Business Terms Chapter 2 Flashcards

Terms Definitions
refers to an innovation mindset, used widely by Indian companies but picked up by American companies recently, that strives to meet customers’ immediate needs quickly and inexpensively
Why history of management is important
provides a broader way of thinking, a way of searching for patters and determining whether they recur across time periods; provides a way of learning from others’ mistakes so as not to repeat them; learning from others’ successes so as to repeat them in the appropriate situation; and most of all, learning to understand why things happen to improve our organizations in the future
Forces that influence organizations and the practice of management
social, political, and economic
Social forces
refer to those aspects of a culture that guide and influence relationships among people (values, needs, standards of behavior); shape social contract
social contract
unwritten, common rules and perceptions about relationships among people and between employees and management
Political forces
refer to the influence of political and legal institutions on people and organizations
Economic forces
pertain to the availability, production, and distribution of resources in a society
Classical perspective
emerged during the nineteenth century and early twentieth centuries as a result of problems arising from the control of factories (providing tools, training employees, scheduling, dealing with strikes); resulted in professional managers that organized, coordinated, and controlled the workers
Scientific management
subfield of classical perspective; emphasizes scientifically determined jobs and management practices as the way to improve efficiency and labor productivity
Founders of scientific management
Frederick Winslow Taylor, Henry Gantt, Frank B. Gilbreth, Lillian M. Gilbreth
Frederick Winslow Taylor
father of scientific management; believed change in management led to increased productivity, and the change could be determined by scientific study; replace rules of thumb with precise procedures developed from studying individual situations
Gantt chart
bar graph that measures planned and completed work along each stage of production by time elapsed
Frank B. Gilbreth
stressed efficiency and one best way to do work; time and motion study
Time and motion study
stresses techniques similar to Taylor, although he found them independently
Lillian M. Gilbreth
Worked on human side of management with consulting, lecturing, and working in industrial psychology and human resource management
Basic ideas of scientific management
a. Develop standard methods for doing each job
b. Select workers with the appropriate abilities
c. Train workers in the standard methods
d. Support workers and eliminate interruptions
e. Provide wage incentives
Contributions of scientific management
a. Demonstrated the importance of compensation for performance
b. Initiated the careful study of tasks and jobs
c. Demonstrated the importance of personnel selection and training
Criticisms of scientific management
a. Did not appreciate the social context of work and higher needs of workers
b. Did not acknowledge variance among individuals
c. Tended to regard workers as uninformed and ignored their ideas and suggestions
Bureaucratic organizations
subset of scientific management; systematic approach developed in Europe that looks at the organization as a whole
Qualities of bureaucracy
a. Division of labor, with clear definitions of authority and responsibility
b. Positions organized in a hierarchy of authority
c. Managers subject to rules and procedures that will ensure reliable, predictable behavior
d. Management separate from the ownership of the organization
e. Administrative acts and decisions recorded in writing
f. Personnel selected and promoted based on technical qualifications
Cons of bureaucracy
a. Too many rules
b. Seemingly silly procedures
Pros of bureaucracy
a. Equal treatment
b. Knowledge of rules leads to efficiency
Administrative principles
approach that focuses on the productivity of the total organization
Henri Fayol
French mining engineer who worked his way up to head of a mining group and wrote on concepts of administration based on his own experience, General and Industrial Management (Fayol) discusses 14 general principles of management, some of which are still used today
Fayol’s five basic functions or elements of management
a. Planning
b. Organizing
c. Commanding
d. Coordinating
e. Controlling
Humanistic perspective
emphasizes the importance of understanding human behaviors, needs, and attitudes in the workplace as well as social interactions and group processes
Mary Parker Follett
early advocate of humanistic perspective
1. Studied philosophy and political science at Radcliffe; studied social psych and management
2. Wrote of importance of common superordinate goals for reducing conflict in organizations
3. Popular with businesspeople but overlooked by management scholars
4. Stressed leadership focusing on people rather than engineering techniques and analyzed the dynamics of management-organization interactions
5. Addressed issues of ethics, power, and how to lead in a way that encourages employees
6. Concepts of empowerment for employees
Chester Barnard
Studied econ at Harvard; became president of New Jersey Bell; Informal organization; Acceptance theory of authority
Informal organization
occurs in all formal organizations and includes cliques and naturally occurring social groupings; powerful forces that can help the organization if properly managed
Acceptance theory of authority
states that people have free will and can choose whether to follow management orders
Human relations movement
subfield of humanistic perspective; based on the idea that truly effective control comes from within the individual worker rather than from strict, authoritarian control; grew from social pressures for enlightened treatment of employees
Hawthorne studies
a series of experiments on worker productivity begun in 1924 at the Hawthorne plant of Western Electric Company in Illinois; attributed employees’ increased output to managers’ better treatment of them during the study and started the revolution in worker treatment
Dairy farm view of management
contented cows give more milk, contented workers give more work
Human resources perspective
subfield of humanistic perspective; deeper than human relations movement; maintained an interest in worker participation and considerate leadership but shifted the emphasis to consider the daily tasks that people perform; combines prescriptions for design of job tasks with theories of motivation
Abraham Maslow
Psychologist that observed his patients problems usually stemmed from an inability to satisfy their needs; suggested hierarchy of needs
Hierarchy of needs
Physiological  safety  belongingness  esteem  self-actualization
Douglas McGregor
Developed Theory X and Theory Y based on experiences as a manager and consultant and training as psych
Theory X
basis for classical perspective and, slightly modified, human relations; the average human being has an inherent dislike of work and will avoid it if possible; because of the human characteristic of dislike for work, most people must be coerced, controlled, directed, or threatened with punishment to get them to put forth adequate effort toward the achievement of organizational objectives; the average human being prefers to be directed, wishes to avoid responsibility, has relatively little ambition, and wants security above all
Theory Y
organizations can use the potential of their employees to benefit
i. Average human does not inherently dislike work
ii. External control and threat of punishment are not the only means for bringing about effort toward organizational objectives; a person will exercise self-direction and self-control in the service of objectives to which he or she is committed
iii. Average human learns to accept and seek responsibility
iv. Capacity to exercise imagination and creativity in the solution of organizational problems in widely distributed in the population
v. Intellectual potentials of human are only partially utilized
Behavioral sciences approach
uses scientific methods and draws from sociology, psychology, anthropology, econ, and other disciplines to develop theories about human behavior and interaction in an organizational setting
Organization development
based in behavioral sciences approach; evolved as a separate field in the 1970s that applied the behavioral sciences to improve the organization’s health and effectiveness through its ability to cope with change, improve internal relationships, and increase problem-solving capabilities
Concepts from behavioral sciences approach
matrix organizations, self-managed teams, ideas about corporate culture, and management by wandering around
Quantitative perspective
aka management science; provided a way to address problems of managing and need for more tools due to WWII and therefore brought to business world; distinguished for its application of mathematics, stats, and other quantitative techniques to management decision making and problem solving
Peter Drucker
1946 book Concept of the Corporation sparked a dramatic increase in the academic study of business and management
Operations research
subset of quantitative perspective; grew out of WWII; consists of mathematical model building and other applications of quantitative techniques to managerial problems
Operations management
subset of quantitative perspective; refers to the field of management that specializes in the physical production of goods or services; specialists use methods of forecasting, inventory modeling, linear and nonlinear programming, queuing theory, scheduling, simulation, and break-even analysis to solve manufacturing problems
Information technology
most recent subfield of quantitative perspective; used in management info systems designed to provide relevant info to managers in a timely and cost-effective manner; evolved to include intranets and extranets, as well as various software programs that help managers estimate costs, plan and track production, manage projects, allocate resources, or schedule employees
financial managers and others who base their decisions on complex quantitative analysis, under the assumption that using advanced mathematics and sophisticated computer technology can accurately predict how the market works and help make profit
Systems thinking
the ability to see both the distinct elements of a system or situation and the complex and changing interaction among those elements; relationships among parts is what matters; enables managers to look for patterns of movement over time and focus on the qualities of rhythm, flow, direction, shape, and networks of relationships that accomplish the performance of the whole
set of interrelated parts that function as a whole to achieve a common purpose
parts of a system, such as an organization, that depend on one another
means that the whole is greater than the sum of its parts
Peter Senge
The Fifth Discipline, argues that reality is made up of circles rather than straight lines
contingency view
integrate universalist view (whatever worked in one organization works in another) and case view (each situation is unique); certain contingencies exist for helping management identify and understand situations
W. Edwards Deming
"father of quality movement"
total quality management
focuses on managing the total organization to deliver better quality to customers; infuses high-quality values throughout every activity within a company
four elements of quality management
employee involvement, focus on the customer, benchmarking, continuous improvement (kaizen)
employee involvement
achieving better quality requires companywide participation in quality control
focused on the customer
companies find out what customers want and try to meet their needs and expectations
process whereby companies find out how others do something better then they do and try to imitate or improve it
continuous improvement
implementation of small, incremental improvements in all areas of the organization on an ongoing basis
management techniques resulting from use of technology
customer relationship management, outsourcing, supply chain management
customer relationship management
use latest information tech to keep in clos touch with customers and to collect and manage large amounts of customer data
contracting out selected functions or activities to other organizations that can do the work more cost efficiently
supply chain management
managing the sequence of suppliers and purchasers, covering all stages of processing from obtaining raw materials to distributing finished goods to consumers
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