Essential Business Management Definitions and Core Concepts

Organizational Structure and Delegation

Centralized Organization

A hierarchical decision-making structure where authority and decisions are concentrated at the top level of management.

Decentralized Organization

A structure where most decisions are delegated and made by mid-level or lower-level managers.

Departmentalization

The process of dividing an organization into different specialized departments based on function, product, or geography.

Delegation of Authority

An organizational process wherein a manager divides and assigns work responsibilities among subordinates.

Line and Staff Structure

A structure featuring a traditional line relationship between superiors and subordinates, supplemented by specialized staff managers who provide advice and support.

Human Resources, Labor, and Leadership

Management

The organization and coordination of the activities of a business in order to achieve defined goals.

HR Duties (Human Resources)

Core responsibilities include:

• Recruiting employees
• Compensating employees
• Training and development of employees

Labor Union

An organized association of workers formed to protect and further their rights and interests.

Collective Bargaining

A process of negotiation between employers and a group of employees (often represented by a union) aimed at reaching agreements to regulate workers' needs and conditions.

Leadership

The ability to influence employees to work collaboratively toward achieving organizational goals.

Title VII of the Civil Rights Act

A federal law that prohibits employers from discriminating against employees on the basis of sex, race, color, national origin, or religion.

Motivation and Organizational Culture

Motivation

A driving force, internal or external, which promotes action and goal achievement.

Equity Theory

A theory focused on Keeping Employees Motivated. Equity Theory is based on the idea that individuals are motivated by fairness in comparison to others.

Maslow’s Hierarchy of Needs

A psychological theory that arranges the basic needs of people in a hierarchical structure (often depicted as a pyramid):

1. Physiological Needs
2. Security Needs
3. Social Needs
4. Esteem Needs
5. Self-Actualization

Organizational Culture

A firm’s shared values, beliefs, traditions, philosophies, rules, and role models that define acceptable behavior within the organization.

Planning, Efficiency, and Quality

Strategic, Tactical, and Operational Plans

• Strategic Plan: Plans that establish long-range objectives and the overall strategy by which a firm fulfills its mission.
• Tactical Plan: Short-range plans designed to implement the activities specified in the strategic plan.
• Operational Plan: Very short-term plans that specify actions needed to achieve tactical goals.

Supply Chain Management (SCM)

The coordination and connection of all members of the distribution system in order to efficiently satisfy customers.

Just-In-Time (JIT) Inventory

A strategy to increase efficiency by receiving goods only as they are needed in the production process, thereby significantly reducing inventory costs.

Total Quality Management (TQM)

A management approach that describes a long-term commitment to success through continuous improvement and customer satisfaction.

Management Philosophies (McGregor's Theories)

Theory X

McGregor’s traditional view of management, assuming that workers generally dislike work and must be coerced or forced to do their jobs.

Theory Y

McGregor’s humanistic view of management, assuming that workers inherently like to work and that, under proper conditions, employees will seek out responsibility to satisfy their needs.

Theory Z

A management philosophy that stresses employee participation in all aspects of company decision-making, emphasizing consensus and long-term employment.