15 Important Terms and Philosophies Used in Management

Not only must one understand human beings in order to effectively lead and manage them, but one must also understand different philosophies involved in management. In big corporations, certain terminology are used and as a manager it is important that you understand the meaning and philosophies behind the terms.

Important terms and Philosophies

1) Bottom line- This refers to the most important measure of success in a particular organization. This is taken from the bottom most figure on a profit and loss statement.

2) Break even point- The point where profits begin

3)Cash Cow- Any product or service that is highly profitable

4) DIRFT- Doing it right the first time.

5) 80-20 Rule ( Pareto rule) – this means that the majority of your productivity is accounted for by a minority of your activity. For example, 80% of your sales comes from 20% of customers.

6) Halo Effect- Tendency to evaluate a person’s overall qualifications or preference on the basis of a specific trait or accomplishment.

7) Marketing Mix- combination of the four P’s designed to meet the customers needs. These are the Price, Place, Product and Promotion.

Management by Objective (MBO)- A management philosophy based on the principle that performance should be measured by quantifiable objectives. It suggests that managers evaluate staff based on results rather than on how the results are achieved.

9) Managing by waiting around (MBWA) – A philosophy that suggests that managers should get out of the office and walk around talking to those on the line.

10) Mission Statement- A formal written statements that specifies the purpose of any organization.

11) Open- Door Policy- A policy allowing employees access to their supervisor or manager at any time without necessarily making an appointment.

12) Product life cycle- A theory that suggest that all products progress through four stages; introduction, growth, maturity and decline.

13) Pygmalion effect- Suggests that results are based on expectations. That is to say, high expectations for another’s performance results in high performance and low expectations results in low results.

14) Quality of work Life ( QWL)- A belief in the importance of enriching the intrinsic motivating factors on the job, including such factors as safety and health, challenges, involvement and significance.

15) Span of control- The number of people reporting to a particular supervisor or manager.

Remember that the most effective way to manage the flow of opportunity is to know what you want and then identify those people who can make it happen. A good manager understand the resources available to them including manpower and uses those resources to achieve the results.