Few Important Keywords in Management Functions and Behaviours

Firm: Organisation established for commercial purpose. The terms organisation, firm
and company are used interchangeably.

High-tech-industry: Industries which use modern, sophisticated production
technology and involve high level of research and development.

Mission: Mission of a firm defines the very purpose and justification for a firm's
existence. It is always described in terms of the benefits which a firm provides to the
customers and not in any physical terms.

Multinational corporation or company: Commercial organisation with
manufacturing and marketing facilities in more than one country.

Objectives: Specific aims of the firm. Obsolescence: The process of becoming
obsolete, i.e. going out of use, or going out of date.

Public limited company: A company whose shares are quoted and dealt with on the
stock exchange.

Public sector: A commercial organisation owned and managed by the state.
Top management: That level of managers which is concerned with defining the
mission and objectives of the firm, and designing strategy to achieve them.

Obsolescence: The process of becoming obsolete, i.e. going out of use, or going out
of date.
Public limited company: A company whose shares are quoted and dealt with on the
stock exchange.

Public sector: A commercial organisation owned and managed by the state.

Top management: That level of managers which is concerned with defining the
mission and objectives of the firm, and designing strategy to achieve them.


Balance sheet: Statement of company's financial position at a particular point,
usually at the end of a financial year.
Bankrupt: When a firm is linable to pay its creditors and assets of the firm are
distributed among the creditors.

Capital: Money and goods, such as buildings, plants, machines, used in running a
business.

Dividend: Interest paid on capital.

Financial institutions: Institutions from which firms can borrow money, e.g. bank,
State Financial Corporation, Industrial Development Bank of India, etc.


Break-even Analysis: Comparison between sales and expenses to determine that
volume of production where there is no profit and no loss.

Budget: Statement of plans expressed in quantitative and financial terms for the
allocation and use of resources.

Environment: The universe in which the firm operates is known as its environment
and includes all those economic, political, socio-cultural, legal, demographic and
other factors which have a critical bearing on its operations.

Organisation, Firm or Company: These terms have been used interchangeably and
refer to all types of formal bodies created for a specific purpose. These include all
types of business organisations and non-commercial organisations such as hospitals,
schools, charitable trusts, voluntary bodies, etc.

Organisational Objective(s): The specific purposes, results and achievements
sought by the organisation. In this lesson we have used this term in a broad sense to
include both mission and objectives.