BUSI 1301 EXAM II

What is departmentalization?

Setting up individual departments to do specialized tasks.

What does a traditional organizational chart show?

Shows relationships among people: who is accountable for the completion of specific work, and who reports to whom.

What are the 3 major forms of business in the United States? Which is the most common form?

Sole proprietorships (most common), partnerships, & corporations.

What is an enterprise zone?

Specific geographic areas to which governments try to attract private business investment by offering lower taxes and other government support

What is a functional unit?

The functional unit of a product system is a quantified description of the performance requirements that the product system fulfils.

What is an online business?

A business that uses the global communications infrastructure of the internet as a trading base

What is the role of a general partner in a partnership?

A general partner is an owner (partner) who has unlimited liability and is active in managing the firm. Every partnership has at least one general partner.

What is an entrepreneurship 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.

What role do managers play when assigning resources?

A manager as a resource allocator is supposed to distribute resources in a way that maximizes the efficiency and resourcefulness of an organization. This means he needs to identify project requirements and assign resources within the company's timeline and budget.

What is an entrepreneur?

A person who organizes, manages, and takes on the risks of a business.

What is a stockholder?

A person who owns stock in a corporation.

What is a centralized organization?

A structure in which top-level managers delegate little authority to lower levels

What is a bureaucracy? What are the pros and cons?

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

What do progressive/modern managers believe should be used to encourage employees?

By empowering employees through assigning authority.

What is an "economy of scale"?

Companies can reduce their production costs by purchasing raw materials in bulk. Average cost of goods decreases as production levels rise.

What is "span of control"?

Describes the optimal number of employees a manager supervises or should supervise.

According to Fayol, how should employees be treated?

Introduced principles such as unity of command, hierarchy of authority, division of labor, subordination of individual interests to the general interest, clear communication channels, order, and equity.

What was Fayol's view on management?

Management is a universal skill that is applicable to all undertakings large or small, industrial, commercial, political or religious

Define the four functions of management

PLANNING (key function)- Includes anticipating trends and determining the best strategies and tactics to achieve organizational goals and objectives. ORGANIZING - Includes designing the structure of the organization and creating conditions and systems in which everyone and everything work together to achieve the organizations goals and objectives. LEADING - Means creating a vision for the organization and communicating, guiding, training, coaching, and motivating others to achieve goals and objectives in a timely manner. CONTROLLING - Establishes clear standards to determine whether an organization is progressing towards its goals and objectives.

What are the pros and cons of forming a corporation?

PROS Limited liability. Ability to raise more money for investment. Size. Perpetual life (death of owers does not terminate life of corporation). Ease of ownership change. Ease of attracting talented employees. Separation of ownership from management. CONS Initial cost extensive paperwork Double taxation. Two tax returns. Size. Difficulty of termination. Possible conflict with stockholders and board of directors.

What are the pros and cons of a partnership?

PROS More financial resources. Shared management and pooled/complementary skills and knowledge. Longer survival. No special taxes. CONS Unlimited liability. Division of profits. disagreements among partners. Difficulty of termination.

What are the pros and cons of sole proprietorship?

PROS ease of starting and ending the business. Ability to be your own boss. Pride of ownership. Leaving a legacy. Retention of company profits. No special taxes. CONS Unlimited liability limited financial resources management difficulties overwhelming time commitment. Few fringe benefits Limited growth. Limited life span.

What makes an entrepreneur successful?

Self- directed Self-nurturing. Action-oriented Highly energetic Tolerant of uncertainty

Why are small businesses important to the U.S. economy?

Small business accounts for almost 50% of GDP, and 80% of U.S. workers' first jobs are in small businesses

What is a vision statement?

The Vision Statement provides a concise description of the goals of the project which help the team stay focused on what is important from the organization point of view. Broad statement

Who is responsible for taxes and debt of sole proprietorship?

The owners have to pay self-employment tax, estimate their taxes and make quarterly payments to the government.

What is a strategic goal?

The process determining the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals.

What is the role of trust in management?

Trust is important as a manager because it helps employees feel supported and motivated. Building a culture of trust also helps colleagues collaborate better with each other. While it's a manager's duty to guide their team, it's just as important to give each employee freedom and space.

What is a limited partner?

a person who invests money in a business but who has no management responsibility or liability for losses beyond his or her investment in the partnership

What is a mission statement?

a statement of the organization's purpose - what it wants to accomplish in the larger environment Fundamental purposes

What is a SWOT analysis?

analysis of strengths, weaknesses, opportunities, and threats

What is a business incubator?

centers that offer new businesses low-cost offices with basic business services

What is the role of a stockholder?

essentially own the company, which comes with certain rights and responsibilities. This type of ownership allows them to reap the benefits of a business's success. These rewards come in the form of increased stock valuations or financial profits distributed as dividends.

What is division of labor?

is the process of dividing large jobs into small jobs to make them more manageable

What is a small business?

one that is independently owned and operated for profit and is not dominant in its field

What are the four functions of management?

planning, organizing, leading, controlling

What is an operational goal?

process of setting work standards and schedules necessary to implement a company's tactical objectives

What is brainstorming?

the process of getting a group to think of unlimited ways to vary a product or solve a problem