Business Management Lecture Review Flashcards

A comprehensive set of vocabulary flashcards covering basic business management, organizational theories, motivation, strategic analysis, marketing, and financial accounting based on the provided lecture transcript.} assistant lecture notes.

Management Categories

The eight categories of management include Financial, Strategic, Human Resource, Operations, Marketing, MIS/Accounting, Management Information System, and International Management.

BEP (Break-Even Point) Formula

The point where total sales equal total costs, calculated as $P \times Q = F + (V \times Q)$, where $P$ is price, $Q$ is quantity, $F$ is fixed cost, and $V$ is variable cost.

Contribution Margin

The remainder after subtracting the variable cost from the price per unit, represented as $(P - V)$.

Adam Smith

Author of 'The Wealth of Nations' who identified that productivity increases when the production process is divided into specialized steps (division of labor).

Invisible Hand

The concept that an individual's self-interest naturally leads to the benefit of society as a whole within a system of free competition and trade.

Classical Management Assumption

The fundamental assumption that human beings are rational actors.

Taylorism (Scientific Management)

Developed by Frederick Taylor, this approach uses time and motion studies to find the most efficient way to work and introduces task management with performance-based incentives.

Fayol’s 5 Functions of Management

The core administrative activities identified by Henri Fayol: Planning, Organizing, Commanding, Coordinating, and Controlling.

Bureaucracy

Max Weber's organizational theory based on a hierarchical structure and rational-legal authority through fixed rules and procedures.

Rational-Legal Authority

The most ideal form of authority according to Weber, based on rational laws and established rules, commonly found in modern governments and corporations.

Hawthorne Studies

Research by Elton Mayo demonstrating that psychological factors, such as recognition and belonging, influence productivity more than physical working conditions.

Maslow's Hierarchy of Needs

A five-stage theory of motivation: 1. Physiological, 2. Safety, 3. Social (Love/Belonging), 4. Esteem, and 5. Self-Actualization.

Herzberg’s Two-Factor Theory

Distinguishes between Motivators (intrinsic factors like achievement that cause satisfaction) and Hygiene factors (extrinsic factors like salary that prevent dissatisfaction but do not motivate).

Theory X and Theory Y

Douglas McGregor's theory on management views: Theory X assumes workers avoid responsibility and need control; Theory Y assumes workers are self-motivated and seek responsibility.

Argyris’s Maturity-Immaturity Theory

The concept that healthy individuals develop from a state of passivity and dependence (immaturity) to one of activity and independence (maturity).

Vroom's Expectancy Theory

Motivation is determined by the formula: $\text{Motivation} = \text{Expectancy} \times \text{Instrumentality} \times \text{Valence}$.

Equity Theory

Stacey Adams' theory stating that motivation depends on the perceived fairness of the ratio between one's own inputs and outcomes compared to others.

Skinner's Reinforcement Theory

An approach to behavior modification using positive reinforcement, negative reinforcement, punishment, and extinction.

SMART Goals

An acronym for setting effective objectives: Specific, Measurable, Achievable, Relevant, and Time-bound.

PDCA Cycle

A continuous improvement process consisting of four stages: Plan, Do, Check, and Act.

PESTEL Analysis

An external environment analysis tool covering Political, Economic, Social, Technological, Environmental, and Legal factors.

5 Forces Model

Michael Porter's industry analysis framework: 1. Bargaining power of buyers, 2. Threat of substitutes, 3. Competition among rivals, 4. Threat of new entrants, 5. Bargaining power of suppliers.

Industry Life Cycle

The stages of an industry's evolution: Introduction, Growth, Maturity, and Decline.

Pareto Rule (80/20 Rule)

The principle that approximately $80\%$ of results come from $20\%$ of causes or customers.

Long Tail Rule

A strategy focusing on the large number of niche products that sell in small quantities, as opposed to only focusing on a few 'hit' products.

Value Chain Analysis

A model describing primary activities (Inbound Logistics, Operations, Outbound Logistics, Marketing/Sales, Service) and support activities (Procurement, R&D, HRM, Infrastructure) that create value.

BCG Matrix

A portfolio planning tool using market growth and market share to categorize products into Stars, Question Marks, Cash Cows, and Dogs.

The 5 Marketing Concepts

The evolution of marketing focus: Production, Product, Selling, Marketing, and Societal Marketing concepts.

Needs vs. Wants vs. Demands

Needs are basic requirements; Wants are specific ways to satisfy needs influenced by culture; Demands are wants backed by purchasing power.

STP Strategy

The core of marketing strategy: Segmentation (dividing the market), Targeting (selecting segments), and Positioning (defining the brand in the consumer's mind).

Marketing 4P Mix

The controllable tactical tools of marketing: Product, Price, Place, and Promotion.

VALS

A psychographic tool developed by SRI International that segments consumers into 8 groups based on Values, Attitudes, and Lifestyles.

Price Skimming

A strategy of setting a high initial price for a new product to maximize revenue from early adopters before gradually lowering it.

Penetration Pricing

A strategy of setting a low initial price to attract a large number of buyers and win market share quickly.

Cognitive Dissonance

The psychological discomfort experienced by a consumer after a purchase due to conflicting thoughts or uncertainty about the decision.

AIETA Model

The process of adopting a new product: Awareness, Interest, Evaluation, Trial, and Adoption.

Adopter Categories

The classification of consumers based on when they adopt innovations: Innovators, Early Adopters, Early Majority, Late Majority, and Laggards.

Accounting Equation

The fundamental balance sheet relationship: $\text{Assets} = \text{Liabilities} + \text{Equity}$.

Straight-line Depreciation

A method of calculating depreciation by recognizing an equal amount of value loss as an expense every year over the asset's useful life.

EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortization; used to compare the operational profitability of companies and nations.

Cash Flow Categories

The three types of cash movement: Operating activities, Investing activities, and Financing activities.

Auditor Opinions

The four types of audit reports: Unqualified (Proper), Qualified, Adverse, and Disclaimer of Opinion.

Time Value of Money

The principle that money available now is worth more than the same amount in the future, calculated as $FV = PV \times (1 + r)^{n}$.

Net Present Value (NPV)

A method used in capital budgeting to check project feasibility; an investment is recommended if $NPV > 0$.