Principles of Management

Centralized organization

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

Decentralized organization

An organization in which lower-level managers make important decisions

Differentiation

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

Standardization

Establishing common routines and procedures that apply uniformly to everyone

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

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

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

Low-cost strategy

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

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-term direction and strategic intent of a company

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

Macroenvironment

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