Big Words in the World of Management
Acquisition – Occurs when a larger company buys a smaller one and incorporates the acquired company’s operations into its own.
– The opportunity to complete a strategic acquisition is one of the best ways to enhance the value of a company
Autonomy – The degree to which the job provides freedom, independence, and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out.
– A job with a high degree of autonomy allows individual employees to do their work at their own pace and in the way that they choose.
Break-even analysis – A technique for identifying the point at which total revenue is just sufficient to cover total costs.
– Break-even analysis is a simplistic formulation that is valuable to managers because it points out the relationship among revenues, costs, and profits.
Centralization– A function of how much decision-making ability is pushed down to lower levels in an organization.
– The more centralized an organization is, the higher the level at which decisions are made.
Conscientiousness – A personality dimension that describes the degree to which someone is responsible, dependable, persistent, and achievement oriented.
– John is not very conscientious; he is very irresponsible and I cannot depend on him.
Devil’s advocate – A person who purposely presents arguments that run counter to those proposed by the majority or against current practices.
– A devil’s advocate acts as a check against groupthink and practices that have no better justification than “that’s the way we’ve always done it around here.”
Groupthink – The withholding by group members of different views in order to appear to be in agreement.
– Groupthink prevents a group from being able to work effectively.
Growth Strategy – A strategy in which an organization attempts to increase the level of its operations; can take the form of increasing sales revenue, number of employees, or market share.
– Dell Corporation implemented a growth strategy a few years ago and began selling computers overseas.
Kaizen – Japanese term for an organization committed to continuous improvement.
– W. Edwards Deming, a statistician from Wyoming, has been credited with helping Japanese industries make a turnaround after World War II with his idea of kaizen.
Norm – Acceptable standard shared by the members of a group.
– It is important to know the norms of an organization before your interview so you know what to wear to the interview and have an idea of how the organization is run.
Outsourcing – An organization’s use of outside firms for providing necessary products and services.
– Many companies these days choose to outsource to other countries where the labor is cheaper.
Ringisei – Japanese consensus forming group decisions.
– The Japanese value conformity and cooperation. Before making decisions, Japanese CEOs collect a large amount of information, which is then used in ringisei.
Stressor – A factor that causes stress.
– Stressors can range from personal matters, like financial problems, to organizational matters, like downsizing.
Intellectual Property – Proprietary information that is critical to a firm’s efficient and effective operation.
– Many firms are vulnerable to theft of intellectual property. Value chain partners need to balance their trust and control of each other.
Parochialism – Refers to a narrow focus in which one sees things solely through one’s own view and from one’s own perspective.
– To be successful in business, especially international business, people need not have a parochial view of the world.
Rational – Describes choices that are consistent and value-maximizing within specified constraints.
– Managerial decision making is assumed to be rational, or logical and objective.
Creativity – The ability to produce novel and useful ideas.
– I am very creative, but I do not have the means to physically produce my product ideas.
Fixed-Point Reordering System – A specified point at which inventory is replenished.
– Walmart is one business that has a Fixed-Point Reordering System. When inventory decreases to a preset mark, the computer system automatically reorders new inventory.
Authority – The rights inherent in a managerial position to give orders and expect them to be obeyed.
– Authority was a major tenet of the early management writers; it was viewed as the glue that held the organization together.
Fiscal Year – A 12 month period that usually starts on January 1.
– In companies where sales are heavily affected by seasons, the fiscal year may not start on January 1.