Principles of Management Exam 2 Vocabulary

Course of action needed to achieve a stated goal.

Outline of need the firm will fill, the operations of the business, its components and functions, as well as the expected revenues and expenses.

A document that outlines a proposed firm’s goals, the strategy for achieving them, and the standards for measuring success.

Objectives are structured in a unified hierarchy, becoming more specific at lower levels of the organization.

Also known as objective; a specific commitment to achieve a measurable result within a stated period of time.

Tend to span 1 to 5 years and focus on achieving the strategies identified in a company’s strategic plan.

Four-step process in which (1) managers and employees jointly set objectives for the employee, (2) managers develop action plans, (3) managers and employees periodically review the employee’s performance, and (4) the manager makes a performance appraisal and rewards the employee according to results.

A hierarchy of goals; in the chain of management (operational, tactical, strategic), the accomplishment of low-level goals are the means leading to the accomplishment of high-level goals or ends.

An organization’s purpose or reason for being.

Statement that expresses the purpose of the organization.

Also known as goal; a specific commitment to achieve a measurable result within a stated period of time.

Typically designed for a 1-year period, this plan defines how a manager will conduct his or her business based on the action plan; the operating plan identifies clear targets such as revenues, cash flow, and market share.

Goals that are set by and for first-line managers and are concerned with short-term matters associated with realizing tactical goals.

Determining how to accomplish specific tasks with available resources within the next 1-week to 1-year period; done by first-line managers.

A document that outlines how goals are going to be met.

Setting goals and deciding how to achieve them; also, coping with uncertainty by formulating future courses of action to achieve specified results.

A cycle that has two planning steps (1 and 2) and two control steps (3 and 4), as follows: (1) Make the plan. (2) Carry out the plan. (3) Control the direction by comparing results with the plan. (4) Control the direction by taking corrective action in two ways—namely (a) by correcting deviations in the plan being carried out or (b) by improving future plans.

Tend to span 12 month and are connected to strategic goals in a hierarchy known as a means-end chain.

A goal that is Specific, Measurable, Attainable, Results oriented, and has Target dates.

Goals that are set by and for top management and focus on objectives for the organization as a whole.

A process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals.

Determines what the organization’s long-term goals should be for the next one to five years with the resources they expect to have available.

A large-scale action plan that sets the direction for an organization.

Goals that are set by and for middle managers and focus on the actions needed to achieve strategic goals.

Determining what contributions departments or similar work units can make with their given resources during the next 6 months to 2 years; done by middle management.

Expresses what the company stands for, its core priorities, the values its employees embody, and what its products contribute to the world.

A long-term goal describing “what” an organization wants to become; it is a clear sense of the future and the actions needed to get there.

Statement that expresses what the organization should become and where it wants to go strategically.

A management strategy by which companies evaluate their strategic business units on the basis of (1) their business growth rates and (2) their share of the market.

A process by which a company compares its performance with that of high-performing organizations.

Focuses on individual business units or product/service lines.

Also known as scenario planning and scenario analysis; the creation of alternative hypothetical but equally likely future conditions.

Focuses on the organization as a whole.

One of Porter’s four competitive strategies; keeping the costs, and hence prices, of a product or service below those of competitors and to target a narrow market.

One of Porter’s four competitive strategies; keeping the costs, and hence prices, of a product or service below those of competitors and to target a wide market.

Assessment to look at where the organization stands and see what is working and what could be different so as to maximize efficiency and effectiveness in achieving the organization’s mission.

Also called retrenchment strategy, one of three grand strategies, this strategy involves reduction in the organization’s efforts.

One of Porter’s four competitive strategies; offering products or services that are of unique and superior value compared with those of competitors but to target a wide market.

Strategy by which a company operates several businesses in order to spread the risk.

Using questioning, analysis, and follow-through in order to mesh strategy with reality, align people with goals, and achieve the results promised.

One of Porter’s four competitive strategies; offering products or services that are of unique and superior value compared to those of competitors and to target a narrow market.

A vision or projection of the future.

Plan of action by each functional area of the organization to support higher level strategy.

One of three grand strategies, this strategy involves expansion—as in sales revenues, market share, number of employees, or number of customers or (for nonprofits) clients served.

Grows market share or profits by innovating improvements in products or services.

Environmental factors that the organization may exploit for competitive advantage.

The skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its mission.

Environmental factors that hinder an organization’s achieving a competitive advantage.

The drawbacks that hinder an organization in executing strategies in pursuit of its mission.

Also called four generic strategies; (1) cost leadership, (2) differentiation, (3) cost-focus, and (4) focused-differentiation. The first two strategies focus on wide markets, the last two on narrow markets.

Model proposes that business-level strategies originate in five primary competitive forces in the firm’s environment: (1) threats of new entrants, (2) bargaining power of suppliers, (3) bargaining power of buyers, (4) threats of substitute products or services, and (5) rivalry among competitors.

When a company purchases a new business that is related to the company’s existing business portfolio.

Also known as scenario planning and contingency planning; the creation of alternative hypothetical but equally likely future conditions.

One of three grand strategies, this strategy involves little or no significant change.

Monitoring performance to ensure that strategic plans are being implemented and taking corrective action as needed.

Strategy that attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company.

The process of choosing among different strategies and altering them to best fit the organization’s needs.

The implementation of strategic plans.

Exists when other companies cannot duplicate the value delivered to customers.

Also known as a situational analysis, the search for the Strengths, Weaknesses, Opportunities, and Threats affecting the organization.

A hypothetical extension of a past series of events into the future.

Occurs when a company acquires another company in a completely unrelated businesses.

Diversification strategy where a firm expands into businesses that provide the supplies it needs to make its products or that distribute and sells its products.

Is a framework for analyzing a resource of capability to determine its competitive strategic potential by answering four questions about its Value, Rarity, Imitability, and Organization.

The tendency to make decisions based on an initial figure.

The ability of a computer system to perform tasks that normally require human intelligence.

Collect data from situations to make calculations, define probabilities, and make reason-based -decisions according to programmed goals.

The use of information readily available from memory to make judgments.

Stores of data so vast that conventional database management systems cannot handle them.

One type of nonrational decision making; the ability of decision makers to be rational is limited by numerous constraints.

Technique used to help groups generate multiple ideas and alternatives for solving problems; individuals in a group meet and review a problem to be solved, then silently generate ideas, which are collected and later analyzed.

Tendency of decision makers to classify people or information based on observed or inferred characteristics.

Biased way of thinking in which people seek information to support their point of view and discount data that do not support it.

General agreement; group solidarity.

Process of examining data sets in order to draw conclusions about the information they contain.

A choice made from among available alternatives.

The process of identifying and choosing alternative courses of action.

Styles that reflect the combination of how an individual perceives and responds to information.

Graph of decisions and their possible consequences, used to create a plan to reach a goal.

Analyzing the underlying causes.

Technique in which members of a group come together over a computer network to generate ideas and alternatives.

When decision makers increase their commitment to a project despite negative information about it.

Individuals trained in matters of ethics in the workplace, particularly about resolving ethical dilemmas.

The tendency of decision makers to be influenced by the way a situation or problem is presented to them.

The primary goal is subsumed to a secondary goal.

A cohesive group’s blind unwillingness to consider alternatives. This occurs when group members strive for agreement among themselves for the sake of unanimity and avoid accurately assessing the decision situation.

Strategies that simplify the process of making decisions.

The tendency of people to view events as being more predictable than they really are.

Extreme and inflated sense of pride, certainty, and confidence.

Making a choice without the use of conscious thought or logical inference.

An extension of predictive analytics, occurs when systems or algorithms automatically improve themselves based on data patterns, experiences, and observations.

Dissent that occurs when a minority in a group publicly opposes the beliefs, attitudes, ideas, procedures, or policies assumed by the majority of the group.

Models of decision-making style that explain how managers make decisions; they assume that decision making is nearly always uncertain and risky, making it difficult for managers to make optimum.

Situations that present possibilities for exceeding existing goals.

Bias in which people’s subjective confidence in their decision making is greater than their objective accuracy.

Category of data analysis that makes predictions about future outcomes based on historical data and analytics techniques.

Difficulties that inhibit the achievement of goals.

A review of recent decisions in order to identify possible future improvements.

Also called the classical model; the style of decision making that explains how managers should make decisions; it assumes that managers will make logical decisions that are the optimal means of furthering the organization’s best interests.

The tendency to generalize from a small sample or a single event.

When robots act like a human inputting and extracting information.

One type of nonrational decision-making model; managers seek alternatives until they find one that is satisfactory, not optimal.

Occurs when powerless, but useful individuals are selected by leaders to rubber stamp decisions and work hard to implement them.

Way of thinking in which managers add up all the money already spent on a project and conclude it is too costly to simply abandon it; also called the sunk-cost fallacy.

Describes expectation that managers must report and justify work results to the managers above them.

Type of organizational culture that has an external focus and values flexibility.

The right to perform or command; also, the rights inherent in a managerial position to make decisions, give orders, and utilize resources.

A fluid, highly adaptive organization whose members, linked by information technology, come together to collaborate on common tasks; the collaborators may include competitors, suppliers, and customers.

Organizational structure in which important decisions are made by upper managers—power is concentrated at the top.

Type of organizational culture that has an internal focus and values flexibility rather than stability and control.

A goal that unifies employees or members and gives everyone an understanding of the organization’s reason for being.

The coordination of individual efforts into a group or organization-wide effort.

Set of shared taken-for-granted implicit assumptions that group holds and that determines how it perceives, thinks about, and reacts to its various environments.

Divisional structures in which activities are grouped around common customers or clients.

Organizational structure in which important decisions are made by middle-level and supervisory-level managers—power is delegated throughout the organization.

The process of assigning managerial authority and responsibility to managers and employees lower in the hierarchy.

Also known as work specialization; arrangement of having discrete parts of a task done by different people. The work is divided into particular tasks assigned to particular workers.

The third type of organizational structure, whereby people with diverse occupational specialties are put together in formal groups according to products and/or services, customers and/or clients, or geographic regions.

Values and norms actually exhibited in the organization.

Explicitly stated values and norms preferred by an organization.

Organizational structure with few or no levels of middle management between top managers and those reporting to them.

The second type of organizational structure, whereby people with similar occupational specialties are put together in formal groups.

Divisional structures in which activities are grouped around defined regional locations.

A person whose accomplishments embody the values of the organization.

Type of organizational culture that has an internal focus and values stability and control over flexibility.

Also known as chain of command; a control mechanism for making sure the right people do the right things at the right time.

Often called network structure, structure in which the organization has a central core of key functions and outsources other functions to vendors who can do them cheaper or faster.

Also called a team-based design, teams or workgroups, either temporary or permanent, are used to improve collaboration and work on shared tasks by breaking down internal boundaries.

Consist of all of the activities an organization uses to manage its human capital, including staffing, appraising, training and development, and compensation.

Type of organizational culture that has a strong external focus and values stability and control.

Fourth type of organizational structure, which combines functional and divisional chains of command in a grid so that there are two command structures—vertical and horizontal.

Seventh type of organizational structure, in which a firm assembles product chunks, or modules, provided by outside contractors.

A group of people who work together to achieve some specific purpose. A system of consciously coordinated activities of two or more people.

Box-and-lines illustration of the formal relationships of positions of authority and the organization’s official positions or work specializations.

Sometimes called corporate culture; system of shared beliefs and values that develops within an organization and guides the behavior of its members.

Creating the optimal structures of accountability and responsibility that an organization uses to execute its strategies.

The process by which people learn the values, norms, and required behaviors that permit them to participate as members of an organization.

A formal system of task and reporting relationships that coordinates and motivates an organization’s members so that they can work together to achieve the organization’s goals.

The extent to which your personality and values match the climate and culture of an organization.

Divisional structures in which activities are grouped around similar products or services.

The obligation one has to perform the assigned tasks.

The activities and ceremonies, planned and unplanned, that celebrate important occasions and accomplishments in an organization’s life.

The first type of organizational structure, whereby an organization has authority centralized in a single person, as well as a flat hierarchy, few rules, and low work specialization.

The number of people reporting directly to a given manager.

A narrative based on true events, which is repeated—and sometimes embellished upon—to emphasize a particular value.

An object, act, quality, or event that conveys meaning to others.

Principle that stresses an employee should report to no more than one manager in order to avoid conflicting priorities and demands.

An organization whose members are geographically apart, usually working with e-mail, collaborative computing, and other computer connections.