Principles of Management


The expectation that employees will perform a job, take corrective action when necessary, and report upward on the status and quality of their performance


The legitimate right to make decisions and to tell other people what to do

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


The assignment of new or additional responsibilities to a subordinate


An aspect of the organization's internal environment created by job specialization and the divisions of labor

Functional Organization

Departmentalization around specialized activities such as production, marketing and human resources


The authority levels of the organizational pyramid

Line departments

Units that deal directly with the organization's primary goods and services

Matrix organization

An organization composed of dual reporting relationships in which some managers report to two superiors - a functional manager and divisional manager

Organization Chart

the reporting structure and division of labor in an organization


The assignment of a task that an employee is supposed to carry out

Span of Control

The number of subordinates who report directly to an executive or supervisor


A process in which different individuals and units performs different tasks


Establishing common routines and procedures that apply uniformly to everyone


A structure in which each worker reports to one boss, who in turn reports to one boss

Computer-integrated manufacturing (CIM)

The use of computer-aided design and computer aided manufacturing to sequence and optimize a number of production processes

Continuous process

A process that is highly automated and has a continuous production flow

Customer relationship management (CRM)

A multifaceted process focusing on creating two-way exchanges with customers to foster intimate knowledge of their needs, wants, and buying patterns


The planned elimination of positions or jobs

Economies of scope

Economies in which materials and processes employed in one product can be used to make other, related products

Flexible factories

Manufacturing plants that have short production runs, are organized around products, and use decentralized scheduling

High-involvement organization

A type of organization in which top management ensures that there is consensus about the direction in which the business is heading

ISO 9001

A series of quality standards developed by a committee working under the international organization for standardization to improve total quality in all businesses for the benefit of producers and customers

Just-in-time (JIT)

A system that calls for subassemblies and components to be manufactured in very small lots and delivered to the next stage of the production process just as they are needed

Large batch

Technologies that produce goods and services in high volume

Lean manufacturing

An operation that strives to achieve the highest possible productivity and total quality, cost effectively, by eliminating unnecessary steps in the production process and continually striving for improvement

Learning organization

An organization skilled at creating, acquiring and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights


the movement of the right goods in the right amount to the right place at the right time

Mass customization

The production of varied, individually customized products at the low cost of standardized, mass-produced products

Mechanistic organization

A form of organization that seeks to maximize internal efficiency

Organic structure

An organizational form the emphasizes flexibility


A successful effort to achieve an appropriate size at which the company performs most effectively

Six Sigma quality

A method of systematically analyzing work processes to identify and eliminate virtually all causes of defects, standardizing the processes to reach the lowest practicable level of any cause of customer dissatisfaction.

Small batch

Technologies that produce goods and services in low volume

Strategic alliance

A formal relationship created among independent organization with the purpose of join pursuit of mutual goals

Survivor's syndrome

Loss of productivity and morale in employees who remain after a downsizing

Value Chain

The sequence of activities that flow from raw materials to the delivery of goods or service, with additional value created at each step

Human capital

The knowledge, skills, and abilities of employees that have economic value


The process of helping people who have been dismissed from the company regain employment elsewhere