Principles of Management - Lesson 1 Review

Comprehensive vocabulary flashcards based on Lesson 1 of Principles of Management, covering organizational nature, stakeholder theory, behavioral economic models, management vs economics, Maslow's hierarchy of needs, classification of goods, and classes of social entities.

Stakeholders

Any individual or group impacted by a company's decisions, including customers, shareholders, public bodies, suppliers, employees, institutions, banks, government, and the local community.

Shareholders

Individuals or entities who own parts of a company by purchasing its stock and benefit from the company's financial returns.

Fisker Group Inc.

An electric vehicle start-up cited as a case study for business failure and bankruptcy, demonstrating broad impact across various firm stakeholders.

Organization

A community of people at the service of society as a whole, aimed at the production of products or services to satisfy needs, functioning as a private entity of public interest oriented to last over time.

Profit Formula

The financial gain of an organization calculated as $\text{profits} = \text{revenues} - \text{costs}$.

Homo Oeconomicus

A traditional economic model depicting human behavior as autonomous, perfectly rational, egotistical, self-interested, opportunistic (Theory X), and solely focused on maximizing utility, income, and wealth.

Human Being Model (Behavioral Economics)

A modern economic perspective depicting people as boundedly rational, utility satisfiers, cooperative, trustworthy (Theory Y), and influenced by social groups and fairness.

Responsibilities of Firm Leaders

The dual obligations of managers categorized into economic sustainability (creating wealth, achieving goals, surviving) and social/environmental impact (generating positive societal impact and preserving natural resources).

Entrepreneurship

A process where an individual invests personal resources (time, relationships, reputation, money) to create and manage a new organization designed to pursue an innovative opportunity within a specific socio-economic context.

Inventors vs. Entrepreneurs

Inventors (e.g., László Biró) move from problem observation to intuition, whereas entrepreneurs (e.g., Marcel Bich) move from intuition to implication and practical application.

Management (Field)

A profession and practice focused on the single organization level, analyzing elements, operating rules, and relationships with context to achieve good running and growth.

Economics (Field)

The academic field focused on the economic system as a whole, studying supply, demand, and policies to achieve general equilibrium and system development.

Maslow's Pyramid (1943)

A five-tier hierarchy of needs designed by psychologist Maslow classifying human motivation from physiological survival at the base to self-actualization at the top.

Physiological or Survival Needs

The most fundamental needs located at the bottom of Maslow's pyramid necessary to stay alive, such as air, water, food, and rest.

Safety Needs

The second level of Maslow's pyramid encompassing elements needed to feel secure, such as shelter, job security, retirement plans, and insurance.

Love and Belonging Needs

The middle tier of Maslow's pyramid leading human beings to feel loved and connected, including children, friends, and partners.

Esteem Needs

The fourth tier of Maslow's pyramid that completes a human being as a person, comprising fame, recognition, reputation, and dignity.

Self-Actualization Needs

The top step of Maslow's pyramid where a human being completes their life achievements, confidence, and freedom.

Non-Economic Goods

Goods where $\text{Availability} > \text{Needs}$, meaning they are available in unlimited supply, sufficient in quantity/quality for everyone, and free (e.g., air, sunlight).

Economic Goods

Goods where $\text{Availability} < \text{Needs}$, meaning they are useful for satisfying needs but scarce relative to demand (e.g., food, clothing, education).

Disposable Goods

Economic goods (also called monouso) designed to be used up a short time after purchase.

Substitute Goods

Economic goods perceived as the same or similar to other goods.

Complementary Goods

Economic goods used in an interrelated manner with an associated or paired good to complete each other.

Private Goods

Goods whose consumption by one individual prevents another individual from using them.

Public Goods

Goods produced for society's collective consumption, whose production by public administration serves as an end rather than a mean.

Commodity Goods

Interchangeable economic goods of the same type, such as gas or sugar.

Differentiable Goods

Economic goods that are uniquely distinguished from competing products through branding.

Social Entities

Organized groups of people working together to achieve common goals, efficiency, effectiveness, and social relationship rewards, categorized into four primary classes.

Family (Social Entity)

The basic social entity in society whose main economic goal is fulfilling its members' needs using income generated from external work, shares, rental properties, or bonds.

Firm or Profit Organization

A social entity whose primary economic goal is generating monetary and non-monetary rewards, with core interests centered on employees and shareholders.

State and Public Administrations

A political, social, legal, and economic system fostering the common good by producing public goods and services funded through taxes and public debt.