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392 terms

Principles of Management

Vocabulary
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ABC classification system
Method of managing inventories based on their total value.
Abilities
Personal characteristics used in performing a job.
absolute advantage
The ability to produce more of a good than another producer.
acceptance sampling
Statistical method of predicting the quality of a batch or a large group of products by inspecting a sample or group of samples.
active listening
Absorbing what another person is saying and responding to the person's concerns.
activity scheduling
Develops the precise timetable to be followed in producing a product or service.
affirmative action plan
Written document outlining specific goals and timetables for remedying past discriminatory actions.
Age Discrimination in Employment Act of 1968
Passed in 1968, initially designed to protect individuals ages 40 to 65 from discrimination in hiring, retention, and other conditions of employment. Amended in 1978 to include individuals up to age 70. Specifically, forbids mandatory retirement at 65 except in certain circumstances.
aggregate operations planning
Concerned with overall operations and balancing major sections of the operating system; matches the organization's resources with demands for its goods and services.
Americans with Disabilities Act of 1990 (ADA)
Gives individuals with disabilities sharply increased access to services and jobs.
apprenticeship training
System in which an employee is given instruction and experience, both on and off the job, in all of the practical and theoretical aspects of the work required in a skilled occupation, craft, or trade.
aptitude tests
Measure a person's capacity or potential ability to learn.
assembly chart
Depicts the sequence and manner in which the various components of a product or service are assembled.
assessment center
Utilizes a formal procedure to simulate the problems a person might face in a real managerial situation to evaluate the person's potential as a manager and determine the person's development needs.
audit
Method of control normally involved with financial matters; also can include other areas of the organization.
Authority
Legitimate exercise of power; the right to issue directives and expend resources; related to power but narrower in scope.
autocratic leader
Makes most decisions for the group.
avoidance
Giving a person the opportunity to avoid a negative consequence by exhibiting a desirable behavior. Also called negative reinforcement.
balance of trade
Difference between the value of the goods a country exports and the value of the goods it imports.
behavior (personal) control
Based on direct, personal surveillance.
behaviorally anchored rating scale (BARS)
Assesses behaviors required to successfully perform a job.
bet-your-company culture
Requires big-stakes decisions; considerable time passes before the results are known.
board of directors
Carefully selected committee that reviews major policy and strategy decisions proposed by top management.
bottom-up management
Philosophy popularized by William B. Given that encouraged widespread delegation of authority to solicit the participation of all employees from the bottom to the top of the organization.
Brainstorming
Presenting a problem to a group and allowing group members to produce a large quantity of ideas for its solution; no criticisms are allowed initially.
brainwriting
Technique in which a group is presented with a problem situation and members anonymously write down ideas, then exchange papers with others who build on ideas and pass them on until all members have participated.
break-even chart
Depicts graphically the relationship of volume of operations to profits.
Budget
Statement of expected results or requirements expressed in financial or numerical terms.
Burnout
Condition that occurs when work is no longer meaningful to a person.
business game
Generally provides a setting of a company and its environment and requires a team of players to make decisions involving company operations.
business strategies
Focus on how to compete in a given business.
case study
Training technique that presents real and hypothetical situations for the trainee to analyze.
central tendency
Tendency of raters to rate most employees as doing average or above-average work.
centralization
Little authority is delegated to lower levels of management.
checklist
Requires the manager to answer yes or no to a series of questions concerning the employee's behavior.
Civil Rights Act of 1991
Permits women, persons with disabilities, and persons who are in religious minorities to have a jury trial and sue for punitive damages if they can prove intentional hiring and workplace discrimination. Also requires companies to provide evidence that the business practice that led to the discrimination was not discriminatory but was related to the performance of the job in question and consistent with business necessity.
coaching
Carried out by experienced managers, emphasizes the responsibility of all managers for developing employees.
code of ethics
A document that outlines the principles of conduct to be used in making decisions within an organization.
combination strategy
Used when an organization simultaneously employs different strategies for different parts of the company.
Committee
Organization structure in which a group of people are formally appointed, organized, and superimposed on the line or line and staff structure to consider or decide certain matters.
communication
The act of exchanging information.
comparative advantage
Exists when a country can produce goods more efficiently or cheaply than other countries because of its specific circumstance.
compensation
Composed of the extrinsic rewards offered by the organization and consists of the base wage or salary, any incentives or bonuses, and any benefits employees receive in exchange for their work.
competitive advantage
Sometimes called businessspecific advantage; refers to some proprietary characteristic of the business, such as a brand name, that competitors cannot imitate without substantial cost and risk.
computer-aided design (CAD)
Generates various views of different components and assemblies.
computer-aided engineering (CAE)
Uses a product's characteristics to analyze its performance under different parameters.
computer-aided manufacturing
(CAM) Uses stored data regarding various products to provide instructions for automated production equipment.
computer-based training
Training that allows the trainee to absorb knowledge from a preset computer program and advance his or her knowledge in a self-paced format.
computer-integrated manufacturing (CIM)
Uses computer technology to incorporate all of the organization's production-related functions into an integrated computer system to assist, augment, or automate most functions.
conceptual skills
Involve understanding the relationship of the parts of a business to one another and to the business as a whole. Decision making, planning, and organizing are specific managerial activities that require conceptual skills.
concurrent (screening) control
Focuses on process as it occurs; designed to detect a problem when it occurs.
Conflict
Overt behavior that results when an individual or a group of individuals thinks a perceived need or needs of the individual or group have been blocked or are about to be blocked.
Consideration
Leader behavior of showing concern for individual group members and satisfying their needs.
contingency approach to leadership
Focuses on the style of leadership that is most effective in particular situations.
contingency approach to management
Theorizes that different situations and conditions require different management approaches.
contingency (situational) approach to organization structure
States that the most appropriate structure depends on the technology used, the rate of environmental change, and other dynamic forces.
contingency plans
Address the what-ifs of the manager's job; get the manager in the habit of being prepared and knowing what to do if something does go wrong.
continuous flow system
Operating system used by companies that produce large amounts of similar products/services flowing through similar stages of the operating system.
continuous improvement
Refers to an ongoing effort to make improvements in every part of the organization relative to all of its products and services.
contract
An agreement between two parties to carry out a transaction.
control
Process of ensuring that organizational activities are going according to plan; accomplished by comparing actual performance to predetermined standards or objectives, then taking action to correct any deviations.
control tolerances
Variation from the standard that is acceptable to the manager.
controlling
Measuring performance against objectives, determining the causes of deviations, and taking corrective action where necessary.
copyright
The protection provided to a creative work.
corporate culture
Communicates how people in an organization should behave by establishing a value system conveyed through rites, rituals, myths, legends, and actions.
corporate strategies
See grand strategies.
corporation
A business formed under state or federal statutes that is authorized to act as a legal person.
creativity
Coming up with an idea that is new, original, useful, or satisfying to its creator or to someone else.
critical-incident appraisal
Requires the manager to keep a written record of incidents, as they occur, involving job behaviors that illustrate both satisfactory and unsatisfactory performance of the employee being rated.
critical path method (CPM)
Planning and control technique that graphically depicts the relationships among the various activities of a project; used when time durations of project activities are accurately known and have little variance.
culture
Set of important understandings (often unstated) that members of a community share.
customer departmentalization
Defining organizational units in terms of customers served.
data processing
Capture, processing, and storage of data.
Decentralization
A great deal of authority is delegated to lower levels of management.
decision making
In its narrowest sense, the process of choosing from among various alternatives.
decision process
Process that involves three stages: intelligence, design, and choice. Intelligence is searching the environment for conditions requiring a decision. Design is inventing, developing, and analyzing possible courses of action. Choice is the actual selection of a course of action.
defensive (retrenchment) strategy
Used when a company wants or needs to reduce its operations.
democratic leader
Guides and encourages the group to make decisions.
Departmentalization
Grouping jobs into related work units.
dependent demand item
Subassembly or component parts used to make a finished product; their demand is based on the number of finished products being produced.
direct feedback
Process in which the change agent communicates the information gathered through diagnosis directly to the affected people.
Dissonance
Feeling of conflict felt by individual trying to make a decision.
Diversity
Including people of different genders, races, religions, nationalities, ethnic groups, age groups, and physical abilities.
economic order quantity (EOQ)
Optimal number of units to order at one time.
Effort
Results from being motivated; refers to the amount of energy an employee uses in performing a job.
Embargo
Involves stopping the flow of exports to or imports from a foreign country.
employee assistance program (EAP)
Program sponsored by the organization that attempts to help employees with stress, burnout, and other personal problems that include alcohol and drug abuse, depression, anxiety, domestic trauma, financial problems, and other psychiatric/medical problems.
employee leasing companies
Provide permanent staffs at customer companies.
empowerment
Form of decentralization in which subordinates have authority to make decisions.
entrepreneur
An individual who conceives the idea of what product or service to produce, starts the organization, and builds it to the point where additional people are needed.
entry socialization
Adaptation process by which new employees are introduced and indoctrinated into the organization.
environmental changes
All nontechnological changes that occur outside the organization.
equal employment opportunity
The right of all people to work and to advance on the bases of merit, ability, and potential.
Equal Pay Act of 1963
Prohibits wage discrimination on the basis of sex.
equity theory
Motivation theory based on the idea that people want to be treated fairly in relationship to others.
Ergonomics
Study of the interface between humans and machines
essay appraisal method
Requires the manager to describe an employee's performance in written narrative form.
ethics
A set of moral principles or values that govern behavior.
evaluation phase
Third phase in strategic management, in which the implemented strategic plan is monitored, evaluated, and updated.
exception principle
States that managers should concentrate on matters that deviate significantly from normal and let subordinates handle routine matters; also called management by exception.
expectancy
Employee's belief that his or her effort will lead to the desired level of performance.
expectancy approach
Based on the idea that employees' beliefs about the relationship among effort, performance, and outcomes as a result of performance and the value employees place on the outcomes determine their level of motivation.
exports
Goods and services that are sold abroad.
external environment
Consists of everything outside the organization.
extinction
Providing no positive consequences or removing previously provided positive consequences as a result of undesirable behavior.
extrinsic rewards
Rewards that are directly controlled and distributed by the organization.
facilities layout
Process of planning the optimal physical arrangement of facilities, including personnel, operating equipment, storage space, office space, materials-handling equipment, and room for customer or product movement.
Family and Medical Leave Act (FMLA)
Enables qualified employees to take prolonged unpaid leave for family- and health-related reasons without fear of losing their jobs.
feedback
The flow of information from the receiver to the sender.
feedback system
System in which outputs from the system affect future inputs or future activities of the system.
fixed overhead expenses
Expenses that do not change appreciably with fluctuations in the level of production or service.
fixed-position layout
A type of facilities layout where the product is too large to move and remains in one place.
flat structure
Organization with few levels and relatively large spans of management at each level.
flow process chart
Outlines what happens to a product or service as it progresses through the facility.
forced-choice rating
Requires the manager to rank a set of statements describing how an employee carries out the duties and responsibilities of the job.
formal plan
Written, documented plan developed through an identifiable process.
formal work group
Work group established and formally recognized by the organizing function of management.
formulation phase
First phase in strategic management, in which the initial strategic plan is developed.
free trade area
A region within which trade restrictions are reduced or eliminated.
functional departmentalization
Defining organizational units in terms of the nature of the work.
functional plans
Originate from the functional areas of an organization such as production, marketing, finance, and personnel.
functional strategies
Concerned with the activities of the different functional areas of the business.
Gantt chart
Planning and controlling device that graphically depicts work planned and work accomplished in their relation to each other and to time.
geographic departmentalization
Defining organizational units by territories.
glass ceiling
Refers to a level within the managerial hierarchy beyond which very few women and minorities advance.
global economy
Economy in which companies compete actively with businesses from around the world.
Gordon technique
Differs from brainstorming in that no one but the group leader knows the exact nature of the real problem under consideration. A key word is used to describe a problem area.
grand or corporate strategies
Address which businesses an organization will be in and how resources will be allocated among those businesses.
grapevine
Informal channels of communication within an organization.
graphic rating scale
Requires the manager to assess an employee on factors such as quantity of work, dependability, job knowledge, attendance, accuracy of work, and cooperativeness.
group cohesiveness
Degree of attraction each member has for the group, or the "stick-togetherness" of the group.
group conformity
Degree to which the members of the group accept and abide by the norms of the group.
group norms
Informal rules a group adopts to regulate and regularize group members' behavior.
groupthink
Dysfunctional syndrome that cohesive groups experience that causes the group to lose its critical evaluative capabilities.
growth strategy
Used when the organization tries to expand, as measured by sales, product line, number of employees, or similar measures.
halo effect
Occurs when the interviewer allows a single prominent characteristic to dominate judgment of all other traits.
Hawthorne effect
States that giving special attention to a group of employees (such as involving them in an experiment) changes their behavior.
Hawthorne studies
Series of experiments conducted in 1924 at the Hawthorne plant of Western Electric in Cicero, Illinois; production increased in relationship to psychological and social conditions rather than to the environment.
horizontal or lateral communication
Communication across the lines of the formal chain of command.
horizontal structure
Consists of two groups. One group is composed of members of senior management who are responsible for strategic decisions and policies. The second group is composed of empowered employees working together in different process teams.
human asset accounting
Determining and recording the value of an organization's human resources in its statement of financial condition.
human relations skills
Involve understanding people and being able to work well with them.
human resource forecasting
Process that attempts to determine the future human resource needs of the organization in light of the organization's objectives.
human resource planning (HRP)
Process of "getting the right number of qualified people into the right job at the right time." Also called personnel planning.
hybrid departmentalization
Occurs when an organization simultaneously uses more than one type of departmentalization.
idiosyncrasy credit
Phenomenon that occurs when certain members who have made or are making significant contributions to the group's goals are allowed to take some liberties within the group.
implementation phase
Second phase in strategic management, in which the strategic plan is put into effect.
importing
The purchasing of goods from a foreign company.
imports
Goods and services purchased abroad.
In Search of Excellence
Book by Thomas J. Peters and Robert H. Waterman, Jr., that identifies 36 companies with an excellent 20-year performance record. The authors identified eight characteristics of excellence after interviewing managers in each company.
in-basket technique
Simulates a realistic situation by requiring each trainee to answer one manager's mail and telephone calls.
income tax
A tax levied against a business's profits.
independent demand items
Finished goods ready to be shipped out or sold.
inequity
Exists when a person perceives his or her job inputs and outcomes to be less than the job inputs and outcomes of another person.
informal organization
Aggregate of the personal contacts and interactions and the associated groupings of people working within the formal organization.
informal work group
Work group that results from personal contacts and interactions among people and is not formally recognized by the organization.
initiating structure
Leader behavior of structuring the work of group members and directing the group toward the attainment of the group's goals.
innovation
Process of applying a new and creative idea to a product, service, or method of operation.
inputs
What an employee perceives are his or her contributions to the organization (e.g., education, intelligence, experience, training, skills, and the effort exerted on the job).
instrumentality
Employee's belief that attaining the desired level of performance will lead to desired rewards.
intellectual property
Ownership of ideas; gives creators of the intellectual property the exclusive right to market and sell their work.
interest tests
Determine how a person's interests compare with the interests of successful people in a specific job.
intergroup (structural) conflict
Conflict that results from the organizational structure; may be relatively independent of the individuals occupying the roles within the structure.
intermittent flow system
Operating system used when customized products and services are produced.
internal changes
Budget adjustments, policy changes, personnel changes, and the like.
international trade
The exchange of goods and services by different countries.
Internet
A global collection of independently operating, but interconnected, computers.
interpersonal communication
An interactive process between individuals that involves sending and receiving verbal and nonverbal messages.
interpersonal conflict
Conflict between two or more individuals.
intranet
A private, corporate, computer network that uses Internet products and technologies to provide multimedia applications within organizations.
intrapersonal conflict
Conflict internal to the individual.
intrapreneurship
Entrepreneurship within a large or medium-size company.
intrinsic rewards
Rewards internal to the individual and normally derived from involvement in work activities.
intuitive approach
Approach used when managers make decisions based largely on hunches and intuition.
inventory
Quantity of raw materials, in-process goods, or finished goods on hand; serves as a buffer between different rates of flow associated with the operating system.
ISO 9000
A set of quality standards for international business.
ISO 14000
Addition to the ISO 9000 to control the impact of an organization's activities and outputs on the environment.
job analysis
Process of determining, through observation and study, the pertinent information relating to the nature of a specific job.
job content
Aggregate of all the work tasks the jobholder may be asked to perform.
job depth
Refers to the freedom of employees to plan and organize their own work, work at their own pace, and move around and communicate as desired.
job description
Written statement that identifies the tasks, duties, activities, and performance results required in a particular job.
job design
Designates the specific work activities of an individual or a group of individuals.
job enlargement
Giving an employee more of a similar type of operation to perform.
job enrichment
Upgrading the job by adding motivator factors.
job knowledge tests
Measure the job-related knowledge possessed by a job applicant.
job method
Manner in which the human body is used, the arrangement of the workplace, and the design of the tools and equipment used.
job rotation
Process in which the trainee goes from one job to another within the organization, generally remaining in each job from six months to a year.
job satisfaction
An individual's general attitude about his or her job.
job scope
Refers to the number of different types of operations performed on the job.
job specification
Written statement that identifies the abilities, skills, traits, or attributes necessary for successful performance in a particular job.
just-in-time inventory control (JIT)
Inventory control system that schedules materials to arrive and leave as they are needed.
kaizen
"Good change"; a process of continuous and relentless improvement.
laissez-faire leader
Allows people within the group to make all decisions.
law of comparative advantage
Producers should produce the goods they are most efficient at producing and purchase from others the goods they are less efficient at producing.
layoff
Occurs when there is not enough work for all employees; employees will be called back if and when the workload increases.
leader
One who obtains followers and influences them in setting and achieving objectives.
Leader Behavior Description Questionnaire (LBDQ)
Questionnaire designed to determine what a successful leader does, regardless of the type of group being led.
leader-member relations
Degree to which others trust and respect the leader and the leader's friendliness.
leadership
Ability to influence people to willingly follow one's guidance or adhere to one's decisions.
leading
Directing and channeling human behavior toward the accomplishment of objectives.
lean manufacturing
A systematic approach to identifying and eliminating waste and non-value-added activities.
lean six sigma
A combination of lean methods and six sigma; draws on the philosophies, principles, and tools of both approaches. Goal is growth and not just cost-cutting.
leniency
Grouping of ratings at the positive end of the scale instead of spreading them throughout the scale.
level of aspiration
Level of performance that a person expects to attain; determined by the person's prior successes and failures.
limited liability partnership (LLP)
A partnership where liability is limited to the amount of money invested in the business or any guarantees given.
linchpin concept
Because managers are members of overlapping groups, they link formal work groups to the total organization.
line and staff structure
Organization structure that results when staff specialists are added to a line organization.
line functions
Functions and activities directly involved in producing and marketing the organization's goods or services.
line structure
Organization structure with direct vertical lines between the different levels of the organization.
long-range objectives
Go beyond the current fiscal year; must support and not conflict with the organizational mission.
long-range plans
Typically span at least three to five years; some extend as far as 20 years into the future.
Malcolm Baldrige Award
Recognition of U.S. companies' achievements in quality.
management
A process of deciding the best way to use an organization's resources to produce goods or provide services.
management audit
Attempts to evaluate the overall management practices and policies of the organization.
management by objectives (MBO)
MBO is a philosophy based on converting organizational objectives into personal objectives. It assumes that establishing personal objectives elicits employee commitment, which leads to improved performance.
management development
Process of developing the attitudes and skills necessary to become or remain an effective manager.
management information system (MIS)
Integrated approach for providing interpreted and relevant data that can help managers make decisions.
management theory jungle
Term developed by Harold Koontz referring to the division of thought that resulted from the multiple approaches to studying the management process.
Managerial Grid
A two-dimensional framework rating a leader on the basis of concern for people and concern for production.
material requirements planning (MRP)
Dependent inventory planning and control system that schedules the right amount of materials needed to produce the final product on schedule.
matrix structure
Hybrid organization structure in which individuals from different functional areas are assigned to work on a specific project or task.
maximax approach
Selecting the alternative whose best possible outcome is the best of all possible outcomes for all alternatives; sometimes called the optimistic or gambling approach to decision making.
maximin approach
Comparing the worst possible outcomes for each alternative and selecting the one that is least undesirable; sometimes called the pessimistic approach to decision making.
McCormick multiple-management plan
Developed by Charles McCormick, a plan that uses participation as a training and motivational tool by selecting promising young employees from various company departments to form a junior board of directors.
mechanistic systems
Organizational systems characterized by a rigid delineation of functional duties, precise job descriptions, fixed authority and responsibility, and a well-developed organizational hierarchy through which information filters up and instructions flow down.
middle management
Responsible for implementing and achieving organizational objectives; also responsible for developing departmental objectives and actions.
mission
Defines the basic purpose(s) of an organization: why the organization exists.
motivation
Concerned with what activates human behavior, what directs this behavior toward a particular goal, and how this behavior is sustained.
motivation maintenance
An approach to work motivation that associates factors of high-low motivation with either the work environment or the work itself. Also called motivation hygiene.
multinational corporation (MNC)
Business that maintains a presence in two or more countries, has a considerable portion of its assets invested in and derives a substantial portion of its sales and profits from international activities, considers opportunities throughout the world, and has a worldwide perspective and orientation.
need hierarchy
Based on the assumption that individuals are motivated to satisfy a number of needs and that money can directly or indirectly satisfy only some of these needs.
needs assessment
Systematic analysis of the specific training activities a business requires to achieve its objectives.
nominal group technique (NGT)
Highly structured technique for solving group tasks; minimizes personal interactions to encourage activity and reduce pressures toward conformity.
nonprogrammed decisions
Decisions that have little or no precedent; they are relatively unstructured and generally require a creative approach by the decision maker.
North American Free Trade Agreement (NAFTA)
NAFTA allows businesses in the United States, Mexico, and Canada to sell their products anywhere in North America without facing major trade restrictions.
objectives
Statements outlining what the organization is trying to achieve; give an organization and its members direction.
Occupational Safety and Health Act (OSHA) of 1970
Federal legislation designed to reduce job injuries; established specific federal safety guidelines for almost all U.S. organizations.
on-the-job training (OJT)
Normally given by a senior employee or supervisor, training in which the trainee is shown how to perform the job and allowed to do it under the trainer's supervision.
operating systems
Consist of the processes and activities necessary to turn inputs into goods or services.
operations management
Application of the basic concepts and principles of management to those segments of the organization that produce its goods or services.
operations or tactical planning
Short-range planning; done primarily by middle- to lower-level managers, it concentrates on the formulation of functional plans.
operations planning
Designing the systems of the organization that produce goods or services; planning the day-to-day operations within those systems.
optimizing
Selecting the best possible alternative.
optimizing approach
Includes the following steps: recognize the need for a decision; establish, rank, and weigh criteria; gather available information and data; identify possible alternatives; evaluate each alternative with respect to all criteria; and select the best alternative.
organic systems
Organizational systems characterized by less formal job descriptions, greater emphasis on adaptability, more participation, and less fixed authority.
organization
Group of people working together in some concerted or coordinated effort to attain objectives.
organization structure
Framework that defines the boundaries of the formal organization and within which the organization operates.
organizational conflict
Conflict between employees and the organization itself.
organizational development (OD)
Organizationwide, planned effort, managed from the top, to increase organizational performance through planned interventions.
organizational diplomacy
Strategies used to minimize conflict in a diverse workplace.
organizational morale
An individual's feeling of being accepted by, and belonging to, a group of employees through common goals, confidence in the desirability of these goals, and progress toward these goals.
organizational rewards
All types of rewards, both intrinsic and extrinsic, received as a result of employment by the organization.
organizing
Grouping activities, assigning activities, and providing the authority necessary to carry out the activities.
orientation
Introduction of new employees to the organization, their work units, and their jobs.
orientation kit
Normally prepared by the human resource department, provides a wide variety of materials to supplement the general organizational orientation.
output (impersonal) control
Based on the measurement of outputs.
outsourcing
Practice of subcontracting information systems work to an independent outside source.
paralanguage
A form of nonverbal communication that includes the pitch, tempo, loudness, and hesitations in verbal communication.
parity principle
States that authority and responsibility must coincide.
partnership
An association of two or more persons who jointly own a for-profit business.
patent
The document the federal government issues to inventors and companies that gives them the exclusive right to their inventions for 17 years.
path-goal theory of leadership
Attempts to define the relationships between a leader's behavior and the subordinates' performance and work activities.
perception
The mental and sensory processes an individual uses in interpreting information received.
performance
Degree of accomplishment of the tasks that make up an employee's job.
performance appraisal
Process that involves determining and communicating to employees how they are performing their jobs and establishing a plan for improvement.
period of solidification
A period in the 1920s and 1930s in which management became recognized as a discipline.
Peter Principle
Tendency of individuals in a hierarchy to rise to their levels of incompetence.
physical inventory
Counting the number of units of inventory a company holds in stock.
planning
Process of deciding what objectives to pursue during a future time period and what to do to achieve those objectives.
policies
Broad, general guides to action that constrain or direct the attainment of objectives.
polygraph
A device that records physical changes in the body as the test subject answers a series of questions.
polygraph tests
Record physical changes in the body as the test subject answers a series of questions; popularly known as lie detector tests.
position power
Power and influence that go with a job.
positive reinforcement
Providing a positive consequence as a result of desirable behavior.
postaction control
Designed to detect an existing or a potential problem before it gets out of hand.
power
Ability to influence, command, or apply force; a measure of a person's potential to get others to do what he or she wants them to do, as well as to avoid being forced by others to do what he or she does not want to do.
preliminary (steering) control
Method of exercising control to prevent a problem from occurring.
principle
A basic truth or law.
principle of bounded rationality
Assumes people have the time and cognitive ability to process only a limited amount of information on which to base decisions.
principle of individual rights
Involves making decisions based on protecting human dignity.
problem solving
Process of determining the appropriate responses or actions necessary to alleviate a problem.
procedure
Series of related steps or tasks expressed in chronological order for a specific purpose.
process approach to management
Focuses on the management functions of planning, controlling, organizing, staffing, and leading.
process control
Relates to equipment and processes used during the production process; used to monitor quality while the product or service is being produced.
process control chart
Time-based graphic display that shows whether a machine or a process is producing items that meet preestablished specifications.
process culture
Involves low risk with little feedback; employees focus on how things are done rather than on the outcomes.
process layout
Facilities layout that groups together equipment or services of a similar functional type.
process selection
Specifies in detail the processes and sequences required to transform inputs into products or services.
product departmentalization
Grouping all activities necessary to produce and market a product or service under one manager.
product layout
Facilities layout that arranges equipment or services according to the progressive steps by which the product is made or the customer is served.
product quality control
Relates to inputs or outputs of the system; used when quality is evaluated with respect to a batch of existing products or services.
production planning
Concerned primarily with aggregate operations planning, resource allocation, and activity scheduling.
production standards approach
Performance appraisal method most frequently used for employees who are involved in physically producing a product; is basically a form of objective setting for these employees.
professional manager
Career manager who does not necessarily have a controlling interest in the organization and bears a responsibility to employees, stockholders, and the public.
proficiency tests
Measure how well the applicant can do a sample of the work that is to be performed.
program evaluation and review technique (PERT)
Planning and control technique that graphically depicts the relationships among the various activities of a project; used when the durations of the project activities are not accurately known.
programmed decisions
Decisions that are reached by following an established or systematic procedure.
property tax
Tax levied against the property, buildings, and land owned by a business.
psychological tests
Attempt to measure personality characteristics.
psychomotor tests
Measure a person's strength, dexterity, and coordination.
punishment
Providing a negative consequence as a result of undesirable behavior.
quality
For the operations manager, quality is determined in relation to the specifications or standards set in the design stages—the degree or grade of excellence specified.
quality at the source
The philosophy of making each employee responsible for the quality of his or her own work.
quality circle
Composed of a group of employees (usually from 5 to 15 people) who are members of a single work unit, section, or department; the basic purpose of a quality circle is to discuss quality problems and generate ideas that might help improve quality.
quota
Establishes the maximum quantity of a product that can be imported or exported during a given period.
recency
Occurs when performance evaluations are based on work performed most recently, generally work performed one to two months before evaluation.
recruitment
Seeking and attracting a supply of people from which qualified candidates for job vacancies can be selected.
reengineering
Searching for and implementing radical change in business processes to achieve breakthroughs in costs, speed, productivity, and service.
regulations
Rules that government agencies issue to implement laws.
Rehabilitation Act of 1973
Prohibits discrimination in hiring of persons with disabilities by federal agencies and federal contractors.
reinforcement theory
States that the consequences of a person's present behavior influence future behavior.
resource allocation
Efficient allocation of people, materials, and equipment to meet the demand requirements of the operating system.
responsibility
Accountability for the attainment of objectives, the use of resources, and the adherence to organizational policy.
reverse discrimination
Providing preferential treatment for one group (e.g., minority or female) over another group (e.g., white male) rather than merely providing equal opportunity.
risk-averting approach
Choosing the alternative with the least variation among its possible outcomes.
role
Set of behaviors associated with a particular job.
role perception
Direction in which employees believe they should channel their efforts on their jobs.
routing
Finds the best path and sequence of operations for attaining a desired level of output with a given mix of equipment and personnel.
rules
Require specific and definite actions to be taken or not to be taken in a given situation.
sabbatical
Derived from Sabbath and literally means a recurring period of rest and renewal.
safety stocks
Inventory maintained to accommodate unexpected changes in demand and supply and allow for variations in delivery time.
satisficing
Selecting the first alternative that meets the decision maker's minimum standard of satisfaction.
scalar principle
States that authority in the organization flows through the chain of managers one link at a time, ranging from the highest to the lowest ranks; also called chain of command.
Scanlon plan
Incentive plan developed in 1938 by Joseph Scanlon to give workers a bonus for tangible savings in labor costs.
scientific management
Philosophy of Frederick W. Taylor that sought to increase productivity and make the work easier by scientifically studying work methods and establishing standards.
self-directed work teams (SDWT)
Teams in which members are empowered to control the work they do without a formal supervisor.
self-fulfilling prophecy
The relationship between a leader's expectations and the resulting performance of subordinates.
semantics
The science or study of the meanings of words and symbols.
sensitivity training
Method used in OD to make one more aware of oneself and one's impact on others.
short-range objectives
Generally tied to a specific time period of a year or less and are derived from an in-depth evaluation of long-range objectives.
short-range plans
Generally cover up to one year.
situation of certainty
Situation that occurs when a decision maker knows exactly what will happen and can often calculate the precise outcome for each alternative.
situation of risk
Situation that occurs when a decision maker is aware of the relative probabilities of occurrence associated with each alternative.
situation of uncertainty
Situation that occurs when a decision maker has very little or no reliable information on which to evaluate the different possible outcomes.
situational leadership theory
As the level of maturity of followers increases, structure should be reduced while socioemotional support should first be increased and then gradually decreased.
six sigma
Both a precise set of statistical tools and a rallying cry for continuous improvement.
skills inventory
Consolidates information about the organization's current human resources.
small business
A company that is independently owned and operated and is not dominant in its field; generally has fewer than 100 employees.
social audit
A method used by management to evaluate the success or lack of success of programs designed to improve the social performance of the organization.
social responsibility
The obligation that individuals or businesses have to help solve social problems.
sociotechnical approach
Approach to job design that considers both the technical system and the accompanying social system.
soldiering
Describes the actions of employees who intentionally restrict output.
sole proprietorship
A business owned by a single individual, or proprietor.
span of management
Number of subordinates a manager can effectively manage; also called span of control.
stability strategy
Used when the organization is satisfied with its present course (status quo strategy).
staff functions
Functions that are advisory and supportive in nature; designed to contribute to the efficiency and maintenance of the organization.
staffing
Determining human resource needs and recruiting, selecting, training, and developing human resources.
stakeholders
The people—employees, customers, suppliers, and the community—who are affected by the actions of a business.
standard
Value used as a point of reference for comparing other values.
strategic business unit (SBU)
Distinct business that has its own set of competitors and can be managed reasonably independently of other businesses within the organization.
strategic management
Formulation, proper implementation, and continuous evaluation of strategic plans; determines the long-run directions and performance of an organization. The essence of strategic management is developing strategic plans and keeping them current.
strategic planning
Analogous to top-level long-range planning; covers a relatively long period; affects many parts of the organization.
strategy
Outlines the basic steps management plans to take to reach an objective or a set of objectives; outlines how management intends to achieve its objectives.
stress
Mental or physical condition that results from a perceived threat of danger (physical or emotional) and the pressure to remove it.
subsidies or subsidized protection
Widely used practice of government support of domestic industries to make their prices cheaper than the prices of imports.
supervisory management
Manages operative employees; generally considered the first level of management.
synectics
Creative problem-solving technique that uses metaphorical thinking to "make the familiar strange and the strange familiar."
systems approach to management
A way of thinking about the job of managing that provides a framework for visualizing internal and external environmental factors as an integrated whole.
tall structure
Organization with many levels and relatively small spans of management.
tariffs
Government-imposed taxes charged on goods imported into a country.
task structure
Degree to which job tasks are structured.
team building
Process by which the formal work group develops an awareness of those conditions that keep it from functioning effectively and then requires the group to eliminate those conditions.
technical skills
Involve being able to perform the mechanics of a particular job.
technological changes
Changes in such things as new equipment and new processes.
technostress
Personal stress generated by reliance on technological devices—a panicky feeling when they fail a state of near-constant stimulation, or being constantly "plugged in."
temporary help
People working for employment agencies who are subcontracted out to businesses at an hourly rate for a period of time specified by the businesses.
test reliability
Consistency or reproducibility of the results of a test.
test validity
Extent to which a test predicts a specific criterion.
tests
Provide a sample of behavior used to draw inferences about the future behavior or performance of an individual.
Theory Z
A theory developed by William Ouchi that attempts to integrate American and Japanese management practices by combining the American emphasis on individual responsibility with the Japanese emphasis on collective decision making, slow evaluation and promotion, and holistic concern for employees.
360-degree feedback (multirater assessment)
Method of performance appraisal that uses input from an employee's managers, peers, customers, suppliers, or colleagues.
Title VII of the Civil Rights Act of 1964
Designed to eliminate employment discrimination related to race, color, religion, sex, or national origin in organizations that conduct interstate commerce.
top or senior management
Establishes the objectives of the organization, formulates the actions necessary to achieve them, and allocates the resources of the organization to achieve the objectives.
tough-person, macho culture
Characterized by individuals who take high risks and get quick feedback on whether their decisions are right or wrong.
trademark
A word, name, symbol, or slogan a business uses to identify its own goods.
training
Acquiring skills or learning concepts to increase the performance of employees.
trait theory
Stressed what the leader was like rather than what the leader did.
transactional leadership
Takes the approach that leaders engage in a bargaining relationship with their followers.
transaction-processing system
Substitutes computer processing for manual recordkeeping procedures.
transformational leadership
Involves cultivating employee acceptance of the group mission.
unity of command principle
States that an employee should have one, and only one, immediate manager.
valence
Employee's belief about the value of the rewards.
value
A conception, explicit or implicit, that defines what an individual or a group regards as desirable. People are not born with values; rather, they acquire and develop them early in life.
value-added chain
Process by which a business combines the raw material, labor, and technology into a finished product, markets the product, and distributes the product.
variable overhead expenses
Expenses that change in proportion to the level of production or service.
vestibule training
System in which procedures and equipment similar to those used in the actual job are set up in a special working area called a vestibule.
virtual organization
Temporary network of independent companies—suppliers, customers, and even rivals—linked by information technology to share skills, costs, and access to one another's markets.
wellness program
Company-implemented program designed to prevent illness and enhance employee well-being.
workaholism
Working to the exclusion of everything else in one's life.
work-hard/play-hard culture
Encourages employees to take few risks and to expect rapid feedback.
zero-base budgeting
Form of budgeting in which the manager must build and justify each area of a budget. Each activity is identified, evaluated, and ranked by importance.
zero-defects program
Increasing quality by increasing everyone's impact on quality.