CFLM / FLM Exam flashcards

34 cards. Read the term and the definition here. The deck at the top of this page is optional.

Span of control

The number of subordinates reporting directly to one manager. Wider spans reduce administrative layers but demand more delegation; narrow spans increase supervision and cost.

Transformational leadership

A leadership style built on idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration, producing follower commitment and discretionary effort beyond transactional compliance.

Path-goal theory

House's theory that leaders motivate followers by clarifying goals, removing obstacles, and adjusting style: directive, supportive, participative, or achievement-oriented based on task and follower characteristics.

Management by exception

A transactional leadership approach in which the manager intervenes only when performance deviates from standards, either actively monitoring or passively waiting for problems to surface.

SWOT analysis

A planning tool that inventories internal strengths and weaknesses and external opportunities and threats. It organizes information but does not by itself produce strategic choices.

Porter's five forces

An industry attractiveness framework assessing rivalry among competitors, threat of new entrants, threat of substitutes, supplier bargaining power, and buyer bargaining power.

Bounded rationality

Simon's concept that decision makers have limited information, time, and cognitive capacity, so they satisfice by choosing the first option meeting acceptable criteria.

Escalation of commitment

Continuing a failing course of action because of already invested sunk costs. The corrective principle is to weigh only future costs and benefits.

Expected value

The probability-weighted average of all possible outcomes, calculated by multiplying each payoff by its probability and summing the results.

Groupthink

A deterioration of group judgment caused by conformity pressure, marked by illusion of invulnerability, self-censorship, and suppression of dissent. Countered by devil's advocacy and anonymous input.

Tuckman's stages

The five phases of group development: forming, storming, norming, performing, and adjourning. Conflict typically peaks during storming as roles and norms are negotiated.

Social loafing

The tendency for individual effort to decline as group size increases because contributions become less identifiable and accountability is diffused.

Expectancy theory

Vroom's model: motivation equals expectancy times instrumentality times valence. If any one factor is zero, overall motivation is zero.

Herzberg's two factors

Hygiene factors such as pay and working conditions prevent dissatisfaction; motivators such as achievement, recognition, and growth create satisfaction. They are not opposites on one scale.

Psychological safety

Edmondson's shared belief that a team is safe for interpersonal risk-taking, such as admitting error or asking questions, which supports learning and improvement.

Equity theory

Adams's theory that employees compare their input-to-outcome ratio with a referent's; perceived inequity motivates reduced effort, requests for change, or exit.

Break-even point

The volume at which total revenue equals total cost. In units it equals fixed costs divided by contribution margin per unit.

Contribution margin

Price minus variable cost per unit. It measures how much each sale contributes to covering fixed costs and then generating profit.

Net present value

The sum of future cash flows discounted at the cost of capital minus the initial investment. A positive NPV indicates value creation.

Quick ratio

Current assets minus inventory, divided by current liabilities. It tests short-term liquidity without relying on selling inventory.

Zero-based budgeting

A budgeting method that builds each period's budget from zero, requiring every expense to be justified, rather than adjusting the prior year's figures.

Four-fifths rule

A selection-rate test for adverse impact: if a protected group's rate is below 80 percent of the highest group's rate, adverse impact is indicated.

Structured interview

A selection interview using predetermined questions and scored rating criteria applied consistently to all candidates, improving predictive validity and legal defensibility.

Kirkpatrick levels

Four levels of training evaluation: reaction, learning, behavior, and results. Results-level evaluation measures on-the-job performance impact.

Job specification

The portion of job analysis output listing the knowledge, skills, abilities, and other characteristics a person needs to perform the job successfully.

Little's Law

Work-in-process equals throughput multiplied by flow time. It links inventory, cycle time, and output rate in any stable process.

Takt time

Available production time divided by customer demand. It sets the pace at which a process must complete one unit to meet demand.

DMAIC

The Six Sigma improvement cycle: Define, Measure, Analyze, Improve, and Control. It targets root causes and reduces process variation.

Theory of Constraints

Goldratt's principle that system throughput is limited by its bottleneck. Steps: identify, exploit, subordinate, elevate the constraint, then repeat.

Fraud triangle

Cressey's model identifying three conditions that enable fraud: pressure or incentive, opportunity, and rationalization. Removing opportunity is the strongest control.

Residual risk

The risk that remains after existing controls are applied, as distinct from inherent risk, which is assessed before controls.

Whistleblower protection

Legal and policy safeguards prohibiting retaliation against employees who report suspected wrongdoing in good faith, encouraging internal disclosure of misconduct.

Stakeholder salience

Mitchell's model holding that a stakeholder's importance depends on power, legitimacy, and urgency; possessing all three makes a definitive stakeholder.

Channel richness

The capacity of a communication channel to convey cues and enable immediate feedback. Face-to-face is richest; written reports are leanest.