Internal Environment of Business

This set of flashcards covers key concepts and terminology related to the internal environment of business, management functions, organizational governance, and strategic management.

Management Functions (POLC)

The four key functions of management: Planning, Organizing, Leading, and Controlling.

Planning

The management function that involves formulating strategies to achieve organizational goals.

Organizing

The management function that involves designing work activities and delegating tasks.

Leading

The management function that includes communicating ideas and guiding employees.

Controlling

The management function that involves conflict resolution and maintaining standards.

Managerial Roles

Categories of roles that managers take on, including Informational, Interpersonal, and Decisional.

Informational Roles

Roles that involve monitoring and disseminating relevant data within the organization.

Interpersonal Roles

Roles that focus on relationships and motivation, including being a leader and figurehead.

Decisional Roles

Roles that involve decision-making processes, such as resource allocation and initiating new projects.

Classical Management Philosophies

Frameworks including Scientific, Administrative, and Bureaucratic management.

Scientific Management (Taylorism)

Focus on standardizing work processes and closely supervising employees.

Administrative Management (Fayol)

Emphasis on division of work and unity of command within the organization.

Bureaucratic Management (Weber)

Focus on rules, procedures, and a clear hierarchy in organizations.

Human Relations Movement

The theory that employee productivity improves when they are given special attention.

Esprit de Corps

The principle that encourages unity among employees to improve morale.

Sole Proprietorship

A business owned and managed by one individual with no legal distinction from the owner.

Partnership

A business owned by two or more individuals sharing profits and responsibilities.

Corporation

A legal entity that exists independently of its owners, offering limited liability.

Cooperative

A business model owned and managed by its employees to meet common needs.

Corporate Governance

The system of rules and processes by which a company is governed.

Principal-Agent Problem

The conflict arising when management's interests do not align with those of the owners.

Good Governance Features

Accountability, fairness, transparency, reliable leadership, and stakeholder engagement.

Work Specialization

The degree to which tasks are divided into separate jobs.

Centralization vs. Decentralization

The extent to which decision-making is concentrated at the top levels of management vs. spread throughout lower levels.

Tall vs. Flat Structures

Describes levels of hierarchy in an organization; tall has many levels, flat has few.

Formalization

The extent to which rules and procedures govern how work is done.

Departmentation

The division of labor into different departments within an organization.

Virtual Organization

An organization that outsources tasks and forms alliances to remain flexible.

SWOT Analysis

A strategic planning technique used to identify strengths, weaknesses, opportunities, and threats.

Five Forces Model

A framework for analyzing the competitive environment of an industry.

Rivalry/Competition

The intensity of competition within an industry, impacted by factors like differentiation and exit barriers.

VRIO Model

A framework that assesses an organization's resources based on Value, Rareness, Imitability, and Organization.

Bounded Rationality Model

A decision-making model that recognizes limitations in information and cognitive processes.

Prospect Theory

A behavioral economic theory stating people tend to take risks to recover losses.

Escalating Commitment

The tendency to continue an endeavor once an investment in money, effort, or time had been made, mainly to save face and one’s ego

Single-Loop Learning vs. Double-Loop Learning

Single-loop learning focuses on addressing symptoms, while double-loop learning addresses underlying issues.

Organizational Culture

The shared values, beliefs, and practices that guide how employees behave within an organization.

Maslow's Hierarchy of Needs

A motivational theory proposing that people are motivated by five basic categories of needs: physiological, safety, love, esteem, and self-actualization, arranged in a hierarchy.

Transformational Leadership

A leadership style where leaders inspire and motivate followers to achieve extraordinary outcomes and develop their own leadership capacity.