Chapter 5 Management Key Terms
Action plan - correct answer-Course of action to achieve a stated goal
Business model - correct answer-Outline of need the firm will fill, the operations of a
business, its components and functions, as well as the expected revenues and expenses
Business plan - correct answer-a document that outlines a proposed firm's goals, the
strategy for achieving them, and the standards for measuring success
Cascading goals - correct answer-goals is the process of ensuring that the strategic goals
set at the top level align, or "cascade" downward with more specific short term goals at lower
levels within an organization, including employees' objectivities and activities
Goals - correct answer-also known as objective; a specific commitment to achieve a
measurable result within a period of time
Long term goals - correct answer-are generally referred to as strategic goals. They tend to
span 1 to 5 years and focus on the strategies identified in a company's strategic plan
Management by Objectives (MBO) - correct answer-1) Managers and employees jointly set
objectives for the employee
2) Managers develop action plans
3) Managers and employees periodically review the employee performance
4) The manager makes a performance appraisal and rewards the employee according to
results
Means-end chain - correct answer-a hierarchy of goals; in the chain of management
(operation, tactical, strategic) the accomplishment of low level goals are the means leading
to the accomplishment of high-level goals or ends
Mission - correct answer-an organizations purpose or reason for being
Mission statement - correct answer-statement that expresses the purpose of the
organization
Objective - correct answer-also known as goal; a specific commitment to achieve a
measurable result within a state of time
Operating plan - correct answer-typically designed for a 1-year period, this plan defines how
a manager will conduct his business based on an action plan; the operating plan identifies
clear targets such as revenues, cash flow, and market share
Operational goals - correct answer-Goals that are set by and for first line managers and are
concerned with short term matters associated with realizing tactical
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