Kerala Plus Two Business Studies (DHSE) key terms

The process of getting things done through other people so that organisational goals are achieved efficiently and effectively. It combines planning, organising, staffing, directing and controlling into one continuous activity.

Completing a task and reaching the intended goal within the time set, regardless of how much resource was used. It focuses on doing the right things and producing the desired result.

Doing a task with the least possible cost, time and waste while still achieving the goal. It focuses on doing things the right way and on the best use of available resources.

The orderly synchronising of the efforts of individuals and groups so that they work together smoothly towards a common goal. It is present in every managerial function rather than being a separate function.

The view that management meets some features of a profession, such as a body of knowledge and a code of conduct, but lacks compulsory licensing and restricted entry. Hence it is treated as a profession only in a limited sense.

The idea that management principles and functions apply to all kinds of organisations, whether business, government, hospital or club, and at every level. It supports the claim that management is a universal process.

A broad general guideline, derived from observation and experience, that managers can use when handling recurring situations. It is not a rigid rule and must be applied with judgement to fit the case.

Breaking the total work into small, specialised tasks and assigning each to a person or group. It increases speed, accuracy and skill, but excessive splitting can reduce flexibility and create boredom.

Each employee should receive orders from and be accountable to only one superior. Following this principle avoids confusion, conflicting instructions and shifting of responsibility.

The unbroken line of authority running from the topmost manager to the lowest worker, which shows who reports to whom. Fayol allowed a shortcut called the gang plank for faster communication between equals.

Fayol's principle that managers should build team spirit and harmony so that employees feel united. It stresses union in effort and avoiding needless division among staff.

An approach that studies work scientifically to find the one best method, then selects and trains workers and pays them according to output. It aims at maximum efficiency through standardisation, method study and differential piece rates.

Standardisation fixes uniform methods, tools and materials for a task, while simplification removes unnecessary varieties and sizes. Both reduce confusion, cut costs and make work easier to learn and repeat.

All the external forces, institutions and factors outside a firm that affect its working and decisions. It includes economic, social, political, legal and technological conditions, and is largely beyond the firm's control.

The part of the environment made up of stakeholders who directly affect a firm's daily operations, such as customers, suppliers, competitors and financiers. These groups are close to the business and influence it immediately.

The wider forces such as economic, social, technological, political and legal conditions that affect all firms in an economy. Their effect is indirect and long-term, but they shape opportunities and threats for every business.

A tool that lists a firm's internal strengths and weaknesses and its external opportunities and threats. It helps managers match the firm's capabilities with the environment before setting objectives and plans.

The process of deciding in advance what to do, how to do it, when to do it and who will do it. It bridges the gap between where the firm is and where it wants to reach.

The assumptions about future conditions, such as sales forecasts, costs and government policy, on which a plan is built. Correct premises make plans realistic; wrong premises make the whole plan fail.

A comprehensive plan that sets the direction of the firm and the broad path it will follow to reach its long-term objectives. It deals with matching internal strengths to the external environment.

The managerial function of identifying and grouping work, assigning duties, and creating authority relationships so that people work together effectively. It produces the structure through which plans are carried out.

The process by which a superior gives a subordinate part of his work, the authority needed to do it, and holds the subordinate accountable for results. Authority can be delegated, but final accountability stays with the superior.

Authority is the right to give orders and use resources, while accountability is the obligation to answer for the results of assigned work. Accountability flows upward and cannot be passed on to another person.

The number of subordinates who report directly to one superior. A narrow span creates a tall structure with many levels, while a wide span creates a flat structure with fewer levels.

The pattern of jobs and reporting relationships that shows how work is divided and coordinated in an enterprise. It may be functional, where activities are grouped by work type, or divisional, where they are grouped by product or territory.

The function of finding the right number and kind of people for the jobs in an organisation and keeping them suitably placed. It covers recruitment, selection, placement, training and appraisal of employees.

The process of searching for and attracting a pool of prospective candidates so that the firm can choose the best person for a vacancy. It may draw on internal sources, such as transfers, or external sources, such as advertisements.

The process of screening applicants and picking the most suitable one for a job through tests, interviews and reference checks. It is a negative process because unsuitable candidates are rejected at each stage.

Training builds the skills a worker needs for his present job, while development prepares him for larger future responsibilities. Both improve performance and help the organisation adapt to change.

The function of instructing, guiding, supervising and motivating people so that they work willingly towards organisational goals. It starts the actual performance of work and is performed at every level of management.

The inner drive that makes a person act towards a goal because he wants to satisfy a need. Managers create motivation through rewards, recognition and a supportive work climate.

The ability of a manager to influence the behaviour of others so that they follow him willingly towards a goal. It depends on personal qualities and the situation rather than on formal position alone.

The exchange of information and understanding between two or more persons through a chosen channel. It may flow downward, upward or sideways, and needs feedback to be complete.

A theory that arranges human needs in five levels: physiological, safety, social, esteem and self-actualisation. A satisfied need no longer motivates, so managers must offer rewards that match the level currently unmet.

The function of measuring actual performance against standards, finding deviations and taking corrective action. It keeps activity on track and links back to planning, since standards come from plans.

A control principle under which managers attend only to significant deviations from standards and leave minor ones to subordinates. It saves time and focuses attention where corrective action matters most.

The activity of planning, raising, investing and monitoring funds so that the firm earns a fair return while keeping risk under control. Its key decisions are investment, financing and dividend decisions.

The mix of debt and equity that a firm uses to finance its assets. More debt raises return to shareholders but also raises financial risk, so a balance must be chosen.

The funds invested in current assets such as stock, debtors and cash, needed for day-to-day operations. It is calculated as current assets minus current liabilities and varies with the operating cycle.

The choice of how much of the profit to distribute to shareholders and how much to retain in the business. It affects the firm's growth funds as well as shareholder satisfaction.

The market in which a company issues new securities to investors to raise fresh capital. Money from these issues goes to the issuing company, as in an initial public offer.

The market where existing securities are bought and sold among investors, as on a stock exchange. The company gets no new funds, but the market provides liquidity and price discovery.

The first sale of shares by a company to the general public to raise capital and get listed on a stock exchange. It is a primary market issue made under securities regulations.

The set of controllable elements a firm combines to satisfy its target market, usually described as the four Ps: product, price, place and promotion. The mix must be consistent with the chosen target segment.

Dividing a heterogeneous market into smaller groups of buyers with similar needs or characteristics. The firm then selects one or more segments and designs a mix for each chosen segment.

Giving a product a name, sign, symbol or design, or a combination of these, to identify it and distinguish it from competitors. A brand builds recognition, trust and customer loyalty.

The stages a product passes through from introduction to growth, maturity and decline. Marketing strategy and profit levels differ at each stage, so the mix must be adjusted over time.

Planning and executing the conception, pricing, promotion and distribution of goods and services to create exchanges that satisfy individual and organisational goals. It involves analysing, planning and controlling marketing programmes.

The body of laws, institutions and practices that safeguard buyers against unfair trade practices, defective goods and deficient services. In India it is mainly carried out through the Consumer Protection Act and consumer courts.

The legal entitlements of a buyer, such as the right to safety, information, choice, being heard, redressal and consumer education. They empower consumers to act against exploitation by sellers.

The three-tier quasi-judicial machinery, at district, state and national levels, that hears consumer complaints and grants relief. Its jurisdiction depends on the value of the goods or compensation claimed.

The Indian statute that protects buyers of goods and services, defines unfair and restrictive trade practices, and provides speedy redressal through consumer commissions. It also creates consumer councils for promoting awareness.