MGMT 390 Test 2 Study Guide/Vocabulary Words
Holders of common stock have the right to:
- Elect members of the company's board of directors and vote on important issues affecting the company - Share in the firm's profits through dividends, if approved by the firm's board of directors - Purchase new shares of common stock before anyone else
Some advantages to a firm of issuing stock include:
-As owners of the business, stockholders never have to be repaid their investment. -There's no legal obligation to pay dividends to stockholders; therefore, the firm can reinvest income (retained earnings) to finance future needs. -Selling stock can improve the condition of a firm's balance sheet since issuing stock creates no debt. (A corporation may also buy back its stock to improve its balance sheet and make the company appear stronger financially.)
Disadvantages of issuing stock include:
-As owners, stockholders (usually only holders of common stock) have the right to vote for the company's board of directors. (Typically, one vote is granted for each share of stock.) Issuing new shares of stock can thus alter the control of the firm. -Dividends are paid from profit after taxes and are not tax-deductible. -The need to keep stockholders happy can affect managers' decisions.
Advantages of issuing bonds
-Bondholders are creditors, not owners of the firm and can't vote on corporate matters. -Bond interest is tax deductible. -Bonds are a temporary source of funding and are eventually repaid. -Bonds can be repaid before the maturity date if they contain a call provision.
Disadvantages of issuing bonds
-Bonds increase debt and can affect the market's perception of the firm. -Paying interest on bonds is a legal obligation. If interest isn't paid, bondholders can take legal action. -The face value of the bond must be repaid on the maturity date.
Benefits of job sharing include:
-Employment opportunities for those who cannot or prefer not to work full-time -An enthusiastic and productive workforce -Reduced absenteeism and tardiness -Ability to schedule part-time workers into peak demand periods -Retention of experienced employees who might otherwise have retired
Sinking funds are generally attractive to both issuing firms and investors for several reasons:
-They provide for an orderly retirement (repayment) of a bond issue. -They reduce the risk the bond will not be repaid. -They support the market price of the bond because they reduce the risk the bond will not be repaid.
Debenture Bonds
Bonds that are unsecured (i.e., not backed by any collateral such as equipment).
Convertible Bonds
Bonds that can be converted into common stock in the issuing company
Policies
Broad guidelines for action
Diversification
Buying several different investment alternatives to spread the risk of investing.
Vroom contends that employees ask three questions before committing their maximum effort to a task:
1) Can I accomplish the task? (2) If I do accomplish it, what's my reward? (3) Is the reward worth the effort?
Performance appraisals have six steps:
1) establishing performance standards 2) communicating those standards 3) evaluating performance 4) discussing results with employees 5) taking corrective action 6) using the results to make decisions
Training and development include three steps:
1. Assessing organizational needs and employee skills to determine training needs 2. Designing training activities to meet identified needs 3. Evaluating the training's effectiveness
What are the various ways a firm can departmentalize?
1. By product 2. By function 3. By customer group 4. By geographic location 5. By process
Leaders must
1. Communicate a vision and rally others around that vision 2. Establish corporate values 3. Promote corporate ethics 4. Embrace change 5. Stress accountability and responsibility
What are some hygiene (maintenance) factors?
1. Company policy and administration 2. Job security 3. Working conditions 4. Salary 5. Personal life
Procedures for encouraging open communication include the following:
1. Create an organizational culture that rewards listening. 2. Train supervisors and managers to listen. 3. Use effective questioning techniques 4. Remove barriers to open communication. 5. Avoid vague and ambiguous communication. 6. Make it easy to communicate. 7. Ask employees what is important to them.
What are the six Ds of decision making?
1. Define the situation 2. Describe and collect needed information 3. Develop alternatives 4. Decide which alternative is best 5. Do what is indicated 6. Determine whether the decision was a good one and follow up
Decision Making
Choosing among two or more alternatives
Agency Shop Agreement
Clause in a labor-management agreement that says employers may hire nonunion workers; employees are not required to join the union but must pay a union fee.
Exchange-Traded Funds (EFTs)
Collections of stocks that are traded on exchanges but are traded more like individual stocks than like mutual funds.
Brainstorming
Coming up with as many solutions to a problem as possible in a short period of time with no censoring of ideas
Benchmarking
Comparing an organization's practices, processes, and products against the world's best
Leading
Creating a vision for the organization and guiding, training, coaching, and motivating others to work effectively to achieve the organization's goals and objectives
Hostile Work Environment Sexual Harassment
Creating or maintaining a work environment that is offensive, intimidating, or hostile because of a person's sex.
What are the disadvantages of departmentalization?
1. Departments may not communicate well. 2. Employees may identify with their department's goals rather than the organization's. 3. The company's response to external changes may be slow. 4. People may not be trained to take different managerial responsibilities; rather, they tend to become narrow specialists. 5. Department members may engage in groupthink (they think alike) and may need input from outside to become more creative.
Researchers David Nadler and Edward Lawler modified Vroom's theory and suggested that managers follow five steps to improve employee performance:
1. Determine what rewards employees value. 2. Determine each employee's desired performance standard. 3. Ensure that performance standards are attainable. 4. Guarantee rewards tied to performance. 5. Be certain that employees consider the rewards adequate.
The assumptions of Theory Z are:
1. Employee involvement is the key to increased productivity 2. Employee control is implied and informal 3. Employees prefer to share responsibility and decision making 4. Employees perform better in environments that foster trust and cooperation 5. Employees need guaranteed employment and will accept slow evaluations and promotions
What are the advantages of departmentalization?
1. Employees can develop skills in depth and progress within a department as they master more skills 2. The company can achieve economies of sale by centralizing all the resources it needs and locate various experts in the area 3. Employees can coordinate work within the function, and top management can easily direct and control various departments' activities
The assumptions of Theory X are:
1. Employees dislike work and will try to avoid it 2. Employees prefer to be controlled and directed 3. Employees seek security, not responsibility 4. Employees must be intimidated by managers to perform 5. Employees are motivated by financial rewards
The assumptions of Theory Y are:
1. Employees view work as a natural part of life 2. Employees prefer limited control and direction 3. Employees will seek responsibility under proper work conditions 4. Employees perform better in work environments that are nonintimidating 5. Employees are motivated by many different needs
Controlling consists of five steps:
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 or results. 3. Comparing results against plans and standards. 4. Communicating results and deviations to the appropriate employees. 5. Taking corrective action when needed and providing positive feedback for work well done.
For empowerment to be a real motivator, management should follow these three steps:
1. FInd out what people think the problems in the organization are 2. Let them design the solutions 3. Get out of the way and let them put those solutions to action
What are the benefits of mentoring programs?
1. Improved recruiting and retention 2. More engaged employees 3. Cost savings 4. Increased skills and better attitudes
What are the five criteria when selecting investment options?
1. Investment risk 2. Yield 3. Duration 4. Liquidity 5. Tax consequences
What are the advantages of matrix organization?
1. It gives managers flexibility in assigning people to projects. 2. It encourages interorganizational cooperation and teamwork. 3. It can produce creative solutions to product development problems. 4. It makes efficient use of organizational resources.
What are the disadvantages of matrix organization?
1. It's costly and complex. 2. It can confuse employees about where their loyalty belongs—with the project manager or with their functional unit. 3. It requires good interpersonal skills as well as cooperative employees and managers to avoid communication problems. 4. It may be only a temporary solution to a long-term problem.
What did Weber's principles of organization emphasize?
1. Job descriptions 2. Written rules, decision guidelines and detailed records 3. Consistent procedures, regulations and policies 4. Staffing and promotion based on qualifications
What is the Type J (Japanese) approach?
1. Lifetime employment 2. Consensual decision making 3. Collective responsibility 4. Slow evaluation and promotion 5. Implicit, informal control 6. Nonspecialized career paths 7. Holistic concern for employees
What are the four ways to structure an organization?
1. Line organizations 2. Line-and-staff organizations 3. Matrix style organizations 4. cross-functional self-managed teams
What is the Type Z (modified American) approach?
1. Long-term employment 2. Collective decision making 3. Individual responsibility 4. Slow evaluation and promotion 5. Implicit, informal control with explicit, formalized control 6. Moderately specialized career paths 7. Holistic concern for employees (including family)
A typical selection process has six steps:
1. Obtaining complete application forms 2. Conducting initial and follow-up interviews 3. Giving employment tests 4. Conducting background investigations 5. Obtaining results from physical exams 6. Establishing trial (probationary) periods
What do most management training programs include?
1. On-the-job coaching 2. Understudy positions 3. Job rotation 4. Off-the-job courses and training
What are some common training and development activities?
1. Orientation 2. On-the-job training 3. Apprenticeships 4. Off-the-job training 5. Vestibule training 6. Job simulation 7. Management training
What are the five standards for a useful form of money?
1. Portability 2. Divisibility 3. Stability 4. Durability 5. Uniqueness
The five steps in the human resources planning process are:
1. Preparing a human inventory of the organization's employees 2. Preparing a job analysis 3. Assessing future human resource demand 4. Assessing future labor supply 5. Establishing a strategic plan
What are the three basic tools the Fed uses to manage money supply?
1. Reserve requirements 2. Open-market operations 3. Discount rate
What creates enthusiasm for workers and makes them work to full potential?
1. Sense of achievement 2. Earned recognition 3. Interest in the work itself 4. Opportunity for growth 5. Opportunity for advancement 6. Importance of responsibility 7. Peer and group relationships 8. Pay 9. Supervisor's fairness 10. Company policies and rules 11. Status 12. Job security 13. Supervisor's friendliness 14. Working conditions
What is the Type A (American) approach?
1. Short-term employment 2. Individual decision making 3. Individual responsibility 4. Rapid evaluation and promotion 5. Explicit, formalized control 6. Specialized career paths 7. Segmented concern for employees
Those who advocate job enrichment believe that five characteristics of work are important in motivation and performance:
1. Skill variety 2. Task identity 3. Task significance 4. Autonomy 5. Feedback
A manager must have three categories of skills:
1. Technical skills 2. Human relations skills 3. Conceptual skills
The Federal Reserve consists of five major parts:
1. The board of governors 2. The federal Open Market Committee (FOMC) 3. 12 Federal Reserve banks 4. Three advisory councils 5. The member banks of the system
What should a mission statement address?
1. The organization's self-concept 2. Its philosophy 3. Long-term survival needs 4. Customer needs 5. Social responsibility 6. Nature of the product or service
What were Fayol's Principles of Organization?
1. Unity of command 2. Hierarchy of authority 3. Division of labor 4. Subordination of individual interests to the general interest 5. Authority 6. Degree of Centralization 7. Clear communication channels 8. Order 9. Equity 10. Esprit de corps
What are the fundamental questions does the planning procedure answer?
1. What is the situation now? 2. How can we get to our goal from here?
What are some motivational factors?
1. Work itself 2. Achievement 3. Possibility of growth 4. Advancement 5. Recognition 6. Status
What are the four major choices in structuring organizations?
1. centralization versus decentralization 2. breadth of span of control 3. tall versus flat organizational structures 4. type of departmentalization
Companies that are the most successful in adapting to change have these common traits:
1. they listen to customers 2. they have inspirational managers who drive new ideas throughout the organizations 3. they often have had a close call with going out of business
Strategies
Determine the best way to use resources
Reverse Discrimination
Discrimination against members of a dominant of majority group (whites or males) in hiring or promoting.
Hygiene (Maintenance) Factors
In Herzberg's theory of motivating factors, job factors that can cause dissatisfaction if missing but that do not necessarily motivate employees if increased
Motivators
In Herzberg's theory of motivating factors, job factors that cause employees to be productive and that give them satisfaction
Internal Customers
Individuals and units within the firm that receive services from other individuals or units
Bulls
Investors who believe stock prices are going to rise; they buy stock in anticipation of the increase
Bears
Investors who expect stock prices to decline and sell their stocks in anticipation of falling prices
Institutional Investors
Large organizations - such as pension funds, mutual funds, and insurance companies - that invest their own funds or the funds of others
Participative (Democratic) Leadership
Leadership style that consists of managers and employees working together to make decisions
Autocratic Leadership
Leadership style that involves making managerial decisions without consulting others
Free-Rein Leadership
Leadership style that involves managers setting objectives and employees being relatively free to do whatever it takes to accomplish those objectives
PMI
Listing all the pluses for a solution in one column, all the minuses in another, and the implications in a third column.
M-3
M-2 plus big deposits like institutional money market funds
Supervisory Management
Managers who are directly responsible for supervising workers and evaluating their daily performance
M-2
Money included in M-1 plus money that may take a little more time to obtain (savings accounts, money market accounts, mutual funds, certificates of deposit, etc.)
M-1
Money that can be accessed quickly and easily (coins and paper money, checks, traveler's checks, etc.)
Credit Unions
Nonprofit, member-owned financial cooperatives that offer the full variety of banking services to their members.
International Monetary Fund (IMF)
Organization that assists the smooth flow of money among nations.
Management by Objectives (MBO)
Peter Drucker's system of goal setting and implementation; it involves a cycle of discussion, review, and evaluation of objectives among top and middle-level managers, supervisors, and employees.
Offboarding
Process of managing the way employees leave the organization.
Age Discrimination in Employment Act of 1967
Prohibits discrimination against workers over the age of 40 and restricts mandatory retirement
Restructing
Redesigning an organization so that it can more effectively and efficiently serve its customers
Hot-Desking
Sharing a desk with other employees who work at different times
Human Relations Skills
Skills that involve communication and motivation; they enable managers to work through and with people
Technical Skills
Skills that involve the ability to perform tasks in a specific discipline or department
Conceptual Skills
Skills that involve the ability to picture the organization as a whole and the relationship among its various parts
Extrinsic Reward
Something given to you by someone else as recognition for good work; extrinsic rewards include pay increases, praise, and promotions.
Objectives
Specific, short-term statements detailing how to achieve the organization's goals.
Penny Stock
Stock that costs less than $2 per share; extremely high risk
Preferred Stock
Stock that gives its owners preference in the payment of dividends and an earlier claim on assets than common stockholders if the company is forced out of business and its assets sold
Time-Motion Studies
Studies, begun by Frederick Taylor, of which tasks must be performed to complete a job and the time needed to do each task
Scientific Management
Studying workers to find the most efficient ways of doing things and then teaching people those techniques
Directing
Telling employees what to do to meet the goals and objectives of the organization
Orientation
The activity that introduces new employees to the organization; to fellow employees; to their immediate supervisors; and to the policies, practices, and objectives of the firm.
Arbitration
The agreement to bring in an impartial third party (a single arbitrator or a panel of arbitrators) to render a binding decision in a labor dispute.
Falling Dollar
The amount of goods and services you can buy with a dollar decreases.
Money Supply
The amount of money the Federal Reserve Bank makes available for people to buy goods and services.
Dow Jones Industrial Average
The average cost of 30 selected stocks, used to give an indication of the direction (up or down) of the stock market over time.
World Bank
The bank primarily responsible for financing economic development; also known as the International Bank for Reconstruction and Development.
Goals
The broad, long-term accomplishments an organization wishes to attain.
Open-Market Operations
The buying and selling of U.S. government bonds by the Fed with the goal of regulating the money supply
Barter
The direct trading of goods or services for other goods or services.
Departmentalization
The dividing of organizational functions into separate units
Maturity Date
The exact date the issuer of the bond must pay the principal to the bondholder
Initial Public Offering (IPO)
The first public offering of a corporation's stock.
Discount Rate
The interest rate that the Fed charges for loans to member banks
Middle Management
The level of management that includes general managers, division managers, and branch and plant managers who are responsible for tactical planning and controlling
Chain of Command
The line of authority that moves from the top of a hierarchy to the lowest level
Span of Control
The optimum number of subordinates a manager supervises or should supervise
Interest
The payment the issuer of the bond makes to the bondholders for the use of the borrowed money
Intrinsic Reward
The personal satisfaction you feel when you perform well and complete goals
Capital Gains
The positive difference between the purchase price of a stock and its sale price.
Real Time
The present moment or the actual time in which something takes place
Transparency
The presentation of a company's facts and figures in a way that is clear and apparent to all stakeholders
Strategic Planning
The process of determining the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals
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
Networking
The process of establishing and maintaining contacts with key managers in one's own organization and other organizations and using those contacts to weave strong relationships that serve as informal development systems
Selection
The process of gathering information and deciding who should be hired, under legal guidelines, for the best interests of the individual and the organization.
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
Operational Planning
The process of setting work standards and schedules necessary to implement the company's tactical objectives
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
Management Development
The process of training and educating employees to become good managers and then monitoring the progress of their managerial skills over time.
Management
The process used to accomplish organizational goals through planning, organizing, leading, and controlling people and other organizational resources
Recruitment
The set of activities used to obtain a sufficient number of the right people at the right time
Economies of Scale
The situation in which companies can reduce their production costs if they can purchase raw materials in bulk; the average cost of goods goes down as production levels increase
Formal Organization
The structure that details lines of responsibility, authority, and position; that is, the structure shown on organization charts.
Informal Organization
The system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority outside the formal organization; that is, the human side of organization that does not appear on any organization chart
Demand Deposit
The technical name for a checking account; the money in a demand deposit can be withdrawn anytime on demand from the depositor
Time Deposit
The technical name for a savings account; the bank can require prior notice before the owner withdraws money from a time deposit.
Hawthorne Effect
The tendency for people to behave differently when they know they are being studied
Principle of Motion Economy
Theory developed by Frank and Lillian Gilbreth that every job can be broken down into a series of elementary motions
Maslow's Hierarchy of Needs
Theory of motivation based on unmet human needs from basic physiological needs to safety, social, and esteem needs to self-actualization needs
Core Competencies
Those functions that the organization can do as well as or better than any other organization in the world
On-the-job Training
Training at the workplace that lets the employee learn by doing or by watching others for a while and then imitating them.
Apprentice Programs
Training programs involving a period during which a learner works alongside an experienced employee to master the skills and procedures of a craft.
Problem-Solving Teams
Two or more workers assigned to solve a specific problem
Networking
Using communications technology and other means to link organizations and allow them to work together on common objectives
Expectancy Theory
Victor Vroom's theory that the amount of effort employees exert on a specific task depends on their expectations of the outcome
Organizational (or corporate) Culture
Widely shared values within an organization that provide unity and cooperation to achieve common goals
Flexible Plan
Work schedule that gives employees some freedom to choose when to work, as long as they work the required number of hours.
Contingent Workers
Workers who do not have the expectation of regular, full-time employment.
Digital Natives
Young people who have grown up using the internet and social networking
Grievance
a charge by employees that management is not abiding by the terms of the negotiated labor-management agreement
Quid Pro Quo Sexual Harassment
a form of sexual harassment in which employment outcomes, such as hiring, promotion, or simply keeping one's job, depend on whether an individual submits to sexual harassment
Job Enlargement
a job enrichment strategy that involves combining a series of tasks into one challenging and interesting assignment
Job Rotation
a job enrichment strategy that involves moving employees from one job to another
American with Disabilities Act of 1990
a law passed in 1990 that requires employers and public facilities to make "reasonable accomodations" for people with disabilities and prohibits discrimination against these individuals in employment
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
Direct Payment
a preauthorized electronic payment
Banker's Acceptance
a promise that the bank will pay some specified amount at a particular time
Income Stock
a stock that pays higher-than-average dividends compared to other stock issues
Job Analysis
a study of what is done by employees who hold various job titles
Strike
a union strategy in which workers refuse to go to work; the purpose is to further workers' objectives after an impasse in collective bargaining
To compete successfully, U.S. firms must create:
a work environment that includes goals such as social contribution, honesty, reliability, service, quality, dependability, and unity—for all levels of employees
Job Specifications
a written summary of the minimum qualifications required of workers to do a particular job
Open Shop Agreement
agreement in right-to-work states that gives workers the option to join or not join a union, if one exists in their workplace
Stock Splits
an action by a company that gives stockholders two or more shares of stock for each one they own
Job Sharing
an arrangement whereby two part-time employees share one full-time job
Secondary Boycott
an attempt by labor to convince others to stop doing business with a firm that is the subject of a primary boycott; prohibited by the Taft-Hartley Act
Debit Card
an electronic funds transfer tool that serves the same function as checks: it withdraws funds from a checking account
Mentor
an experienced employee who supervises, coaches, and guides lower-level employees by introducing them to the right people and generally being their organizational sponsor
Federal Deposit Insurance Corporation (FDIC)
an independent agency of the U.S. government that insures bank deposits
Market Order
an order telling a broker to buy or sell a stock immediately at the best price available
Limit Order
an order to a broker to buy a specific stock only if its price is below a certain level, or to sell a specific stock only if its price is above a certain level
Craft Union
an organization of skilled specialists in a particular craft or trade
Mutual Fund
an organization that buys stocks and bonds and then sells shares in those securities to the public
Stock Exchange
an organization whose members can buy and sell (exchange) securities for companies and individual investors
Money
anything that people generally accept as payment for goods and services
Gain-Sharing Systems
base bonuses on improvements over previous performance
Hay Method
based on job grades, each of which has a strict pay range
Fringe Benefits
benefits such as sick-leave pay, vacation pay, pension plans, and health plans that represent additional compensation beyond base wages
Callable Bond
bond that permits the bond issuer to pay off the bond's principal before its maturity date
Union Shop Agreement
clause in a labor-management agreement that says workers do not have to be members of a union to be hired, but must agree to join the union within a prescribed period
Closed Shop Agreement
clause in a labor-management agreement that specified workers had to be members of a union before being hired (was outlawed by the Taft-Hartley Act in 1947)
Market-Based Pay Structures
compensate people relative to the market value of their job, regardless of their level in the organization
Skill-Based Pay
compensation system that pays employees for learning additional skills or knowledge
Codetermination
cooperation between management and workers in decision making
Margin Call
demand by a broker that investors pay back loans made for stocks purchased on margin
On-Call Scheduling
entails employers calling in or canceling workers with little notice
Over-the-Counter (OTC) Market
exchange that provides a means to trade stocks not listed on the national exchanges
Nonbanks
financial organizations that accept no deposits but offer many of the services provided by regular banks (pension funds, insurance companies, commercial finance companies, consumer finance companies, and brokerage houses)
Cafeteria-Style Fringe Benefits
fringe benefits plan that allows employees to choose the benefits they want up to a certain dollar amount
Debt Financing
funds raised through various forms of borrowing that must be repaid
Program Trading
giving instructions to computers to automatically sell if the price of a stock dips to a certain point to avoid potential losses
Soft Benefits
help workers maintain the balance between work and family life that is often as important to hardworking employees as the nature of the job itself
cumulative preferred stock
if one or more dividends are not paid when promised, they accumulate and the corporation must pay them in full at a later date before it can distribute any common stock dividends.
Core Time
in a flextime plan, the period when all employees are expected to be at their job stations
Industrial Unions
labor organizations of unskilled and semiskilled workers in mass-production industries such as automobiles and mining
Golden Handshake
large sum of money paid as compensation to someone who is obliged to leave a job or retire early
Right-to-Work Laws
legislation that gives workers the right, under an open shop, to join or not join a union if it is present
Equity Financing
money raised from within the firm, from operations or through the sale of ownership in the firm (stock or venture capital)
Dividends
part of a firm's profits that the firm may distribute to stockholders as either cash payments or additional shares of stock
Continuous Performance Reviews
performance management strategy that allows workers to receive and give continuous, real-time feedback via mobile apps that are focused on helping employees meet goals— or leave the company faster
callable preferred stock
preferred stockholders could be required to sell their shares back to the corporation
Pay Equity
principle that women and men who perform jobs that are of equal value to society and that require equal training ought to be paid equally
Title VII of the Civil Rights Act of 1964
prohibits discrimination in hiring, firing, compensation, apprenticeships, training, terms, conditions, or privileges of employment based on race, religion, creed, sex, or national origin (age was later added)
Union Security Clause
provision in a negotiated labor-management agreement that stipulates that employees who benefit from a union must either officially join or at least pay dues to the union
Buying Stock on a Margin
purchasing stocks by borrowing some of the purchase cost from the brokerage firm
Primary Market
security market that handles the sale of new securities
Secondary Market
security market that handles the trading of the securities between investors, which the proceeds of the sale going to the investor selling the stock, not to the corporation whose stock is sold
Stocks
shares of ownership in a company
Secured Bonds
sometimes called mortgage bonds, are backed by collateral such as land or buildings that is pledged to bondholders if interest or principal isn't paid when promised
Investment Bankers
specialists who assist in the issue and sale of new securities
Quantitative Easing (QE)
the Fed can create more money when it believes that money is needed to get the economy moving again
Rising Dollar
the amount of goods and services you can buy with a dollar goes up
Comparable Worth
the concept that women and men should receive equal pay for jobs calling for comparable skill and responsibility
Knights of Labor
the first national labor union; formed in 1869
Equity Theory
the idea that employees try to maintain equity between inputs and outputs compared to others in similar positions
Goal Setting Theory
the idea that setting ambitious but attainable goals can motivate workers and improve performance if the goals are accepted, accompanied by feedback, and facilitated by organizational conditions
Federal Funds Rate
the interest rate at which banks make overnight loans to one another
Common Stock
the most basic form of ownership in a firm; it confers voting rights and the right to share in the firm's profits through dividends, if approved by the firm's board of directors
Savings Association Insurance Fund (SAIF)
the part of the FDIC that insures holders of accounts in savings and loan associations
Decertification
the process by which workers take away a union's right to represent them
Human Resource Management
the process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organizational goals
Collective Bargaining
the process whereby union and management representatives form a labor-management agreement, or contract, for workers
Bargaining Zone
the range of options between the initial and final offer that each party will consider before negotiations dissolve or reach an impasse
Mediation
the use of a third party, called a mediator, who encourages both sides in a dispute to continue negotiating and often makes suggestions for resolving the dispute
Job Simulation
the use of equipment that duplicates job conditions and tasks so trainees can learn skills before attempting them on the job
Central Bank
A bank at which other banks could keep their funds and borrow funds if needed
Electric Funds Transfer (EFT)
A computerized system that electronically performs financial transactions such as making purchases, paying bills, and receiving paychecks
Prospectus
A condensed version of economic and financial information that a company must file with the SEC before issuing stock; the prospectus must be sent to prospective investors.
Bond
A corporate certificate indicating that an investor has lent money to a firm (or a government)
Injunction
A court order directing someone to do something or to refrain from doing something
Saving and Loan Association (S&Ls)
A financial institution that accepts both savings and checking deposits and provides home mortgage loans
Planning
A management function that includes anticipating trends and determining the best strategies and tactics to achieve organizational goals and objectives
Staffing
A management function that includes hiring, motivating, and retaining the best people available to accomplish the company's objectives
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 doing a good job, and taking corrective action if they are not
Exit Interview
A meeting of a departing employee with the employee's supervisor and/or a human resource specialist to discuss the employee's reasons for leaving.
Job Enrichment
A motivational strategy that emphasizes motivating the worker through the job itself.
Index Fund
A mutual fund that is constructed to match or track the components of a market index; they are very low cost, easy to obtain, and can be held by investors for a long period of time; they have matched or beat the performance of higher-priced funds managed by professional money managers
NASDAQ
A nationwide electronic system that communicates over-the-counter trades to brokers.
Reserve Requirement
A percentage of commercial banks' checking and savings accounts that must be physically kept in the bank.
SWOT analysis
A planning tool used to analyze an organization's strengths, weaknesses, opportunities, and threats
Commercial Bank
A profit-seeking organization that receives deposits from individuals and corporations in the form of checking and savings accounts and then uses some of these funds to make loans.
Letter of Credit
A promise by the bank to pay the seller a given amount if certain conditions are met
Stockbroker
A registered representative who works as a market intermediary to buy and sell securities for clients.
Sinking Fund
A reserve account in which the issuer of a bond periodically retires some part of the bond principal prior to maturity so that enough capital will be accumulated by the maturity date to pay off the bond.
Rational Decision-Making Model
A series of steps managers often follow to make logical, intelligent, and well-founded decisions
Growth Stock
A stock from a company which has a consistent record of relatively rapid growth and earnings in all economic conditions.
Job Description
A summary of the objectives of a job, the type of work to be done, the responsibilities and duties, the working conditions, and the relationship of the job to other functions.
Hierarchy
A system in which one person is at the top of the organization and there is a ranked or sequential ordering from the top down of managers who are responsible to that person
Virtual Corporation
A temporary networked organization made up of replaceable firms that join and leave as needed
Certificate of Deposit (CD)
A time-deposit (savings) account that earns interest to be delivered at the end of the certificate's maturity date.
Yellow-Dog Contract
A type of contract that required employees to agree as a condition of employment not to join a union; prohibited by the Norris-LaGuardia Act in 1932.
Organization 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
Negotiated Labor-Management Agreement (Labor Contract)
Agreement that sets the tone and clarifies the terms under which management and labor agree to function over a period of time
Training and Development
All attempts to improve productivity by increasing an employee's ability to perform. Training focuses on short-term skills, whereas development focuses on long-term abilities.
Pension Funds
Amounts of money put aside by corporations, nonprofit organizations, or unions to cover part of the financial needs of members when they retire
Lockout
An attempt by management to put pressure on unions by temporarily closing the business
Direct Deposit
An automatic deposit of a paycheck without having to take a physical check to the bank.
Smart Card
An electronic funds transfer tool that is a combination credit card, debit card, phone card, driver's license card, and more.
Union
An employee organization that has the main goal of representing members in employee-management bargaining over job-related issues.
Vision
An encompassing explanation of why the organization exists and where it's trying to head
Performance Appraisal
An evaluation that measures employee performance against established standards in order to make decisions about promotions, compensation, training or termination.
Land Banks
An institution, established by a colonial legislature, that printed paper money and lent it to farmers
Matrix Organization
An organization in which specialists from different parts of the organization are brought together to work on specific projects but still remain part of a line-and-staff structure
American Federation of Labor (AFL)
An organization of craft unions that championed fundamental labor issues; founded in 1886.
Decentralized Authority
An organization structure in which decision-making authority is delegated to lower-level managers more familiar with local conditions than headquarters management could be
Inverted Organization
An organization that has contact people at the top and the CEO at the bottom of the organizational chart
Line Organization
An organization that has direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with all people reporting to only one supervisor
Bureaucracy
An organization with many layers of managers who set rules and regulations and oversee all decisions
Centralized Authority
An organizational structure in which decision-making authority is maintained at the top level of management at the company's headquarters
Tall Organization Structure
An organizational structure in which the pyramidal organization chart would be quite tall because of the various levels of management
Flat Organizational Structure
An organizational structure that has a few layers of management and a broad span of control
Mission Statement
An outline of the fundamental purposes of an organization
Vestibule Training
training done in classrooms where employees are taught on equipment similar to that used on the job
Online Training
training programs in which employees complete classes via the internet
Off-the-job Training
training that occurs away from the workplace and consists of internal or external programs to develop any of a variety of skills or to foster personal development
Shop Stewards
union officials who work permanently in an organization and represent employee interests on a daily basis
Congress of Industrial Organizations (CIO)
union organization of unskilled workers; broke away from the American Federation of Labor (AFL) in 1935 and rejoined it in 1955
Sexual Harassment
unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature that creates a hostile work environment
Insider Trading
using knowledge or information that individuals gain through their position that allows them to benefit unfairly from fluctuations in security prices
Primary Boycott
when a union encourages both its members and the general public not to buy the products of a firm involved in a labor dispute
Cooling-off Period
when workers in a critical industry return to their jobs while the union and management continue negotiations
Compressed Workweek
work schedule that allows an employee to work a full number of hours per week but in fewer days
Strikebreakers
workers hired to do the jobs of striking workers until the labor dispute is resolved
Knowledge Management
Finding the right information, keeping the information in a readily accessible place, and making the information known to everyone in the firm
Certification
Formal process whereby a union is recognized by the NLRB as the bargaining agent for a group of employees.
Empowerment
Giving employees the authority to make a decision without consulting the manager and the responsibility to respond quickly to customer requests
Enabling
Giving workers the education and tools they need to make decisions
Cross-Functional Self-Managed Teams
Groups of employees from different departments who work together on a long-term basis
Junk Bonds
High-risk, high-interest bonds
Top Management
Highest level of management, consisting of the president and other key company executives who develop strategic plans
Securities and Exchange Commission (SEC)
Federal agency that has responsibility for regulating the various stock exchanges
External Customers
Dealers, who buy products to sell to others, and ultimate customers (or end users), who buy products for their own personal use
Staff Personnel
Employees who advise and assist line personnel in meeting their goals
Line Personnel
Employees who are part of the chain of command that is responsible for achieving organizational goals
Affirmative Action
Employment activities designed to "right past wrongs" by increasing opportunities for minorities and women.
Stock Certificate
Evidence of stock ownership that specifies the name of the company, the number of shares it represents, and the type of stock being issued.