KEY TERMS – CHAPTER 1

manager Someone who coordinates and oversees the work of other people so that organizational
goals can be accomplished.

first-line managers Managers at the lowest level of the organization who manage the work of non-managerial
employees.

middle managers Managers between the first level and the top level of the organization who manage the
work of first-line managers.

top managers Managers at or near the upper levels of the organization structure who are responsible for
making organization-wide decisions and establishing the goals and plans that affect the
entire organization.

management Coordinating and overseeing the work activities of others so that their activities are
completed efficiently and effectively.

efficiency Doing things right, or getting the most output from the least amount of inputs.

effectiveness Doing the right things, or completing activities so that organizational goals are attained.

planning Management function that involves defining goals, establishing strategies for achieving
those goals, and developing plans to integrate and coordinate activities.

organizing Management function that involves arranging and structuring work to accomplish the
organization’s goals.

leading Management function that involves working with and through people to accomplish
organizational goals.

controlling Management function that involves monitoring, comparing, and correcting work
performance.

management roles Specific categories of managerial behavior.

interpersonal roles Managerial roles that involve people and other duties that are ceremonial and symbolic in
nature.

informational roles Managerial roles that involve collecting, receiving, and disseminating information.

decisional roles Managerial roles that revolve around making choices.

technical skills Job-specific knowledge and techniques needed to proficiently perform specific tasks.

human skills The ability to work well with other people individually and in a group.

conceptual skills The ability to think and to conceptualize about abstract and complex situations.

organization A deliberate arrangement of people to accomplish some specific purpose.

universality of The reality that management is needed in all types and sizes of
management organizations, at all organizational levels, in all organizational areas, and in organizations
in all countries around the globe.

KEY TERMS – CHAPTER 2

division of labor The breakdown of jobs into narrow and repetitive tasks.
(or job specialization)

Industrial Revolution The substitution of machine power for human power, which made it more economical to
manufacture goods in factories rather than at home.

scientific managementUsing the scientific method to determine the “one best way” for a job to be done.

therbligs A classification scheme for labeling seventeen basic hand motions.

general administrativeA theory of management that focused on describing what theory

managers do and what constitutes good management
principles of managementFundamental rules of management that could be taught in schools and applied in all
organizational situations.

bureaucracy A form of organization characterized by division of labor, a clearly defined hierarchy,

detailed rules and regulations, and impersonal relationships.

quantitative approachThe use of quantitative techniques to improve decision making.

organizational behavior The field of study concerned with the actions (behavior) of
(OB) people at work.

Hawthorne Studies A series of studies during the 1920s and 1930s that provided new insights in individual and
group behavior.

system A set of interrelated and interdependent parts arranged in a manner that produces a
unified whole.

closed systems Systems that are not influenced by and do not interact with their environment.

open systems Systems that interact with their environment.

contingency approachManagement approach that says that organizations are different, face different situations
(contingencies), and require different ways of managing.
workforce diversity A workforce that’s heterogeneous in terms of gender, race, ethnicity, age, and other
characteristics that reflect differences.

entrepreneurship The process of starting new businesses, generally in response to opportunities.

e-business (electronicThe way an organization does its work by using electronic

business) (Internet-based) linkages with its key constituencies in order to efficiently and effectively
achieve its goals.

e-commerce (electronicThe sales and marketing aspect of e-business.

commerce)

intranet A Web-based internal communication system accessible only by organizational employees.

learning organizationAn organization that has developed the capacity to continuously learn, adapt, and change.

knowledge managementCultivating a learning culture where organizational members systematically gather

knowledge and share it with others in the organization so as to achieve better
performance.

quality management A philosophy of management that is driven by continual improvement and responding to
customer needs and expectations.
KEY TERMS – CHAPTER 3

omnipotent view of management The view that managers are directly responsible for
an organization’s success or failure.

symbolic view of management The view that much of an organization’s success or

failure is due to external forces outside managers’
control.

organizational culture The shared values, principles, traditions, and ways

of doing things that influence the way
organizational members act.

strong cultures Organizational cultures in which the key values are intensely held and
widely shared.

socialization The process that helps employees adapt to the

organization’s culture.

workplace spirituality A culture where organizational values promote

a sense of purpose through meaningful work
that takes place in the context of community.

external environment Those factors and forces outside the organization

that affect the organization’s performance.
specific environment Those external forces that have a direct impact on
managers’ decisions and actions and are directly
relevant to the achievement of the organization’s
goals.

general environment Broad external conditions that may affect the

organization.

environmental uncertainty The degree of change and complexity in an

organization’s environment.

environmental complexity The number of components in an organization’s

environment and the extent of the organization’s
knowledge about those components.

stakeholders Any constituencies in the organization’s

environment that are affected by the organization’s
decisions and actions.

KEY TERMS – CHAPTER 5

classical view The view that management’s only social responsibility is to maximize profits.

socioeconomic view The view that management’s social responsibility goes beyond making profits to
include protecting and improving society’s welfare.

social obligation When a firm engages in social actions because of its obligation to meet certain
economic and legal responsibilities.

social responsiveness When a firm engages in social actions in response to some popular social need .

social responsibility A business’s intention, beyond its legal and economic obligations, to do the right
things and act in ways that are good for society .

social screening Applying social criteria (screens) to investment decisions.

greening of management The recognition of the close link between an organization’s decisions and activities
and its impact on the natural environment.

values-based management An approach to managing in which managers are guided by the organization’s
shared values in their management practices.

ethics Principles, values, and beliefs that define what is right and wrong behavior.

values Basic convictions about what is right and wrong.

ego strength A personality measure of the strength of a person’s convictions.

locus of control A personality attribute that measures the degree to which people believe they
control their own fate.

code of ethics A formal statement of an organization’s primary values and the ethical rules it
expects its employees to follow .

whistleblower Individuals who raise ethical concerns or issues to others inside or outside the
organization.

social entrepreneur An individual or organization who seeks out opportunities

to improve society by using practical, innovative, and
sustainable approaches.

social impact management An approach to managing in which managers examine the

social impacts of their decisions and actions.
KEY TERMS – CHAPTER 6

decision A choice from two or more alternatives.

decision-making process A set of eight steps that include identifying a problem, selecting an
alternative, and evaluating the decision’s effectiveness.

problem A discrepancy between an existing and a desired state of affairs.

decision criteria Criteria that define what’s relevant in a decision.

rational decision making Decision-making behavior where choices are consistent and value-
maximizing within specified constraints.

bounded rationality Decision-making behavior that’s rational, but limited (bounded) by an

individual’s ability to process information.

satisficing Accepting solutions that are “good enough.”

escalation of commitment An increased commitment to a previous decision despite evidence that it

may have been wrong.

intuitive decision making Making decisions on the basis of experience, feelings, and accumulated
judgment.

structured problems Straightforward, familiar, and easily defined problems.

programmed decision A repetitive decision that can be handled by a routine approach.

procedure A series of interrelated sequential steps that can be used to respond to a

well-structured problem.

rule An explicit statement that tells managers what they can or cannot do.

policy A guideline for making decisions.

unstructured problems Problems that are new or unusual and for which information is ambiguous
or incomplete.

nonprogrammed decisions A unique decision that requires a custom-made solution.

certainty A situation in which a manager can make accurate decisions because all
outcomes are known.

risk A situation in which the decision maker is able to estimate the likelihood of certain outcomes.

uncertainty A situation in which a decision maker has neither certainty nor reasonable
probability estimates available.

directive style A decision-making style characterized by low tolerance for ambiguity and a
rational way of thinking.

analytic style A decision-making style characterized by a high tolerance for ambiguity

and a rational way of thinking.

conceptual style A decision-making style characterized by a high tolerance for ambiguity

and an intuitive way of thinking.

behavioral style A decision-making style characterized by a low tolerance for ambiguity and
an intuitive way of thinking.

heuristics Rules of thumb that managers use to simplify decision making.

business performance IT software which provides key performance

management (BPM) indicators to help managers monitor
software efficiency of projects and employees.
KEY TERMS – CHAPTER 7

planning Defining the organization’s goals, establishing an overall strategy for

achieving those goals, and developing plans for organizational work
activities.

goals Desired outcomes for individuals, groups, or entire organizations.

plans Documents that outline how goals are going to be met.

stated goals Official statements of what an organization says, and what it wants its
various stakeholders to believe, its goals are.

real goals Goals that an organization actually pursues, as defined by the actions of its
members.

framing A way to use language to manage meaning.

strategic plans Plans that apply to the entire organization, establish the organization’s
overall goals, and seek to position the organization in terms of its
environment.

operational plans Plans that specify the details of how the overall goals are to be achieved.

long-term plans Plans with a time frame beyond three years.

short-term plans Plans covering one year or less.

specific plans Plans that are clearly defined and which leave no room for interpretation.

directional plans Plans that are flexible and that set out general guidelines.

single-use plan A one-time plan specifically designed to meet the needs of a unique
situation.

standing plans Ongoing plans that provide guidance for activities performed repeatedly.
traditional goal setting An approach to setting goals in which goals are set at the top level of the
organization and then broken into subgoals for each level of the
organization.

means-ends chain An integrated network of goals in which the accomplishment of goals at

one level serves as the means for achieving the goals, or ends, at the next
level.

management by objectives (MBO) A process of setting mutually-agreed upon goals and using those goals to
evaluate employee performance.

mission The purpose of an organization.

commitment concept Plans should extend far enough to meet those commitments made today.

formal planning department A group of planning specialists whose sole responsibility is helping to write
organizational plans.
KEY TERMS – CHAPTER 8

strategic management What managers do to develop the organization’s strategies.

strategies The decisions and actions that determine the long-run performance
of an organization.

business model A strategic design for how a company intends to profits from its
strategies, processes, and activities.

strategic management process A six-step process that encompasses strategic planning,

implementation, and evaluation.

mission A statement of the purpose of an organization.

opportunities Positive trends in external environmental factors.

threats Negative trends in external environmental factors.

resources An organization’s assets that are used to develop, manufacture,

and deliver products or services to its customers.

capabilities An organization’s skills and abilities in doing the work activities

needed in its business.
core competencies The organization’s major value-creating skills and capabilities that
determine its competitive weapons.

strengths Any activities the organization does well or any unique resources
that it has.

weaknesses Activities the organization does not do well or resources it needs

but does not possess.

SWOT analysis An analysis of the organization’s strengths, weaknesses,

opportunities, and threats.

corporate strategy An organizational strategy that determines what businesses a

company is in, should be in, or wants to be in, and what it wants to
do with those businesses.

growth strategy A corporate strategy that’s used when an organization wants to

grow and does so by expanding the number of products offered or
markets served, either through its current business(es) or through
new business(es).

related diversification When a company grows by combining with firms in different, but
related, industries.

unrelated diversification When a company grows by combining with firms in different and
unrelated industries.

stability strategy A corporate strategy characterized by an absence of significant

change in what the organization is currently doing.

renewal strategy A corporate strategy designed to address organizational weakness

that are leading to performance declines.

retrenchment strategy A short-run renewal strategy.

turnaround strategy A renewal strategy for situations in which

the organization’s performance problems are
more serious.

BCG matrix A strategy tool that guides resource allocation decisions on the
basis of market share and growth rate of SBUs.

business or competitive strategy An organizational strategy focused on how the organization will
compete in each of its businesses.

strategic business units The single businesses of an organization in several different

businesses that are independent and formulate their own
strategies.

competitive advantage What sets an organization apart; its distinctive edge.

cost leadership strategy A business or competitive strategy in which the organization

competes on the basis of having the lowest costs in its industry.

differentiation strategy A business or competitive strategy in which a company offers

unique products that are widely valued by customers.

focus strategy A business or competitive strategy in which a company pursues a

cost or differentiation advantage in a narrow industry segment.

stuck in the middle A situation where an organization hasn’t been able to develop
either a low cost or a differentiation competitive advantage.

functional strategies The strategies used by an organization’s various functional

departments to support the business or competitive strategy.

strategic flexibility The ability to recognize major external environmental changes, to

quickly commit resources, and to recognize when a strategic
decision was a mistake.
first mover An organization that’s first to bring a product innovation to the
market or to use a new process innovation.
KEY TERMS – CHAPTER 9

environmental scanning The screening of large amounts of information to anticipate and interpret
changes in the environment.

competitor intelligence Environmental scanning activity by which organizations gather information

about competitors.

forecasts Predictions of outcomes.

quantitative forecasting Forecasting that applies a set of mathematical rules to a series of past
data to predict outcomes.

qualitative forecasting Forecasting that uses the judgment and opinions of knowledgeable
individuals to predict outcomes.

benchmarking The search for the best practices among competitors or noncompetitors
that lead to their superior performance.

resources The assets of the organization including financial, physical, human,

intangible, and structural/cultural.

budget A numerical plan for allocating resources to specific activities.

scheduling Detailing what activities have to be done, the order in which they are to be
completed, who is to do each, and when they are to be completed.

Gannt chart A scheduling chart developed by Henry Gantt that shows actual and
planned output over a period of time.

load chart A modified Gantt chart that schedules capacity by entire departments or
specific resources.

PERT network A flowchart diagram showing the sequence of activities needed to

complete a project and the time or cost associated with each.

events End points that represent the completion of major activities in a PERT network.

activities The time or resources needed to progress from one event to another in a
PERT network.

slack time The amount of time an individual activity can be delayed without delaying
the whole project.

critical path The longest sequence of activities in a PERT network.

breakeven analysis A technique for identifying the point at which total revenue is just sufficient
to cover total costs.

linear programming A mathematical technique that solves resource allocation problems.

projectA one-time-only set of activities that has a definite beginning and ending point in time.

project management The task of getting a project’s activities done on time, within budget, and
according to specifications.

scenario A consistent view of what the future is likely to be.