Final Exam Review Commerce
Resources: a general term that incorporates human resources, natural resources,
and financial resources
Management: the process used to accomplish organizational goals through
planning, organizing, leading, and controlling people and other organizational
Planning: a management function that includes anticipating trends and
determining the best strategies and tactics to achieve organizational goals and
Organizing: a management function that includes designing the structure of the
organization and creating conditions and systems in which everyone and everything
work together to achieve the organization’s goals and objectives.
Leading: creating a vision for the organization and guiding, training, coaching, and
motivating others to work effectively to achieve the organization’s goals and
What Managers Do
Setting organizational goals
Developing strategies to reach those goals
Determining resources needed
Setting precise standards
Allocating resources, assigning tasks and establishing procedures for
Preparing a structure (organization chart) showing lines of authority and
Recruiting, selecting, training, and developing employees
Placing employees where they’ll be most effective
Guiding and motivating employees to work effectively to accomplish
organizational goals and objectives
Providing feedback on performance
Measuring results against corporate objectives
Monitoring performance relative to standards
Rewarding outstanding performance
Taking corrective action when necessary Controlling: a management function that involves establishing clear standards to
determine whether or not an organization is progressing toward its goals and
objectives, rewarding people for a good job, and taking corrective action if they are
Vision: an encompassing explanation of why the organization exists and where it is
trying to head.
Values: a set of fundamental beliefs that guide a business in the decisions they make
Mission Statement: an outline of the fundamental purposes of an organization
Meaningful mission statement includes:
The organization’s self-concept
Company philosophy and goals
The nature of the company’s product or service
Goals: the broad, long-term accomplishments an organization wishes to attain
Objectives: specific, short-term statements detailing how to achieve the
SWOT Analysis: a planning tool used to analyze an organization’s strengths,
weaknesses, opportunities, and threats.
Strategic Planning: the process of determining the major goals of the organization
and the policies and strategies for obtaining and using natural resources to achieve
Potential Internal Strengths
An acknowledged market leader
Core competencies in key areas
Proven and respected management
Potential Internal Weaknesses
No clear strategic direction
Weak market image
Potential External Opportunities
Falling trade barriers in attractive foreign markets
New government policies
Increases in market demand
Tactical Planning: the process of developing detailed, short-term statements about
what is to be done, who is to do it, and how it is to be done.
Operational Planning: the process of setting work standards and schedules
necessary to implement then company’s tactical objectives.
Contingency Planning: the process of preparing alternative courses of action that
may be used if the primary plans don’t achieve the organization’s objectives.
Crisis Planning: involves reacting to sudden changes in the environment. Decision Making: Seven D’s
1. Define the situation
2. Describe and collect needed information
3. Develop alternatives
4. Develop agreement among those involved
5. Decide which alternative is best
6. Do what is indicated
7. Determine whether the decision was a good one to follow up
Problem Solving: the process of solving the everyday problems that occur. Problem
solving is less formal than decision-making and usually calls for quicker action.
Brainstorming: coming up with as many solutions to a problem as possible in a
short period of time with no censoring of ideas.
PMI: listing of all plusses for a solution in one column, all the minuses in another,
and the interesting in a third column.
Organizational Chart: a visual device that shows relationships among people and
divides the organization’s work; it shows who is accountable for the completion of
specific work and who reports to whom.
Top Management: highest level of management, consisting of the president and
other key company executives, who develop strategic plans.
Middle Management: the level of management that includes general managers,
division managers, and branch managers, who are responsible for tactical planning
Supervisory Management: managers who are directly responsible for supervising
workers and evaluating their daily performance.
Technical Skills: skills that involve the ability to perform tasks in a specific
discipline or department.
Human Relations Skills: skills that involve communication and motivation; they
enable managers to work through and with people.
Conceptual Skills: skills that involve the ability to picture the organization as a
whole and the relationships among its various parts.
Autocratic Leadership: leadership style that involves making managerial decisions
without consulting others.
Participate (democratic) Leadership: leadership style that consists of managers
and employees working together to make decisions.
Free-rein (laissez-faire) Leadership: leadership style that involves managers
setting objectives and employees being relatively free to do whatever it takes to
accomplish those objectives.
Knowledge Management: finding the right information, keeping the information
in a readily accessible place, and making the information known to everyone in the
5 Steps of Controlling
1. Establishing clear performance standards. This ties the planning function to
the control function. Without clear standards, control is impossible.
2. Monitoring and recording actual performance
3. Comparing results against plans and standards
4. Communicating results and deviations to the employees involved 5. Taking corrective action when needed and providing positive feedback for
work well done.
Motivation: a person’s internal drive to act.
Intrinsic Reward: the good feeling you have when you have done a good job.
Extrinsic Reward: something given to you by someone else as recognition for good
work; extrinsic rewards include pay increases, praise, and promotions.
Scientific Management: studying workers to find the most efficient ways of doing
things and then teaching people those techniques.
Time-motion Studies: studies, begun by Fredrick taylor, of which tasks must be
performed to complete a job and the time needed to do each task.
Principle of Motion Economy: theory developed by frank and Lillian Gilbreth that
every job can be broken down into a series of elementary motions.
Hawthorne Effect: the tendency for people to behave differently when they know
they are being studied
Maslow’s Hierarchy of Needs: theory of motivation that places different types of
human needs in order of importance, from basic physiological needs to safety,
social, and esteem needs to self-actualization needs.
1. Phsiological needs-basic survival needs for food
2. Safety needs- the need to feel secure at work and at home
3. Social needs- the need to feel loved, accepted, and part of the group
4. Esteem needs- the need for recognition and acknowlgement from others, as
well as self-respect and a sense of status or importance
5. Self-actualization needs- the need to develop to one’s fullest potential
Motivators: in Herzberg’s theory of motivating factors, jobs factors that cause
employees to be productive and that give them satisfaction
Job Enrichment: a motivational strategy that emphasizes motivating the worker
through the job its self
Job Enlargement: a job enrichment strategy that extends the work cycle by adding
related tasks to the job description.
Job Rotation: a job enrichment strategy that involves moving employees from one
Theory X management:
-The average person dislikes work and will avoid it at all costs
-Because of the dislike, workers must be forced, controlled, directed or threatened
with punishment to make them work
-The average worker prefers to be directed, wishes to avoid responsibility, has
relatively little ambition, and wants security
-Primary motivators are fear and money
Theory Y management:
-Most people like to work, it is as natural as play a