Management Definitions PDF

Chapter1 Revenue Money that a company brings in through the sale of goods and services Business model A concise description of how a business intends to generate revenue Profit Money left over after all the costs involved in doing business have been deducted from the revenue Competitive advanta...

Chapter1 Revenue Money that a company brings in through the sale of goods and services Business model A concise description of how a business intends to generate revenue Profit Money left over after all the costs involved in doing business have been deducted from the revenue Competitive advantage Aspect of a product or company that makes it more appealing to its target customers Not-for-profit organisations Organisations that provide goods and services without having a profit motive; Major type of businesses are goods producing and service businesses, Moral hazard: link between risk and reward is broken. Multiple types of businesses: Market, social, economic, technological, legal and regulatory. Stakeholders Anyone affected by a company’s decisions/activities Social environment: population trends, values etc. Market :Target customers Technological environment: Forces resulting from the practical application of science to innovations, products, and processes Economic environment: Conditions and forces that affect the cost and availability of goods, services, and labour. Legal and regulatory environment: Laws and regulations at local, state, national, and international levels Disruptive technologies Fundamentally change the nature of an industry Can create or destroy entire companies Research and Development (R&D): Responsible for conceiving and designing new products. Information Technology (IT): Manages systems that enhance communication and information usage within the company.Supports services offered to customers through technological solutions. Manufacturing, Production, or Operations:Focuses on how the company produces goods or delivers services. Includes purchasing, logistics, facilities management, and quality control. Marketing: Identifies and understands market opportunities. Develops products to address these opportunities. Creates branding and promotion strategies. Sets prices and manages the distribution of goods. Chapter 2 Economy: The sum total of all the economic activity within a given region Economics: The study of how a society uses its scarce resources to produce and distribute goods and services Microeconomics: How consumers, businesses, and industries determine the quantity of goods demanded/supplied at different prices Macroeconomics: “Big picture” issues in an economy: competitive behavior among firms, effect of government policies, and overall resource allocation issues Natural resources: Land, forests, minerals, water, fuels,… Human resources:People who work in an organisation or on its behalf Capital: Funds that finance the operations of a business; Physical elements used to produce goods and services (tractor, computers) Entrepreneurship:Willingness to take the risks to create and operate new businesses Knowledge (Know-How): Expertise gained through experience or association Scarcity A condition of any productive resource that has finite supply Opportunity cost The value of the most appealing alternative not chosen. Economic system Policies that define a society’s particular economic structure Capitalism Economic system based on economic freedom and competition Nationalization A government’s takeover of selected companies or industries Privatization: Turning over services once performed by the government and allowing private businesses to perform them instead Demand Buyers’ willingness/ability to purchase products at various price points Supply Specific quantity of a product that the seller is able/willing to provide at various prices Demand curve A graph of the quantities of a product that buyers will purchase at various prices Supply curve A graph of the quantities of a product that sellers will offer for sale, regardless of demand, at various prices Equilibrium point Point at which quantity supplied equals quantity demanded Monopoly One company dominates a market to the degree that it can control prices Monopolistic Competition Many sellers differentiate their products from those of competitors in at least some small way Oligopoly Market situation in which a very small number of suppliers, sometimes only two, provide a particular good or service Recession A period during which national income, employment, and production all fall; defined as at least six months of decline in the GDP Business cycles Fluctuations in the rate of growth that an economy experiences over a period of several years Unemployment rate The portion of the labor force (everyone over 16 who has or is looking for a job) currently without a job Inflation Economic condition in which prices rise steadily throughout the economy Deflation Economic condition in which prices fall steadily throughout the economy Regulation Relying more on laws and policies than on market forces to govern economic activity Deregulation Removing regulations to allow the market to prevent excesses and correct itself over time Monetary policy Government policy and actions taken by the Federal Reserve Board (central bank)to regulate the nation’s money supply (money supply and interest rates.) Fiscal policy Strategy for the use of government revenue collection (taxation and spending) Economic indicators: Statistics that measure the performance of the economy (leading, lagging, Price Indexes). Consumer price index (CPI): Monthly statistic that measures changes in the prices of a representative collection of consumer goods and services. Producer price index (PPI): Statistical measure of price trends at the producer and wholesaler levels. Gross domestic product (GDP): Value of all the final goods and services produced by businesses located within a nation’s borders; excludes outputs from overseas operations of domestic companies. Chapter 3 Globalisation: integration and interdependence of national economies 2 Inventions that changed the world through commerce: The container and letter of credit. Trade deficit: when a country imports more than it exports Balance of payments: Sum of all payments a country receives from other countries minus the sum of all payments it makes to the other countries Exchange rate: rate at which the money of one country is traded for the money of another. Protectionism: Government policies aimed at shielding a country’s industries from foreign competition Tariffs: Taxes levied on imports Import quotas: Limits placed on the quantity of imports a nation will allow for a specific product. (Jeans imported from China to Spain had quotas up to 2001) Embargo: A total ban on trade with a particular nation (a sanction) or product. Export subsidies: financial assistance to producers from the government to allow them to lower their prices to compete in the global market Dumping: Charging less than the actual cost or less than the home-country price for goods sold in other countries. (Chinese solar panels ruined Spanish producers) Sanctions: embargoes that revoke a country’s normal trade relations status World Trade Organization (WTO): A forum for negotiating, implementing, and monitoring international trade and mediating trade disputes among 150 member countries. International Monetary Fund (IMF): Monitors global financial developments, provides technical advice and training, offers short-term loans to countries in financial difficulty, and works to reduce poverty in developing economies. World Bank: A UN agency that funds projects globally to address poverty, health, and education in developing countries Trading Blocs: Organizations of nations that remove trade barriers among themselves and establish uniform barriers with non-member nations. North American Free Trade Agreement (NAFTA): U.S., Canada, and Mexico allow the free flow of goods, services, and capital. European Union (EU): 28 countries that have eliminated local regulations, product standard variations, and protectionist measures to facilitate trade. Asia-Pacific Economic Cooperation (APEC): 21 countries working to liberalize trade in the Pacific Rim. Importing: Purchasing goods or services from another country into one’s own country. Exporting: Selling and shipping goods or services to another country. Licensing: Agreement to produce and market another company’s product in exchange for a royalty or fee. Foreign Direct Investment (FDI): Investment of money by foreign companies in domestic business enterprises. Multinational Corporations (MNCs): Companies with operations in more than one country. Strategic Approaches to International Markets: Multidomestic Strategy: Decentralized approach to international expansion, creating highly independent operating units in each new country. Global Strategy: Highly centralized approach to international expansion, with headquarters in the home country making all major decisions. Transnational Strategy: Hybrid approach that aims to benefit from international scale while being responsive to local market dynamics. Chapter 4: Ethics The rules or standards governing the conduct of a person or group. code of ethics A written statement that sets forth the principles that guide an organization’s decisions. transparency The degree to which affected parties can observe relevant aspects of transactions or decisions. whistleblowing The disclosure of information by a company insider that exposes illegal or unethical behavior by others within the organization. conflicts of interest Situations in which competing loyalties can lead to ethical lapses, such as when a business decision may be influenced by the potential for personal gain. corporate social responsibility (CSR) The idea that business has obligations to society beyond the pursuit of profits. philanthropy The donation of money, time, goods, or services to charitable, humanitarian, or educational institutions. strategic CSR Social contributions that are directly aligned with a company’s overall business strategy. nongovernmental organizations (NGOs) Nonprofit groups that provide charitable services or promote social and environmental causes. purpose-driven business Any company that aspires to accomplish more than just make money for owners and investors. sustainable development Operating business in a manner that minimizes pollution and resource depletion, ensuring that future generations will have vital resources. circular economy Model of resource usage that operates as a series of loops in which materials and products are continually reused, recycled, and repurposed rather than being used by one owner and then discarded. identity theft A crime in which thieves steal personal information and use it to take out loans and commit other types of fraud. discrimination In a social and economic sense, denial of opportunities to individuals on the basis of some characteristic that has no bearing on their ability to perform in a job. Chapter 5: Unlimited liability A legal condition under which any damages or debts incurred by a business are the owner’s personal responsibility partnership An unincorporated company owned by two or more people. general partnership A partnership in which all partners have joint authority to make decisions for the firm and joint liability for the firm’s financial obligations. limited partnership A partnership in which one or more persons act as general partners who run the business and have the same unlimited liability as sole proprietors. limited liability A legal condition in which the maximum amount each owner is liable for is equal to whatever amount each invested in the business. corporation A legal entity, distinct from any individual persons, that has the power to own property and conduct business. shareholders Investors who purchase shares of stock in a corporation. public corporation A corporation in which stock is sold to anyone who has the means to buy it. private corporation A corporation in which all the stock is owned by only a few individuals or companies and is not made available for purchase by the public. liquidity A measure of how easily and quickly an asset such as corporate stock can be converted into cash by selling it. Special types of corporation: S corporation A type of corporation that combines the capital-raising options and limited liability of a corporation with the federal taxation advantages of a partnership. limited liability company (LLC) A structure that combines limited liability with the pass-through taxation benefits of a partnership; the number of shareholders is not restricted, nor is members’ participation in management. benefit corporation A profit-seeking corporation whose charter specifies a social or environmental goal that the company must pursue in addition to profit. board of directors A group of professionals elected by shareholders as their representatives with responsibility for the overall direction of the company and the selection of top executives. corporate governance In a broad sense, all the policies, procedures, relationships, and systems in place to oversee the successful and legal operation of the enterprise; in a narrow sense, the responsibilities and performance of the board of directors specifically. proxy A document that authorizes another person to vote on behalf of a shareholder in a corporation. shareholder activism Activities undertaken by shareholders (individually or in groups) to influence executive decision-making in areas ranging from strategic planning to social responsibility corporate officers The top executives who run a corporation. chief executive officer (CEO) The highest-ranking officer of a corporation. merger An action taken by two companies to combine as a single entity. acquisition An action taken by one company to buy a controlling interest in the voting stock of another company. hostile takeover Acquisition of another company against the wishes of management. leveraged buyout (LBO) Acquisition of a company’s publicly traded stock, using funds that are primarily borrowed, usually with the intent of using some of the acquired assets to pay back the loans used to acquire the company. strategic alliance A long-term partnership between companies to jointly develop, produce, or sell products. joint venture A separate legal entity established by two or more companies to pursue shared business objectives. big data The massive data sets that companies collect and analyze to find important trends and insights. analytics Computing tools and techniques used to analyze big data; major types include data mining, text mining, and predictive analytics. Chapter 6 small business A company that is independently owned and operated, is not dominant in its field, and employs fewer than 500 people. entrepreneurial spirit The positive, forward-thinking desire to create profitable, sustainable business enterprises. business plan A document that summarizes a proposed business venture, its goals, and plans for achieving those goals. pivoting Adjusting a firm’s business model when a better opportunity presents itself. advisory board A team of people with subject- area expertise or vital contacts who help a business owner review plans and decisions. business incubators Facilities that help early-stage entrepreneurial teams develop ideas into workable business models and establish company frameworks for commercializing products. business accelerators Organizations that work with existing companies with the primary goal of making them more attractive to investors. seed money The first infusion of capital used to get a business started. microlenders Organizations, often not-for- profit, that lend smaller amounts of money to business owners who might not qualify for conventional bank loans. venture capitalists (VCs) Investors who provide money to finance new businesses in exchange for a portion of ownership, with the objective of selling their shares at a significant gain. angel investors Private individuals who invest money in start-ups, usually earlier in a business’s life and in smaller amounts than VCs are willing to invest or banks are willing to lend. initial public offering (IPO) A corporation’s first offering of shares to the public. crowdfunding Soliciting project funds, business investment, or business loans from members of the public. franchise A business arrangement in which one company (the franchisee) obtains the rights to sell the products and use various elements of a business system of another company (the franchisor). franchisor A company that licenses elements of its business system to other companies (franchisees). franchisee A business owner who pays for the rights to sell the products and use the business system of a franchisor. machine learning The general capability of computers to learn and adapt without receiving explicit human instructions. deep learning A type of machine learning that uses layers of neural networks to attack problems at multiple levels. Chapter 7: management The process of planning, organizing, leading, and controlling to meet organizational goals. planning Establishing objectives and goals for an organization and determining the best ways to accomplish them. strategic plans Plans that establish the actions and the resource allocation required to accomplish strategic goals; they’re usually defined for periods of two to five years and developed by top managers. mission statement A brief statement of why an organization exists; in other words, what the organization aims to accomplish for customers, investors, and other stakeholders. values statement A brief articulation of the principles that guide a company’s decisions and behaviors. goal A broad, long-range target. objective A specific, short-range target. organizing The process of arranging resources to carry out the organization’s plans. management pyramid An organizational structure divided into top, middle, and first-line management. top managers Those at the highest level of the organization’s management hierarchy; they are responsible for setting strategic goals, and they have the most power and responsibility in the organization. middle managers Those in the middle of the management hierarchy; they develop plans to implement the goals of top managers and coordinate the work of first-line managers. first-line managers Those at the lowest level of the management hierarchy; they supervise the operating employees and implement the plans set by higher management levels. leading The process of guiding and motivating people to work toward organizational goals. autocratic leaders Leaders who do not involve others in decision-making. democratic leaders Leaders who delegate authority and involve employees in decision-making. participative management A philosophy of allowing employees to take part in planning and decision-making. laissez-faire leaders Leaders who leave most decisions up to employees, particularly those concerning day-to-day matters. employee empowerment Giving employees the power to make decisions that apply to their specific aspects of work. coaching Helping employees reach their highest potential by meeting with them, discussing problems that hinder their ability to work effectively, and offering suggestions and encouragement to overcome these problems. mentoring A process in which experienced managers guide less-experienced colleagues in nuances of office politics, serving as role models for appropriate business behavior and helping to negotiate the corporate structure. organizational culture A set of shared values and norms that support the management system and that guide management and employee behavior. benchmarking Collecting and comparing process and performance data from other companies. controlling The process of measuring progress against goals and objectives and correcting deviations if results are not as expected. alanced scorecard A method of monitoring the performance from four perspectives: finances, operations, customer relationships, and the growth and development of employees and intellectual property. crisis management Procedures and systems for minimizing the harm that might result from some unusually threatening situations. interpersonal skills Skills required to understand other people and to interact effectively with them. CHAPTER 7 Management Roles, Functions, and Skills 233 technical skills The ability and knowledge to perform the mechanics of a par- ticular job. administrative skills The technical skills necessary to direct an organization, including scheduling, researching, analyz- ing data, and managing projects. conceptual skills The ability to understand the relationship of parts to the whole. decision-making skills The ability to identify a decision situation, analyze the problem, weigh the alternatives, choose an alternative, implement it, and evaluate the results cognitive automation AI technology that aims to help professionals and managers with complex questions that present some of the most daunting decision scenarios. Chapter 8: organization structure A framework that enables managers to divide responsibilities, ensure employee accountability, and distribute decision-making authority. organization chart A diagram that shows how employees and tasks are grouped and where the lines of communication and authority flow. core competencies Activities that a company considers central and vital to its business. work specialization Specialization in or responsibility for some portion of an organization’s overall work tasks; also called division of labor. chain of command A pathway for the flow of authority from one management level to the next. span of management The number of people under one manager’s control; also known as span of control. centralization Concentration of decision- making authority at the top of an organization. decentralization Delegation of decision-making authority to employees in lower- level positions agile organization A company whose structure, policies, and capabilities allow employees to respond quickly to customer needs and changes in the business environment. departmentalization Grouping people within an organization according to function, division, matrix, or network. functional structure Grouping workers according to their similar skills, resource use, and expertise. divisional structure Grouping departments according to similarities in product, process, customer, or geography. matrix structure A structure in which employees are assigned to both a functional group and a project team (thus using functional and divisional patterns simultaneously). network structure A structure in which individual companies are connected through digital communication to perform selected tasks for a small headquarters organization. team A unit of two or more people who share a mission and collective responsibility as they work together to achieve a goal problem-solving team A team that meets to find ways of improving quality, efficiency, and the work environment. self-managed team A team in which members are responsible for an entire process or operation. functional team A team whose members come from a single functional department and that is based on the organization’s vertical structure. cross-functional team A team that draws together employees from different functional areas. task force A team of people from several departments who are temporarily brought together to address a specific issue. committee A team that may become a permanent part of the organization and is designed to deal with regularly recurring tasks. virtual team A team that uses communication technology to bring together geographically distant employees to achieve goals groupthink Uniformity of thought that occurs when peer pressures cause individual team members to withhold contrary or unpopular opinions. hidden agenda Private, counterproductive motives in a team setting, such as a desire to take control of the group, to undermine someone else on the team, or to pursue an incompatible goal. norms Informal standards of conduct that guide team behavior. unstructured organization An organization that doesn’t have a conventional structure but instead assembles talent as needed from the open market; the virtual and networked organizational concepts taken to the extreme. taskbot Software agent that can be assigned to complete a variety of tasks within an app or business system. robotic process automation (RPA) Software capability that does for knowledge work what mechanical robots do for manufacturing and other physical processes.