BUS 1011: Quiz #2 (Chapters 6-11)

Fred Smith

founder of Fed Ex based on an idea that was the topic of a term paper he submitted while at college in Yale.

Small Business Administration

A U.S. government agency that advises and assists small businesses by providing management training and financial advice. SBA started a microloan program in 1991 that provides very small loans to small business owners.

Other forms of help

A commercial loan officer can help: Design an acceptable business plan. Give financial advice. Lend money. An insurance agent can help you: Know the risks associated with the business. How to cover risks with insurance. How to prevent risks with safety devices. [SCORE] Service Corps of Retired Executives: More than 10,500 volunteers from industry, trade associations, and education who counsel small business at no cost.

Intrapreneur

A creative person who works as an entrepreneur within a corporation. (Ex. Arthur Fry of 3M developed Post-Its when he was trying to mark pages of his hymnal without damage.)

Business Plan

A detailed written statement that describes the nature of the business, the target market, the advantages the business will have over competition, and the resources and owners qualifications.

Entrepreneurial Team

A group of experienced people from different areas of business who join to form a managerial team with the skills to develop, make and market a new product. (Ex. Steve Jobs, Steve Wozniak, and Mike Markkula)

Job Rotation

A job enrichment strategy that involves moving employees from one job to another.

Job Enrichment

A motivational strategy that emphasizes motivating the worker through the job itself.

Six Sigma Quality

A quality measure that allows only 3.4 defects per million opportunities

Hierarchy

A system in which one person is at the top of an organization and there is a ranked or sequential ordering from the top down.

Organization Chart

A visual device that shows relationships among people and divides the organization's work; it shows who is accountable to whom and also who reports to whom.

Benefits of Home-based Business

Ability to start your business immediately Minimal startup capital needed No rent or excessive set-up charges Comfortable working conditions Reduced wardrobe expenses No commuting Tax benefits Elimination of office politics Low risk for trial and error

Manufacturing in the US

About 20% of all goods produced worldwide, each year comes from the U.S. Since 2001, manufacturing output in the U.S. rose each year. Lately, though it has leveled off. The U.S. is still one of the world's leading manufacturers

Training and Development

All attempts to improve productivity by increasing an employee's ability to perform.

Cafeteria Style Fringe Benefits

Allow employees to choose the benefits they want (up to a certain dollar amount).

Performance Appraisal

An evaluation that measures employee performance against established standards in order to make decisions about promotions, compensation, training or termination.

Bureaucracy

An organization with many layers of managers who set rules and regulations and oversee all decisions.

Benchmarking

Compares an organization's practices, processes and products against the world's best.

Leadership Styles

Autocratic Leadership -- Making managerial decisions without consulting others. Participative or Democratic Leadership -- Managers and employees work together to make decisions. Free-Rein Leadership -- Managers set objectives and employees are free to do whatever is appropriate to accomplish those objectives

Structuring an Organization

Create a division of labor Set up teams or departments Allocate resources Assign tasks Establish procedures Adjust to new realities

Top Ten Exporting States

California Texas Ohio Michigan New York Illinois Pennsylvania Washington North Carolina Indiana

What is made in the USA

Chemicals: value of about $250 Billion, with 830K Employees. Transportation Equipment: value of about $195 Billion, with 1.4 Million+ workers Processed Foods, Beverages, and Tobacco: value of about $175 Billion, with 1.7 Million Employees. Computers and Electronics: value of about $146 Billion, with 1.2 Million Employees

Top Management Positions

Chief Executive Officer...some titles include: (CEO) (Chairperson of the Board) (President): Introduces change into an organization. Chief Operating Officer (COO): Implements CEO's changes. Chief Financial Officer (CFO): Obtains funds, plans budgets, collects funds, etc. Chief Information Officer (CIO): Gets the right information to the right people so decisions can be made. Chief Marketing Officer (CMO): In charge of all sales, advertising and promotion

Decision Making

Choosing among two or more alternatives.

Economies of Scale

Companies can reduce their production costs by purchasing raw materials in bulk, the average cost of goods decrease as production levels rise.

Accounting Assistance

Computers simplify the process by helping with inventory control, customer records and payroll. A good accountant can help in: Deciding whether to buy or lease equipment. Deciding whether to own or rent a building. Tax planning. Financial forecasting. Choosing sources of financing. Writing requests for funds

Quality

Consistently producing what the customer wants while reducing errors before and after delivery.

Rational Decision Making Model

Define the situation (what is the problem?) Describe and collect needed information (ask questions) Develop alternatives (at least two) Develop agreement among those involved (the buy-in phase) Decide which alternative is best (often a test is necessary) Implement the solution that was decided (roll it out) Determine whether the decision was a good one & follow up. (audit the results)

Cons of Home-Based business

Difficult to establish work habits Limited support system Isolation Work space may be limited Disruption of personal life Clients may be uncomfortable coming to your home Zoning restrictions in some communities Success is based 100% on your efforts

Reverse Discrimination

Discrimination against whites or males in hiring or promoting.

Departmentalization

Divides organizations into separate units. (Human Resources, Accounting, Marketing, Security, etc.)

Weber's Principles

Employees just need to do what they're told. In addition to Fayol's principles, Weber emphasized: Job descriptions. Written rules, decision guidelines and detailed records. Consistent procedures, regulations and policies. Staffing and promotion based on qualifications.

Staff personnel

Employees who advise and assist line personnel in meeting their goals, and include marketing research, legal advising, IT and human resource employees.

Micropreneur

Entrepreneurs willing to accept the risk of starting and managing a business that remains small, lets them do the work they want to do, and offers a balanced lifestyle. (60% are male)

Networking

Establishing and maintaining contacts with key managers in and out of the organization and using those contacts to develop relationships.

Principle of Motion Economy

Every job can be broken down into a series of elementary motions (called a therblig) ; developed by Frank and Lillian Gilbreth.

Mentors

Managers who supervise, coach and guide selected lower-level employees by acting as corporate sponsors.

Enabling

Giving workers the education and tools they need to make decisions.

Management Theorists

Henri Fayol- each worker should report to only one manager Max Weber- middle managers implement the orders of top managers...less educated workers need strict rules to follow

Contingent Workers

Include part-time and temporary workers, seasonal workers, independent contractors, lifeguards, interns and co-op students.

Middle Management

Includes general managers, division managers, and branch and plant managers who are responsible for tactical planning and controlling.

Small Businesses

Independently owned and operated, for profit, and not dominant in its field of operation and meets certain standards of size.

Venture Capitalists

Individuals or companies that invest in new businesses in exchange for partial ownership.

Areas where Job Applicants make mistakes

Interview 32% Resume 21% Cover Letter 9% Reference Checks 9% Follow Up Interview 7% Screening Call 6% Other/Dont Know: 16%

Leadership

Leaders must: Communicate a vision and rally others around that vision. Establish corporate values. Promote corporate ethics. Embrace change. Stress accountability and responsibility

Learning about small business

Learn from Others - Investigate your local colleges for classes on small business and entrepreneurship; talk to and work for successful local entrepreneurs. Get Some Experience - Gain three years experience in the field; then start a part-time small business. Take Over a Successful Firm - Serve as an apprentice and eventually take over once the owner steps down.

PMI

Listing all the pluses for a solution in one column, all the minuses in another and the implications in a third.

How to ease pressure on workers

Manage output instead of hours. Train workers to be ready for a more complex corporate structure. Allow lower-level managers to make decisions. Use new technology to foster teamwork and efficiency Shift hiring emphasis to collaboration.

Marketing Research

Marketing decisions need to be made long before introducing a product or opening a store. A marketing research study can help you: Determine where to locate. Whom to select as your target market. What is an effective strategy for reaching the market.

Vision

More than a goal, it's a broad explanation of why the organization exists and where it's trying to go.

Warnings of Employee Stress

Negative attitudes about work Drops in productivity Chronic lateness Absenteeism Careless with details Unable to work with others Withdrawal from co-workers Easily upset or angered

Steps in the Selection Process

Obtaining complete application forms Conducting initial and follow-up interviews Giving employment tests (not always done) Conducting background investigations Obtaining results from physical exams Establishing trial (probationary) work periods

Incubators

Offer new businesses low-cost offices with basic services.

Organizations Based on Fayol's Principles

Organizations in which employees have no more than one boss; lines of authority are clear. Rigid organizations that often don't respond to customers quickly.

Mission Statement

Outlines the organization's fundamental purposes. It includes: The organization's self-concept. Its philosophy. Long-term survival needs. Customer needs. Social responsibility. Nature of the product or service.

Legal Help

Owners need outside consulting advice early in the process. Small and medium-sized firms cannot afford to hire experts as employees. A competent lawyer can help with: Leases Contracts Partnership agreements Protection against liabilities

Hawthorne Effect or Rule

People act differently when they know they are being studied.

Intrinsic Rewards

Personal satisfaction felt by a person when he or she performs well and completes goals.

Sources of Capital

Personal savings Relatives and friends Former employers Banks & finance companies Investors buying stock Government agencies Angel investors Venture capitalists

Four Functions of management

Planning--setting goals, preparing strategies, determining resources, setting standards Organizing--allocating resources, structuring organization, assigning tasks Leading--guiding and motivating employees, giving assignments, providing feedback Controlling--measuring and rewarding results or taking corrective actions.

Affirmative Action

Policy designed to "right past wrongs" by increasing opportunities for minorities and women in the workplace.

Staffing

Recruiting, hiring, motivating and retaining the best people available to accomplish the company's objectives.

Types of Pay Systems

Salary Hourly Wage/Day Work Piecework System Commission Plans Bonus Plans Profit Sharing Plans Stock Options

Maslow's Hierarchy of Needs

Self-actualization needs Esteem Needs Social needs Safety Needs Psychological Needs

What does it take to be an entrepreneur

Self-directed-disciplined Self-nurturing-believe in your idea Action oriented-burning desire to succeed Highly energetic-do it yourself attitude Tolerant of uncertainty

Fringe Benefits

Sick leave, vacation pay, pension and health plans that provide additional compensation to employees beyond base wages.

Extrinsic Rewards

Something given to you by another person as a recognition for good work.

Objective

Specific, short-term statements detailing how to achieve the organization's goals.

Job Description

Specifies the objectives of the job, the type of work, the responsibilities and duties, working conditions and relationship to other jobs.

SWOT analysis

Strengths, Weaknesses, Opportunities Threats.

Time Motion Studies

Studies of which tasks must be performed to complete a job and the time needed to do each task.

Frederick Taylor's Four Key Principles

Study how a job is performed. Codify the best method into rules. Choose workers whose skill matches the rules. Establish a fair level of performance and pay.

Managerial Skills

Technical Skills -- The ability to perform tasks in a specific discipline or department. Human Relations Skills -- Skills that involve communication and motivation; they enable managers to work through and with people. Conceptual Skills -- Skills that involve the ability to picture the organization as a whole and the relationship among its various parts.

Service Jobs

The U.S. economy is no longer only manufacturing based. 85% of jobs are in the service sector. The top-paying service jobs in the U.S. are in: Legal services Medical services Entertainment Accounting Finance Management consulting

Goals

The broad, long-term accomplishments an organization wishes to attain.

ISO 9000

The common name given to quality management and assurance standards. ISO 9000 certification is demanded of all firms competing within the EU.

Production

The creation of goods using land, labor, capital, entrepreneurship and knowledge (the factors of production).

Purchasing

The function that searches for high-quality material resources, finds the best suppliers and negotiates the best price for goods and services

Core Competencies

The functions an organization can do as well as or better than any other organization in the world.

Top Management

The highest level, consists of the president and other key company executives who develop strategic plans.

Chain of Command

The line of authority that moves from the top of the hierarchy to the lowest levels.

Span of Cntrol

The optimal number of subordinates a manager supervises or should supervise: Broad Span (15-40 employees) narrow spans (4 to 8 workers)

Transparency

The presentation of the company's facts and figures in a way that is clear and apparent to all stakeholders.

Human Resource Management

The process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating and scheduling employees to achieve organizational goals.

Selection

The process of gathering information and deciding who should be hired, under legal guidelines, to fit the needs of the organization and individuals.

Contingency Planning

The process of preparing alternative courses of action the firm can use if its primary plans don't work out. (sometimes called Plan B)

Problem Solving

The process of solving the everyday problems that occur; less formal than decision making and needs quicker action.

Management Development

The process of training and educating employees to become good managers and tracking the progress of their skills over time.

Management

The process used to accomplish organizational goals through planning, organizing, leading and controlling people and other organizational resources.

Just in Time Inventory Control

The production process in which a minimum of inventory is kept and parts, supplies and other needs are delivered just in time to go on the assembly line.

Recruiting

The set of activities for obtaining the right number of qualified people at the right time.

Computer Aided Manufacturing (CAM)

The use of computers in manufacturing

Computer Aided Design (CAD)

The use of computers in the design of products.

Form Utility

The value producers add to materials in the creation of finished goods and services. Bakers, auto-makers, fashion goods

Hierarchy of Needs

Theory of motivation based on unmet human needs from basic physiological needs to safety, social and esteem needs to self-actualization needs.

Small Business stats

There are over 20 million small businesses in the U.S. Of all nonfarm business in the U.S., almost 97% are considered small. Small businesses account for over 54% of the GDP. Small businesses generate about 7 out of 10 of new jobs. About 80% of U.S. workers first jobs were in small business.

Supervisory Management

Those directly responsible for supervising workers and evaluating daily performance.

Management Levels

Top Management Middle Management Supervisory Management

Scientific Management

Using a stopwatch and simple observation this studies workers to determine the most efficient ways of doing things and then teaching those techniques to others.

Famous Business Failures

Walt Disney - First film company went bankrupt Henry Ford - First two car companies failed L.L. Bean - Almost went bankrupt in the first year Tommy Hilfiger - First store went bankrupt Milton Hershey - First confectionary failed H.J. Heinz - Company went bankrupt six years after start

Line Personnel

Workers responsible for directly achieving organizational goals, and include production, distribution and marketing employees.

Management by Objectives (MBO)

a system of goal setting and implementation involving a cycle of discussions between management and employees on objectives, and formulating goals that are agreed upon by both sides.

Empowerment

giving frontline workers the responsibility, authority, freedom, training and equipment they need to respond quickly to customer requests.

Sam Walton

in 1962 founded Walmart as a single store in Rogers, Ark. and it is the largest retailer worldwide.

Brainstorming

is a group or individual creativity technique by which efforts are made to find a conclusion for a specific problem by gathering a list of ideas from several sectors of the organization.

Civil Rights Act of 1964

prohibits discrimination in hiring, firing, compensation, apprenticeships, training, terms, conditions or privileges of employment based on: Race Religion Creed Sex Age National Origin

Jeff Bezos

started Amazon.com with investments from his family and friends.

Strategic Planning

the process performed by top management of determining the major goals of the organization and the policies, procedures, strategies for obtaining and using resources it will need to achieve the goals.