Test #3 Flashcards
A process designed to achieve an organization’s objectives by using its resources effectively and efficiently in a changing environment
Management
Individuals in organizations who make decisions about the use of resources and who are concerned with planning, organizing, staffing, directing, and controlling the organization’s activities to reach its objectives
Managers
The process of determining the organization’s objectives and deciding how to accomplish them; the first function of management
Planning
The statement of an organization’s fundamental purpose and basic philosophy
Mission statement
Expressed in general terms and do not contain specific, quantifiable metrics of where the firm is now or where is going; aspirational by nature
Goals
The ends of results desired by an organization, derive from the organization’s missions and goals
Objectives
Plans that establish the long-range objectives and overall strategy or course of action by which a firm fulfills its mission
Strategic Plan
Short-range plans designed to implement the activities and objectives specified in the strategic plan
Tactical plan
Very-short-term plan that specify what actions individuals, work groups, or departments need to accomplish in order to achieve the tactical pan and ultimately the strategic plan
Operational plan
An element in planning that deals with potential disasters such as product tampering, oil spills, fire, earthquake, computer virus, or airplane crash
Contingency planning
The structuring of resources and activities to accomplish objectives in an efficient and effective manner
Organizing
Motivating and leading employees to achieve organizational objectives
Directing
The process of evaluating and correcting activities to keep the organization on course
Controlling
Top of the pyramid:
President, CEO, Executive Vice Presidents; Do mostly planning
High-Level Management
Middle of the pyramid:
Plant managers, Division managers, department managers; Do mostly organizing
Middle Management
Bottom of the pyramid:
Foremen, Supervisors, Office managers; Do mostly controlling
Front-Line Management
The specialized knowledge and training needed to perform jobs that are related to particular areas of management
Technical expertise
The ability to think in abstract terms and to see how parts fit together to form the whole
Conceptual skills
The ability to identify relevant issues, recognize their importance, understand the relationships between them, and perceive the underlying causes of a situation
Analytical skills
The ability to deal with people, both inside and outside the organization
Human relations skills
When employees are provided with the ability to take on responsibilities and make decisions about their jobs
Employee empowerment
- Recognize and define the decision situation
- Develop options
- Analyze options
- Select the best option
- Implement the decision
- Monitor the consequences
6 steps of the decision-making process
A firm’s shared values, beliefs, traditions, principles, rules, and role models for behavior
Organizational culture
The arrangement or relationship of positions within an organization
Structure
Visual display of the organizational structure, lines of authority, staff relationships, permanent committee arrangements, and lines of communication
Organizational chart
The grouping of jobs into working units usually called departments, units, or divisions
Departmentalization
The grouping of jobs that perform similar functional activities, such as finance, manufacturing, marketing, and human resources
Functional departmentalization
The organization of jobs in relation to the products of the firm
Product departmentalization
The grouping of jobs according to geographic location, such as state, region, country, or continent
Geographical departmentalization
The arrangement of jobs around the needs of various types of customers
Customer departmentalization
Giving employees not only tasks but also the power to make commitments, use resources, and take whatever actions are necessary to carry out those tasks
Delegation of authority
A structure in which authority is concentrated at the top and very little decision-making authority is delegated to lower levels of authority
Centralized organization
An organization in which decision-making authority is delegated as far down the chain of command as possible
Decentralized organization
The number of subordinates who report to a particular manager
Span of management
A permanent, formal group that performs a specific task
Committee
A temporary group of employees responsible for bringing about a particular change
Task force
Groups similar to task forces that normally run their operation and have total control of a specific work project
Project teams
Communication that flows from lower to higher levels of the organization
Upward communication
Traditional flow of communication from upper organizational levels to lower organizational levels
Downward communication
The recording, measurement, and interpretation of financial information
Accounting
An individual who has been state certified to provide accounting services ranging from the preparation of financial records and the filing of tax returns to complex audits of corporate financial records
Certified Public Accountant
Board of Directors, owners, managers, accountants, and business analysists
Internal users
Government, creditors, stockholders, employees,, customers
External users
The internal use of accounting statements by managers in planning and directing the organization’s activities
Managerial accounting
Summary of a firm’s financial information, products, and growth plans for owners and potential investors
Annual report
Assets = Liabilities + Owners’ Equity
Accounting Equation
A firm’s economic resources, or items of value that it owns, such as cash, inventory, land, equipment, buildings, and other tangible and intangible things
Assets
Debts that a firm owes to others
Liabilities
Equal assets minus liabilities and reflects historical values
Owners’ Equity
- Examining source documents
- Recording transactions in an accounting journal
- Posting recorded transactions
- Preparing financial statements
Accounting cycle
A financial report that shows an organization’s profitability over a period of time - month, quarter, or year
Income statement
The total amount of money received from the sale of goods or services, as well as from related business activities
Revenue
The amount of money a firm spent to buy or produce the products it sold during the period to which the income statement applies
Cost of Goods Sold
The total profit (or loss) after all expenses, including taxes, have been deducted from revenue; also called net earnings
Net income
A “snapshot” of an organization’s financial position at a given moment
Balance sheet
Assets that are used or converted into cash within the course of a calendar year
Current assets
A firm’s financial obligations to short-term creditors, which must be repaid within one year
Current liabilities
Explains how the company’s cash changed from the beginning of the accounting period to the end
Statement of Cash Flows
Calculations that measure an organization’s financial health
Ratio Analyses
