or services

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operations management The branch of the quantitative approach to management that is

concerned with helping the organization more efficiently produce its products or services

operations management The total set of managerial activities used by an organization to

transform resource inputs into products, services, or both

oral communication Face-to-face conversation, group discussions, telephone calls, and other
circumstances in which the spoken word is used to transmit meaning

organic organization A very flexible and informal model of organization design, most often
found in unstable and unpredictable environments

organization A group of people working together in a structured and coordinated fashion to

achieve a set of goals

organization change Any substantive modification to some part of the organization

organization culture The set of values, beliefs, behaviours, customs, and attitudes that helps
the members of the organization understand what it stands for, how it does things, and what it
considers important

organization development (OD) An effort that is planned, organization wide, and managed
from the top, intended to increase organizational effectiveness and health through planned
interventions in the organization's process, using behavioural science knowledge

organization structure and design The set of elements that can be used to configure an
organization

organizational behaviour Behavioural perspectives on management that acknowledge that

human behaviour in organizations is very important

organizational citizenship Behaviour of individuals that makes a positive overall contribution

to the organization

organizational commitment An attitude that reflects an individual's identification with and

attachment to the organization itself

organizational life cycle Progression through which organizations evolve as they grow and
mature

organizational opportunity An area in the environment that, if exploited, may generate higher
performance

organizational size The total number of full-time or full-time-equivalent employees

organizational strength A skill or capability that enables an organization to conceive of and

implement its strategies

organizational threat An area in the environment that increases the difficulty of an

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organization's achieving high performance

organizational weakness A deficit in skills or capabilities that prevents an organization from

choosing and implementing strategies that support its mission

organizing Determining how activities and resources are to be grouped

outcomes Consequences of behaviours in an organizational setting, usually rewards

outsourcing Subcontracting services and operations to other firms that can perform them more
cheaply or better

overall cost leadership strategy A strategy in which an organization attempts to gain a

competitive advantage by reducing its costs below the costs of competing firms

owner Whoever can claim property rights to an organization

participation The process of giving employees a voice in making decisions about their own
work

path-goal theory A theory of leadership that suggests that the primary functions of a leader
are to make valued or desired rewards available in the workplace and to clarify for the
subordinate the kinds of behaviour that will lead to those rewards

perception The set of processes by which an individual becomes aware of and interprets
information about the environment

performance appraisal A formal assessment of how well an employee is doing his or her job

performance behaviours The total set of work-related behaviours that the organization
expects the individual to display

performance-to-outcome expectancy The individual's perception that performance will lead

to a specific outcome

personality The relatively permanent set of psychological and behavioural attributes that
distinguish one person from another

person-job fit The extent to which the contributions made by the individual match the
inducements offered by the organization

philanthropic giving Awarding funds or gifts to charities or other worthy causes

piece-rate incentive plan A reward system wherein the organization pays an employee a
certain amount of money for every unit she or he produces

planned change Change that is designed and implemented in an orderly and timely fashion in

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anticipation of future events

planning Setting an organization's goals and deciding how best to achieve them

policy A standing plan that specifies the organization's general response to a designated
problem or situation

political behaviour Activities carried out for the specific purpose of acquiring, developing,
and using power and other resources to obtain one's preferred outcomes

political-legal climate The government regulation of business and the relationship between
business and government.

pooled interdependence A form of interdependence in which units operate with little

interaction, and their output is simply pooled

portfolio management technique A method that diversified organizations use to determine

which businesses to engage in and how to manage these businesses to maximize corporate
performance

positive affectivity A tendency to be relatively upbeat and optimistic, to have an overall sense
of well-being, to see things in a positive light, and to seem to be in a good mood.

positive reinforcement A method of strengthening behaviour by administering rewards or

positive outcomes after a desired behaviour is performed

post action control Operations control that monitors the outputs or results after the
transformation of resources into products or services is complete

power The ability to affect the behaviour of others

preliminary control Operations control that attempts to monitor the quality or quantity of
financial, physical, human, and information resources before they actually become part of the
system

process innovation A change in the way a product or service is manufactured, created, or

distributed

process layout A physical configuration of facilities arranged around the process; used in
facilities that create or process a variety of products

process perspectives Approaches to motivation that focus on why people choose certain
behavioural options to fulfill their needs and how they evaluate their satisfaction after they
have attained these goals

product departmentalization Grouping activities around products or product groups

product innovation A change in the physical characteristics or performance of an existing

product or service or the creation of new products or services

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product layout A physical configuration of facilities arranged around the product; used when
large quantities of a single product are needed

product life cycle A model that portrays how sales volume for products changes over the life
of products

productivity An economic measure of efficiency that summarizes the value of what is

produced relative to the value of the resources used to produce it

program A single-use plan for a large set of activities

programmed decision A decision that is fairly structured or recurs with some frequency (or
both)

project A single-use plan of less scope and complexity than a program

psychological contract The overall set of expectations held by an individual with respect to
what he or she will contribute to the organization and what the organization will provide in
return

punishment A method of weakening undesired behaviours by administering negative

outcomes or unpleasant consequences when the behaviour is performed

purchasing management Management concerned with buying materials and resources

needed to produce products and services

quality The totality of features and characteristics of a product or service that bear on its ability
to satisfy stated or implied needs

quantitative management perspective An approach that applies quantitative techniques to

business management

quota A limit on the number or value of goods that can be traded

radical innovation A new product, service, or technology that completely replaces an existing
one

ratio analysis The calculation of one or more financial ratios to assess some aspect of the
organization's financial health

reactive change A piecemeal response to circumstances as they develop

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realistic job preview (RJP) The practice of providing the applicant with a realistic picture of
what it will be like to perform the job that the organization is trying to fill

reciprocal interdependence A form of interdependence in which activities flow both ways

between units

recruiting The process of attracting individuals to apply for jobs that are open

referent power The personal power that accrues to someone on the basis of identification,
imitation, loyalty, or charisma

regulator A body that has the potential to control, legislate, or otherwise influence the
organization's policies and practices

regulatory agency An agency created by the government to regulate business activities

reinforcement theory An approach to motivation that argues that behaviour that results in
rewarding consequences is likely to be repeated, whereas behaviour that results in punishing
consequences is less likely to be repeated

related diversification A strategy in which an organization operates in several businesses that

are somehow linked with one another

relevant information Information that is useful to managers in their particular circumstances

for their particular needs

resource deployment How an organization distributes its resources across the areas in which
it competes

reward power The power to give or withhold rewards, such as salary increases, bonuses,
promotions, praise, recognition, and interesting job assignments

reward system The formal and informal mechanisms by which employee performance is
defined, evaluated, and rewarded

risk propensity The extent to which a decision maker is willing to gamble when making a
decision

risk propensity The degree to which an individual is willing to take chances and make risky
decisions

robot Any artificial device that is able to perform functions ordinarily thought to be appropriate
for human beings

role ambiguity Ambiguity that arises in the role structure within a group when the sent role is
unclear and the individual does not know what is expected of him or her

role conflict Conflict that arises within the role structure of a group when the messages and
cues that make up the sent role are clear but contradictory or mutually exclusive

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 Glossary of Management Terms
role overload A consequence of a weak role structure within a group, which occurs when
expectations for the role assigned to an individual exceed his or her capabilities to perform

role structure The set of defined roles and interrelationships among those roles that the group
members define and accept

roles The parts that individual members of a group play in helping the group reach its goals

rules and regulations Standing plans that describe exactly how specific activities are to be
carried out

Sarbanes-Oxley Act of 2002 A law that requires CEOs and CFOs to vouch personally for the
truthfulness and fairness of their firms' financial disclosures and imposes tough new measures
to deter and punish corporate and accounting fraud and corruption.

satisficing The tendency to search for alternatives only until one is found that meets some
minimum standard of sufficiency

Scanlon plan A program similar to gainsharing, but the distribution of gains is tilted much
more heavily toward employees

scientific management The branch of the classical management perspective that is concerned
with improving the performance of individual workers

scope When applied to strategy, the range of markets in which an organization will compete

screening control Operations control that relies heavily on feedback processes during the
transformation of resources into products or services

selective perception The process of screening out information that we are uncomfortable with
or that contradicts our beliefs

self-efficacy An individual's beliefs about her or his capabilities to perform a task

self-esteem The extent to which a person believes that he or she is a worthwhile and deserving
individual

sequential interdependence A form of interdependence in which the output of one unit

becomes the input for another in sequential fashion

service organization An organization that transforms resources into services

single-product strategy A strategy in which an organization manufactures just one product or

service and sells it in a single geographic market

single-use plan Developed to carry out a course of action that is not likely to be repeated in
the future

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 Glossary of Management Terms

situational view of organization design A view of organization design that is based on the
assumption that the optimal design for any given organization depends on a set of relevant
situational factors

small business A business that is privately owned by one individual or a small group of
individuals and has sales and assets that are not large enough to influence its environment

social responsibility The set of obligations an organization has to protect and enhance the
societal context in which it functions

socialization Generalized norm conformity that occurs as a person makes the transition from
being an outsider to being an insider in the organization

soldiering Employees' deliberately working at a slow pace

span of management The number of people who report to a particular manager

standard operating procedure (SOP) A standing plan that outlines the steps to be followed
in particular circumstances.

standing plan A plan developed for activities that recur regularly over a period of time

state of certainty A condition in which the decision maker knows with reasonable certainty
what the alternatives are and what conditions are associated with each alternative

state of risk A condition in which the availability of each alternative and its potential payoffs
and costs are all associated with probability estimates

state of uncertainty A condition in which the decision maker does not know all the alternatives,
the risks associated with each, or the consequences each alternative is likely to have

statistical quality control (SQC) A set of specific statistical techniques that can be used to
monitor quality; includes acceptance sampling and in-process sampling

steps in rational decision making Recognize and define the decision situation; identify
appropriate alternatives; evaluate each alternative in terms of its feasibility, satisfactoriness,
and consequences; select the best alternative; implement the chosen alternative; follow up and
evaluate the results of the chosen alternative

stereotyping The process of categorizing or labeling people on the basis of a single attribute

stock option plan An aspect of compensation established to give senior managers the option
to buy company stock in the future at a predetermined fixed price

strategic alliance A cooperative arrangement between two or more firms for mutual gain

strategic control Control aimed at ensuring that the organization is maintaining an effective
alignment with its environment and moving toward achieving its strategic goals

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 Glossary of Management Terms
strategic goal A goal set by and for top management of the organization

strategic leadership The capability to understand the complexities of both the organization
and its environment and to lead change in the organization in order to achieve and maintain a
superior alignment between the organization and its environment

strategic partner (strategic ally) An organization working together with one or more other
organizations in a joint venture or similar arrangement

strategy formulation The set of processes involved in creating or determining the strategies
of the organization; it focuses on the content of strategies

strategy implementation The methods by which strategies are operationalized, or executed,

within the organization; it focuses on the processes through which strategies are achieved

stress An individual's response to a strong stimulus, which is called a stressor

structural control Monitoring, and when necessary adjusting, how effectively the elements of
the organization's structure are serving their intended purpose

substitutes for leadership A concept that identifies situations in which leader behaviours are
neutralized or replaced by characteristics of subordinates, the task, and the organization

subsystem A system within another system

supplier An organization that provides resources for other organizations

supply chain management The process of managing operations control, resource acquisition,
and inventory so as to improve overall efficiency and effectiveness

SWOT An acronym that stands for strengths, weaknesses, opportunities, and threats

synergy Two or more subsystems working together to produce more than the total of what they
might produce working alone

system An interrelated set of elements functioning as a whole

tactical goal A goal set by and for middle managers of the organization

tariff A tax collected on goods shipped across national boundaries

task group A group created by the organization to accomplish a relatively narrow range of
purposes within a stated or implied time horizon

team A group of workers that functions as a unit, often with little or no supervision, to carry

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 Glossary of Management Terms
out work-related tasks, functions, and activities

team organization An organization that relies almost exclusively on project-type teams, with
little or no underlying functional hierarchy

technical innovation A change in the appearance or performance of products or services, or

in the physical processes through which a product or service passes

technical skills The skills necessary to accomplish or understand the specific kind of work
being done in an organization

technology The set of processes and systems used by organizations to convert resources into
products or services

technology Conversion processes used to transform inputs into outputs

technology The set of processes and systems used by organizations to convert resources into
products or services

telecommuting A work arrangement that allows employees to spend part of their time working
offsite, usually at home

theory A conceptual framework for organizing knowledge and providing a blueprint for action

Theory X A pessimistic and negative view of workers that is consistent with the views of
scientific management

Theory Y A positive view of workers that reflects the assumptions that human relations
advocates make

timely information Information that is available in time for appropriate managerial action

time-management skills The manager's ability to prioritize work, to work efficiently, and to
delegate appropriately

Title VII of the Civil Rights Act of 1964 Forbids discrimination on the basis of sex, race,
colour, religion, or national origin in all areas of the employment relationship

top managers The relatively small group of senior executives who manage the overall
organization

total quality management (TQM) (quality assurance) A strategic commitment by top

management to change its whole approach to business in order to make quality a guiding factor
in everything it does

training Teaching operational or technical employees how to do the job for which they were
hired

transaction-processing system (TPS) An application of information processing for basic day-

to-day business transactions

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 Glossary of Management Terms

transformational leadership Leadership that goes beyond ordinary expectations by

transmitting a sense of mission, stimulating learning experiences, and inspiring new ways of
thinking

turnover The loss of employees that occurs when people quit their job

two-factor theory of motivation A content perspective on motivation that suggests that

people's satisfaction and dissatisfaction are influenced by two independent sets of factors -
motivation factors and hygiene factors

Type A Individuals who are extremely competitive, are very devoted to work, and have a
strong sense of time urgency

Type B Individuals who are not particularly competitive, are only moderately devoted to work,
and do not have a strong sense of time urgency

unethical behaviour Behaviour that does not conform to generally accepted social norms

universal perspective The point of view that there is "one best way" to do something

unrelated diversification A strategy in which an organization operates multiple businesses

that are not logically associated with one another

valence An index of how much an individual desires a particular outcome; the attractiveness
of the outcome to the individual

validation Determining the extent to which a selection device is really predictive of future job
performance

value-added analysis The comprehensive evaluation of all work activities, materials flows,
and paperwork to determine the value that they add for customers

variable-interval schedule Provides reinforcement at varying intervals of time, such as

occasional visits by the supervisor

variable-ratio schedule Provide reinforcement after varying numbers of behaviours are

performed, such as the use of compliments by a supervisor on an irregular basis

venture capital company A group of small investors seeking to make profits on companies
that have the potential for rapid growth

vertical communication Communication that flows up and down the organization, usually

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 Glossary of Management Terms
along formal reporting lines; takes place between managers and their subordinates and may
involve several different levels of the organization

virtual organization An organization that has little or no formal structure

Vroom's decision tree approach An approach to leadership that predicts what kinds of
situations call for different degrees of group participation

whistle blowing The disclosure, by an employee, of illegal or unethical conduct on the part of
others within the organization

work team An alternative to job specialization that allows an entire group to design the work
system it will use to perform an interrelated set of tasks

workplace behaviour A pattern of action by the members of an organization that directly or

indirectly influences organizational effectiveness

World Trade Organization (WTO) An organization, which currently includes 140 member
nations and 32 observer countries, that requires members to open their markets to international
trade and to follow WTO rules

written communication Memos, letters, reports, notes, and other circumstances in which the
written word is used to transmit meaning

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