Hi! In this series of posts, I will share with you a compilation of concepts, theories, models, books, and anything that’s related to Innovation and Entrepreneurship. The compilation will be useful to CMAT aspirants and MBA aspirants in general. Innovation and Entrepreneurship is a new section that’s been introduced in CMAT this year. I hope this series saves some crucial time and helps in last minute push-ups! 🙂
26. In Search of Excellence – An international bestselling book written by Tom Peters and Robert H. Waterman, Jr. First published in 1982, it is one of the biggest selling business books ever.
27. A glass ceiling – A political term used to describe “the unseen, yet unbreachable barrier that keeps minorities and women from rising to the upper rungs of the corporate ladder, regardless of their qualifications or achievements. The term was first coined in March 1984 by Gay Bryant.
28. Entrepreneur – A loanword from French. It is defined as an individual who organizes or operates a business or businesses. Credit for coining the term entrepreneur generally goes to the French economist Jean-Baptiste Say, but in fact the Irish-French economist Richard Cantillon defined it first. Cantillon used the term differently. Biographer Anthony Breer noted that Cantillon saw the entrepreneur as a risk-taker while Say considered the entrepreneur a “planner”.
29. Professional Employer Organization (PEO) – A firm that provides a service under which an employer can outsource employee management tasks, such as employee benefits, payroll and workers’ compensation, recruiting, risk/safety management, and training and development. This practice is known as joint employment or co-employment.
30. Kaizen – Japanese for “good change”. Kaizen refers to activities that continually improve all functions and involve all employees from the CEO to the assembly line workers. It also applies to processes, such as purchasing and logistics that cross organizational boundaries into the supply chain.
31. The International Labour Organization (ILO) – A United Nations agency dealing with labour issues, particularly international labour standards and decent work for all. ILO Headquarters is in Geneva, Switzerland. In 1969, the organization received the Nobel Peace Prize for improving peace among classes, pursuing justice for workers, and providing technical assistance to other developing nations.
32. Red tape – An idiom that refers to excessive regulation or rigid conformity to formal rules that is considered redundant or bureaucratic and hinders or prevents action or decision-making. It is usually applied to governments, corporations, and other large organizations.
33. An open door policy – A communication policy in which a manager, CEO, president or supervisor leaves their office door “open” in order to encourage openness and transparency with the employees of that company. As the term implies, employees are encouraged to stop by whenever they feel the need to meet and ask questions, discuss suggestions, and address problems or concerns with management.
34. The Delphi method – A structured communication technique, originally developed as a systematic, interactive forecasting method which relies on a panel of experts. The name “Delphi” derives from the Oracle of Delphi. The Delphi method is based on the assumption that group judgements are more valid than individual judgements.
35. The halo effect – A cognitive bias in which an observer’s overall impression of a person, company, brand, or product influences the observer’s feelings and thoughts about that entity’s character or properties. It was named by psychologist Edward Thorndike in reference to a person being perceived as having a halo.
36. The horn effect – A form of cognitive bias that causes one’s perception of another to be unduly influenced by a single negative trait. An example of the horn effect may be that an observer is more likely to assume a physically unattractive person is morally inferior to an attractive person, despite the lack of relationship between morality and physical appearance.
37. The Hawthorne effect – (also referred to as the observer effect) refers to a phenomenon whereby workers improve or modify an aspect of their behavior in response to the fact of change in their environment, rather than in response to the nature of the change itself. The term was coined in 1950 by Henry A. Landsberger when analyzing earlier experiments from 1924–32 at the Hawthorne Works (a Western Electric factory outside Chicago).
38. The Value Chain – To analyze the specific activities through which firms can create a competitive advantage, it is useful to model the firm as a chain of value-creating activities. Michael Porter identified a set of interrelated generic activities common to a wide range of firms. The resulting model is known as the value chain and is depicted below: Inbound Logistics – Operations – Outbound Logistics – Marketing & Sales – Service.
39. Management by objectives (MBO) – A process of defining objectives within an organization so that management and employees agree to the objectives and understand what they need to do in the organization in order to achieve them. The term “management by objectives” was first popularized by Peter Drucker in his 1954 book The Practice of Management.
40. A core competency – A concept in management theory introduced by, C. K. Prahalad, Julian Kriviak and Gary Hamel. It can be defined as “a harmonised combination of multiple resources and skills that distinguish a firm in the marketplace”. Core competencies fulfill three criteria: Provides potential access to a wide variety of markets, Should make a significant contribution to the perceived customer benefits of the end product, Difficult to imitate by competitors.
41. Triple bottom line – A framework which incorporates the notion of sustainability into business decisions, coined by John Elkington in 1994. The TBL is an accounting framework with three dimensions: social, environmental (or ecological) and financial. The TBL dimensions are also commonly called the three Ps: people, planet and profit and are referred to as the “three pillars of sustainability”.
42. The Human Side of Enterprise – A book by Douglas McGregor where he identified an approach of creating an environment within which employees are motivated via authoritative, direction and control or integration and self-control, which he called theory X and theory Y.
43. Management by wandering around (MBWA) – It refers to a style of business management which involves managers wandering around, in an unstructured manner, through the workplace(s), at random, to check with employees, or equipment, about the status of ongoing work. The origin of the term has been traced to executives at the company Hewlett-Packard, for management practices in the 1970s. Also, the management consultants Tom Peters and Robert H. Waterman had used the term in their 1982 book In Search of Excellence: Lessons from America’s Best-Run Companies.
44. Built to Last: Successful Habits of Visionary Companies – A 1994 book written by Jim Collins and Jerry I. Porras. The text outlines the results of a six-year research project into what makes enduring great companies.
45. Social loafing – The phenomenon of people exerting less effort to achieve a goal when they work in a group than when they work alone. This is seen as one of the main reasons groups are sometimes less productive than the combined performance of their members working as individuals.
46. BCG growth-share matrix displays the various business units on a graph of the market growth rate vs. market share relative to competitors. Resources are allocated to business units according to where they are situated on the grid as follows: Cash Cow, Star, Question Mark, and Dog. It was created by Bruce D. Henderson for the Boston Consulting Group in 1970 to help corporations to analyze their business units, that is, their product lines.
47. Person–environment fit (P–E fit) – It is defined as the degree to which individual and environmental characteristics match. Due to its important implications in the workplace, person–environment fit has maintained a prominent position in Industrial and organizational psychology and related fields.
48. The “carrot and stick” approach – An idiom that refers to a policy of offering a combination of rewards and punishment to induce behavior. It is named in reference to a cart driver dangling a carrot in front of a mule and holding a stick behind it. The mule would move towards the carrot because it wants the reward of food, while also moving away from the stick behind it, since it does not want the punishment of pain, thus drawing the cart.
49. H. Igor Ansoff – Ansoff was a Russian American, applied mathematician and business manager. He is known as the father of Strategic management. Ansoff’s matrix provides four different growth strategies: Market Penetration, Market Development, Product Development, and Diversification.
50. The Pygmalion effect – Also known as Rosenthal effect, it is the phenomenon whereby the greater the expectation placed upon people, the better they perform. The effect is named after the Greek myth of Pygmalion. Pygmalion was a sculptor who fell in love with a statue he had carved.
To read the next part, click here: CMAT – Innovation and Entrepreneurship – Part 3
Hope this helps! The new post will be up in a few hours and the entire series will be available by Sunday (March 28th EOD). Please give your feedback in the comments section. Do share with your friends and co-aspirants. Happy prepping! 🙂