Chapter 1 Flashcards - Effective Management

A person who is responsible for the performance and development of a group, an organizational unit, or an organization as a whole.

The sum of the external factors and forces that can influence the performance and development of an organization. 

Having an effect on the opinion, beliefs, or behavior of other people.

A serious disagreement based on diverging interests, different points of view, or other incompatibilities.

The phenomenon that in organizations that are complex open systems with many interrelated elements, one decision can lead to multiple consequences and multiple actions are often needed to reach one goal.

Multiple causal relations (and interrelations) between different factors and elements in a complex system.

The ability to see a problem in its overall context, while still being able to attend to details if necessary.

In a trade-off situation, we need to give up something that we value in order to get something else that we value.

Systems and processes by which organizations are directed and controlled in a way that ensures accountability.

An approach from economic theory that explains how to best organize the relationship between one person or entity (the “agent”) who makes decisions and does work on behalf of another person or entity (the “principal”).

In agency theory, the agency dilemma (also known as the “principal-agent problem”) describes a situation in which the “agent” (who makes decisions and works on behalf of the “principal”) is motivated to follow their own best interest which might come into conflict with the principal’s best interest.

A theory that suggests that managers are intrinsically motivated to act in the best interest of the entity for which they are responsible.

A management concept that orients businesses toward making positive impacts on society and the natural environment.

The total monetary value that shareholders (also called “­stockholders”) obtain from their investment in a company (including dividend payments, gains from share price increases, or any other payouts).

The idea that there is an implicit “contract” in which both society and businesses have certain obligations toward each other (e.g. society providing businesses with a functioning legal system, the right to own resources, infrastructure, an educated workforce, and businesses providing jobs, taking care of workers’ interests, or doing no harm to the environment).