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CHAPTER 1 Managing and Performing

Conceptual and decision skills Skills pertaining to the ability to identify and resolve problems for the benefit
of the organization and its members.

Controlling The management function of monitoring performance and making needed changes.

Cost competitiveness Keeping costs low to achieve profits and be able to offer prices that are attractive to
consumers.

Emotional intelligence The skills of understanding yourself, managing yourself, and dealing effectively with
others.

Frontline managers Lower-level managers who supervise the operational activities of the organization.

Innovation The introduction of new goods and services.

Interpersonal and communication skills People skills; the ability to lead, motivate, and communicate
effectively with others.

Knowledge management Practices aimed at discovering and harnessing an organization’s intellectual

resources.

Leading The management function that involves the manager’s efforts to stimulate high performance by
employees.

Management The process of working with people and resources to accomplish organizational goals.

Middle-level managers Managers located in the middle layers of the organizational hierarchy, reporting to
top-level executives.

Organizing The management function of assembling and coordinating human, financial, physical,
informational, and other resources needed to achieve goals.

Planning The management function of systematically making decisions about the goals and activities that an
individual, a group, a work unit, or the overall organization will pursue.

Quality The excellence of your product (goods or services).

Service the speed and dependability with which an organization delivers what customers want.

Social capital Goodwill stemming from your social relationships.

Speed Fast and timely execution, response, and delivery of results.

Sustainability The effort to minimize the use of resources, especially those that are not polluting and
nonrenewable.

Technical skill The ability to perform a specialized task involving a particular method or process.

Top-level managers Senior executives responsible for the overall management and effectiveness of the
organization.

Value The monetary amount associated with how well a job, task, good, or service meets user’s needs.

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CHAPTER 2 The External and Internal Environments

Acquisition One firm buying another

Barriers to entry Conditions that prevent new companies from entering an industry

Benchmarking The process of comparing an organization’s practices and technologies with those of other
companies

Buffering Creating supplies of excess resources in case of unpredictable needs

Competitive environment The immediate environment surrounding a firm; includes suppliers, customers, rivals, and
the like

Competitive intelligence Information that helps managers determine how to compete better

Cooperative strategies Strategies used by two or more working organizations working together to manage the
external environment

Defenders Companies that stay within a stable product domain as a strategic maneuver

Demographics Measures of various characteristics of the people who make up groups or other social units

Diversification A firm’s investment in a different product, business, or geographic area

Divestiture A firm selling one or more businesses

Domain selection Entering a new market or industry with an existing expertise

Empowerment The process of sharing power with employees, thereby enhancing their confidence in their ability to
perform their jobs and their belief that they are influential contributors to the organization

Environmental scanning Searching for and sorting through information about the environment

Environmental uncertainty Lack of information needed to understand or predict the future

External environment All relevant forces outside a firm’s boundaries, such as competitors, customers, the
government, and the economy

Final consumer Those who purchase products in their finished form

Flexible processes Methods for adapting the technical core to changes in the environment

Forecasting Method for predicting how variables will change the future

Independent strategies Strategies that an organization acting on its own uses to change some aspect of its current
environment

Inputs Goods and services organizations take in and use to create products or services

Intermediate consumer A customer who purchases raw materials or wholesale products before selling them to final
customers

Macroenvironment The general environment; includes governments, economic conditions, and other fundamental
factors that generally affect all organizations

Merger One or more companies combining with another

Open systems Organizations that are affected by, and that affect, their environment

Organizational climate: The patterns of attitudes and behavior that shape people’s experience of an organization

Organization culture The set of important assumptions about the organization and its goals and practices that
members of the company share

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Outputs The products and services organizations create

Prospectors Companies that continually change the boundaries for their task environments by seeking new products
and markets, diversifying and merging, or acquiring new enterprises

Scenario A narrative that describes a particular set of future conditions

Smoothing Leveling normal fluctuations at the boundaries of the environment

Strategic maneuvering An organization’s conscious efforts to change the boundaries of its task environment

Supply chain management The managing of the network of facilities and people that obtain materials from outside
the organization, transform them into products, and distribute them to customers

Switching costs Fixed costs buyers face when they change suppliers

CHAPTER 3 Managerial Decision Making

Affective conflict Emotional disagreement directed toward other people

Bounded rationality A less-than-perfect form of rationality in which decision makers cannot be perfectly rational
because decisions are complex and complete information is unavailable or cannot be fully processed

Brainstorming A process in which group members generate as many ideas about a problem as they can; criticism is
withheld until all ideas have been proposed

Certainty The state that exists when decision makers have accurate and comprehensive information

Coalitional model Model of organizational decision making in which groups with differing preferences use power and
negotiation to influence decisions

Cognitive conflict Issue-based differences in perspectives or judgments

Conflict Opposing pressures from different sources, occurring on the level of psychological conflict or of conflict
between individuals or groups

Contingency plans Alternative courses of action that can be implemented based on how the future unfolds

Custom-made solutions New, creative solutions designed specifically for the problem

Devil’s advocate A person who has the job of criticizing ideas to ensure that their downsides are fully explored

Dialectic A structured debate comparing two conflicting courses of action

Discounting the future A bias weighting short-term costs more heavily than longer-term costs and benefits

Framing effects A decision bias influenced by the way in which a problem or decision alternative is phrased or
presented

Garbage can model Model of organizational decision making depicting a chaotic process and seemingly random
decisions

Goal displacement A condition that occurs when a decision-making group loses sight of its original goal and a new,
less important goal emerges

Groupthink A phenomenon that occurs in decision making when group members avoid disagreement as they strive
for consensus

Illusion of control People’s belief that they can influence events, even when they have no control over what will
happen

Incremental model Model of organizational decision making in which major solutions arise through a series of
smaller decisions

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Maximizing A decision realizing the best possible outcome

Nonprogrammed decisions New, novel, complex decisions having no proven answers

Optimizing Achieving the best possible balance among several goals

Programmed decisions Decisions encountered and made before, having objectively correct answers, and solvable
by using simple rules, policies, or numerical computations

Ready-made solutions Ideas that have been seen or tried before

Risk The state that exists when the probability of success is less than 100 percent and losses may occur

Satisficing Choosing an option that is acceptable, although not necessarily the best or perfect

Uncertainty The state that exists when decision makers have insufficient information

Vigilance A process in which a decision maker carefully executes all stages of decision making

CHAPTER 4, Planning and Strategic Management

Business strategy The major actions by which a business competes in a particular industry or market

Concentration A strategy employed for an organization that operates a single business and competes in a single
industry

Concentric diversification A strategy used to add new businesses that produce related products or are involved in
related markets and activities

Conglomerate diversification A strategy used to add new businesses that produce unrelated products or are
involved in unrelated markets and activities

Core competence A unique skill and/or knowledge an organization possesses that gives it an edge over competitors

Corporate strategy The set of businesses, markets, or industries in which an organization competes and the
distribution of resources among those entities

Differentiation strategy A strategy an organization uses to build competitive advantage by being unique in its
industry or market segment along one or more dimensions

Functional strategy Strategies implemented by each functional area of the organization to support the organization’s
business strategy

Goal A target or end that management desires to reach

Low-cost strategy A strategy an organization uses to build competitive advantage by being efficient and offering a
standard, no-frills product

Mission An organization’s basic purpose and scope of operations

Operational planning The process of identifying the specific procedures and processes required at lower levels of
the organization

Plans The actions or means managers intend to use to achieve organizational goals

Resources Inputs to a system that can enhance performance

Scenario A narrative that describes a particular set of future conditions

Situational analysis A process planners use, within time and resource constraints, to gather, interpret, and
summarize all information relevant to the planning issue under consideration

Stakeholders Groups and individuals who affect and are affected by the achievement of the organization’s mission,
goals, and strategies

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Strategic control system A system designed to support managers in evaluating the organization’s progress
regarding its strategy and, when discrepancies exist, taking corrective action

Strategic goals Major targets or end results relating to the organization’s long-term survival, value, and growth

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

Strategic planning A set of procedures for making decisions about the organization’s long-term goals and strategies

Strategic vision The long-term5 direction and strategic intent of a company

Strategy A pattern of actions and resource allocations designed to achieve the organization’s goals

SWOT analysis A comparison of strengths, weaknesses, opportunities, and threats that helps executives formulate
strategy

Tactical planning A set of procedures for translating broad strategic goals and plans into specific goals and plans
that are relevant to a distinct portion of the organization, such as a functional area like marketing

Vertical integration The acquisition or development of new businesses that produce parts or components of the
organization’s product

CHAPTER 5, Ethics, Corporate Responsibility, and Sustainability

Business ethics The moral principles and standards that guide behavior in the world of business

Caux Principles Ethical principles established by international executives based in Caux, Switzerland, in
collaboration with business leaders from Japan, Europe, and the United States

Carbon footprint The output of carbon dioxide and other greenhouse gases

Compliance-based ethics programs Company mechanisms typically designed by corporate counsel to prevent,
detect, and punish legal violations

Corporate social responsibility Obligation toward society assumed by business

Ecocentric management Its goal is the creation of sustainable economic development and improvement of quality of
life worldwide for all organizational stakeholders

Economic responsibilities To produce goods and services that society wants at a price that perpetuates the
business and satisfies its obligations to investors

Egoism An ethical system defining acceptable behavior as that which maximizes consequences for the individual

Ethical climate In an organization, the processes by which decisions are evaluated and made on the basis of right
and wrong

Ethical issue Situation, problem, or opportunity in which an individual must choose among several actions that must
be evaluated as morally right or wrong

Ethical leader One who is both a moral person and a moral manager influencing others to behave ethically

Ethical responsibilities Meeting other social expectations, not written as law

Ethics The system of rules that governs the ordering of values

Integrity-based ethics programs Company mechanisms designed to instill in people a personal responsibility for
ethical behavior

Kohlberg’s model of cognitive moral development Perspective that what is moral comes from what a mature
person with “good” moral character would deem right

Legal responsibilities To obey local, state, federal, and relevant international laws

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Life-cycle analysis (LCA) A process of analyzing all inputs and outputs, through the entire “cradle-to-grave” life of a
product, to determine total environmental impact

Moral philosophy Principles, rules, and values people use in deciding what is right or wrong

Philanthropic responsibilities Additional behaviors and activities that society finds desirable and that the values of
the business support

Relativism Philosophy that bases ethical behavior on the opinions and behaviors of relevant other people

Sarbanes-Oxley Act An act passed into law by Congress in 2002 to establish strict accounting and reporting rules in
order to make senior managers more accountable and to improve and maintain investor confidence

Sustainable growth Economic growth and development that meet present needs without harming the needs of
future generations

Transcendent education An education with five higher goals that balance self-interest with responsibility to others

Triple bottom line Economic, social, and environmental performance

Universalism The ethical system stating that all people should uphold certain values that society needs to function

Utilitarianism An ethical system stating that the greatest good for the greatest number should be the overriding
concern of decision makers

Virtue ethics Classification of people based on their level of moral judgment

CHAPTER 6 International Management

Culture shock The disorientation and stress associated with being in a foreign environment

Ethnocentrism The tendency to judge others by the standards of one’s group or culture, which are seen as superior

Expatriates Parent-company nationals who are sent to work at a foreign subsidiary

Failure rate The number of expatriate managers of an overseas operation who come home early

Global mode An organizational model consisting of a company’s overseas subsidiaries and characterized by
centralized decision making and tight control by the parent company over most aspects of worldwide operations;
typically adopted by organizations that base their global competitive strategy on cost considerations

Host-country nationals Natives of the country where an overseas subsidiary is located

Inpatriate A foreign national brought in to work at the parent company

International model An organizational model that is composed of a company’s overseas subsidiaries and
characterized by greater control by the parent company over the research function and local product and marketing
strategies than is the case in the multinational model

Multinational model An organizational model that consists of the subsidiaries in each country in which a company
does business, and provides a great deal of discretion to those subsidiaries to respond to local conditions.

North American Free Trade Agreement (NAFTA) An economic pact that combined the economies of the United
States, Canada, and Mexico into one of the world’s largest trading blocs.

Offshoring Moving work to other countries

Outsourcing Contracting with an outside provider to produce one or more of an organization’s goods or services

Third-country national Natives of a country other than the home country or the host country of an overseas
subsidiary

Transnational model An organizational model characterized by centralizing certain functions in locations that best
achieve cost economies; basing other functions in the company’s national subsidiaries to facilitate greater local

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responsiveness; and fostering communication among subsidiaries to permit transfer of technological expertise and
skills

CHAPTER 7 Entrepreneurship

Advertising support model Charging fees to advertise on a site

Affiliate model Charging fees to direct site visitors to other companies’ sites

Bootlegging Informal work on projects, other than those officially assigned, of employee’s own choosing and
initiative

Business incubators Protected environments for new, small businesses

Business accellerators

Business plan A formal planning step that focuses on the entire venture and describes all the elements involved in
starting it

Entrepreneur Individuals who establish a new organization without the benefit of corporate sponsorship

Entrepreneurial orientation The tendency of an organization to identify and capitalize successfully on

opportunities to launch new ventures by entering new or established markets with new or existing goods or services

Entrepreneurial venture A new business having growth and high profitability as primary objectives.

Entrepreneurship The pursuit of lucrative opportunities by enterprising individuals

Franchising An entrepreneurial alliance between a franchisor (an innovator who has created at least one
successful store and wants to grow) and an franchisee (a partner who manages a new store of the same type in a
new location)

Initial public offering (IPO) Sale to the public, for the first time, of federally registered and underwritten shares of
stock in the company

Intermediary model Charging fees to bring buyers and sellers together

Intrapreneur New-venture creators working inside big companies

Legitimacy People’s judgment of a company’s acceptance, appropriateness, and desirability, generally stemming
from company goals and methods that are consistent with societal values

Opportunity analysis A description of the good or service, an assessment of an opportunity, an assessment of the
entrepreneur, specification of activities and resources needed to translate your idea into a viable business, and your
source(s) of capital.

Skunkworks A project team designated to produce a new, innovative product

Small business A business having fewer than 100 employees, independently owned and operated, not dominant in
its field, and not characterized by many innovative practices

Social capital A competitive advantage in the form of relationships with other people and the image other people
have of you

Social entrepreneurship leveraging resources to address social problems

Social enterprises

Subscription model Charging fees for site visits

Transaction fee model Charging fees for good and services

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CHAPTER 8 Organization Structure

Accountability The expectation that employees will perform a job, take corrective action when necessary, and
report upward on the status and quality of their performance

Authority The legitimate right to make decisions and to tell other people what to do

Broker A person who assembles and coordinates participants in a network

Centralized organization An organization in which high-level executives make most decisions and pass them down
to lower levels for implementation

Coordination The procedures that link the various parts of an organization for the purpose of achieving the
organization’s overall mission

Coordination by mutual adjustment Units interact with one another to make accommodations to achieve flexible
coordination

Coordination by plan Interdependent units are required to meet deadlines and objectives that contribute to a
common goal

Corporate governance The role of a corporation’s executive staff and board of directors in ensuring that the firm’s
activities meet the goals of the firm’s stakeholders

Decentralized organization An organization in which lower-level managers make important decisions

Delegation The assignment of new or additional responsibilities to a subordinate

Departmentalization Subdividing an organization into smaller subunits

Differentiation An aspect of the organization’s internal environment created by job specialization and the division of
labor

Division of labor the assignment of different tasks to different people or groups

Divisional organization Departmentalization that groups units around products, customers, or geographic regions

Dynamic network Temporary arrangements among partners that can be assembled and reassembled to adapt to
the environment

Formalization the presence of rules and regulations governing how people in the organization interact

Functional organization Departmentalization around specialized activities such as production, marketing, and
human resources

Hierarchy The authority levels of the organizational pyramid

Integration the degree to which differentiated work units work together and coordinate their efforts

Line departments Units that deal directly with the organization’s primary goods and services

Matrix organization An organization composed of dual reporting relationships in which some managers report to
two superiors – a functional manager and a divisional manager

Network organization A collection of independent, mostly single-function firms that collaborate on a good or
service

Organization chart the reporting structure and division of labor in an organization

Responsibility The assignment of a task that an employee is supposed to carry out

Span of control The number of subordinates who report directly to an executive or supervisor

Specialization A process in which different individuals and units performs different tasks

Staff departments Units that support line departments

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Standardization Establishing common routines and procedures that apply uniformly to everyone

Subunits Subdivisions of an organization

Unity-of-command principle A structure in which each worker reports to one boss, who in turn reports to one boss

CHAPTER 9 Organizational Agility

Computer-integrated manufacturing (CIM) The use of computer-aided design and computer-aided manufacturing
to sequence and optimize a number of production processes

Concurrent engineering A design approach in which all relevant functions cooperate jointly and continually in a
maximum effort aimed at producing high-quality products that meet customer’s needs

Continuous process A process that is highly automated and has a continuous production flow

Customer relationship management (CRM) A multifaceted process focusing on creating two-way exchanges with
customers to foster intimate knowledge of their needs, wants, and buying patterns

Downsizing The planned elimination of positions or jobs

Economies of scope Economies in which materials and processes employed in one product can be used to make
other, related products

Flexible factories Manufacturing plants that have short production runs, are organized around products, and use
decentralized scheduling

High-involvement organization A type of organization in which top management ensures that there is consensus
about the direction in which the business is heading

ISO 9001 A series of quality standards developed by a committee working under the International Organization for
Standardization to improve total quality in all businesses for the benefit of producers and customers

Just-in-time (JIT) A system that calls for subassemblies and components to be manufactured in very small lots and
delivered to the next stage of the production process just as they are needed

Large batch Technologies that produce goods and services in high volume

Lean manufacturing An operation that strives to achieve the highest possible productivity and total quality, cost
effectively, by eliminating unnecessary steps in the production process and continually striving for improvement

Learning organization An organization skilled at creating, acquiring, and transferring knowledge, and at modifying
its behavior to reflect new knowledge and insights

Logistics The movement of the right goods in the right amount to the right place at the right time

Mass customization The production of varied, individually customized products at the low cost of standardized,
mass-produced products

Mechanistic organization A form of organization that seeks to maximize internal efficiency

Organic structure An organizational form that emphasizes flexibility

Reengineering A process where the organization completely overhauls the operation to achieve the greatest benefits
to the customer and the to the organization.

Rightsizing A successful effort to achieve an appropriate size at which the company performs most effectively

Six Sigma quality A method of systematically analyzing work processes to identify and eliminate virtually all causes
of defects, standardizing the processes to reach the lowest practicable level of any cause of customer dissatisfaction

Small batch Technologies that produce goods and services in low volume

Strategic alliance A formal relationship created among independent organizations with the purpose of joint pursuit

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of mutual goals

Survivor’s syndrome Loss of productivity and morale in employees who remain after a downsizing

Technology the systematic application of scientific knowledge to a new product, process, or service

Time-based competition (TBC) Strategies aimed at reducing the total time needed to deliver a good or service

Total quality management (TQM) An integrative approach to management that supports the attainment of
customer satisfaction through a wide variety of tools and techniques that results in high-quality goods and services

Value chain The sequence of activities that flow from raw materials to the delivery of good or service, with
additional value created at each step

CHAPTER 10, Human Resources Management

Adverse impact When a seemingly neutral employment practice has a disproportionately

negative effect on a protected group.

Arbitration The use of a neutral third party to resolve a labor dispute.

Assessment center A managerial performance test in which candidates participate in a variety of

exercises and situations.

Cafeteria benefit programs An employee benefit program in which employees choose from a
menu of options to create a benefit package tailored to their needs.

Comparable worth Principle of equal pay for different jobs of equal worth.

Development Helping managers and professional employees learn the broad skills needed for
their present and future jobs.

Diversity training Programs that focus on identifying and reducing hidden biases against people
with differences and developing the skills needed to manage a diversified workforce.

Employment-at-will The legal concept that an employee may be terminated for any reason.

Flexible benefit programs Benefit programs in which employees are given credits to spend on
benefits that fit their unique needs.

Human capital The knowledge, skills, and abilities of employees that have economic value.

Human resources management (HRM) Formal systems for the management of people within an
organization.

Job analysis A tool for determining what is done on a given job and what should be done on that
job.

Labor relations The system of relations between workers and management.

Management by objectives (MBO) A process in which objectives set by a subordinate and a

supervisor must be reached within a given time period.

Needs assessment An analysis identifying the jobs, people, and departments for which training is
necessary.

Orientation training Training designed to introduce new employees to the company and
familiarize them with policies, procedures, culture, and the like.

Outplacement The process of helping people who have been dismissed from the company regain
employment elsewhere.

Performance appraisal (PA) Assessment of an employee’s job performance.

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Recruitment The development of a pool of applicants for jobs in an organization.

Reliability The consistency of test scores over time and across alternative measurements.

Right-to-work Legislation that allows employees to work without having to join a union.

Selection Choosing from among qualified applicants to hire into an organization.

Structured interview Selection technique that involves asking all applicants the same questions
and comparing their responses to a standardized set of answers.

360-degree appraisal Process of using multiple sources of appraisal to gain a comprehensive

perspective on one’s performance.

Team training Training that provides employees with the skills and perspectives they need to
collaborate with others.

Termination interview A discussion between a manager and an employee about the employee’s
dismissal.

Training Teaching lower-level employees how to perform their present jobs.

Union shop An organization with a union and a union security clause specifying that workers
must join the union after a set period of time.

Validity The degree to which a selection test predicts or correlates with job performance.

CHAPTER 11 Managing the Diverse Workforce

Affirmative action Special efforts to recruit and hire qualified members of groups that have been
discriminated against in the past.

Managing diversity Managing a culturally diverse workforce by recognizing the characteristics

common to specific groups of employees while dealing with such employees as individuals and
supporting, nurturing, and utilizing their differences to the organization’s advantage.

Mentors Higher-level managers who help ensure that high-potential people are introduced to top
management and socialized into the norms and values of the organization.

Monolithic organization An organization that has a low degree of structural integration -

employing few women, minorities, or other groups that differ from the majority – and thus has a
highly homogeneous employee population.

Multicultural organization An organization that values cultural diversity and seeks to utilize and
encourage it.

Pluralistic organization An organization that has a relatively diverse employee population and
makes an effort to involve employees from different gender, racial, or cultural backgrounds.

Reasonable Accommodation Under Title I of the Americans with Disabilities Act (ADA), a
reasonable accommodation is a modification or adjustment to a job, the work environment, or the
way things are usually done during the hiring process. These modifications enable an individual
with a disability to have an equal opportunity not only to get a job, but successfully perform their job
tasks to the same extent as people without disabilities. (source - US Department of Labor
www.dol.gov)

Sexual harassment Conduct of a sexual nature that has negative consequences for
employment.

CHAPTER 12 Leadership

Authentic leadership A style in which the leader is true to himself or herself while leading.

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Autocratic leadership A form of leadership in which the leader makes decisions on his or her
own and then announces those decisions to the group.

Behavioral approach A leadership perspective that attempts to identify what good leaders do –
that is, what behaviors they exhibit.

Charismatic leader A person who is dominant, self-confident, convinced of the moral

righteousness of his or her beliefs, and able to arouse a sense of excitement and adventure in
followers.

Democratic leadership A form of leadership in which the leader solicits input from
subordinates.

Fiedler’s contingency model of leadership effectiveness A situational approach to leadership

postulating that effectiveness depends on the personal style of the leader and the degree to which
the situation gives the leader power, control, and influence over the situation.

Group maintenance behaviors Actions taken to ensure the satisfaction of group members,
develop and maintain harmonious work relationships, and preserve the social stability of the group.

Hersey and Blanchard’s situational theory A life cycle theory of leadership postulating that a
manager should consider an employee’s psychological and job maturity before deciding whether a
task performance or maintenance behaviors are more important.

Intergroup leader A leader who leads collaborative performance between different groups or
organizations.

Job maturity The level of the employee’s skills and technical knowledge relative to the task being
performed.

Laissez-faire Leadership philosophy characterized by an absence of managerial decision

making.

Lateral leadership Style in which colleagues at the same hierarchical level are invited to
collaborate and facilitate joint problem solving.

Leader-Member Exchange (LMX) Highlights the importance of leader behaviors not just toward
the group as a whole but toward individuals on a personal basis.

Level 5 leadership A combination of strong professional will (determination) and humility that
builds enduring greatness.

Participation in decision making Leader behaviors that managers perform in involving their
employees in making decisions.

Path-goal theory A theory that concerns how leaders influence subordinates’ perceptions of their
work goals and the paths they follow toward attainment of those goals.

Power The ability to influence others.

Pseudotransformational leaders Leaders who talk about positive change but allow their self-
interest to take precedence over followers’ needs.

Psychological maturity An employee’s self-confidence and self-respect.

Relationship-motivated leadership Leadership that places primary emphasis on maintaining

good interpersonal relationships.

Servant-leader A leader who serves others’ needs while strengthening the organization.

Shared leadership Rotating leadership, in which people rotate through the leadership role based
on which person has the most relevant skills at a particular time.

Situational approach Leadership perspective proposing that universally important traits and
behaviors do not exist, and that effective leadership behavior varies from situation to situation.

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Strategic leadership Behavior that gives purpose and meaning to organizations, envisioning and
creating a positive future.

Substitutes for leadership Factors in the workplace that can exert the same influence on
employees as leaders would provide.

Supervisory leadership Behavior that provides guidance, support, and corrective feedback for
day-to-day activities.

Task-motivated leadership Leadership that places primary emphasis on completing a task.

Task performance behaviors Actions taken to ensure that the work group or organization
reaches its goals.

Trait approach A leadership perspective that attempts to determine the personal characteristics
that great leaders share.

Transactional leaders Leaders who manage through transactions, using their legitimate, reward,
and coercive powers to give commands and exchange rewards for services rendered.

Transformational leader A leader who motivates people to transcend their personal interests for
the good of the group.

Vision A mental image of a possible and desirable future state of the organization.

Vroom model A situational model that focuses on the participative dimension of leadership.

CHAPTER 13 Motivating for Performance

Alderfer’s ERG theory A human needs theory postulating that people have three basic sets of
needs that can operate simultaneously.

Empowerment The process of sharing power with employees, thereby enhancing their confidence
in their ability to perform their jobs and their belief that they are influential contributors to the
organization.

Equity theory A theory stating that people assess how fairly they have been treated according to
two key factors: outcomes and inputs.

Expectancy Employees’ perception of the likelihood that their efforts will enable them to attain
their performance goals.

Expectancy theory A theory proposing that people will behave based on their perceived likelihood
that their effort will lead to a certain outcome and on how highly they value that outcome.

Extinction Withdrawing or failing to provide a reinforcing consequence.

Extrinsic rewards Rewards given to a person by the boss, the company, or some other person.

Goal-setting theory A motivation theory stating that people have conscious goals that energize
them and direct their thoughts and behaviors toward a particular end.

Growth need strength The degree to which individuals want personal and psychological
development.

Hygiene factors Characteristics of the workplace, such as company policies, working conditions,
pay, and supervision, that can make people dissatisfied.

Instrumentality The perceived likelihood that performance will be followed by a particular

outcome.

Intrinsic reward Reward a worker derives directly from performing the job itself.

Job enlargement Giving people additional tasks at the same time to alleviate boredom.

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Job enrichment Changing a task to make it inherently more rewarding, motivating, and satisfying.

Job rotation Changing from one routine task to another to alleviate boredom.

Law of effect A law formulated by Edward Thorndike in 1911 stating that behavior that is followed
by positive consequences will likely be repeated.

Maslow’s need hierarchy A conception of human needs organizing needs into a hierarchy of five
major types.

Motivation Forces that energize, direct, and sustain a person’s efforts.

Motivators Factors that make a job more motivating, such as additional job responsibilities,
opportunities for personal growth and recognition, and feelings of achievement.

Negative reinforcement Removing or withholding an undesirable consequence.

Organizational behavior modification (OB mod) The application of reinforcement theory in

organizational settings.

Outcome A consequence a person receives for his or her performance.

Positive reinforcement Applying consequences that increase the likelihood that a person will
repeat the behavior that led to it.

Procedural justice Using fair process in decision making and making sure others know that the
process was as fair as possible.

Psychological contract A set of perceptions of what employees owe their employers, and what
their employers owe them.

Punishment Administering an aversive consequence.

Quality of work life (QWL) programs Programs designed to create a workplace that enhances
employee well-being.

Reinforcers Positive consequences that motivate behavior.

Stretch goals Targets that are particularly demanding, sometimes even thought to be impossible.

Two-factor theory Herzberg’s theory describing two factors affecting people’s work motivation and
satisfaction.

Valence The value an outcome holds for the person contemplating it.

CHAPTER 14 Teamwork

Autonomous work group Groups that control decisions about and execution of a complete range
of tasks.

Avoidance A reaction to conflict that involves ignoring the problem by doing nothing at all, or
deemphasizing the disagreement.

Cohesiveness The degree to which a group is attractive to its members, members are motivated
to remain in the group, and members influence one another.

Collaboration A style of dealing with conflict emphasizing both cooperation and assertiveness to
maximize both parties’ satisfaction.

Competing A style of dealing with conflict involving strong focus on one’s own goals and little or no
concern for the other person’s goals.

Compromise A style of dealing with conflict involving moderate attention to both parties’
concerns.

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Gatekeeper A team member who keeps abreast of current developments and provides the team
with relevant information.

Informing A team strategy that entails making decisions with the team and then informing
outsiders of its intentions.

Management teams Teams that coordinate and provide direction to the subunits under their
jurisdiction and integrate work among subunits.

Mediator A third party who intervenes to help others manage their conflict.

Norms Shared beliefs about how people should think and behave.

Parading A team strategy that entails simultaneously emphasizing internal team building and
achieving external visibility.

Parallel teams Teams that operate separately from the regular work structure, and exist
temporarily.

Probing A team strategy that requires team members to interact frequently with outsiders,
diagnose their needs, and experiment with solutions.

Project and development teams Teams that work on long-term projects but disband once the
work is completed.

Roles Different sets of expectations for how different individuals should behave.

Self-designing teams Teams with the responsibilities of autonomous work groups, plus control
over hiring, firing, and deciding what tasks members perform.

Social facilitation effect Working harder when in a group than when working alone.

Social loafing Working less hard and being less productive when in a group.

Superordinate goals Higher-level goals taking priority over specific individual or group goals.

Task specialist An individual who has more advanced job-related skills and abilities than other
group members possess.

Team A small number of people with complementary skills who are committed to a common
purpose, set of performance goals, and approach for which they hold themselves mutually
accountable.

Teaming is a strategy of teamwork on the fly, creating many temporary, changing teams.

Team maintenance roles Role used to team harmony.

Transnational teams Work groups composed of multinational members whose activities span
multiple countries.

Virtual teams teams that are physically dispersed and communicate electronically more than face-
to-face.

Work teams Teams that make or do things like manufacture, assemble, sell, or provide service.

CHAPTER 15 Communicating

Boundaryless organization Organization in which there are no barriers to information flow.

Coaching Dialogue with a goal of helping another be more effective and achieve his or her full
potential on the job.

Communication The transmission of information and meaning from one party to another through
the use of shared symbols.

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Downward communication Information that flows from higher to lower levels in the organization’s
hierarchy.

Filtering the process of withholding, ignoring, or distorting information.

Grapevine Informal communication network.

Horizontal communication Information shared among people on the same hierarchical level.

Media richness The degree to which a communication channel conveys information.

One-way communication A process in which information flows in only one direction – from the
sender to the receiver, with no feedback loop.

Open-book management Practice of sharing with employees at all levels of the organization vital
information previously meant for management’s eyes only.

Perception The process of receiving and interpreting information.

Reflection Process by which a person states what he or she believes the other person is saying.

Two-way communication A process in which information flows in two directions – the receiver
provides feedback, and the sender is receptive to the feedback.

Upward communication Information that flows from lower to higher levels in the organization’s
hierarchy.

Virtual office A mobile office in which people can work anywhere, as long as they have the tools to
communicate with customers and colleagues.

CHAPTER 16 Managerial Control

Accounting audits Procedures used to verify accounting reports and statements.

Activity-based costing (ABC) A method of cost accounting designed to identify streams of activity
and then to allocate costs across particular business processes according to the amount of time
employees devote to particular activities.

After-action review A frank and open-minded discussion of four basic questions aimed at
continuous improvement.

Assets The values of the various items the corporation owns.

Balanced scorecard Control system combining four sets of performance measures: financial,
customer, business process, and learning and growth.

Balance sheet A report that shows the financial picture of a company at a given time and itemizes
assets, liabilities, and stockholders’ equity.

Budgeting the process of investigating what is being done and comparing the results with the
corresponding budget data to verify accomplishments or remedy differences; also called budgetary
controlling.

Bureaucratic control The use of rules, regulations, and authority to guide performance.

Clan control Control based on the norms, values, shared goals, and trust among group members.

Concurrent control The control process used while plans are being carried out, including
directing, monitoring, and fine-tuning activities as they are performed.

Control Any process that directs the activities of individuals toward the achievement of
organizational goals.

Current ratio A liquidity ratio that indicates the extent to which short-term assets can decline and

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still be adequate to pay short-term liabilities.

Debt-equity ratio A leverage ratio that indicates the company’s ability to meet its long-term
financial obligations.

External audit An evaluation conducted by one organization, such as a CPA firm, on another.

Feedback control Control that focuses on the use of information about previous results to correct
deviations from the acceptable standard.

Feedforward control The control process used before operations begin, including policies,
procedures, and rules designed to ensure that planned activities are carried out properly.

Internal audit A periodic assessment of a company’s own planning, organizing, leading, and
controlling processes.

Liabilities The amounts a corporation owes to various creditors.

Management audit An evaluation of the effectiveness and efficiency of various systems within an
organization.

Management myopia Focusing on short-term earnings and profits at the expense of longer-term
strategic obligations.

Market control Control based on the use of pricing mechanisms and economic information to
regulate activities within organizations.

Principle of exception A managerial principle stating that control is enhanced by concentrating on

the exceptions to or significant deviations from the expected result or standard.

Profit and loss statement An itemized financial statement of the income and expenses of a
company’s operations.

Return on investment (ROI) A ratio of profit to capital used, or a rate of return from capital.

Standard Expected performance for a given goal; a target that establishes a desired performance
level, motivates performance, and serves as a benchmark against which actual performance is
assessed.

Stockholders’ equity The amount accruing to the corporation’s owners.

Transfer price Price charged by one unit for a good or service provided to another unit within the
organization.

CHAPTER 17 Managing Technology and Innovation

Chief information officer (CIO) Executive in charge of information technology strategy and
development.

Development project A focused organizational effort to create a new product or process via
technological advances.

Executive champion An executive who supports a new technology and protects the product
champion of the innovation.

Innovation A change in method or technology; a positive, useful departure from previous ways of
doing things.

Make-or-buy decision The question an organization asks itself about whether to acquire new
technology from an outside source or develop it itself.

Product champion A person who promotes a new technology throughout the organization in an
effort to obtain acceptance of and support for it.

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Sociotechnical systems An approach to job design that attempts to redesign tasks to optimize
operation of a new technology while preserving employees’ interpersonal relationships and other
human aspects of the work.

Technical innovator A person who develops a new technology or has the key skills to install and
operate the technology.

Technology The systematic application of scientific knowledge to a new product, process, or

service.

Technology audit Process of clarifying the key technologies on which an organization depends.

Technology life cycle A predictable pattern followed by a technological innovation, from its inception and
development to market saturation and replacement

CHAPTER 18 Creating and Leading Change

Adapters Companies that take the current industry structure and its evolution as givens, and
choose where to compete.

Force-field analysis An approach to implementing the unfreezing/moving/refreezing model by

identifying the forces that prevent people from changing and those that will drive people toward
change.

Genius of the “and” Also Organization ambidexterity; ability to achieve multiple objectives
simultaneously.

Moving Instituting the change.

Organization development (OD) The system-wide application of behavioral science knowledge to

develop, improve, and reinforce the strategies, structures, and processes that lead to organizational
effectiveness.

Organizational ambidexterity See Genius of the “and”

Performance gap The difference between actual performance and desired performance.

Proactive change A response that is initiated before a performance gap has occurred.

Reactive change A response that occurs under pressure; problem-driven change.

Refreezing Strengthening the new behaviors that support the change.

Shapers Companies that try to change the structure of their industries, creating a future
competitive landscape of their own design.

Total organization change Introducing and sustaining multiple policies, practices, and procedures
across multiple units and levels.

Tyranny or the “or” The belief that things must be either A or B and cannot be both; that only one
goal and not another can be attained.

Unfreezing Realizing that current practices are inappropriate and that new behavior is necessary.

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