Sacred cow Inviolable traditional assumptions, ideas, and theories; reference to the animal that is venerated in Hindu culture.
Safety See OSHA.
Sagacity segmentation Subdivision of a market to differentiate by stages of life, noting levels of income, demographics, and lifestyle.
Salary Fixed, regular payments to employees in return for their services, expressed in annual earnings.
Salary grade Bracket in which a person’s salary falls, based on seniority and with a maximum and minimum but excluding bonuses, allowances, and perquisites.
Sale Transaction in which a good is purchased by a user or consumer from a manufacturer or merchant, following inspection, by description from a salesman, or by sample on the basis that the quality of goods received will be as good as the sample.
Sales orientation Sales strategy focused on selling existing products through aggressive techniques and advertising.
Sales representative Principal contact between manufacturer and retailer or consumer; usually works in an assigned sales territory, either as an employee or on commission. Responsibilities include disseminating product information, generating new sales leads through cold calling, and gathering information about competitors’ products and activities.
Sales resistance Customer lack of interest in a product, particularly when confronted with the standard sales pitch or price adjustment.
Sample In market research, a representative selection of people or products with a certain characteristic that is assumed to be true of all members of the group.
Sandbag Stalling tactic used by an unwilling target company in a takeover bid. It consists of prolonging the discussions, making unreasonable requests for documents, and postponing the day of reckoning.
S&P 500 STANDARD AND POOR’S 500 STOCK INDEX
Sapiential authority Aura of authority invested in a person because of his or her superior knowledge, wisdom, or experience, rather than by management status.
Sarbanes-Oxley Act 2002 federal legislation to establish and enforce new standards in corporate governance, financial reporting, and auditing, passed in the wake of the Enron collapse.
Sacrificing behavior Action by a company or individual aimed at achieving a satisfactory immediate return in lieu of long-term growth.
Satisfaction Organizational morale that is not quantifiable in monetary terms.
Satisficing Situation in a negotiation or sales targeting in which the outcome is less than optimal but is the best possible under the circumstances.
Satisfier FREDERICK HERZBERG term for an activity that brings satisfaction to the worker beyond the wages.
Saving face Maintaining one’s self-esteem and the respect of peers in a conflict or situation that is potentially humiliating.
Savings and loan association Financial institution that offers loans with a fixed rate of interest and greater investment flexibility.
Scalar principle In management, theory that authority should flow from the immediate superior to the immediate subordinate, and that there should be only one link at any given time.
Scanlon plan Cooperative relationship between management and labor, devised by and named after cost accountant and union activist Joseph Scanlon, in which labor receives a percentage of the profits resulting from increased productivity.
Scase, Richard Leading British business strategist and Emeritus Professor of Organizational Change at the University of Kent. Author of Global Remix.
Scatter diagram Mathematical diagram using Cartesian coordinates to display values for two variables in a set of data. The data are displayed as a collection of points, each having the value of one variable on the horizontal axis and the other variable on the vertical axis. Also, SCATTER PLOT.
Scatter plot Mathematical diagram using Cartesian coordinates to display values for two variables in a set of data. The data is displayed as a collection of points with the value of one variable determining its position on the horizontal axis and the value of the other variable determining its position on the vertical axis. Also SCATTER DIAGRAM.
Scenario analysis Forecasting technique similar to the DELPHI TECHNIQUE, in which a battery of experts offer their views of possible and probable futures and identify major trends and challenges. The final integrated scenario examines strategic options and challenges existing assumptions and practices.
Scenario planning Method of visualizing alternative features and adopting strategies for achieving them. Many scenarios begin in the past and use past events and historical data to develop future plans. Scenario plans may be broad or narrow depending on the kind of data used and on the assumption that certain phenomena will continue to produce the same results as they did in the past. The process begins with a PEST analysis from which critical indicators are selected and future events are impacted against them using the DELPHI TECHNIQUE. A series of usually no more than three scenarios can then be developed on the basis of alternative predictions. A cross-impact analysis examines the effect of contrary variables. All scenarios must be internally consistent and they must be possible or plausible.
Schedule 1. Plan of work aligning resources with the tasks at hand and allocating them to the person or persons most qualified to handle them. 2. Tax classification system for returns that specifies details and sources.
Schein, Edgar Henry (1928–) Professor at the Sloan School of Management at MIT who coined the expression management culture. He also made important contributions to the study of group consultation and career development. He developed the concept of career anchors, which consist of talents, abilities, and values as they pertain to career development. He identified eight career anchors: Autonomy, Security, Technical Competence, Managerial Competence, Creativity, Dedication, Challenge, and Lifestyle.
Scheme of arrangement Compact between a company and its creditors on restructuring the business to avoid bankruptcy or a takeover.
Schumpeter, Joseph (1883–1950) Austrian-American economist who popularized the expressions “small is beautiful” and “creative destruction.” From 1932 to 1950 he served on the staff at Harvard University.
Schumpeterian growth Endogenous economic growth driven by innovation, described as CREATIVE DESTRUCTION, as distinct from growth driven by exogenous factors, such as a growth in national income or government spending.
Scientific management Classic approach to management that emphasizes application of scientific principles and enhancement of efficiency, performance, and productivity through rational analysis of the components of production. Developed by F. W. TAYLOR in the 19th century, the theory forms the basis of what is now known as WORK STUDY. Also called Taylorism, it has the elements of responsibility, efficiency, planning, selection and training, and monitoring. Taylorism is credited with improvements in productivity, but by the same token, it made work boring and repetitive and dehumanized the workplace.
Scope economies Increase in efficiency and sales, resulting from ECONOMIES OF SCALE and MASS MARKETING.
Scorched-earth policy From the military, a tactic taken by a company under threat of takeover by which it makes itself less attractive, often by borrowing unnecessarily at an exorbitant rate of interest.
Scorekeeping In management accounting, the monitoring of managerial performance and its incorporation in periodic financial statements.
Scott, Walter Dill (1869–1955) A pioneer in motivational studies, Scott devised a system for classifying personnel and testing candidates.
Scrambled merchandising Sale of products in nontraditional outlets, such as the sale of financial services in supermarkets.
Scrap What is left of an asset at the end of its useful life.
Screwdriver operation Factory where only the parts of a product are assembled, especially prevalent in Third World countries where labor is cheap.
Seasonality Descriptive of predictable changes in certain economic phenomena, such as unemployment tied to harvests or holidays.
SEC SECURITIES AND EXCHANGE COMMISSION
Secondary market 1. In finance, an exchange for resale of stocks, bonds, options, and other financial instruments, distinct from the primary market, where these are purchased from the issuers. Sometimes called an aftermarket. Also, market in which mortgages are resold, as to FANNIE MAE. 2. In sales, an additional market for a product or good beyond its primary use.
Secondary sector Manufacturing sector of the economy, as distinguished from agriculture (primary sector) and services (tertiary sector).
Secondary worker Retired worker who is rehired for a seasonal job.
Secondment Transfer of personnel for a temporary period without affecting their seniority.
Second-tier market Exchange for riskier investments, often in new and developing companies, that are exempt from the complex regulations governing sale of primary investments.
Secular In finance, denoting a long-term trend, in contrast to seasonal or cyclical phenomena.
Securities and Exchange Commission (SEC) U.S. government agency created in 1934 and charged with the responsibility of overseeing compliance of public companies traded on the various exchanges. Its principal divisions are corporation finance, market regulation, enforcement, investment management, and compliance inspections and examinations. It enforces seven major securities legislation: Securities Act of 1933, Securities Exchange Act of 1934, Public Utility Holding Act of 1935, Trust Indenture Act of 1939, Investment Company Act of 1940, Investment Advisors Act of 1940, and Sarbanes-Oxley Act of 2002.
Securitization Process by which assets are turned into securities; one party sells a portfolio of assets, such as home mortgages or bank loans, to an issuer that finances the purchase off-balance sheet by packaging the cash flows from these assets as tradable financial instruments or securities, which in turn are sold to investors.
Security Asset against which a borrower receives money from a lender and which is forfeited if the borrower defaults. Also collateral.
Security of tenure Constitutional or legal guarantee that an officeholder cannot be dismissed or removed from office except in exceptional circumstances specified in a document.
Seed capital Amount of capital required to jump-start a company and draw up a business plan.
Segmental reporting Disclosure in the annual accounts of the results of subsidiaries of a diversified conglomerate; the report accurately reflects the quantitative performance of the subsidiaries.
Segmentation Business strategy of breaking up a market into smaller units. Geographic segmentation may be region, size, density of population, or climate. Demographic segmentation may be by age, gender, family size, family life cycle, income, occupation, education, religion, race, or nationality. Psychographic segmentation may be personality, lifestyle, or social class, as well as by such characteristics as user status, usage rate, loyalty, attitude, and interests.
Self-actualization In psychology, the motivation that drives people to find satisfaction and meaning in their job and their needs for challenge, responsibility, creativity, variety, self-worth, and pride in accomplishment. It provides them with a self identity that is lost when they lose their job.
Self-concept Individual’s perception of him- or herself and perception of others; one of the prime motivating drivers in a person’s economic decisions.
Self-discipline Quality of a person that enables him or her to do a task at hand without distraction.
Self-fulfilling Descriptive of a prediction or statement, the tendency of a desire to actualize itself because the speaker or writer unconsciously creates the conditions that facilitate its fulfillment.
Sellers’ market Situation in which demand exceeds supply, so that the seller can charge what the traffic will bear. See BUYER’S MARKET.
Selten, Richard (1930–) German economist and professor emeritus at the University of Bonn. He won the Nobel Prize in Economic Sciences in 1994. He is well known for his work in bounded rationality and is considered the founding father of experimental economics. He also developed the game known as Selten’s Horse.
Semantic differential Method of comparing the strengths and weaknesses of a product or company image by asking respondents to describe, in so many words, the qualities they associate with the product.
Semi-manufactures Semi-processed material, ready to use in a final manufacture.
Semi-variable Describing a cost structure that is part variable and part fixed, and in which the fixed cost remains even when the variable ceases to apply.
Sempai Kohai In Japan, the practice of mentoring junior managers by their more experienced seniors.
Senge, Peter Management guru who popularized the theory of the LEARNING ORGANIZATION, as described in his Fifth Discipline: The Art and the Practice of the Learning Organization (1990).
Senior capital Capital in the form of secured loans, which need to be repaid first in the case of LIQUIDATION.
Senior management Team of managers at the top of a hierarchy, generally including the chairman, directors, president, CEO, CFO, and senior vice presidents
Seniority Rank and status gained on the basis of longer chronological service, irrespective of merit.
Sense of mission marketing Definition of a company’s raison d’etre, in broad terms encompassing its rationale rather than in terms of the product or service that it creates.
Sensitive market In finance, an unstable market in which the prices and volume of trading fluctuate wildly because of the potential for unforeseeable events.
Sensitivity analysis Method of judging the validity of a decision by fine-tuning the assumptions and premises on which it is based. By altering one or more of these premises, the analysis tests the strength of each assumption.
Sensitivity training Developed by psychologist KURT LEWIN in 1947, training designed to ensure the quality of interpersonal relationships in an organization by open and honest discussion that exposes weaknesses, residual prejudices, and biases.
Sequence arrow Part of a diagram showing the sequence of events in a network.
Sequencing Establishing the priorities and order of work to be done, taking into account queuing times and job interference.
Sequential product development Approach to NEW PRODUCT DEVELOPMENT in which one stage is completed before the next one is begun.
Serendipity Unanticipated happy experience of finding something new while searching for something else. Term coined by Horace Walpole and drawn from the Isle of Serendip (or Ceylon, now Sri Lanka), which was discovered in the story The Three Princes of Serendip.
Serial organization Type of organization in which the entire task is assigned to a particular department, division, or unit.
Served market Segment of the total market that a firm is actively trying to serve and that is always on the firm’s radar. A firm obviously knows more about its served market than about other segments, and is therefore poised to target it more effectively.
Service economy Sector of an economy that provides direct services to the consumer, especially in four categories: (1) finance, insurance, and real estate; (2) transport; (3) professional, as in accountants, lawyers, doctors, and architects; (4) consumer services, as in restaurants, cleaners, and mechanics. The service sector is characterized by (1) intangibility, because there is no transfer of ownership, and the product is experiential rather than concrete and the assessment of quality is subjective; (2) consumer participation, because the consumer is an active participant in the transaction; (3) simultaneity, because production and consumption are simultaneous; (4) interaction, because it is a unique experience and may not be replicated exactly at another time; (5) seamless, because the provider also sells and delivers the service; and (6) geographical proximity, because services providers must be close to the consumer geographically and therefore tend to be local.
Service factory Term coined by business consultants Richard Chase and Warren Erikson, designating a factory that also serves as a showroom, customer service facility, and laboratory.
Service industry Sector of the economy outside of agriculture and manufacturing, including financial services, personal services, business services, sales, distribution, entertainment, health care, legal services, and education. In the United States, it has been the fastest-growing sector since the 1980s.
Servqual Combination of high-quality products and high-quality customer service, an ingredient in customer satisfaction. Servqual is based on a number of factors: tangibles, reliability, consistency, dependability, responsiveness, promptness, assurance, credibility, competence, access, and empathy.
Set-up time Period of time used for preparation and start-up of a machine or operation.
Sexism Prejudicial actions or beliefs against members of the opposite sex, especially in recruitment and promotion.
Sexual harassment Physical or verbal abuse directed against others in the workplace, especially sexual advances and sexually oriented communications, which are prohibited by law; often manipulative, reflecting an unequal power relationship.
Shadow pricing Best price estimate for a product that has not reached the market and therefore lacks the demand on which to base an actual price.
Shakeout Change in the traditional structure of an industry or market that drives the weaker players to leave the market or go bankrupt.
Shamrock organization Described by psychologist CHARLES HANDY, an organizational structure consisting of four levels: professional; labor, including flexible-time workers; contractors; and consumers. Only professional workers are on the payroll.
Share Portion of the title to a company, as evidenced by a share certificate. Shares are divided into ORDINARY SHARES with voting rights and PREFERERED SHARES without voting rights. Shares in a public company are bought and sold in an open market, as in a STOCK EXCHANGE. Also termed STOCK.
Share index Average of a selected number of prominent stocks traded on an exchange, compared to a baseline, such as their relative value at the beginning of a year. Also stock market index.
Share option Right of employees to buy shares in their company at a favorable fixed price or at a stated discount over the market price.
Shared value Value held in common by a group, making the group more cohesive than otherwise.
Shareholder Person who holds a SHARE in a company. Also a stockholder.
Shareholder value Worth of a company’s stock, in terms of dividends, price, and potential. A common corporate outlook today regards maximizing the value of its shares as a high priority. Thus, shareholder value may be increased through greater dividend payments, appreciation in the value of the share, and better performance results.
Shareholder value analysis Method for valuing EQUITY in a company, using the formula: shareholder value equals value of business debt.
Shark repellent See PORCUPINE PROVISION
Shark watcher Business consultant who specializes in helping companies identify raiders and provides early warning of stock warehousing that would be preliminary to a takeover attempt.
Sharpbender Firm that has been underperforming its rivals in an industry but suddenly takes off and joins the overachievers, often as a result of a new management team, a new product, or a new strategy.
SHEEP SKY-HIGH EARNINGS EXPECTATIONS
Shelf life Longevity of a product, especially a perishable commodity.
Shell company Nontrading company with or without a stock exchange listing, used as a cover for illegal activities, such as money LAUNDERING.
Shewhart, Walter A. (1891–1967) Originator of the Shewhart cycle, formulated in his Economic Control of Quality of Manufactured Product (1931). He is also credited with the development of theories of PROCESS CONTROL and the Shewhart transformation process.
Shigeo Shingo (1919–1990) One of the pioneers of JUST-IN-TIME and one of the world’s leading experts on the manufacturing process. Author of A Study of the Toyota Production System from an Industrial Engineering Viewpoint (1989), Revolution in Manufacturing: The SMED (Single Minute Exchange of Die) System (1985), and Zero Quality Control: Source Inspection and the Poka Yoke System (1986).
Shop floor Area of a factory where production takes place, as distinguished from an office or retail space.
Shop steward Employee who represents a trade union and who is charged with negotiations of labor contracts.
Short position Spectulative selling of securities, commodities, or currencies before they are purchased, in anticipation of a decline in price. The securities are usually “borrowed” from a broker and then returned when purchased. Also termed selling short or shorting. Opposite of LONG POSITION, which is the conventional purchase of shares in anticipation of a price rise.
Short-termism Policy that maximizes current or short-term profits at the expense of long-term development and investments.
Show stopper In business, legal action in which the target firm in a hostile takeover seeks a permanent court injunction against the other party, citing potential injury to its business.
Shunto In Japan, annual wage negotiations every spring.
Shut-down cost Expense incurred in closing down an operation or company.
SIC STANDARD INDUSTRIAL CLASSIFICATION
Sick building syndrome Widespread and simultaneous illnesses claimed by occupants of a building where there is suspected pollutants, poor ventilation, ill-cleaned air conditioners, or pathogens in the air.
Signaling Transferring information from one party to another, as a form of communication that is less overt than a formal notification.
Signaling hypothesis Principle that actions by economic agents are motivated by the desire to send a positive signal rather than the stated purpose. It explains the mismatch or asymmetry between the investment on an advertising or production budget and the anticipated benefits. Every action is interpreted as a message to the wider market that the company is doing well and is standing by its commitments.
Silver bullet Magic, quick solution to a difficult and persistent problem; from the popular radio and TV series The Lone Ranger, who used silver bullets in pursuit of outlaws.
Simo chart Basic motion-time chart used to show the simultaneous nature of motions, commonly a THERBLIG chart with motion symbols plotted vertically with respect to time. Also motion-cycle chart.
Simon, Herbert A. (1916–2001) American social scientist, one of the most influential in the 20th century, His research ranged across cognitive psychology, cognitive science, computer science, public administration, economics, management, sociology, and political science. He was a professor at Carnegie Mellon University. He was the founding father of several of the frontier sciences including information processing, artificial intelligence, decision making, problem solving, attention economics, organization theory, and complex systems. He coined the terms “bounded rationality” and “satisficing.” He won the Nobel Prize in Economics in 1975.
Simulated market test Market research technique to forecast and measure repurchase rates and numbers of repeat customers. Also called Hall’s test.
Simulation Recreating or modeling a hypothetical situation through the use of random numbers in order to preview likely outcomes and develop problem-solving strategies. The best-known method is the Monte CARLO SIMULATION, which measures uncertainty.
Sin tax Tax levied on undesirable activities and products, such as cigarettes and liquor.
Sinecure Job or position that involves little work but is a reward for past favors.
Singer, Peter Albert David (1946–) Australian moral philosopher. He is the Ira W. DeCamp Professor of Bioethics at Princeton University and a Laureate Professor at the Centre for Applied Philosophy and Public Ethics at the University of Melbourne. He is a humanist concerned with human and animal rights.
Single business strategy Industry in which 90% or more of sales come from one buyer, product, or business. There is no attempt at diversification and management concentrates on traditional strengths.
Single loop learning Concept in organizational learning where the effects of feedback from previous learning are used to change present behavior.
Single sourcing Purchasing policy of using only one supplier for a component or service.
Single status Japanese concept under which all employees have the same standing in nonfunctional roles, thus all employees wear the same uniform and use the same canteen.
Sit-in Industrial action involving workers who physically occupy a company’s premises and refuse to leave in an effort to forestall LOCKOUT.
Situational analysis Process of analyzing past and present situations facing an organization in order to prioritize them by degree of complexity.
Six-markets framework Model showing a firm’s six constituent markets: internal, referral, influence, recruitment, supplier, and customer.
Six-Sigma Data-driven method for achieving faultless perfection and quality without defect. Sigma is the Greek letter used to denote standard deviation. The greater the number of sigmas, the fewer the defects; six sigmas indicate a defect level of 3.4 per million.
Skewness Asymmetrical nature of a statistical distribution curve.
Skillware Blend of hardware and software.
Skinner, Burrhus Frederick (1904–1990) American psychologist and professor of psychology at Harvard University until 1974. He founded his own school of experimental research psychology, invented the operant conditioning chamber, and founded the branch of philosophy known as radical behaviorism. His analysis of human behavior culminated in the work Verbal Behavior (1957). He identified the rate of response as a dependent variable in psychological research and devised schedules of reinforcement. His other major works are Walden Two (1948) and Beyond Freedom and Dignity (1971).
Skunkworks Special operations division of a corporation engaged in or charged with radical innovation, operating outside the hierarchical structure.
Sky-high earnings expectations (SHEEP) Describing investments that promise unrealistically high returns.
Sleeper Product or service for which there is a steady demand and that takes off to become a bestseller.
Sleeper effect Gap between discover and application, or other types of time lapses between conception and execution, usually relating to research.
Sloane, Alfred P. (1875–1966) American industrialist and long-time president of General Motors in its heyday. Sloane introduced the concept of a professional management style, in contrast with the personal and highly autocratic style of HENRY FORD, his competitor.
Slumpflation Economic downturn characterized by declining output and rising prices.
Slush fund Clandestine fund set apart for promoting illegal activities and not reported to the authorities.
Small business Privately owned corporation, partnership, or sole partnership with typically fewer than 500 employees. They fall under the purview of the Small Business Administration.
Small office, home office (SOHO) Place where many self-employed workers conduct their business.
Small print Conditions and obligations of parties to a contract or agreement, printed in small letters and usually in legalese, in the hope of avoiding closer scrutiny.
Smart money Knowledgeable investors who avoid common pitfalls and have inside information on better opportunities.
Smartsizing Alternative to DOWNSIZING, involving laying off only incompetent employees and eliminating highly wasteful expenditures.
Smith, Adam (1723–1790) Scottish economist and philosopher, author of The Wealth of Nations and other works, whose theories on the FREE MARKET and rational economy undergird CAPITALISM. Smith argued that all human activities are driven by self-interest, and the cumulative effect of self-interest works toward the good of all members of society. He also argued for the division of labor and specialization in manufacturing.
Smokestack industries Traditional manufacturing industries, such as steel.
Smurfing Dividing a large financial transaction into smaller ones that then fall below the threshold for reporting to regulatory agencies.
Social accounting Record keeping that emphasizes charitable contributions, community involvement, environmental and health causes, advocacy, education, product safety, and other nontraditional expenditures.
Social audit Assessment of the nonfinancial impact of a corporation on society, the environment, public welfare, political advocacy, and education and training.
Social capital Cumulative social skills of employees considered as a company asset, enhancing teamwork, encouraging democratic decision making, and helping develop a sense of community.
Social control Control exerted by societal norms on individual opinions and attitudes.
Social costs Financial effects of a project on society and the environment. Also social opportunity costs.
Social Darwinism Charles Darwin’s theory of evolution applied to economic and social situations. Generally disregarded today, but some previously applied a “survival of the fittest” view to show that the strong get stronger at the expense of the weak, and the rich get richer at the expense of the poor; the implication was that this inequality is legitimate because it is nature’s pattern.
Social loafing Tendency of people to expend less effort on a task when working as part of a group than when working individually.
Social media Various forms of electronic communication, including Facebook and Twitter. Also termed social network.
Social responsibility Fashionable concern for nonmonetary and societal issues by corporations, as expressed in annual statements detailing financial contributions to social causes, health projects, charities, and educational scholarships, as well as community involvement designed to boost corporate image. Also termed social responsiveness.
Social status Rank in a classification based on social standing, educational and professional attainment, and contributions to social welfare.
Societal marketing Linkage of marketing programs with popular social goals, such as the environment, antismoking, fitness, medical research, literacy, safety, and child welfare, mostly to create a favorable public image. Societal marketing operates at the intersection of public relations and merchandising. Also termed social marketing.
Sociotechnical system Term coined by ERIC TRIST, Ken Bamforth, and FREDERICK EMORY to describe the interaction between people and technology in the workplace as well as between human behavior and social infrastructure. The focus is on procedures and structures and the knowledge that governs their mutual growth.
Soft core Unaggressive, unsophisticated, or elementary.
Soft landing Downward economic spiral, slowing down without going into a RECESSION.
Soft sell Sales pitch characterized by gentle and nonaggressive tactics, with respect to the customer’s wishes.
Soga shosha Massive international trading companies, such as Mitsubishi and Mitsui, created in Japan during the Meiji restoration. Other major soga shosha include Itochu, Mayuberi, Sumotomo, Nisho Iwai, Tomen, Nichimen, and Kanematsu. Soga shosha operate in a number of ways: as pure traders, as project organizers and managers for complex projects, as market intelligence coordinators, as enablers of Japanese companies who want to enter foreign markets, as brokers for strategic raw materials, and as sources of trade finance.
SOHO SMALL OFFICE, HOME OFFICE
Solvency ratio Accounting measure used to judge a company’s long-term solvency, measuring a company’s after-tax income against its total debt obligations.
SORC STIMULUS, ORGANISM, RESPONSE, CONSEQUENCE
Sore thumbing Technique in job evaluation of identifying people who stand out as odd, and therefore are a distraction to others.
South Popular but imprecise term for underdeveloped countries, which are found mostly in the Southern Hemisphere. Contrast with NORTH, or the industrialized world.
Sovereign wealth fund Investment fund owned by a sovereign nation.
Span of control Number of subordinates who report directly to a given manager in a CHAIN OF COMMAND. The concept affects ORGANIZATIONAL DESIGN, including speed of communications, employee motivation, reporting relationships, and administrative overhead.
Spear carrier Loyal official in a second tier of command, charged with carrying out orders and ensuring the compliance of subordinates.
Special drawing rights (SDR) Standard unit of account used by the INTERNATIONAL MONETARY FUND.
Specialization Segment of a larger task, handled by a worker who is a specialist in that segment. The smaller the segment, the greater the specialization.
Specific risk In finance, a risk associated with an individual asset in a portfolio, as opposed to a systematic risk associated with the market as a whole; a specific risk can be corrected by DIVERSIFICATION.
Speculation Practice of engaging in risky financial transactions, especially in a stock market, in an attempt to profit from short-or medium-term fluctuations in their market value. It absorbs excess risks, which may be offset by larger profits in the future.
Spend management Systematic effort to maximize corporate expenditures by achieving best value for every dollar spent. Unlike simple cost-cutting, this analyzes spending behavior patterns in all areas, especially procurement, contract management, supply chain logistics, and invoicing.
Spinoff Less profitable division or subsidiary that is divested by a corporation; the resulting smaller entity sometimes becomes more valuable in the process.
Spokesperson Representative of a group or organization charged with expressing its position on issues or problems.
Spondulik Physical unit of money, such as coins.
Sponsor In finance, an institution, such as an INVESTMENT BANK, that handles new issues of stock.
Spot contract Contract for buying or selling a commodity, security, or currency for payment and delivery and settlement on the spot date, which is normally two business days after the trade date. The settlement price is called the spot price or spot rate. Contrast with FORWARD CONTRACT or FUTURES CONTRACT. Also spot transaction.
Squeeze Controls imposed by a government to control the rate of INFLATION, such as limits on lending or increases in wages and salaries.
Staff Full-time WHITE-COLLAR workers, whose conditions of work, pay grades, and fringe benefits are different from those of BLUE-COLLAR workers.
Staff management Personnel having a specialist or advisory support function, but who are not in the CHAIN OF COMMAND.
Stagflation Blend of terms STAGNATION and INFLATION, reflecting an economic downturn where income and output are declining while prices are rising.
Staggered directorship When election of members of the BOARD OF DIRECTORS is spread over a couple of years, so that they don’t all begin and end their terms simultaneously; this has the effect of prolonging any attempts at a hostile takeover, as only a fraction of directors can be replaced during a single election.
Stagnation Stage in economic development when there is little forward activity.
Stakeholder Member of a community with interest in the fortunes of a company or organization, and who possibly benefits from its success and profits, including employees, shareholders, suppliers and distributors, and all other persons affected by a firm’s decisions and actions.
Stakeholder analysis Study of the divergent interests of all those who have a stake in the operation of an organization and therefore its management decisions.
Stale bull Trader or speculator who has a LONG POSITION on a commodity that shows a paper profit, which cannot be translated into actual profits because there is no demand for it.
Stalemate industry Industry in which there are few opportunities to create competitive advantages against existing products. ECONOMIES OF SCALE do not produce significant cost advantages. Such industries are high in capital intensity and have large fixed capital. This makes exit from such businesses difficult, as the assets are difficult to resell and environmental legislation requiring cleanup after closure forces them to continue production despite losses.
Standard and Poor’s 500 Stock Index (S&P 500) General market index of leading U.S. stocks, produced by Standard and Poor’s, a McGraw-Hill company.
Standard costing System of cost control that sets predetermined standards and then compares them with actual costs to establish the variance.
Standard industrial classification (SIC) Codified classification system used to describe different types of industries.
Standard performance Concept used in work measurement to achieve comparability of data or range of observations and to provide a basis for calculating wok-related bonuses.
Standardization Setting of acceptable standards in production and quality of products, or of uniform measurements and specifications for products in the manufacturing process.
Standby credit Letter of credit that guarantees a loan or a third-party guarantee to honor a loan to an investor who has a low credit rating.
Star In the BOSTON MATRIX, an investment opportunity with high growth potential.
Start-up costs Preliminary expenses associated with the launch of a project or operation, usually until it becomes self-supporting.
State of the art Exhibiting the most advanced techniques and expertise, and representative of the best knowledge on the subject.
Stateless globalism Borderless multinational business activity that is under so many jurisdictions that it is virtually under none and can thus flout local ordinances.
Statistical demand analysis Set of statistical procedures used to examine major influences on sales, such as prices, promotion, and product quality.
Statistical process control Technique for determining, by sampling, whether a product or service is conforming to its original specifications.
Statistical quality control Statistical inference to determine tolerance levels for inspection of process output on which to base decisions to accept or reject.
Status Position and rank within a hierarchy of persons or products and the respect accorded.
Status consensus Agreement among members of a group regarding the relative position of each member. Also termed status consequence.
Status symbol Representation of someone’s importance; in business, traditionally the corner office, perquisites, and other signs of importance.
Steady state Stable organizational cycle in which routine activities predominate the calendar.
Stealth marketing Subtle form of marketing that utilizes noncommercial outlets where promoters do not reveal their identities. Also termed buzz marketing.
Stealth tax Tax obligation, the incidence of which may be concealed under various rubrics through the abolition of allowances and adjustment of thresholds.
Steamroller tactics Rough and ruthless pressure tactics designed to intimidate and smother opposition and achieve a given goal without regard to its human cost.
Step change Discontinuous change in which there is a quantum but orderly leap from one stage to another.
Stepped cost Operating costs calibrated for a certain range of output and then allowed to rise by steps upon the addition of more elements.
Stereotyping Making blanket assumptions about individuals or groups, based on prejudices and folk beliefs.
Stewardship accounting Recording and monitoring of business transactions for the purpose of oversight rather than analysis.
Stewart, Rosemary Gordon British management guru respected for her research on managerial behavior. Author of The Reality of Management (1963).
Stewart, Thomas A. Editor of the Harvard Business Review. He pioneered the field of intellectual capital in his book Intellectual Capital: The New Wealth of Organizations (1997). He expanded the concept in his second book, Wealth of Knowledge: Intellectual Capital and the Twenty First Century Organization.
Stickiness Tendency of certain economic indicators and variables to pause at or near their existing levels, despite changes in supply and demand. Stickiness is related to limited information, the existence of long-term contracts, and the hidden costs of repricing.
Stimulus, organism, response, consequence (SORC) Behavioral model used in ORGANIZATIONAL DEVELOPMENT.
Stock exchange Market in which securities are bought and sold; its primary function is to raise capital.
Stock watering Practice by which a company inflates the value of its assets and exaggerates its profits as a pretext for issuing new shares and thus diluting the equity.
Stockpile Hoarding of products or raw materials as a hedge against shortages or price increases, or as a means of profiting from subsequent shortages.
Stop-go In the United Kingdom, fiscal policy that vacillates between growth and slowdown.
Stop-loss order Directions placed with a broker to sell shares when they drop to a specified price; used in a volatile market by speculators.
Straight-line method Calculation of the amount by which a fixed asset is to be appreciated, in which the depreciation is based on the original cost or valuation less the asset’s net residual value, divided by its estimated life in years—in effect, depreciating the charges against profits annually.
Strategic alliance Friendly effort of two or more companies to build on their mutual strengths and expertise for a specified time to reach a particular goal. Such alliances are less far-reaching than JOINT VENTURES. As a strategy, alliances enable companies to gain access to markets, exchange technologies, form defensive shareholding blocs, and share expenses. They are easily formed and disbanded. Despite these advantages, the alliances also pose risks, especially cultural clashes with firms based in different nations with different cultural values.
Strategic asset Source of competitive advantage, based on exogenous factors rather than internal core strengths, such as access to new government subsidies.
Strategic behavior Corporate behavior designed to influence the structure of the market positively, especially by diluting the FREE MARKET or restricting consumer choice and regulating the supply of goods.
Strategic business unit (SBU) Autonomous division of a large company, responsible for a particular range or mix of products, with a specific set of strategic objectives and investment policy.
Strategic choice Alternatives available to decision makers for using available resources and manipulating a competitive edge.
Strategic core competences Combination of competences required by an organization to dominate existing markets or create new ones.
Strategic drift Self-imposed limitations on strategic choices driven by past assumptions and the experience gained in past successes and failures. It makes corporations more conservative by discouraging forays into untried areas.
Strategic fit 1. Extent to which diversification into another field harmonizes with plans for growth in terms of costs and product mix. A good fit measures the synergy that results from mergers involving a fusion of skills and know-how, as well as cost reductions from ECONOMIES OF SCALE. 2. When two businesses reach the same consumers through different distribution channels or are marketed and promoted through the same channels; the cost sharing can take place in procurement, R&D, and administration.
Strategic gap analysis Examination of a business strategy to determine how it advances the company’s overall standing and position in the market. If there are gaps, they need to be closed before the STRATEGIC PLAN can be adopted.
Strategic group Group of firms in a market or industry that hold a controlling position in regard to range, coverage, and distribution; comparison of members of the group can help identify the closest competitors and potential challenges and opportunities.
Strategic inflection point The point at which an organization decides to change its corporate direction and pursue a different strategy of growth.
Strategic intent Clear statement of the overall direction of a company’s growth and the paths it intends to take to get there; in essence, this is a manifesto that brings the team together in pursuit of a common goal and vision.
Strategic management Philosophy that focuses on long-term objectives and develops policies designed to achieve them through concrete steps that harness the resources of the organization. The process begins with a POSITION AUDIT that analyzes Swot. This leads to a statement of STRATEGIC INTENT and a STRATEGIC PLAN. Implementation of the plan will require the allocation of sufficient financial, human, and technical resources; establishment of appropriate mechanisms and structures; and continuous monitoring and analysis of results and performance. The plan must also allow a process of constant reevaluation and reassessment of the plan as new opportunities and challenges emerge either internally or externally.
Strategic management consists of both decision making and implementation. The decision-making process comprises a series of nine steps: (1) determination of the mission of the corporation; (2) assessment of the internal environment and corporate culture; (3) analysis of the firm’s external environment through PEST analysis; (4) use of SWOT analysis to match external environments with internal strengths and weaknesses; (5) identification of management options in navigating the maze of problems and opportunities; (6) choice of relevant strategies and policies to address the options; (7) development of two sets of strategies, one long term and the other short term; (8) budgeting of allocations and drawing up of implementation schedules; and (9) review and evaluation.
Strategic management occurs at three hierarchical levels: (1) the corporate level, where the parameters are defined; (2) the business-unit level, or cluster of business units, where the plans are drawn up and portfolio models are adopted determining growth, life cycle, competitive position, and direction; and (3) the business level. Companies evolve by stages toward strategic management, not at one quantum leap. According to McKinsey and Company, they proceed through four stages: (1) financial planning, (2) forecast-based plannings, (3) externally oriented planning, and (4) strategic management. Leading companies go into decline because they fall into any one of three traps: (1) they use unrealistic or obsolete criteria to assess strengths and weaknesses; (2) they become complacent and thus inflexible; and (3) they fail to recognize industry changes and respond.
Strategic management accounting System that provides results-oriented information, not merely mathematical calculations; the method is not static but dynamic.
Strategic misrepresentation In planning and budgeting, the tendency to deliberately minimize the negative and accentuate the positive, or to understate costs and overstate benefits. Planners tend to acquire a personal bias in pushing the projects that they direct and therefore they tailor the data to fit their conclusions.
Strategic plan Future-oriented statement that presents all the information and data needed to determine the direction of a company or project. There are several elements that go into a corporate plan: vision, assumptions, objectives, information, analysis, measurement, evaluation, and opportunity.
Strategic style Ways in which a parent company directs the growth of a subsidiary through full control, financial control, or strategic control, the last allowing some leeway for the subsidiary to have input into strategic decisions.
Straw boss In a workplace, a foreman with no formal title or status.
Straw man, building Forming an initial, somewhat tenuous plan to solve a problem, thereby providing a starting point for further development.
Street, the Wall Street, as in “heard on the street.”
Strengths, weaknesses, opportunities, and threats (SWOT) Analysis and audit procedure of internal or external elements in consideration of a proposed undertaking. Strengths and weaknesses are internal while threats and opportunities are external, and both are weighed before approval. Internal strengths are a good distribution system and good cash flow, while weakness could be an extended product line and poor servicing capabilities. Opportunities could be an opening for a new product or the failure or vulnerability of a competitor while threats might come from plans for a similar venture by a competitor or new government regulation. SWOT is also used for POSITION AUDITS.
Stress In human beings as well as institutions, structures, and machines, the cumulative effect of wear and tear and the weakness of constituent parts brought about by structural defects or breakdown, which may in time affect the integrity of the entity.
Stress audit Review of the stress factors identifiable through an analysis of vulnerabilities in a corporate environment.
Stress interview Meeting with a prospective employee, conducted in a hostile manner with the intention of testing the interviewee’s ability to cope with stress.
Stress testing Method of risk analysis in which simulations are used to estimate the impact of worst-case situations.
Strike price Fixed price at which the owner of an option can purchase (in the case of a call) or sell (in the case of a put) a security or commodity. Strike price is the key variable in a derivatives contract between two parties. Also EXERCISE PRICE.
Stroking In transactional analysis, giving another person a sense of recognition and support.
Structural capital Supportive infrastructure, processes, and databases that enable human capital to function. It includes organizational capital, such as buildings, hardware, software, patents, and brands. Process capital includes techniques, procedures, and programs that enhance delivery of goods and services. Innovation capital includes intellectual properties and intangible assets.
Structural unemployment Long-term unemployment resulting from the changing nature of an industry and not the result of seasonal variations in production.
Structure-conduct-performance model Common paradigm in INDUSTRIAL ORGANIZATION ECONOMICS that states that the structure or form of a particular market (the ease of entry versus barriers to entry) will determine the conduct or strategic behavior of buyers and sellers, and the overall performance and social efficiency of that market. As the number of players increases or decreases, the ability of any one firm or group to influence prices also changes, thereby affecting overall efficiency.
Structured finance Creation of complex debt instruments by SECURITIZATION or the addition of DERIVATIVES. It involves pooling of assets, TRANCHING of liabilities, and reduction or dilution of risk.
Structured interview Quantitative research method employed in survey research in which each interviewee is presented with the same questions in the same order. The choice of answers is often fixed or close-ended. Also standard interview.
Structured investment vehicle ARBITRAGE fund that raises money by selling asset-backed commercial paper and medium-term notes, and invests the money in asset-backed securities.
Structure of organizations Five base levels make up an organizational structure: (1) operating core or persons in production and distribution; (2) strategic apex, or supervisors and managers responsible for overall direction; (3) middle line, or managers who connect the apex with the operating core; (4) support staff, social, legal, human relations, and accounting; (5) technostructure, or people who monitor and supervise others.
Subculture Specialized group within a larger corporate culture, subject to the societal influences of the larger culture.
Subjective goodwill Accounting of company assets, calculated by deducting its net tangible assets from the net present value of its estimated future cash flows.
Submarginal Relating to a yield less than the cost of production.
Suboptimization Failure of individual components of a system to work together to achieve desired SYNERGY. This may result from the failure of any component to meet the output goals, poor communications and inadequate information, or growth of contradictory SUBCULTURES that deviate from the common direction.
Subprime Categorization of loans to borrowers with poor credit ratings, usually entailing greater risk, thus requiring SECURITIZATION with high-risk, OFF-BALANCE SHEET instruments.
Subsidiary Enterprise owned and controlled by another, usually larger one.
Subsistence agriculture Self-sufficiency farming in which farmers grow enough food to feed themselves and have little left over for the markets.
Subsistence crop Crop grown by a farmer to feed his family and not intended for sale in the market.
Subsistence theory of wages In classical economics, the theory that personal earnings are always influenced by a person’s level of minimum subsistence.
Substance over form Accounting principle that transactions are governed more by their commercial rationale than their legal form, especially as applied to creative and OFF-BALANCE SHEET accounting.
Substitution awareness effect Consumer resistance and sensitivity to prices as determined by the existence of alternative choices.
Succession management Human resources effort concerned with ensuring that there are qualified candidates available to take positions as they become vacant through retirement or attrition. It requires a forecasting technique that matches future needs in personnel with available resources.
Successive approximation Method of estimation that begins with a rough approximation and is refined with additional data.
Sucker effect Reluctance to appear gullible when in a team, contributing more than the minimum effort.
Suggestion scheme Attempt to encourage employees to share with management their ideas on improving quality and productivity, and making monetary awards or offering other inducements to do so.
Sugging Short for “survey under the guise of research,” a marketing ploy by which telemarketers masquerade as researchers to gather valuable information on consumer preferences.
Sumptuary law Legislation that minimizes the sale and consumption of goods believed to be harmful to human beings or society.
Sunk costs Expenditures that have already been incurred and cannot be recovered.
Sunlighting Continuing in full-time employment after retirement.
Sunrise industry Industry in the early stages of its life cycle that experiences growth as a result of a wave of technological advances.
Sunset industry Industry in decline or in the later stages of its life cycle, unable to meet competition because of poor planning, redundant products, or unprofitability.
Sunset law Law that expires on a certain date unless it is renewed.
Superordinate goal Principle that when people cooperate on reaching a goal of equal importance to them all, the effort will bring them closer together. Used in business to encourage teamwork.
Supervisor First-level manager who controls workers and takes full responsibility for their conduct and performance.
Supply and demand Economic model of price determination in which the price for a good will vary until it settles at a point where the quantity demanded by consumers at current price will equal the quantity supplied by producers.
Supply chain Series of linked stages in a supply network, along which flow goods and services in an orderly fashion.
Supply chain management Management of the links in a SUPPLY CHAIN to maximize the orderly flow of materials and inventory of stock. It includes logistics, the timing of purchases, quality of supplies, and information on suppliers.
Supply-side economics MACROECONOMIC policy based on the idea that stimulating growth by producers (manufacturers, services) will increase the supply of goods, thereby lowering prices and benefiting consumers as well as encouraging overall economic growth; this is usually achieved through tax cuts to businesses, and it’s a concept usually associated with conservative ideology, the opposite of KEYNESIAN ECONOMICS. See also TRICKLE-DOWN ECONOMICS.
Surface bargaining Negotiation in which there is a hidden agenda and stated issues are secondary.
Survey research Form of market research in which data are gathered through face-to-face and telephone interviews and by mailed questionnaires.
Sustainable development In the developing world, economic policies designed to promote growth without depleting or undermining the country’s ecology or resource base.
Sustainable growth Rate at which a company can achieve a healthy growth rate while not depleting funds.
Swap See CREDIT-DEFAULT SWAP.
Sweatshop Factory employing cheap labor, for long hours and under unsafe conditions, so as to mass-produce goods. Though largely produced for the developed world, today these goods are made in underdeveloped countries where there are few laws protecting workers. The term, however, dates back to early U.S. factories, especially the garment industry.
Sweep Banking facility that automatically transfers funds from one account to a higher or lower interest-earning account when a threshold is reached.
Sweetheart contract Agreement between a manufacturer and a supplier, not based on the lowest bid received but on special relationships, favoritism, or nepotism.
Swing shift Flexible work schedule by which workers have variable hours of work but are required to work for a certain number of hours per week at their convenience.
SWOT STRENGTHS, WEAKNESSES, OPPORTUNITIES, AND THREATS
Symbolic information Data processed by computer, involving numbers, names, and words that can be handled in a binary manner.
Syndicate Group that pools its resources in an enterprise in which all members have a stake.
Synectics Problem-solving methodology that simulates thought processes of which the subject may be unaware. It was developed by George M. Price and W. J. Gordon, originating in the Arthur D. Little Invention Design Unit in the 1950s.
Synergy Added value that results when two or more entities join forces to realize more than can be achieved singularly. The effect is based on the principle that the result is greater than the sum of its parts. It is used as rationale for corporate mergers, but may occur in sales, operations, investment, and management.
System Integration of components into a harmonious whole that works seamlessly and therefore can be understood and studied as a single unit.
System Four Form of ORGANIZATIONAL DEVELOPMENT designed by organizational psychologist RENSIS LIKERT, which emphasizes participation, employee-centered leadership, open communication, and group decision making and goal setting.
Systems analysis Study of systems, especially in technology and management, for ensuring that the parts work in conjunction to produce the desired outcome. It studies the feasibility of the system, the choke points, the risk and liability of failure, the technological imperatives, and the costs of maintenance.
Systems dynamics Computer-based system developed by the Massachusetts Institute of Technology for modeling the behavior of transient systems. It determines the adequacy of the systems by interjecting the question, “What if?” at every junction.
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