active management

Quick Reference

1. A management style characterized by high levels of involvement in both task-related activities, such as initiating structures and setting goals, and interpersonal activities, such as listening, motivating, and providing feedback. See relationship-motivated; task-motivated. See also Blake–Mouton managerial grid.

2. A method of portfolio management in which individual investments are selected with an eye to earning abnormal returns. The general academic view is that this approach runs counter to the efficient markets hypothesis and is therefore unlikely to be successful. The strategies of diversification and following a market index are thought more likely to provide greater returns. Compare passive management.

Subjects: Business and Management — Economics.

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