U1 Flashcards

1
Q

An organizational process is the means by which management ?

A

rallies together labor resources, materials, technology, information, and people to achieve its business goals and objectives.

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2
Q

An effective organization is usually defined as?

A

an association which:
-ensures optimal use of its resources,
-minimizing production loss and disruption in the interaction between different organizational units
-and avoiding breakdowns in communication channels.

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3
Q

It is generally accepted that specialization and division of labor underlie the concept of?

A

organizational efficiency and business growth.

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4
Q

Historically, maximizing efficiency has led to the most important achievements in the ————————————— and its derivatives.

A

development of performance

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5
Q

Different models of enhancing and managing performance have led to an increase in ?

A

production efficiency, which has changed the very nature and quality of modern society and the global balance of power in the business world.

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6
Q

The methods for achieving high performance do not only consider ————- ——— (resource) processing, which contributes to the success of the——————– ————(output),
but also organizational activities and components, including using——————————————————————————————————————————.

A

optimal input

final product

technologies, a manufactured design, and a structure of work as well as a different influence of external factors and environment.

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7
Q

Performance measurement can be defined as a?

A

process by which businesses, governments, and other organizations set up certain criteria for measuring the quality of their activities based on organizational goals (i.e., standards).

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8
Q

It involves creating a simple but effective system for ?

A

determining whether organizations are able to meet their objectives.

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9
Q

Examples from business might include

A

increases in turnover and profit,
reductions in production costs,
and decreases in the time period required to process customer orders.

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10
Q

The reason for considering all these examples is?

A

to explain that the result can be measured quantitatively.

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11
Q

Effective performance measurement requires ?

A

quantitative evidence (for an association) to determine organizational progress toward achieving its goals.

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12
Q

Søren Kierkegaard once uttered the famous phrase:

A

“Life can only be understood backwards, but it must be lived forwards.”

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13
Q

What is true for life also applies to science and research. Hence, to understand the background of performance measurement theory-where it comes from and where it is going-we need to

A

-first look at a taxonomy of broad management theories based on a chronological approach.

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14
Q

This includes six main concepts, which we will specify and discuss in the following sequence:

A

=Theory of scientific management (1885–1920)
=Theory of administration (1920–1950)
=Human relations movement\/neoclassical management (1930–1950)
=Behavioral management theory (1950–present)
=Theory of quantitative management (1950–present)
=Strategic management theory (1970–present) and its modern manifestations such as ‘total quality management’, ‘competitive advantage strategy’, a concept of ‘customer relation­ship management’ and ‘consumer-oriented management’, etc. (2000–present).

These concepts will not only help you to understand performance measurement, but are also the foundation and background for other theories in management accounting and corporate finance.

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15
Q

Theories Before 1950
The first four theories of management from a chronological perspective are based on ?

A

behav­iorist approaches to management.

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16
Q

Quantitative and strategic management concepts are based on?

A

quantitative analysis and assessment of effective management with the intent to achieve performance excellence.

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17
Q

Management practices have evolved throughout history. It is well known that different types of organizations already existed in ancient times. But before the 20th century, there was no —————- for explaining exactly what makes a management process —————and what improves performance ——————–.

A

clear-cut framework

effective
systematically

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18
Q

Theory of Scientific Management

Effective management and issues of high productivity in commerce and business organizations only became a subject of serious studies at the

A

20th century after the publication of F. Taylor’s ‘Principles of Scientific Management’.

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19
Q

Since that time, efficiency and performance in management have become?

A

an independent area of research and a recognized science.

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20
Q

Frederick Taylor and his theory of scientific management began the era of ————–management and ——————— in manufacturing.

He advocated for?

A

modern

efficiency

training the workforce
and developing ‘a hearty cooperation’ in the production process.

That alone already represented a significant improvement over the feudal human relations of the time.

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21
Q

At the dawn of the 20th century, Frederick Taylor accurately defined
poor administration
and inefficient or ill-directed management
as a ?

A

national loss.

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22
Q

Principles of efficient (rational) management in the manufacturing process laid the foundation for theories of ?

A

scientific management.

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23
Q

But the main focus of scientific management was on ?

A

the lowest level of the organization-a worker and his supervisor-where attention was directed towards how to make the work of this production unit more efficient.

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24
Q

The key elements in the theory of rational management were?

A

standardization, rationalization, specialization, and intensification of work.

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25
F. Taylor, G. Gantt, and F. Gilbert suggested?
dif­ferent quantitative measurements to determine the best options for boosting performance of specific manufacturing operations.
26
This has led to increased?
specialization, productivity, and efficiency of resource management.
27
The planning process, however, has been separated from?
the implementation of plans while increased standardization of manufacturing processes has led to the alienation of workers from the organization and its objectives.
28
Henry Ford introduced a modified concept of ---------------- management, which included ?
scientific a sys­tematic approach towards personnel management.
29
a sys­tematic approach towards personnel management, with the idea of?
-shared responsibilities between workers -and managers in providing a workflow of high quality and efficiency for the organization as well as the idea of a scientific setting of labor quotas.
30
He developed the principal ideas of a hierarchical structure of?
the organizational management, which were then further formulated by Henry Fayol and Max Weber in its definite form.
31
Taylor’s and Ford’s theories laid the foundation for ?
the development of concepts of how to organize large-scale machine production, which in turn determined frameworks for a model of coordination of modern enterprises.
32
Max Weber introduced a concept of an ‘ideal’ model of?
bureaucratic organization focused on the administrative hierarchy and specialization of labor.
33
Weber postulated that western civili­zation was shifting from? to?
‘wertrational’ (or value oriented) thinking, affective action (action derived from emotions) and traditional action (action derived from past precedence) to ‘zweckrational’ (or technocratic) thinking.
34
According to Max Weber, western civilization was changing in order to?
seek technically optimized results at the expense of emotional or humanistic values.
35
Witnessing the growth of large-scale organizations of all types at the turn of the late 19th and early 20th century, Max Weber devised ?
a set of principles for an ‘ideal’ bureaucracy.
36
He believed that activities and performance of organizations are carried out in accordance with?
a coherent system of certain rules and principles.
37
These principles include:
=fixed and official jurisdictional areas, =a firmly ordered hierarchy of supremacy and subordination, =management based on written records, =thorough and expert training, =official activity taking priority over other activities. These measures result in a principle of leadership within a given company which follows stable and knowable rules, especially in recruitment, promotion of employees and staff dismissal.
38
Weber did not advocate bureaucracy; however, he envisioned the bureaucracy as ?
a large machine for attaining the objectives of an organization in the most efficient manner possible.
39
It should be emphasized that different concepts of scientific management engaged primarily in a study of?
processes of manufacturing management, not taking into account the management of the organization as such.
40
But in general, scientific management’s organizational influences contributed to?
the development of the field of industrial engineering, personnel, and quality control.
41
Theory of Administration Between -----------------------------, a rational approach in management focusing on the -------------------- was slowly replaced by a --------------------approach, or what is well-known today as --------------------------- management, relating to the issues of-------------------------------------------------------------------------------------------------------------------.
1920 and 1950 production cycle ‘classical’ administrative improved governance and administration at the level of the organization as a whole
42
The development of the classic theory of administration (classical management) is primarily associated with----------------------------------------------------------------------------------------------------------------------and gives priority to the concept of ‘efficiency’ in relation to the function of the organization as a whole unit.
the names of Henry Fayol, Lyndal F. Urwick, J. D. Mooney, A. C. Railey, and Alfred P. Sloan
43
The theory of classical management mainly focuses on?
the need to formulate the organization’s objectives and describes the functions of management such as planning, organization and control.
44
Classical (administrative) management emphasized ?
the main five principles of organizational management,
45
Classical (administrative) management emphasized the main five principles of organizational management, which were put by?
Fayol
46
Classical (administrative) management emphasized the main five principles of organizational management, which were put by? Fayol as follows:
‘plan’, ‘organize’, ‘command’, ‘coordinate’, and ‘control’.
47
Planning is?
the act of anticipating the future and acting accordingly.
48
Organization is?
the development of the institution’s resources, both material and human.
49
Commanding is?
concerned with keeping the institution’s actions and processes running.
50
Co-ordination?
indicates the alignment and harmonization of the groups’ efforts.
51
Finally, control implies that?
the above activities were performed in accordance with appropriate rules and procedures.
52
In his book, ‘General and Industrial Management’, H. Fayol proposed fourteen principles of ad­­ministration to go hand in hand with ?
management’s five primary roles.
53
These principles are as follows:
=Specialisation/division of labor =Authority with responsibility =Discipline =Unity of command =Unity of direction =Subordination of individual interest to the greater interest =Remuneration of staff =Centralisation =Scalar chain\/line of authority =Order =Equity =Stability of tenure =Initiative =“Esprit de corps”
54
Fayol clearly believed that?
personal efforts and team dynamics were part of an ‘ideal’ organization.
55
He drew attention to ?
the importance of team spirit as a key to efficiency.
56
In addition, Fayol always stressed the importance of specialization to ensure optimal use of?
human re­sources, but also warned that specialization must have its limits.
57
The theories of scientific management and administration became a theoretical basis for?
the formation of a mechanistic model of the organization.
58
The theories of scientific management and administration became a theoretical basis for the formation of a mechanistic model of the organization. However, this particular type of model only exists in practice when?
when the market and the technological environment are stable and predictable.
59
In this case, an organization is seen as a?
mechanism which combines basic factors of production: production and capital goods, labor and raw materials.
60
This mechanistic model allows technical and economic relations to be established and reveals the dependencies between?
the various factors of production.
61
In this model, the organization is a?
closed autonomic system with fixed boundaries which is relatively independent of the external environment.
62
Management of the organization in such systems is invariably directed towards?
operational management and the role of the human factor is not considered when attempting to improve performance and increase organizational efficiency.
63
The Human Relations Movement A new direction in management-the neoclassical management ?
(the theory behind the human relations movement which replaced the classical administration)-emerged in the 1930s.
64
the neoclassical management ?
This theory adopted the achievement of sociology and psychology and used them as tools.
65
Within the framework of this approach, business institutions were viewed as?
social structures, for which it is necessary to apply knowledge of the organizational culture, different types of motivation, and behavioral functions of the staff.
66
Mary Parker Follett and George Elton Mayo were? instead of considering the production process and people involved in it to be components to be controlled, it is vital to focus on the interpersonal relationships within the organization.
the most determined advocates of the theory of human relations movement and today remain the leading authorities in the development of this approach in management.
67
They first called attention to the fact that ?
68
Mary Parker Follett and George Elton Mayo were?
the most determined advocates of the theory of human relations movement and today remain the leading authorities in the development of this approach in management.
68
They first called attention to the fact that ?
instead of considering the production process and people involved in it to be components to be controlled, it is vital to focus on the interpersonal relationships within the organization.
69
Follett believed that a successful and effective manager should ? what the real situation dictates and not from what is prescribed in control functions.
refuse formal interactions with employees and become a leader who is recognized by workers, rather than relying solely on their authorized or official power.
70
According to Follett, leadership has to be based on ?
71
Follett believed that a successful and effective manager should ? what the real situation dictates and not from what is prescribed in control functions.
refuse formal interactions with employees and become a leader who is recognized by workers, rather than relying solely on their authorized or official power.
71
According to Follett, leadership has to be based on ?
72
Follett believed that a successful and effective manager should ? what the real situation dictates and not from what is prescribed in control functions.
refuse formal interactions with employees and become a leader who is recognized by workers, rather than relying solely on their authorized or official power.
72
According to Follett, leadership has to be based on ?
73
Experiments which were carried out under the direction of E. Mayo and F. D. Roethlisberger as part of the ----------------------------------- at Western Electric in Illinois emphasized the impor­tance of leadership and working groups. The experiment started in the early 1920s as an attempt to determine the effects of lighting on worker productivity.
‘Hawthorne experiment’
74
Experiments which were carried out under the direction of E. Mayo and F. D. Roethlisberger as part of the ‘Hawthorne experiment’ at Western Electric in Illinois emphasized the impor­tance of?
leadership and working groups.
74
Experiments which were carried out under the direction of E. Mayo and F. D. Roethlisberger as part of the ----------------------------------- at ------------------------------------ in Illinois emphasized the impor­tance of leadership and working groups.
‘Hawthorne experiment’ Western Electric
75
According to Follett, leadership has to be based on ?
what the real situation dictates and not from what is prescribed in control functions.
76
Follett believed that a successful and effective manager should ?
refuse formal interactions with employees and become a leader who is recognized by workers, rather than relying solely on their authorized or official power.
77
The experiment started in the --------------- as an attempt to determine the effects of-------------------------------------------------.
early 1920s lighting on worker productivity
78
When those experiments showed no clear correlation, the researchers started looking into other factors such as?
rest breaks, free meals, and hours in the workday.
79
The productivity went up at each change in one of these factors. Finally the workers were put back to?
their original hours and conditions and they set a productivity record.
80
The experiments determined that the workers had become?
a team and that the social dynamics of the team were a strong force influencing productivity.
81
The other findings stated that the workers would vary their work methods to avoid?
boredom without harming overall produc­tivity.
82
These results made it clear that the group dynamics and social composition of an organization were an?
extremely important force affecting productivity.
83
These results made it clear that the group dynamics and social composition of an organization were an extremely important force affecting productivity. This caused ?
a call for greater participation for the workers, greater trust and openness in the working environment, and a greater attention to teams and groups in the work place.
84
The human relations movement’s greatest impact was seen in ?
changes to the activities of the organization’s leadership and personnel department.
85
The seemingly modern concepts of ‘group dynamics’, ‘teamwork’, and organizational ‘social systems’ all stem from?
Follett and Mayo’s work in the mid–1920s and mid 1930s.
86
The theory of the human relations movement studied human behavior from the production point of view i.e.?
what propels worker performance.
87
This approach focuses on?
the relation­ships between performance and social and psychological conditions as critical management elements.
88
Theories After 1950 In the 1950s, a shift from problems of production management to individual behavior and its contribution to production efficiency started a new era in ?
organizational management and gave rise to theories of behavioral management.
89
Further -development -and active promotion of psychology and sociology, -as well as a great improvement in research methodologies after the Second World War, made the study of human behavior at workplace increasingly?
scientific.
90
Behavioral Management Theory The theory of behavioral management postulates that?
a close interaction exists between the internal capacity and personal needs of employees and organizational efficiency and related production growth, making management of employees a key task required to achieve a high level of performance.
91
For example, Chris Argyris and Douglas M. McGregor argued that ?
1-the bureaucratic form of management is largely incompatible with the individual needs of the employees, 2-Rigid hierarchy might cause inefficient relations within an organization.
92
Rigid hierarchy might cause inefficient relations within an organization when?
representatives of a higher level of an association (management level) consider subordinates (the lower level staff) to be irresponsible. These relations create structures which promote an unhealthy one-sided dependence and lead to the basic needs of the workforce being unmet.
93
representatives of a higher level of an association (management level) consider subordinates (the lower level staff) to be irresponsible. These relations create structures which promote an unhealthy one-sided dependence and lead to the basic needs of the workforce being unmet. This can in turn lead to?
conditions that foster reduced interest of employees in their work and the development of anti-organizational activities such as strikes.
94
In ‘The Human Side of Enterprise’, McGregor theorized that?
the main task of management is to create conditions in which employees will direct their efforts towards achieving the goals of an enterprise in a way that will also allow the employees to realize their own personal goals to the best of their ability.
95
McGregor was also the founder of ?
the famous theory X and theory Y which explain employee motivation. These theories suggest that the main role of management is to ‘skillfully’ assemble the key factors of production, including people, for the benefit of the enterprise.
96
Another well-known psychologist Ralph Stogdill formulated the theory of ?
individual behavior and group achievements.
97
With the publication of Ralph Stogdill first article on leadership?
‘Personal Factors Associated with Leadership: A Survey of the Literature’,
98
With the publication of Ralph Stogdill first article on leadership, ‘Personal Factors Associated with Leadership: A Survey of the Literature’, Stogdill became a?
pre-eminent opinion leader in management research.
99
First published in ---------------- and reprinted many times since, this influential reprinted paper marked a ---------------------------- in the study of leadership.
1948 turning point
100
Adding to this growing body of research, L. Porter found a correlation between?
different approaches in management and the size of the organization that also acknowledged differences between the structure of the organization and different positions held by individuals.
101
The behavioral approach became so popular that it was soon expanded to?
all areas of management in the 1960s.
102
The theories of the human relations movement and behavioral management then became the theoretical basis for?
the development of a new concept of ‘informal organization’.
103
This theoretical model was based on the idea that ?
the organization is a group founded on the principles of the division of labor.
104
Chester Barnard, James G. March, and Herbert A. Simon laid the foundations of ?
the ‘informal organization’ concept which focused on understanding how decisions come to pass among individuals, groups, organizations, companies, and society.
105
Furthermore, it examined fundamental questions such as which factors influence decision making, which led to the following factors being identified as?
critical components influencing deci­sions: risk orientation, leadership, and the ambiguity of the present and the past, politics and the vested interests of stakeholders, the challenges of giving and receiving advice, the chal­lenges of organizational and individual learning, and the challenges of balancing exploration and exploitation in business establishments.
106
The Theory of Quantitative Management In the early ----------------, a quantitative approach appeared alongside the development of the --------------------------------------------------- approach in effective management.
1950s behavioral (behaviorist)
107
The impetus for this was ?
the rapid development of mathematics and cybernetics, which greatly contributed to the wide application of quantitative methods in administration.
108
Mathematics, statistics, engineering, and related disciplines affected by the rapid development in the------------- undoubtedly made a significant contribution to the theory and practice of ----------------.
1950s management
109
Abstract theories derived from natural sciences were incorporated into ?
management theories such as the theory of rational choice and equilibrium solutions, theories and models of optimization, and game theories.
110
The period of the early 1960s was characterized by ?
a more drastic transition from a static to a dynamic management model, which took changes in the internal and external environment of the organization into account.
111
During this period, a more ---------------------------------to management was enacted.
systematic approach
112
In accordance with the theories developed by?
Alfred D. Chandler (Jr.), Thomas G. Burns, G. M. Stalker, Joan Woodward, Paul R. Lawrence, and Jay W. Lorsch,
113
In accordance with the theories developed by Alfred D. Chandler (Jr.), Thomas G. Burns, G. M. Stalker, Joan Woodward, Paul R. Lawrence, and Jay W. Lorsch, the organization was considered to be?
a complex hierarchical and multi-component system which is inextricably linked with the outside world.
114
Key factors for success of a business venture were thought to reside in?
both the external environment (from which it obtains resources, including information) and the internal environment.
115
These concepts promoted quantitative methods in corporate governance, seeking to boost performance through?
effective resource and inventory management.
116
One variant of this approach was ?
the development of the situation analysis.
117
The Strategic Management Theory From 1970 to the early 1980s, the idea of an association being ? However, the causes for internal changes in the organization should be considered with regard to the external environment. In this regard, the theory of management in the decade between the 1970s and the 1980s was mainly focused on studying the relationships between external environments, types of organizational structures, and forms of governance.
an open system was formulated.
118
The pivotal idea at that time was that the organization is constantly adapting to ?
the external environment and changing its internal structures at the same time.
119
Lawrence and Lorsch, for example, studied ?
high- and low-efficiency organizations and came to the conclusion that the effects and the interaction of such factors are the driving force behind technological changes within products and methods of production and also responsible for much of the instability of the environment.
120
As a result, they concluded that bureaucracy is more effective for organizational performance if?
its action is conducted in a stable environment.
121
Organizations which operate in a challenging environment should thus be more ?
decentralized to ensure their success and performance efficiency.
122
Such organizations should therefore pay less attention to?
the existing rules and standard routines.
123
A model that represents an organization as a complex hierarchical structure includes strategic management as ?
a key aspect in its corporate governance, since the performance of the organization in such an uncertain environment cannot be guaranteed by forecasting and planning alone.
124
According to this theory, evaluating the performance of the organization was necessary to ?
strengthen the influence of the environment on organizations and their performance (i.e. efficiency), as well as address social and ethical factors and the interests of different stakeholders and groups involved in organizational development.
125
This evaluation can not only be conducted from the standpoint of social and economic effectiveness, but also has to consider?
the issue of how the approach of the organization meets the individual and group values of the em­­ployees, stakeholders, and the whole society.
126
The decade of the 1980s was characterized by ?
developing important concepts such as organizational culture and even to the present-day, this idea is considered to be an important management tool to achieve optimal performance.
127
Management concepts of the 1990s advocated for the following three principles:
-Alteration of the role and the value of manufacturing (i.e. material, production, and service provision) due to the increasing influence of science and technology, including the growing role of quality for competitive advantage -More attention given to organizational culture and democratic corporative governance with focus on behavioral and social aspects of management -Usage of the ‘product-market’ model for measuring the organizational performance
128
The beginning of the 21st century revealed different concepts within the framework of stra­tegic management. Those are:
total quality management and the idea of customer relationship management.
129
We will discuss the concept of total quality management in the context of performance measurement in more detail, but, in short, its basic principles include:
=continuous improvement of productivity and performance =a fact-based approach towards and involvement of employees in the decision making process =a customer-oriented focus =leadership and a mutually beneficial relationship with suppliers, which goes hand in hand with the creation of strategic targets for effective organizational development and estab­lishing a competitive advantage over time.
130
Customer relationship management (CRM) is a ?
customer-oriented management strategy for organizations which already have certain regular customers.
131
Development of a management strategy using the CRM method includes the following elements:
=strategic management =opportunity management =strategy for marketing management =documentation management
132
The concept of CRM is
a process approach which can be divided into two parts: ‘front-office’ (client-facing part of the organization) and ‘back-office’ (part of the organization dedicated to tasks that support the business itself).
133
In this model, the front-office tends to subdivide performance activity into?
marketing management and customer services,
134
while the back-office divides performance activity into?
optimizing effectiveness of sales and processing, logistics, monitoring financial flows, and other types of business performance.
135
Performance Management The specific field of performance management has diverse origins, drawing from?
many different measurement and management techniques and approaches that are built on differing and at times even contradictory premises.
136
This has influenced the understanding and measurement of performance and resulted in ?
different perspectives and goals within this field.
137
Performance measurement can thus be considered?
multi-faceted and multidimensional.
138
For example
financial and management accounting is mainly concerned with measuring and controlling the financial performance of organizations, while the operations and operational management measures often focus on making improvements via output and efficiency whether that be from a manufacturing or a service perspective.
139
Strategic management is concerned with?
developing plans to deliver future objectives (including planned performance),
140
whereas personnel management (or human resources) is concerned with?
managing the performance of people.
141
For a long time, the measurement of performance has been viewed as?
part of other management activities and it is a relatively recent development that performance management is regarded as an independent concept. It is a unity of different disciplines which recognizes the need for a multidisciplinary approach to managing performance.
142
The theory and practice of management are often associated with?
managing the performance of people as human resources greatly contribute to overall organizational performance.
143
The need for effective human resource management places importance on?
the function of performance management.
144
Performance management recognizes the strategic value of human resource management, reshapes it into?
an integrated and functional system (that integrates individuals’ needs), and associates it with increased productivity, efficiency, and related organizational development.
145
Performance management can be described as ?
the management of the performance of an organization or an individual.
146
Performance management can be described as the management of the performance of an organization or an individual. While this definition is not precise, it does acknowledge?
the breadth of performance management and points to some of the difficulties in defining its scope, ac­­tivities, and practices. It shows that performance management is concerned with managing the performance capacity of a whole organization and is often a multidisciplinary approach in its application.
147
The breadth of the subject and the lack of a concise definition make it difficult to?
identify the boundaries of what performance management is and is not.
148
The theories describing the evolution of performance management most clearly are ?
performance measurement (since it has the most identifiable body of literature) and the ‘balanced scorecard’ (which in the eyes of many people is synonymous with performance measurement).
149
The balanced scorecard was originally an operational tool designed to measure and improve operational performance in?
a manufacturing organization.
150
Its scope was later broadened to the --------------------------------------------------------. Nowadays, it has developed from a measurement tool into a ---------------------------------------------------------------approach of which measurement is but a small component.
measurement of organizational performance strategic performance management
151
‘Balanced scorecard’ is a much used (and abused) term, but it is the most?
identifiable concept in this areas of contemporary business.
152
However, in order to study performance management, its comprehensiveness must be --------------------------------and its vertical and horizontal spread throughout ----------------------------------------------.
acknowledged organizations recognized
153
Methods of performance measurement must be viewed in light of ? We looked at the specific example of how the theories of scientific management by Frederick Taylor started the era of modern management in manufacturing.
management theories, which guide the development of such methods.
154
We looked at management ----------------- as they were practiced before 1950 as well as ---------------------------------- between 1950 and the present day.
theories management theories
155
Modern theories of management are based on?
the behavioristic approach (emerging after 1950) and pay more attention to organizational culture and the ‘product–market’ model.
156
The performance of an organization was?
brought into focus and with it the method of the balanced scorecard, which is now synonymous with performance measurement.