Unit 2 BUS 110

qualification for S corporations

- have no more than 100 share holders - have shareholders that are indiviuduals or estats and are citizens or permanent residents of the US -have only one class of stock -derive no more than 25% of income from passive sources ***it this corporation loses its status, it may not operate under it again or at least 5 years

disadvantages of franchising

- large start up costs -shared profits -management regulations -coattail effects -restrictions on selling -fraudulent franchisors

advantages of LLC

- limited liability - choice of taxation -flexible ownership rules -flexible distribution of profits and losses - operating flexibility

disadvantages of LLC

- no stock, therefore ownership is nontransferable -limited life span -fewer incentives - taxes -paperwork

sole proprietorship

a business owned, and usually managed by one person

corporation

a legal entity with authority to act and have liability aprt from its owners

master limited partnership

a partnership that looks much like a corporation but us taxed like a partnership and thus aviods the corporate income tax

limited partnership

a partnership with one or more general partners and one or more limited partners

conventional (C) corporation

a state chartered legal entity with authority to act and have liability separate from its owners (its stockholders)

international franchising is

a successful growth area for both small and large franchises

S corporations

a unique government creation that looks like a corporation but is taxed like sole proprietorship and partnerships have shareholders, directors and employees plus the benefit of limited liability profits are taxed only as the personal income of the shareholder

general partnership

all owners share in operating the business and in assuming liability for the business's debts

franchise agreement

an arrangement whereby someone with a good idea for a business (franchisor) sells the rights use the business name and sell a product or service (franchise) to other (franchisees) in a given territory

leveraged buyouts (LBO)

an attempt by employees, management or a group of investors to buy out the stockholders in a company range in size

general partner

an owner (partner) who has unlimited liability and is active in managing the firm

limited partner

an owner who invest money in the business but enjoys limited liability

which of the following leadership styles focuses on making decisions without consulting others

autocratic

levelling the playing field from home based businesses___ has (have) made starting a home based business much more affordable

broadband internet connections and other technologies

Julie recently started working at a major urban university. One of the first things her supervisor provided her with was a large white notebook that contained rules and regulations on just about every aspect of the university's business. As a recent business graduate, Julie realized that the university operated in a(n) ___________ environment.

bureaucratic

cooperatives

businesses owned and controlled by the people who use them, producers, consumers, or workers with similar needs who pool their resources for mutual gain -members democratically control the business by electing a board of directors that hires professional managment

which of the following would not be used to describe a company with a positive corporate culture

closer supervision of employees

select the statement that best substantiates why we say " the role of management is changing"

contemporary managers will focus on global issues and green issues and continue t emphasize the team approch to work

in an ___ members democratically control the business by electing a board of directors that hires professional management to run the business

cooperative

limited liability partnership

limites partners risk of losing their personal assets to the outcomes of only their own acts and omissions and those of people under their supervision

technical skills that apply to the business at hand are most often necessary at

lower levels of management

the evolving business environment had made__ a critical management function

managing change

limited liability

means that liability for the debts of the business is limited to the amount the limited partner puts into the company, personal assets are not at risk

Ben oversaw the work of six pharmaceutical sales managers in the southeast region of the U.S. Each sales manager managed a team of 8-10 pharmaceutical sales representatives that developed relationships with doctors, clinics, hospital pharmacies and local drug stores. Ben met regularly with four others in his company whose jobs were similar to his position. How would you describe the level of management Ben has achieved?

middle management

"We believe in creating loyal customers by providing a superior experience at a great value. We are committed to direct relationships, providing the best products and services based on standards-based technology, and outperforming the competition with value and a superior customer experience." This statement is a part of Dell's:

mission statement

In order to more quickly respond to customer needs, Hewlett-Packard is changing its organizational structure to give more authority and responsibility to field managers located across the country. These managers spend time with customers and know what the customers need right away. It appears that HP is moving toward a _______________ structure.

more decentralized

acquisition

one companys purchase of the property and obligations of another company

All managers do planning. Allison is a general manager for a large toy store. Each day she plans the number of employees she will have in each department, including the number of cashiers. She plans the break schedules and the freight delivery schedules. In the business world, we refer to this type of planning as ___________.

operational planning

Cara started a small business a little less than 10 years ago. The business employed several social workers and nurses that visited and cared for persons who had left hospital care, but were not quite ready to be on their own at home. As the CEO of the firm, Cara decided it was time to hire a business operations manager and a marketing manager to handle the details of the business. Which of the following functions of management was Cara primarily performing?

organizing

what are the primary sources of funding for entrepreneurs?

personal savings and individual investors such as family

a traditional tool that serves as a way of evaluating a company's current business situation is called the SWOT analysis. this is an acronym for

strengths, weakness, opportunities and threats

Miriam Njunge wants to start a small business importing some products from her native kenya. before she starts, some good advice to miriam would be

talk to others who have been or are in the import business

division of labor means

tasks are divided into areas of specialization among a group of employees

which of the following lists characteristics typical of a C corporation

taxed separate from its owners who also enjoy limited liability

unlimited liability means

the business is responsible for the debt it incurs, if the business cannnot pay its bills the debt burden transfers to the owners and they are liable for all debt

Most businesses follow a logical process when performing the planning function. It is important to understand ______________________, before embarking upon creating future long-term goals, objectives, and strategies.

the current situation

although the business plan has a great amount of detail and requires thoroughness, a well explained business idea will come to life almost immediately in which part of the document

the executive summaryb

which of the following is a false statement about small business

the first job for most americans is unlikely to be in a small business

conglomerate merger

the joining of firms in completely unrelated industries

vertical merger

the joining of two firms in different stages of related businesses

horizontal merger

the joining of two firms in the same stage

a business plan for a new business does not need to include

the names of the prospective lending companies

merger

the results of the two firms joining to form one compant

transparency refers to

the seamless operation of organizational partners, so that each is perceived as an integral part of the operation, and appears to be part of the same company

partnership

two or more people legally agree to become co-owners of a business

the primary concerns when first starting your business are

financing and planning

During the past recession, Cali-Bration Company created a __________ organization, when it restructured and eliminated several middle management positions and broadened the span of control for the remaining managers. As it emerged from the recession, Cali-Bration realized that technology permitted the remaining employees to be just as responsive to customer needs as the firm was prior to restructuring.

flat

Reed Hastings created Netflix. His inspiration came from the fact that he had to pay a sizeable late fee for returning a DVD beyond the due date at a rental store. It took a few tries to develop the winning business model. Which statement accurately describes his key to success?

his idea solved a problem

Even though he is not a manager, Mr. Bilko is the one to see in the company when there is something you need. He will get it quickly, and can avoid the red tape that often delays action. Mr. Bilko is also the one to see if you need advice or help. Mr. Bilko is an important member of the firm's:

informal structure

Andre works for a company that promotes an entrepreneurial culture. Employees are encouraged to discuss new ideas. Development time is provided on the job for those ideas that float to the top. Employees who use their creative talents to generate ideas and create products within large companies are called ________.

intrapreneurs

While on a trip to South Africa, Erin was impressed with colorful woven outdoor placemats, floor mats, chair cushions, and umbrellas that local artisans were weaving. Upon returning to the U.S., she was confident that U.S. consumers would be as intrigued by these accessories as she was. Erin decided to explore the possibility of starting an importing business to bring these products to the U.S. Which of the following statements seems to be good advice for Erin?

learn from others who import goods from abroad and particularly from africa

benefits of sole proprietorship

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 profit 6 no special taxes

disadvantages of corporations

1 initial cost 2 extensive paperwork 3 double taxation 4 two tax returns 5 size 6 difficulty to termination 7 possible conflict with stockholders and board of directors

advantages of corporations

1 limited liability 2 ability to raise more money for investment 3 size 4 ease of ownership change 5 ease of attracting talented employees 6 separation of ownership from management

advantages of franchising

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/ complement ary skills and knowledge 3 longer survival 4 no special taxes

disadvantages of partnerships

1 unlimited liability 2 division of profits among partners 3 difficult to terminate

Disadvantages of sole proprietorship

1 unlimited liability any debts or damages incurred by the business are your debts, even if it meas selling your home, car or anything else 2 limited financial resources 3 management difficulties 4 few fringe benefits 5 limited growth 6 over whelming time commitment 7 limited life span

how owners affect management

>owners/ stockholders >board of directors (hire officers) >officers (set corporate ojectives and select managers) > managers (supervises employees) >employees

Joe and Mark would like to start a new business selling a product new to the U.S., the Peraves Monotracer. This is a motorcycle-type vehicle that is encased in a sort of shell, so that the rider can ride this product in any kind of weather. Joe and Mark have done a considerable amount of research on this product, and think it would be successful in the U.S. However, they are still concerned about the risk of a new venture and both would like to avoid losing any personal assets. They should organize their firm as a:

corporation

the process of setting up individual departments to do specialized tasks is called

departmentalized

the first step in the process of organizing a business is to

determine the work that needs to be done

contemporary mangers

emphasize teamwork and cooperation and act as a coaches rather than bosses

when going into a partnership you should always

put all terms of the partnership into writing ina partnership agreement

one key advantages of a franchise is

receiving management and marketing expertise from the franchisor

limited liability company (LLC)

similar to an S corporation but with out the eligibility requirements

When Greg started his window-washing business, he wanted to keep things simple. As recommended, he filed a record of the business with the state where he resided. He carefully watched his expenses including state filing expenses and licensure requirements. Greg's financial resources were limited, but so were his concerns; after all, "he was the business." Greg's business is a ___________________.

sole proprietorship

which form of business ownership is the most common in the US

sole proprietorship

the owners of a corporation are called

stockholders