Test 2 CH 5-9 Test Prep Questions

What management principle does a matrix-style organization challenge?

The flexibility inherent in the matrix-style organization directly challenge the rigid line and line-and-staff organization structures.

What are the six Ds of decision making?

1. Define the situation 2. Describe and collect needed information 3. Develop alternatives 4. Decide which alternative is best 5. Do what is indicated (begin implementation) 6. Determine whether the decision was a good one, and follow up

What are the five steps in the control process?

1. Setting clear standards 2. Monitoring and recording performance 3. Comparing performance with plans and standards 4. Communicating results and deviations to employees 5. Providing positive feedback for a job well done and taking corrective action if necessary

What are the major advantages and disadvantages of incorporating a business?

Advantages of incorporating a business include: Limited liability, ability to raise more money for investment, size, perpetual life, ease of ownership change, ease of attracting talented employees, separation of ownership from management. Disadvantages of incorporating are: Initial cost, extensive paperwork, double taxation, two tax returns, size, difficulty to terminate, possible conflict with stockholders and board of directors.

What are the advantages and disadvantages of departmentalization?

Advantages:- allows work to be done by highly qualified specialists - lowers cost by reducing duplication - makes communication and coordination easier Disadvantages:- cross department coordination can be difficult - slower decision making

What is an inverted organization?

An organization that has contacted people at the top and the chief executive officer at the bottom of the organization chart

What are some of the changes happening in management today?

At one time, managers were called bosses, and their job consisted of telling people what to do, watching over them to be sure they did it, and reprimanding those who didn't. Many, if not most, managers still behave that way. Today, however, some managers tend to be more progressive. For example, they emphasize teams and team building; they create drop-in centers, team spaces, and open work areas. They tend to guide, train, support, motivate, and coach employees rather than tell them what to do.

What are some of the factors to consider before buying a franchise?

Before buying a franchise be sure to check a company's resources, financial strength, and reputation. There are many franchising scams. Consider things like: 1) Under what circumstances can you terminate the franchise contract and at what cost to you? 2) How many years has the firm offering you a franchise been in operation? 3) Will the firm help you find a good location for your new business?

What is a cooperative?

Cooperative is a business owned and controlled by the people who use it--producers, consumers, or workers with similar needs who pool their resources for a mutual gain.

What's the main difference between a matrix-style organization's structure and the use of cross-functional teams?

Cross-functional teams tend to be long-lived as compared to the temporary and fluid nature of teams in a matrix-style organization.

What are the various ways a firm can departmentalize?

Customer group, product, functional, geographic, process, and hybrid.

What do you call the integration of CAD and CAM?

Design changes made in computer-aided design (CAD) are instantly incorporated into the computer-aided manufacturing (CAM) process. The linking of CAD and CAM is computer-integrated manufacturing (CIM).

What do the terms division of labor and job specialization mean?

Division of labor is the assignment of different parts of a manufacturing process or task to different people in order to improve efficiency. Job specialization is the process of focusing one's occupational concentration on a specific area of expertise.

How does enabling help achieve empowerment?

Enabling is giving workers the education and tools they need to have the authority and responsibility to respond quickly to customer requests.

What are the principles of management outlined by Fayol?

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

Why do many small businesses avoid doing business globally?

Financing is often difficult to find. Many people don't know how to get started and do not understand the cultural differences in foreign markets. The bureaucratic red tape is often overwhelming.

What are some of the advantages small businesses have over large businesses in selling in global markets?

Foreign buyers enjoy dealing with individuals rather than large corporations because (1) small companies provide a wider variety of suppliers and can chip products more quickly and (2) small companies give more personal service.

What is the difference between a limited partner and a general partner?

General partners are owners (partners) who have unlimited liability and are active in managing the company. Limited partners are owners (partners) who have limited liability and are not active in the company.

What is the difference between goals and objectives?

Goals are broad, long-term achievements that organizations aim to accomplish, whereas objectives are specific, short-term plans made to help reach the goals.

What's the difference between internal and external customers?

Internal customers are individuals and units within the firm that receive services from other individuals or units, whereas external customers are dealers, who buy products to sell to others, and ultimate customers (or end users), who buy products for their own personal use.

Why would unlimited liability be considered a major drawback to sole proprietorships?

It's considered a major drawback because unlimited liability means that sole proprietors must pay all debts and damages caused by their business. They may have to sell their houses, cars, or other personal possessions to pay business debts.

What is just-in-time inventory control?

JIT required suppliers to deliver parts and materials just in time to go on the assembly line so they don't have to be stored in warehouses.

What are the major criteria for facility location?

Labor costs and land costs are two major criteria for selecting the right sites. Other criteria include whether resources are plentiful and inexpensive, skilled workers are available or are trainable, taxes are low and the local government offers support, energy and water are available, transportation costs are low, and the quality of like and of education are high.

Why are so many new businesses choosing a limited liability company (LLC) form of ownership?

Limited liability companies have the advantage of limited liability without the hassles of forming a corporation or the limitations imposed by S corporations. LLCs may choose whether to be taxed as partnerships or corporations.

What is the difference between line and staff personnel?

Line personnel are responsible for directly achieving organizational goals (workers, distribution people, and marketing personnel) Staff personnel advise and assist line personnel in meeting their goals.

What is the difference between MRP and ERP?

MRP is a computer-based operations management system that uses sales forecasts to make sure the needed parts and materials are available at the right time and place. Enterprise resource planning (ERP), a newer version, of MRP, combines the computerized functions of all the decisions and subsidiaries of the firm-such as finance, material requirements of planning, human resources, and order fulfillment- into a single integrated software program that uses a single database. The result is shorter time between orders and payment, less staff to do the ordering and order processing, reduced inventories, and better customer service for all the firms involved.

What does the government do to promote entrepreneurship?

Make enterprise zones (specific geographic areas to which governments try to attract private business investment by offering lower taxes and other government support).

How could you use a Gantt chart to keep track of production?

Managers can trace the production process minute by minute to determine which tasks are on time and which are behind, so that adjustments can be made to allow the company to stay on schedule.

What does a company analyze when it does a SWOT analysis?

Managers look at the strengths and weaknesses of the firm and the opportunities and threats facing it.

What is mass customization?

Mass customization means making custom-designed goods and services for a large number of individual customer. Flexible manufacturing makes mass customization possible. Given the exact needs of a customer, flexible machines can produce a customized as fast as mass-produced goods were once made. Mass customization is also important in service industries.

Why are people willing to take the risks of entrepreneurship?

Opportunity, profit, independence, and challenge.

What is organizational culture?

Organizational culture is a system of shared assumptions, values, and beliefs, which governs how people behave in organizations. These shared values have a strong influence on the people in the organization and dictate how they dress, act, and perform their jobs.

Define and differentiate the following: process manufacturing, assembly process, continuous process, and intermittent process.

Process manufacturing physically or chemically changes materials. Assembly processes put together components. Continuous processes turns out finished goods over time by long production runs. Intermittent process involved a short production run and he frequent changing of machines to make different products.

What is a PERT chart and how does it improve efficiency?

Program Evaluation Review Technique by the US Navy used to schedule, organize, and coordinate tasks within a project.

What are Six Sigma quality, ISO 9001, and ISO 14001?

Six Sigma quality sets standards at just 3.4 defects per million opportunities and defects potential problems before they occur. Statistical quality control (SQC) is the process some managers use to continually monitor all processes in the production process and ensure quality is being built into the product from the beginning. Statistical process control (SPC) tests statistical samples of the product components at each stage of the production process and plots the results on a graph so managers can recognize and correct deviations from quality standards.International standards U.S. firms strive to meet include ISO 9000 and ISO 14000. The first is a world standard for quality and the section is a collection of the best practices for managing an organizations impact on the environment.

What's the role of owners (stockholders) in the corporate hierarchy?

Stockholders do not have to be employees of the corporation. They are investors who have limited liability. Stockholders elect the board of directors of a company who select the management to control the company.

If you buy stock in a corporation and someone gets injured by one of the corporation's products, can you be sued? Why or why not?

Stockholders in a corporation have limited liability meaning as owners they are responsible for its losses only up to the amount they invested. The corporation could be sued and forced out-of-business but the stockholder would only lose what he/she invested.

What are the differences between strategic, tactical, and operational planning?

Strategic planning is broad, long-range planning that outlines the goals of the organization. Tactical planning is specific, short-term planning that lists organizational objectives. Operational planning is part of tactical planning and sets specific timetables and standards.

What opportunities are available for starting a global franchise?

Successful franchising in global markets offers the same opportunities as in domestic markets. However, franchisers must be careful to adapt to the region where they wish to expand. McDonald's, for example, has more than 33,000 restaurants in 119 countries.

What are the advantages of entrepreneurial teams?

Team members can combine creative skills with production and marketing skills right from the start. Entrepreneurial teams can also ensure more cooperation and coordination later among functions in the business.

What are some of the advantages and disadvantages of partnerships?

The advantages include more financial resources, shared management and pooled knowledge, and longer survival. The disadvantages include unlimited liability, division of profits, disagreements among partners, and difficulty of termination.

Most people who start businesses in the United States are sole proprietors. What are the advantages and disadvantages of sole proprietorships?

The advantages of sole proprietorships include ease of starting and ending, ability to be your own boss, pride of ownership, retention of profit, and no special taxes. The disadvantages include unlimited liability, limited financial resources, difficulty in management, overwhelming time commitment, few fringe benefits, limited growth, and limited life span.

What are the four functions of management?

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

What's the definition of management used in this chapter?

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

What are some reasons for having a narrow span of control in an organization?

The span of control narrows at higher levels of the organization, because work becomes less standardized and managers need more face-to face communication.

What is form utility?

The value producers add to materials in the creation of finished goods and services.

Why do organizations outsource functions?

To keep up with market and technology advances.

Why are organizations becoming flatter?

To quickly respond to customer demands. A flatter organization gives lower-level employees the authority and responsibility to make decisions directly affecting customers.

What did Weber add to the principles of Fayol?

Weber added principles of bureaucracy such as job descriptions, written rules and decision guidelines, consistent procedures, and staffing and promotions based on qualifications.

How do micropreneurs differ from other entrepreneurs?

While other entrepreneurs are committed to the quest for growth, micropreneurs know they can be happy even if their companies never appear on a list of top-ranked businesses.