Chapter 1-8: Introduction to Organizational Management and Strategic Planning

Flashcards covering key vocabulary related to authority, organizational structure, management functions, motivation, and strategic planning based on lecture notes.

Authority

The right to make decisions and give orders, which flows downward from the higher parts of an organization, originating from the owners.

Owners (of an Organization)

The ultimate source from whom authority originates in an organization, regardless of its legal structure (e.g., sole proprietorships, partnerships, corporations, LLCs).

Stockholders (Shareholders)

In publicly traded corporations, these individuals elect the board of directors and are the source of organizational authority.

Republic (Representative Democracy)

A form of government where citizens elect representatives to make decisions on their behalf, differing from a pure or direct democracy.

Pure Democracy (Direct Democracy)

A form of government, as historically practiced by the ancient Greeks, where the people directly decide on issues.

Common Shareholders

Individuals who own common stock and typically possess voting rights within an organization.

Preferred Shareholders

Individuals who own preferred stock and usually give up voting rights in exchange for a preferred position in receiving payments, such as in liquidation.

Line Managers

Generalists and decision-makers who manage an entire recognizable functional area or major activity of the firm, directly possessing authority.

Staff Managers

Specialists and advisors to line managers who typically do not make decisions or give orders unless specific authority is delegated to them.

Responsibility

An obligation to perform created by the exercise of one's authority by a line manager; it does not exist independently.

Delegation

The mechanism by which authority is transferred, allowing staff managers to make decisions or give orders when authorized by a line manager.

Organizational Chart

A physical diagram or visual representation that illustrates how authority flows downward through the process of delegation within an organization.

Responsibility Flow

The direction in which accountability flows within an organization, specifically upward.

Insubordination

The act of defying or failing to carry out orders, which is an offense that can lead to disciplinary action or punishment.

Progressive Discipline

A systematic process of increasing penalties for repeated infractions, typically including a verbal warning, written warning, suspension, and ultimately dismissal.

Formal Organization

The official, structured system of authority and responsibility that governs how a company functions, based on established policies and hierarchy.

Informal Organization

The network of interpersonal connections and social relationships that spontaneously develop among individuals within a formal organization, influencing how work gets done.

Power

The ability to influence others and get things done through personal charisma and interpersonal connections within the informal organization, often more effective than formal authority.

Internalized Motivation (Intrinsic Motivation)

A method of influencing employees by understanding and appealing to their personal goals, interests, and inherent drives, making tasks personally meaningful.

Externalized Motivation (Extrinsic Motivation)

Motivating employees through direct orders, external rewards, or punishments, which is generally less effective than internal motivation.

Manager vs. Leader

A manager focuses on giving orders and ensuring tasks are completed, while a leader excels at using power and internalized motivation to inspire and influence people.

Management by Walking Around (MBWA)

A passive and unobtrusive method of managerial control where managers informally interact with employees in their work environment to check on progress and build relationships.

Planning (Management Function)

The function of setting goals, developing strategies, and outlining the actions needed to achieve desired outcomes.

Organizing (Management Function)

The function of structuring resources, tasks, and activities to efficiently implement plans.

Directing (Management Function)

The function of giving orders, guiding, and overseeing employees to ensure tasks are carried out.

Control (Management Function)

The function of measuring actual performance against goals, checking for deviations, and taking corrective actions to keep the organization on track.

Coordinating (Management Function)

The essential-yet-often-overlooked function of ensuring that all other management functions (planning, organizing, directing, control) work together coherently and compatibly as a system.

System (in Management)

The concept that all management functions are interdependent components that must work together seamlessly for the organization to be effective, like parts of a stereo system.

Command and Control (Military)

A highly formalized organizational structure, typical in the military, where authority dictates orders, and accountability rigorously ensures performance, with minimal informal dynamics.

Long-Term Asset

An asset that retains its value and contributes to the firm's operations for a period longer than one year.

Short-Term Liability

An obligation that must be paid in one year or less.

Strategic Planning

A long-term planning process, typically looking five years or more into the future, to define an organization's direction and make decisions on allocating its resources.

Vision (Organizational)

The long-term strategic plan of an organization, outlining its desired future state five years or more ahead.

Mission (Organizational)

The short-term plan of an organization, typically covering one year or less, defining its current purpose and activities, which contributes to achieving the overall vision.

Factors of Production (Inputs)

The four essential resources used to create output or product: Land, Labor, Capital, and Technology.

SWOT Analysis

A strategic planning tool used to assess an organization's internal Strengths and Weaknesses, and external Opportunities and Threats.

BCG Portfolio Matrix (BCG Window)

A strategic planning tool that classifies an organization's products based on market share and market growth rate to guide decisions on product strategy.

Product Market Expansion Grid

A strategic planning tool that helps organizations identify growth opportunities by considering new or existing products and markets.