80 Business Buzzwords—Now and Then

By AMA Staff

Some of these business terms are brand new, while others have been around as long as AMA.

1. Accordion management: the ability to grow or shrink a workforce quickly by hiring or releasing full-time or temporary workers depending on staffing needs, thereby instituting disloyalty on the part of the workforce where once employee loyalty was great.
2. Alliance: collaboration or cooperation with competitors or suppliers of complementary products and services to avoid crippling capital investments and gain market entry or core competencies.
3. Balanced Scorecard: developed by Robert Kaplan and David Norton, a measurement system that links corporate strategy with four key measures for judging performance: financial (e.g., cash flow and quality of earnings), customers (e.g., satisfaction and market share analysis), internal business (e.g., safety performance and productivity), and growth (e.g., revenue per employee or percent of revenues from new products or services).
4. Barefoot pilgrim: someone with little investment know-how who has lost everything trading in securities.
5. Bear hug: an attempt to get the board of a company that is target of an acquisition to recommend an offer to its shareholders.
6. Benchmarking: the process of comparing practices within your company to the very best practices in some of the very best organizations, within and outside your industry.
7. Best practices: formerly a consulting term, it is exactly what it implies—the best in a specific category (e.g., customer service, sales, marketing, product development)—and consequently something other firms want to emulate.
8. Black hole: a project that consumes unlimited amounts of resources without yielding any profit.
9. Blame-time: the moment in an organization when blame for the failure of a project or a task is publicly allocated.
10. Boss management: another term for autocratic management. It refers to a management system that focuses on production and speed of production based on response to a boss's orders, with failure to satisfy the boss resulting in some form of punishment (e.g., termination).
11. Bottom line: based on the bottom figure on a profit-and-loss statement, it refers to an organization's most important measure of success: profits.
12. Brochureware: a Website that is the online equivalent of a printed brochure providing information about products and services.
13. Cash cow: any product or service whose revenue can be obtained with minimal effort.
14. Change management: the process of reinventing or restructuring a corporation's culture, business strategy and/or organization structure in response to external or internal needs.
15. Competitive advantage: a phrase coined by Michael Porter in his discussion of competitive strategy.
16. Contingency workforce: individuals hired by companies to work on short-range projects or to cover unexpected demands that cannot be met by a permanent core group of employees. A means of keeping labor costs down, contingent workers now make up one out of five members of the workforce.
17. Core competencies: a portfolio of various skills, abilities and knowledge that employees, managers and executives must possess to achieve corporate results.
18. Corporate culture: the values, beliefs and rituals characterizing the practices within a given company.
19. Corporate genetics: Gary Hamel and C. K. Prahahlad's term for the set of assumptions of a company's leadership about an industry—including the competition, profitability, customers, technological applications, etc.
20. Cross-functional team: a group of individuals from throughout an organization assembled to work on a single project or ongoing task. A team leader is generally chosen by someone outside the team who needs the work done.
21. Decentralization: power pushed downward, enabling employees to have a greater voice in how things are done. As companies have removed layers of management between the CEO and first-line managers, whether for economy or efficiency, these organizations have come to be referred to as "flat."
22. Declutter: a British term meaning to focus on the core skills that make an enterprise competitive and profitable.
23. Delayering: the reduction or elimination of management layers.
24. DIRFT: an acronym for "Do It Right the First Time," one of the essential philosophies of Total Quality Management.
25. Discontinuous change: a radical shift or innovation in the marketplace that dramatically repositions customer expectations and competitive positioning.
26. Dot.com: a term that refers to organizations that exist only or primarily on the Web.
27. Downsizing: across-the-board cutting of staff for cost reduction. Also see rightsizing.
28. Drivers: a term developed by Gary Hamel and C. K. Prahalad, it describes companies that successfully reinvent their industries. Those companies that get carried along, and benefit modestly from the drivers' initiative, are called passengers. Also see Roadkill.
29. Empowerment: a management style that gives employees the power to make decisions about the work to be done as well as how the work is to be done.
30. Gainsharing: practice of having employees share directly in a company's profitability.
31. Gazelle: a term that refers to not just a fast-growing company but one that demonstrates a growth rate as high as 20 percent per year because of its willingness to take risks to stay ahead of the herd in new markets.
32. Globalization: a widening of corporate operations across borders to produce and sell goods and services in more markets.
33. Hoteling: an office housing concept, associated with virtual offices, that offers work space to employees when needed and who stay in touch with management and each other via e-mail and voice mail.
34. Insourcing: a new buzzword, triggered by the growing trend beginning in the 1990s of outsourcing, that calls for the retention of a service "inside" the company and/or creation of a semi-independent service unit inside the company that sells services to in-house users.
35. Intellectual capital: the ideas and knowledge possessed by key employees that make a company competitive.
36. Intrapreneur: another term for "corporateur," it is an entrepreneur who operates within the corporate structure pursuing innovative projects.
37. Inventory turnover: called "turn" for short, it represents the number of times a firm sells and replaces (turns over) its merchandise in inventory in one year. The lower the investment in inventory, or the more "turns" per year, the better. Dell Corporation's "made to order" approach has made this a competitive advantage for the computer firm.
38. Just-in-Time (JIT)): an inventory system designed to minimize warehousing costs by ordering supplies as needed and producing and delivering finished goods as ordered.
39. Kaizen: a Japanese term, it is another word for "continuous improvement" in the production process.
40. Lean organization: fewer employees doing more work, the after-effect of downsizing after downsizing due to rightsizing or economic necessity.
41. Learning organization: an organization where acquisition of knowledge is a key to success.
42. Loss leader: an item sold at cost or below cost to attract customers for the remaining product line.
43. Management by Objectives (MBO): a performance management approach that measures employees based on their results rather them on how they attain those results.
44. Managing by Walking Around: a management technique in which executives and managers get out of their offices and both observe and talk to employees at locations where they work.
45. Management Information System: while the term typically refers to computer systems, it also applies to any system that gives decision makers access to information.
46. Marketing mix: the combination of product or service, price, distribution and promotion used to reach a given market.
47. Mass customization: the ability to make individually customized and high-quality goods at the same low cost as standardized, mass-produced products. Stan Davis coined the term as the new paradigm of management, a shift from the mass production of standardized goods that built American industry.
48. Mentoring: the process whereby one individual offers guidance and support to facilitate the advancement and professional development of another.
49. Mission statement: a written document specifying the purposes of an organization, for profit or nonprofit.
50. Murphy's Law: there are many laws attributed to "Murphy," but the one to which most people refer is: "Anything that can go wrong will go wrong."
51. OLE, also offline-employment: an acronym for a system whereby production workers who might be laid off during periods of slack demand, are cross trained and capable of producing other products ancillary to the traditional line of a business.
52. Open-door policy: less a practice than an attitude, it refers to encouraging employees to communicate to upper management on any issue of concern to them.
53. Outsourcing: hiring temporary employees or outside contractors to do work previously done by permanent, full-time employees. Usually companies outsource activities like IT, mail or food service—activities peripheral to their core business.
54. Pals: a term coined by Rosabeth Moss Kanter, it describes independent companies that choose to work together for their mutual competitive advantage.
55. Paradigm shift: coined in 1962 by Thomas Kuhn, it is a fundamental change in a major aspect of a business situation or marketplace. This new way of looking at something may be caused by innovations in technology, science or any other factor influencing a situation.
56. Pareto's Law (80/20 Rule): the majority of outcomes stem from a significant minority of sources; e.g., 80 percent of sales typically come from 20 percent of customers.
57. Parkinson's Law: work expands to meet the time allotted to it. So tell employees they have five days to complete a project and it will take them five days, even if it could be done sooner.
58. Participative management: involvement of employees in decisions—too often, in practice, entailing communication of management decisions made with involvement of employees about how the work is to be done.
59. Pay for performance: a performance management/reward system in which compensation is closely tied to job performance.
60. Peter Principle: the theory that employees within an organization will advance to their highest level of competence and then be promoted to, and remain at, a level at which they are incompetent.
61. Positioning: development of an image for a product or service that differentiates it from its competition.
62. Profit center: a term that refers to a department or a function within a company that generates revenue, it is most often used when the unit is not traditionally a source of revenue (e.g., the art department or internal print shop).
63. Pygmalion effect: high expectations for another's performance result in high performance and also the reverse—low expectations encourage low performance.
64. Quality circle: a group of employees who meet during the work day to discuss how to improve product quality.
65. Re-engineering: the process of redesigning organizations so they focus on processes (how to more efficiently serve customers) than on function or position in the corporate hierarchy. Also, a cute word for downsizing.
66. Rightsizing: the restructuring of a company, after evaluating tasks, to eliminate duplications and inefficiencies. The restructuring often includes layoffs and sale or curtailment of product lines not critical to the core business.
67. Road kill: companies that fail to anticipate the future of their industries and, like small animals crossing the road, are mowed down by the competition.
68. Segments of one: single, low-cost but high-quality customized products made possible by information technology.
69. Skunkworks: onsite or off, these are facilities that served as startup for entrepreneurial ideas within established firms.
     
70. Strategic plan: a document that identifies the short- and long-term goals of an organization along with a plan of actions that will achieve those objectives.
71. 360 degree feedback: a performance management tool that generates feedback on an individual's performance from bosses, peers, customers and all others with whom the person interacts.
72. Thunderbolt thinking: another term for that "aha moment," this refers to those sudden insights that can result in profitable business opportunities.
73. Time-based competition: the idea from George Stalk, Jr., in the mid-1980s, that urged companies to use speed to gain a competitive edge in product development.
74. TQM (Total Quality Management): a comprehensive approach to product or service quality, triggered in the 1980s by envy of Japanese product quality that led to ongoing corporate-wide attention to opportunities for continuous improvement in products and processes.
75. Wallenda factor: a term coined by leadership guru Warren Bennis, it refers to a characteristic of leaders who demonstrate industry foresight and possess the ability to look to the future.
76. Wild ducks: based on a remark by IBM founder Thomas Watson about wild ducks who, when domesticated, become fat and lazy and give up flying south for the winter. The term refers to innovative new employees who offer a fresh perspective on a company's management strategy, business or customer needs.
77. Value chain: from Michael Porter, the term describes the activities a company performs to design, produce, market, deliver and support its product.
78. Values: positive corporate behavior representing a broad range of goals from ethics to customer service to product quality.
79. Virtual corporation: a business with a minimum of full-time employees through a combination of outsourcing and computer networking.
80. Zero defections: a service-related version of the manufacturing industry buzzword "zero defects," this term refers to mobilization of companies to keep every customer profitably service satisfied.

About The Author(s)

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