R
Race to the top Competition among peers to achieve the distinction of being the leader, usually the market leader.
Radar chart Graphical method of displaying multivariate data in the form of a two-dimensional chart of three or more quantitative variables represented on axes starting from the same point. Also known as web chart, spider chart, start chart, cobweb chart, polar chart, kiviat diagram, or irregular polygon.
Radar mapping Device that permits management to see at a glance the financial status of the firm.
Radical innovation A new product that represents a quantum leap, rather than a sequential progression. Henry Ford’s introduction of the assembly line is an example of a radical innovation in manufacturing.
Raider Corporation, or its representative (CORPORATE RAIDER), that attempts to take over another company that it has deemed having undervalued assets by making a hostile bid.
Rainmaker Well-connected person who can make things happen, especially in transactions with a government.
Rally Rise, extended or short term, in prices on a stock exchange, sometimes in reaction to positive news or after a fall in prices.
Ramping Attempt to boost the prices of a stock by artificially raising demand and purchasing large quantities, then selling them as soon as the price reaches a plateau.
Rand formula In Canada, a way of ensuring employees pay union dues even when they decline membership; this is to avoid the situation whereby employees benefit from the gains achieved by the union but avoid paying dues.
Random variation Unplanned shift away from a normal level of performance, as a result of factors beyond control, such as weather or the quality of the input.
Rank-order scale In market research, tool used by respondents to rank various products in terms of stated criteria on a progressive scale.
Rat race Common expression for the intense pursuit of career success.
Rate of return Annual amount of income from an investment, expressed as a percentage of the original investment.
Rating Work measurement technique for comparing data from a series of time studies against an accepted standard norm.
Rating agency In finance, an organization, such as Standard and Poor’s or Moody’s, that rates the creditworthiness of institutions, bond issues, and other forms of corporate or government borrowings.
Ratio analysis Use of accounting ratios to evaluate a company’s operating performance and financial stability.
Ratio covenant Clause in a loan agreement stipulating conditions relating to GEARING ratio and interest that indicate the company’s stability. Breach of the covenant enables the lender to request immediate repayment.
Rational appeal In marketing, the approach to potential customers using their basic interests and instincts of a company’s promotional advertisement.
Rational expectation MACROECONOMIC theory developed in the 1960s by economists JOHN F. MUTH and others, that economic transactions are made on the basis of all available information, and although the forecasts may turn out to be wrong, they were nonetheless legitimate because they were based on rational premises.
Rational management Style of management that is overly concerned with input and output, and not with human impacts of decisions.
Rationalization Reorganization of a company by cutting out the dead wood and streamlining operations, thereby making it leaner, more efficient, and profitable. This involves layoffs, closing some units while expanding others, merging stages of production, DOWNSIZING, RIGHTSIZING, and weeding out product lines that have low returns.
Reaction In finance, a reversal of a current market trend or sudden response to positive or negative news; usually means sudden selling in a BULL market and buying in a BEAR market.
Reactive Actions or approach to problems as they occur, rather than in anticipation of them. This is a policy marked by lack of advance planning.
Reactor strategy Strategy in strategic management that is limited to delayed responses to market conditions and opportunities.
Reaganomics Economic policies and philosophy associated with President Ronald Reagan, focusing on DEREGULATION, SUPPLY-SIDE ECONOMICS, and smaller government.
Real interest rate Actual interest rate less the current rate of INFLATION.
Real-time marketing Sale of goods and services customized to incorporate customer needs continuously, without input from customers or sales personnel.
Reality check Effort to ascertain whether something that works well in theory or on paper also works well in practice.
Realized profit/loss In regard to a completed transaction, the full amount either gained or lost, as opposed to a gain or loss on paper only. For example, if a stock is purchased at $50 and its price decreases to $40, the $10 loss in value is realized only when it is actually sold at that lower price.
Rebalancing In finance, adjustment of a hedge to reflect its effectiveness in a rapidly changing market and to its relative standing among various securities.
Rebate Partial refund on the price of a good or service, constituting a discount but paid after the sale.
Reboot Restart a computer or resume a project that has been dormant for any reason.
Rebundling Changing the product mix in a firm’s portfolio to achieve sustainable growth, especially through mergers and acquisitions, thus leveraging economies of scale. It may also require unbundling or the divestiture of nonperforming divisions and subsidiaries.
Recall Manufacturer’s announcement of a product defect that requires the consumers and dealers to return the affected product for repair, replacement, or refund.
Recapitalization Process by which the balance between debt and equity is adjusted without adding to total capital.
Receiver Manager handling the settlement of debts for a bankrupt business, with the authority to liquidate property.
Recency, Frequency and Monetary analysis (RFM) Marketing tool used to analyze customer behavior in terms of how recently they have made a purchase, how frequently they make purchases, and how much money they spend.
Recession Downturn in an economy that is less severe than a DEPRESSION but more severe than STAGNATION, a determination based on many economic factors. According to the National Bureau of Economic Research, a GROSS DOMESTIC PRODUCT for two successive quarters is commonly but erroneously considered to constitute a recession.
Reciprocity In business and trade, mutual extension of favorable terms and conditions, as between friendly equals. There are four types of reciprocity: (1) identical; (2) affinity-based, as in a trading bloc; (3) overall or broad; and (4) sectoral, or limited to specific products or sectors.
Recognition dispute Industrial dispute that follows when a company declines to recognize a labor union as the legitimate representative of its workers.
Recommended retail price Suggested price of a product sold at retail, set by the manufacturer and not binding on the retailer, who is free to charge what the traffic will bear. For example, automobiles are listed with a suggested price but dealers negotiate with customers and offer discounts. Also termed manufacturer’s suggested listed price.
Recourse Right of redress should the terms of a contract not be fulfilled to the satisfaction of the injured party.
Red circling Practice of protecting the salaries of employees whose jobs were downgraded during a RECESSION.
Reddin, William James (1930–1999) British-born Canadian management guru whose book Managerial Effectiveness (1970) explored THREE-DIMENSIONAL MANAGEMENT.
Reductionism Simplification or even oversimplification of a complex event or idea, either to demonstrate its fallacy or to examine its validity.
Redundancy Unnecessary or duplicated employment. This usually leads to loss of a job because it has become superfluous or has been eliminated for economic reasons. Often, this entails dismissal with or without notice, for any reason other than BREACH OF CONTRACT.
Reengineering Approach to introducing change in an organization from the top down, popularized by management experts MICHAEL HAMMER and JAMES CHAMPY. It focuses on processes other than traditional functions and makes extensive use of information technology to help rethink the business from scratch. It requires DELAYERING, DOWNSIZING, and EMPLOYEE EMPOWERMENT
Re-exports Goods that have been imported and then exported without material changes in their value or composition. Re-exports are the staple of the ENTREPOT TRADE.
Reference group Group with which a person identifies emotionally, without reference to membership.
Reference rate Base rate at which a bank offers loans relative to the interest rates prevalent in the financial markets.
Referent power Influence exerted on a subordinate by a powerful superior, by which the former adopts the mannerisms and style of the latter.
Refinancing Process of repaying some or all of a loan or mortgage by obtaining a new loan at a lower rate of interest.
Reflation Policy of stimulating a sagging economy by government stimulus, either by government spending, lowering taxes, or increasing the money supply.
Refreezing State of an organization that has undergone radical changes, in which employees have to relearn their work and adjust to new experiences. Term introduced by German-American psychologist KURT LEWIN.
Regiocentric Focused on or promoting the interests of a region or bloc, as opposed to those outside the region.
Regression In statistics, a method for establishing functional relationships between variables.
Regression analysis Statistical technique that measures the extent to which one variable is related to two or more other variables, often for predicting the future of the dependent variable.
Regressive tax Taxation in which the rate decreases as income increases; more commonly, a tax that is based on consumption rather than income, such as a sales tax, which by default negatively impacts the poor much more than the rich. See also PROGRESSIVE TAX.
Regret rule In decision making, the choice of the option that causes least regret if it turns out to be the wrong one.
Reinforcement theory Process of shaping behavior by controlling its consequences, most often through a combination of rewards and punishments. It is also called OPERANT CONDITIONING because it establishes a relationship between action and consequence.
Related diversified strategy Expansion by a firm into activities that bear strong similarities to their current or original activities. Firms in technology and the skill-based industries were among the first to adopt this strategy.
Related party transaction Transfer of resources or obligations between related parties, regardless of a monetary nexus.
Relational capital Cumulative trust, experience, and knowledge that form the core of the relationship between a firm and its clients.
Relations analysis One of three techniques introduced by management guru PETER DRUCKER to analyze organizational strength. It examines the actual relations among key managers, rather than what their relations ought to be according to the textbooks.
Relationship 1. In marketing or banking, a long-term, sensitive, positive, and supportive relationship based on mutual interests. 2. In management, leadership concerned with avoiding causes of friction and lifting morale, treating subordinates as associates whose ideas and contributions are valued. 3. In banking, the extension of special privileges to long-term or most valued clients.
Relationship role Any of several roles on a team, such as encourager (who uses praise), harmonizer (who mediates opposing views), gatekeeper (who keeps channels of communications open), and comedian (who uses humor).
Relative share Ratio of per capita income to that of the rest of society.
Relevance Importance of particular information to those reaching decisions.
Relevance analysis Study of existing research programs to determine their effectiveness in advancing the company’s core interests.
Reliability principle Belief that every piece of information is faithful to facts, neutral, complete, and free of error.
Reluctant manager Introduced by business consultants RICHARD SCASE and ROBERT GOFFEE, description of a manager who feels alienated from his or her peers because of being left out of key decision making. This alienation reduces the person’s effectiveness as a team member.
Reorganization Process of restructuring a company that is in financial difficulties or is under Chapter 11 for bankruptcy.
Repatriation Return of capital from a foreign investment to its home country.
Replacement demand Need for second-and later-generation products, driven by the concept of model year and the annual introduction of new versions.
Representations Information given by one party to another in furtherance of a transaction.
Representative heuristic Quality of a product judged on the basis of its price or on its similarity to a familiar product.
Resale price maintenance Agreement between a manufacturer and wholesaler or retailer not to sell a specified product below a fixed price recommended by the manufacturer.
Rescission Right of the party to a contract to have the agreement set aside and conditions restored to the precontract position on the grounds that the contract is unfair and based on misrepresentation.
Research Scientific investigation with a purpose. It can be APPLIED RESEARCH or pure research, and it forms the basis for decision making. As a process, research begins with a question and a proposal is designed to answer that question. The research design may be experimental or nonexperimental, with the former conducted in the field or in the laboratory. The next stage is data collection, which may be primary or secondary; a survey design provides the methodology and parameters of the survey.
Research and development (R&D) Work to discover new applications of old ideas or new ideas based on technology, for commercial exploitation and particularly the gaining of new patents. R&D may be of the BLUE SKY type in pure science and technology, without immediate commercial potential, or it may be an extension of existing technology into new fields to satisfy new needs.
Reserve Part of the capital of a company other than the share capital, arising from retained profits or surpluses not yet distributed.
Residual Payment received by a person, such as an actor, musician, or producer of a movie or television commercial, every time the movie or commercial is played in a commercial setting.
Residual income Net income of a subsidiary or division after deduction of a certain percentage for the use of assets, facilities, or property owned by the parent company.
Residual unemployment Unemployable people, such as prisoners and sick people, as a segment of the population.
Resistance level Point at which a price for a good that represents the maximum reached but never exceeded, and therefore is considered its ceiling.
Resistance to change Tendency to resist the forces of change and fear of the uncertainties brought about by change.
Resolution Binding decision adopted by the governing body of a corporation or organization.
Resource appraisal Management review of corporate resources available for making decisions about diversification, takeovers, and acquisitions.
Resource-based Relating to a strategy based on a company’s internal resources, such as its assets, intellectual capital, patents, or managerial talents, rather than on external factors such as market conditions. The strategy holds that sustained competitiveness requires resources characterized by the VRIN criteria: valuable, rare, imperfectly imitable, and nonsubstitutable.
Restraint of trade Activity that restrains a person’s right to carry on a trade or profession or to compete in the marketplace; often a clause in a contract but also part of ANTITRUST legislation.
Restrictive covenant Clause in a contract that restricts the freedom of one of the parties in some way, especially relating to competition or employment.
Restrictive trade practice Collusive agreement between two or more parties with a view toward restricting prices, conditions of sale, quantities offered, processes, and territory, especially in a way that is prejudicial to the public interest and contrary to fair and nondiscriminatory dealings.
Résumé Document that outlines pertinent career and personal information of a candidate for employment, particularly in the context of a specific job opening.
Retailing accordion Manner in which the range of a product mix changes over the lifetime of the products.
Retention marketing Practices focused on keeping the loyalty of existing customers, rather than on acquiring new ones.
Retirement on the job Actions of an employee on the verge of retirement, who tries to do as little as possible or does his job perfunctorily.
Retrenchment One of the tools in company downsizing whereby the existing staff is reduced in number or their pay curtailed and expenses are scaled down.
Retrogressive consumer Consumer who values low prices and economy over quality and new features. Compare PROGRESSIVE CONSUMER.
Return on investment (ROI) Accounting ratio expressing the profit of a company as a percentage of the capital employed. In these calculations, profit is defined as that earned before interest and taxes, while capital is defined as fixed assets plus current assets minus current liabilities.
Revaluation 1. Rise in the exchange rate of a currency, especially in relation to foreign currencies. In general terms it is the calculated adjustment of a country’s official exchange rate relative to a baseline. 2. Adjustment of a tax level to slow or stop the rise in tax revenue as taxable assets increase.
Revaluation of assets Accounting method to reassess value against new baselines or new accounting methods, so as to create a new set of values.
Revenue Form of income that is incorporated into the PROFIT-AND-LOSS ACCOUNT.
Revenue management Use of sophisticated computer systems to analyze consumer behavior, forecast demand, and adjust pricing schedules; used in industries where the resources are fixed and perishable, such as theaters, airlines, hotels, stadiums, and restaurants, and where the loss of income from a particular flight or event is irrecoverable. It is an attempt to optimize yield through market segmentation, price discrimination, and differentiating the product.
Reverse culture shock Experienced by an employee who returns to his or her home country after an extended stay abroad; this is a sharpened perception of changes that have taken place during the period of absence.
Reverse engineering Act of taking apart a competitor’s product and examining it to find what makes it work, then figuring out how to make it better. It is usually done to explore ways of redesigning without infringing on patents.
Reverse evaluation Evaluation of a supervisor by the subordinates.
Reverse takeover Purchase of a larger company by a smaller one, or the purchase of a public company by a private one.
Revolving credit Credit that can be drawn upon at any time, without limit as to the manner and amount of the DRAWDOWN.
RFM RECENCY, FREQUENCY, AND MONETARY ANALYSIS
Rhochrematics Method of seamlessly managing material flow covering production and distribution by using the most efficient combination and mix of options.
Ride the curve Taking advantage of a rapid growth in demand for a new technology as it becomes more widely adopted.
Rigging Attempt to make a big profit in the market by circumventing regulations and overriding normal market forces. This involves taking a long or short position designed to influence prices, and then selling or buying accordingly.
Right-brained Descriptive of people who are visual and intuitive, rather than analytical and verbal. Compare LEFT-BRAINED.
Right first time Concept integral to TOTAL QUALITY MANAGEMENT, whereby the production process does not have any room for mistakes or afterthoughts.
Rightsizing Restructuring and RATIONALIZATION to improve effectiveness and to cut costs without severely DOWNSIZING and only moderately reducing expenditures and staffing.
Rikutsupoi (Japanese, “the brash ones”) Younger workers who are bright but pushy and short on experience or wisdom.
Ringelmann, Maximillien (1861–1931) Professor of Engineering who discovered the RINGELMANN EFFECT, which states that workers are more unproductive when working in groups. He is considered the founding father of social psychology.
Ringelmann effect After agricultural engineer MAX RINGELMANN, a principle that output grows proportionately with the growth in size, but productivity declines by a similar percentage, and that smaller groups are more efficient per capita than larger groups.
Ring-fence 1. To block off part of a company or group that goes into liquidation so that it survives and escapes receivership. 2. To earmark an amount of money for a specific purpose so that it cannot be used for any other purpose.
Ringi system Form of Japanese collective decision making in which all members affected by a decision participate in its forming.
Rising bottoms In regard to the stock market, a pattern in which low prices in a fluctuating market display a steady upward trend over time, presaging a coming BULL market.
Risk Possibility of a financial loss, in absolute terms or relative to expectations, that is built into a speculative endeavor undertaken for gain. Risk arises from uncertainty, the vagaries of nature, or human nature and cannot be forecast.
Risk analysis Consideration of the extent of a risk involving an enterprise, especially its identification, classification, and management.
Risk-averse Tendency to prefer safer opportunities or investments over those presenting greater chances of failure or ruin and lower returns.
Risk capital See VENTURE CAPITAL.
Risk management Understanding and evaluating the risk involved in a business proposition or transaction, so as to prepare for the eventuality of failure or loss and to moderate the effects of such a loss. Common forms of risk management include insurance, derivatives as a hedge against sudden market fluctuations, and higher interest rates to compensate for potential losses.
Risk matrix Method or framework of RISK ANALYSIS first developed by the U.S. military to identify operational risk under combat conditions; it was then applied to business and in that context involves BRAINSTORMING to establish what needs to be saved during a crisis and what is expendable. The framework itself deals with the effects of a business decision on the company’s assets.
Risk premium Difference between the expected rate of return on a risk-free investment and one in a risky investment, often serving as an added cost for a loan.
Robinson-Patman Act 1936 federal law intended to halt discriminatory pricing policies by specifying when a seller is permitted to charge different prices to different buyers.
Robotics Automated assembly of parts and products through the use of automation technologies and nanotechnology; intended to reduced the need for manual labor.
Robust design Design system, devised by GENICHI TAGUCHI, that improves the fundamental function of a production process and facilitates flexible design and concurrent engineering. It reduces costs, improves quality, reduces development time, cuts down component deterioration, and enhances consumer satisfaction. Also TAGUCHI METHOD.
Rogue product Manufactured good that suffers from a high degree of technical problems or is prone to malfunction.
Rogue trader In securities trade, an individual whose rash and unsupervised investment activities can cause irreparable damage or loss to the company or clients.
Role Functional niche assigned to each member of a group, carrying the expectations of peers regarding individual contributions to that group. Roles are differentiated and should be unambiguous.
Role ambiguity Lack of clarity on the part of an employee regarding the expectations of team members concerning work or contribution to a joint effort.
Role culture Style of corporate culture described by management consultant CHARLES HANDY as a rational one where roles are clearly defined and stable.
Role-play Training technique in which subjects assume temporary identities in order to increase sensitivity or empathy.
Role reversal Training situation in which employees deliberately switch assignments to experience the differentiation.
Role underload Situation in which a person feels that his or her assigned role is undervalued or inadequate.
Romalpa clause Clause in a contract, in which the seller retains interest in the goods sold to a third party until they have been paid for. Named for a 1976 decision involving Romalpa Aluminum Company.
Root-cause analysis Problem-solving technique to identify the underlying reasons something has gone wrong and show ways it could have been avoided.
Rostow, Walter Whitman (1916–2003) American economist and political theorist. He developed important concepts in the theory of modernization of underdeveloped societies. His take-off model of economic growth was used by social scientists to illustrate development trends in emerging nations. In his book The Stages of Economic Growth (1960), he identified five stages of economic growth: traditional society, preparation for take-off, take-off, drive to maturity, and mass consumption.
Route sheet Document showing the succession of manufacturing processes through which a product passes.
Royalty Fee paid for permission to use a property or right that belongs to another, such as the work of an author or composer, a patent or other such INTELLECTUAL PROPERTY, or a landowner’s mineral rights. Royalty is considered a WASTING ASSET because it runs out at the end of a specified period.
Rucker plan Gain-sharing scheme to increase the equitable share of labor in the profits of a company, usually through bonuses.
Run In manufacturing, the time span of a good’s production, from start to finish.
Run-out time Length of time that will elapse before an item is out of stock.
Rust belt Former manufacturing zone, with many closed factories; usually refers to the upper Midwest in the United States, where automobiles formerly were built.