Glossary of Management Terms

Blue Ocean Strategy: When company enter into new markets, the word blue ocean
strategy is used. Being first in the business, they can frame the rules and navigate the
strategy the way they want.
Bottom of the Pyramid (BOP) Market: The term was coined by Late C K Prahalad. The
term was coined in his top selling book Fortune at the Bottom of the Pyramid. It suggests
going to the rural areas to tap unexplored markets. This also includes markets in the
shanty towns.
Bottom Line Growth: Growth in the net profit of a company. It is called bottom line
because net profit figures are written at the bottom of the Income Statement.
Brown Field Ventures: Expansion of an existing project.
Brown Goods: Relatively low priced consumer durable, such as mixers, grinders,
toasters and so on
Companies in Black: This refers to a turn-around case where a company has wiped of
all losses and is about to make profits
Companies in Red: This indicates loss making companies
Creative Accounting: This term was used during the Satyam scam where the top man
was accused of showing cash in balance sheet where none existed.
Golden Parachute: This is an HR word. It indicates people leaving an organisation with
exit money including benefits, such as severance bonus, compensation money,
retirement allowances and so on. Therefore, people have a safety net and can take time
for looking better opportunities.
Green Field Ventures: New ventures where a company begins from scratch.
Green Shoots: The term originated when the economy was coming out of recession in
2009-2010. The word indicates early signs of recovery in many sectors.
Greenmail: It is a business tactic used by a company, a syndicate or an individual to
threaten another company and make money. After buying a good number of shares of a
company, they threaten a takeover. A bargain is then struck to force the company to buy
back its shares at an exorbitant rate. Greenmail has been derived from the greenback
and blackmail and is also called a goodbye kiss.
Harvesting: Cashing out at the most appropriate time. Many business men sell their
ventures when they expect to get the best price.
Hostile Takeover: A takeover without the willingness of the seller.
Hive Of: To separate part of a company, often be selling it of.
Incubation Stage: The early stage of a business that requires utmost care and
attention. The new business is like a weak baby, growing in a incubator, where the
incubator is the babys lifeline.
Inorganic Growth: Growth by takeovers and acquisitions. It is fast and discontinuous.
Many CEOs make statement such as We are open growth, both organic and inorganic.

This means they will continue to grow naturally, slow and steady, and they are also open
to fast growth by acquiring other units and companies.
Microfinance: Finance of a small amount. The term was made popular by Prof.
Muhammad Yunus, in Bangladesh, by floating the Grameen Bank.
Organic Growth: The natural growth of a company suggested by year on year sales and
revenue figures. It is slow and continuous.
Outplacement: When a person loses his job mainly because of recessionary conditions,
the employer feels morally bound to guide him to find a job elsewhere. In western
counties, there are outplacement agents who help in such situations. The major activities
of these agents are showing concern for the employee, communicating with the
employee, counselling the employee and making a sincere efort to provide a job
elsewhere.
People on the Bench: This term is widely used in the IT sector for employees who are
not on any project. They continue to be on payroll of the company and wait for new
projects to start.
Pink Slip: During recession, many employees were summarily dismissed by issuing
them a cheque as their last payment.
Poison Pill: The term is used when an unwilling seller makes his company unattractive
or more expensive for a predator, making takeover difficult. This can be done by hiving
of one of the divisions of a company to make the company a less attractive target.
Another method is infusion of additional capital by promoters to make a company
expensive.
Red Ocean Strategy: When companies enter into an already crowded sector with lot of
competition. This is because the sector moves toward stifer competition.
Red Herring Prospectus: At the time of Initial Public Ofer (IPO) the ofer price is
decided by a process of bidding. Promoters provide a specific band within which bids are
to be made. This uncertainty also indicates that a person needs to read the prospectus
carefully before making a decision, which contains risk factors. This prospectus is
submitted to the Securities Exchange Board of India (SEBI).
Serial Entrepreneurs: A Businessman who harvests his business, reinvest the proceeds
into a new business, allows it to grow and re-harvests.
Surrogate Advertisements: When products like liquor and tobacco cannot be
advertised because of regulations, the manufacturers come out with insignificant product
lines, such as mineral water, soda, music cassettes, golf accessories and so on to be in
public memory. The product advertised and the product intended to be advertised are
diferent in surrogate advertising.
Sweat Equity:
It refers to equity shares given to the employees on favourable terms
in recognition for their work. With sweat equity, employees become part owners and
participate in the profits in addition to earning salaries. The Companies Act defines sweat
equity as shares issued to employees or directors at a discount for providing know-how
or making intellectual property rights or valuable additions.
Spin of: Any product or development derived incidentally from the application of
existing knowledge or enterprise.
Top Line Growth: Growth in the sales and revenue of a company. It is called so because
sales figures are written at the top of the Profit and Loss Account.

Venture Capitalist: Capital providers who fund new ventures with the hope that these
ventures will give them good returns. This word is the result of the new economy being
dominated by the services sector where people with new commercial ideas have
knowledge but are looking out for funds for commercially viable projects.
Vulture Capitalist: During the recent recession this word made its appearance in slang
English. It means that when many new ventures failed or could not return the capital
invested by venture capitalists, the venture capitalists pressurised them (ran after their
blood) to return the capital at any cost.
White Goods: Relatively high priced consumer durables, such as televisions, washing
machines and so on.
White Knight: A white knight is a saviour or rescuer in a hostile takeover bid. A white
knight normally helps an unwilling seller and saves the seller from a predator who is keen
to capture the company. However, white knights after completing the job might ofer to
take over the company.
Window Dressing: An accounting adjustment by which a balance sheet looks much
healthier than reality. Literally, the word means the best curtains are put on the window
on the outside to hide the inside picture from outside view. Example: A company
despatches goods close to 31 st March and accounts it as sales. Since this is only an
accounting adjustment, distributors return majority of the stocks as unsold in April, which
goes into the next financial year.
Yellow weeds: If the signs of the recovery from a recession are false and deceptive,
they are called yellow weeds. CEOs then make statements such as Unfortunately there
are yellow weeds and not green shoots.