Foundations of Business Exam 2 Review

Effectiveness, efficiency and _____________ are output requirements.

adaptability

franchise agreement

an arrangement whereby someone with a good idea for a business sells the rights to use the business name and sell a product or service to others in a given territory

leveraged buyout

an attempt by employees, management, or a group of investors to purchase an organization primarily through borrowing

Tall organizational structures

characteristic of centralized companies with multiple layers of management

Foreign corporations

do business in one state but are chartered in another. About one-third of all corporations are chartered in Delaware because of its relatively attractive rules for incorporation. A foreign corporation must register in states where it operates.

Domestic corporations

do business in the state in which they are chartered (incorporated).

Those wishing to improve processes should ______________.

examine the history of rules

Closed (private) corporations

have stock that is held by a few people and isn't available to the general public.

What might happen if a system is not adaptable?

innovations can be missed

Multinational corporations

operate in several countries.

Symptoms are never ___________.

problems

Sources of problems often exist in ______________.

processes

Dropping sales are a ___________, never a problem.

symptom

core competencies

those functions that the organization can do as well as or better than any other organization in the world

When trying to identify problems and define their causes, asking __________ five times is a helpful tool.

why

Conventional Corporation

•Has stockholders. •Limits liability of owners. •Enables many people to share in ownership.

S Corporations

•Unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships.

Master limited partnership

A partnership that looks much like a corporation, but is taxed like a partnership and thus avoids the corporate income tax.

Bureaucracy

A system of managing government through departments run by appointed officials

Flat organizational structures

An organizational structure that has few layers of management and a broad span of control.

Top 5 Elements of Business Style

Easy-to-read/understand Correct level of detail provided Strong organization (macro/skimmer VS micro/skeptic) Conveys correct emotion (when necessary) Concise

Character is understanding the interests of others, cultivating a sense of community, and demonstrating accountability.

False

The ____________ is a technique used to identify the root cause of a problem.

Five Whys

Matrix-Style Organizations

Specialists from different parts of the organization work together temporarily on specific projects, but still remain part of a line-and-staff structure.

Cooperatives

a farm, business, or other organization that is owned and run jointly by its members, who share the profits or benefits.

Max Weber and Organizational Theory

1. Job descriptions 2. Written rules, decision guidelines, and detailed records 3. Consistent procedures, regulations, and policies 4. Staffing and promotion based on qualification "workers simply do as they are told"

Advantages of Sole Proprietorships

1.Ease of starting and ending the business. 2.Being your own boss. 3.Pride of ownership. 4.Leaving a legacy. 5.Retention of company profits. 6.No special taxes.

Disadvantages of Corporations

1.Initial cost. 2.Extensive paperwork. 3.Double taxation. 4.Two tax returns. 5.Size. 6.Difficulty of termination. 7.Possible conflict with stockholders and board of directors.

Disadvantages of Franchises

1.Large start-up costs. 2.Shared profit. 3.Management regulation. 4.Coattail effects. 5.Restrictions on selling. 6.Fraudulent franchisors.

Advantages of Corporations

1.Limited liability. 2.Ability to raise more money for investment. 3.Size. 4.Perpetual life. 5.Ease of ownership change. 6.Ease of attracting talented employees. 7.Separation of ownership from management.

Franchises

1.Management and marketing assistance. 2.Personal ownership. 3.Nationally recognized name. 4.Financial advice and assistance. 5.Lower failure rate.

Advantages of Partnerships

1.More financial resources. 2.Shared management and pooled/complementary skills and knowledge. 3.Longer survival. 4.No special taxes.

Disadvantages of Sole Proprietorships

1.Unlimited liability - risk of personal losses. 2.Limited financial resources. 3.Management difficulties. 4.Overwhelming time commitment. 5.Few fringe benefits. 6.Limited growth. 7.Limited life span.

Disadvantages of Partnerships

1.Unlimited liability. 2.Division of profits. 3.Disagreements among partners. 4.Difficulty of termination.

Franchise

A business established or operated under an authorization to sell or distribute a company's goods or services in a particular area

Partnership

A business in which two or more persons combine their assets and skills

Corporation

A business owned by stockholders who share in its profits but are not personally responsible for its debts

value

A customer's subjective assessment of benefits relative to costs in determining the worth of a product

Virtual corporations

A network of independent companies linked by information technology to share skills, costs, and access to one another's markets; allows the companies to come together quickly to exploit rapidly changing opportunities.

franchisees

A person who buys a franchise

_____________ is an example of customer data from inside the company.

Account data

Mary has, on more than one occasion, contradicted her manager in meetings, and she repeatedly does the job "her way" rather than following the steps her manager requires. Mary believes she is smarter and more capable than her manager, and she often competes with her manager for the attention of executives. The relationship between Mary and her manager can be described as _________.

Adversarial

Ideal Business Tone

Audience-focused Positive/collaborative Constructive Respectful (in all manners)

_____________ is a way to identify opportunities and improves processes.

Benchmarking

merger

Combination of two or more companies into a single firm

_____________ is an example of a process improvement technique.

Eliminating bureaucratic sources of waste

Bob leads a team of six people in his office. In order to motivate his team, he regularly has long rants filled with profanity. This is an example of professional behavior.

False

Considering audience values helps the communicator to adopt a we perspective.

False

Henri Fayol

French engineer and industrialist first to identify the major functions of management

Max Weber

German sociologist that regarded the development of rational social orders as humanity's greatest achievement. Saw bureaucratization (the process whereby labor is divided into an organized community and individuals acquire a sense of personal identity by finding roles for themselves in large systems) as the driving force in modern society.

Adopting a "You" Perspective

Identify audience benefits or constraints Consider audience values and priorities Anticipate audience reactions/questions Consider potential secondary audience(s)

The IDEAL problem solving model is an acronym for _____________.

Identify, Define, Explore, Act, Look

acquisition

In classical conditioning, the initial stage, when one links a neutral stimulus and an unconditioned stimulus so that the neutral stimulus begins triggering the conditioned response. In operant conditioning, the strengthening of a reinforced response.

________ sexual harassment refers to situations in which an employee's submission to unwanted conduct is made either explicitly or implicitly a term or condition of employment or is used to influence employment decisions affecting the worker's job status.

Quid pro quo

________________ are important components in processes.

Suppliers and customers

Height, weight and transgender status might be protected classes in certain states.

True

Race, color and religion are examples of federally protected classes.

True

Sole Proprietorship

a business owned and managed by a single individual

organization chart

a diagram that shows the structure of an organization, classifications of work and jobs, and the relationships among those classifications

formal organization

a group designed for a special purpose and structured for maximum efficiency

restructuring

a new way of thinking about a problem that aids its solution

Benchmarking

a process by which a company compares its performance with that of high-performing organizations

hierarchy

a system or organization in which people or groups are ranked one above the other according to status or authority.

Limited liability partnership

a type of partnership in which all partners are limited partners

centralized authority

an organization structure in which decision-making authority is maintained at the top level of management

inverted organization

an organization that has contact people at the top and the chief executive officer at the bottom of the organization chart

Quasi-public corporations

are chartered by the government as an approved monopoly to perform services to the general public. Public utilities are examples of quasi-public corporations.

Professional corporations

are owned by those who offer professional services (doctors, lawyers, etc.). Shares in professional corporations aren't publicly traded.

According to Ko Nishimura, "The future belongs to those who are better at getting _____________.

better

When defining the cause of a problem, look for sources of ________________.

complaints

networked

connected to other people through a web-like system

Alien corporations

do business in the United States but are chartered (incorporated) in another country.

Nonprofit (or not-for-profit) corporations

don't seek personal profit for their owners.

The extent to which the outputs of the process meet and exceed needs and wants is ____________.

effectiveness

Value-adding is defined by ____________.

effectiveness

staff personnel

employees who advise and assist line personnel in meeting their goals

line personnel

employees who are part of the chain of command that is responsible for achieving organizational goals

cross-functional self-managed teams

groups of employees from different departments who work together on a long-term basis

decentralized authority

important decisions are made by middle-level and supervisory-level managers

What is an example of a symptomatic solution to a problem?

lowering prices

Efficient processes eliminate all _____________ activities.

non value-adding

•Line organizations.

organizations with a clear, simple chain of command from top to bottom

Line-and-Staff Organizations

organizations with line managers forming the primary chain of authority in the company, and staff departments working alongside line departments

limited partnership

partnership in which only one partner is required to be a general partner

General Partnership

partnership in which partners share equally in both responsibility and liability

Open (public) corporations

sell stock to the general public. General Motors and ExxonMobil are examples of public corporations.

customer

someone who pays for goods or services

competence

the ability to do something successfully or efficiently

horizontal merger

the combination of two or more firms competing in the same market with the same good or service

vertical merger

the combination of two or more firms involved in different stages of producing the same good or service

character

the distinctive qualities that describe how a person thinks, feels, and behaves

Departmentalization

the dividing of organizational functions into separate units

conglomerate merger

the joining of firms in completely unrelated industries

chain of command

the line of authority that moves from the top of a hierarchy to the lowest level

span of control

the number of subordinates who report directly to a manager

real time

the present moment or the actual time in which something takes place

organizational culture

the set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization

corporate culture

the shared experiences, stories, beliefs, and norms that characterize an organization

informal organization

the system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority outside the formal organization

Successful leaders should know how ___________ move together in order to make good decisions.

variables

Building an Organization from the Bottom Up

•Begins with a division of labor. •Job specialization allows each person to specialize in a task. •Setting up individual departments to do specialized tasks is called departmentalization. •Allocating resources for various departments is necessary.

Advantages of Limited Liability Companies

•Limited liability. •Choice of taxation. •Flexible ownership rules. •Flexible distribution of profits. •Operating flexibility.

Disadvantages of Limited Liability Companies

•No stock. •Fewer incentives. •Taxes. •Paperwork.

Limited Liability Companies

•Similar to an S corporation, but without the eligibility requirements. •More than half of new business registrations in some states are LLCs.

Fayol's Principles of Organization

•Unity of command. •Hierarchy of authority. •Division of labor. •Subordination of individual interests to the general interest. •Authority. •Degree of centralization. •Clear communication channels. •Order. •Equity. Esprit de corps