BAS 160 Midterm

unity of command

Each worker is to report to one, and only one, boss.

4 functions of management

Planning includes anticipating trends and determining the best strategies and tactics to achieve organizational goals and objectives. One of the major objectives of organizations is to please customers. The trend today is to have planning teams to help monitor the environment, find business opportunities, and watch for challenges. Planning is a key management function because accomplishing the other functions depends heavily on having a good plan. Organizing includes designing the structure of the organization and creating conditions and systems in which everyone and everything work together to achieve the organization's goals and objectives. Many of today's organizations are being designed around pleasing the customer at a profit. Thus they must remain flexible and adaptable, because when customer needs change, firms must change with them.10 Whole Foods Market, for example, is known for its high-quality, high-priced food items. But it has introduced many lower-cost items to adjust to the financial losses of its customer base. General Motors lost much of its customer base to manufacturers of more fuel-efficient cars. It hopes to win back market share by offering hydrogen-powered or electric vehicles that cost less to run. GM has had some success in doing that.11 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. The trend is to empower employees, giving them as much freedom as possible to become self-directed and self-motivated. This function was once known as directing; that is, telling employees exactly what to do. In many smaller firms, that is still the manager's role. In most large firms, however, managers no longer tell people exactly what to do because knowledge workers and others often know how to do their jobs better than the manager does.12 Nonetheless, leadership is still necessary to keep employees focused on the right tasks at the right time.13 Controlling establishes clear standards to determine whether an organization is progressing toward its goals and objectives, rewarding people for doing a good job, and taking corrective action if they are not. Basically, it means measuring whether what actually occurs meets the organization's goals.

outsourcing

contracting with other companies (often in other countries) to do some or all of the functions of a firm; ex. production or accounting tasks

cross-functional self-managed teams

groups of employees from different departments who work together on a long-term basis (as opposed to the temporary teams established in matrix-style organizations). Self-managed means that they are empowered to make decisions without management approval.

whistleblowers

(insiders who report illegal or unethical behavior

small business advice

-learn from others -get some experience -take over a successful firm

Essay: Types of mergers

A vertical merger joins two firms operating in different stages of related businesses.18 A merger between a soft drink company and an artificial sweetener maker would ensure the merged firm a constant supply of an ingredient the soft drink manufacturer needs. It could also help ensure quality control of the soft drink company's products. A horizontal merger joins two firms in the same industry and allows them to diversify or expand their products. A soft drink company and a mineral water company that merge can now supply a variety of beverage products. A conglomerate merger unites firms in completely unrelated industries in order to diversify business operations and investments. A soft drink company and a snack food company would form a conglomerate merger. Figure 5.8 illustrates the differences among the three types of mergers.

Manufacturing trends

Agriculture is still a major industry but fewer farms means-- U.S. agricultural workers are the most productive in the world. Manufacturers, like farms, began using new technology, new tools and machines, to become more productive. Eventually the consequence in manufacturing, as in farming, was the elimination of many jobs. Service sector is now the largest growing industry

Essay: Leadership styles

Autocratic leadership means making managerial decisions without consulting others. This style is effective in emergencies and when absolute followership is needed—for example, when fighting fires. Autocratic leadership is also effective sometimes with new, relatively unskilled workers who need clear direction and guidance. Former Los Angeles Lakers Coach Phil Jackson used an autocratic leadership style to take the team to three consecutive National Basketball Association championships in his first three seasons. By following his leadership, a group of highly skilled individuals became a winning team. Today Jackson is president of the New York Knicks. Do you think he is using the same leadership style as president as he did as coach? What kind of leadership do you see being used most successfully in baseball, football, and other areas? Page 198 Participative (democratic) leadership involves managers and employees working together to make decisions. Research has found that employee participation in decisions may not always increase effectiveness, but it usually does increase job satisfaction.26 Many large organizations like Google, Apple, IBM, Cisco, and AT&T, and most smaller firms have been highly successful using a democratic style of leadership that values traits such as flexibility, good listening skills, and empathy. Employees meet to discuss and resolve management issues by giving everyone some opportunity to contribute to decisions. In free-rein leadership managers set objectives and employees are free to do whatever is appropriate to accomplish those objectives. Free-rein leadership is often the most successful leadership style in certain organizations, such as those in which managers supervise doctors, professors, engineers, or other professionals. The traits managers need in such organizations include warmth, friendliness, and understanding. More and more firms are adopting this style of leadership with at least some of their employees.

comparative advantage vs absolute advantage

Comparative advantage theory states that a country should sell to other countries those products it produces most effectively and efficiently, and buy from other countries those products it cannot produce as effectively or efficiently. absolute advantage if it can produce a specific product more efficiently than all other countries.

fiscal and monetary policy

Fiscal policy refers to the federal government's efforts to keep the economy stable by increasing or decreasing taxes or government spending. Monetary policy is the management of the money supply and interest rates by the Federal Reserve Bank

goals and objectives-- performance standard

Goals are the broad, long-term accomplishments an organization wishes to attain. Because workers and management need to agree on them, setting goals is often a team process. Objectives are specific, short-term statements detailing how to achieve the organization's goals.

leaders vs mangers

Managers strive to produce order and stability, whereas leaders embrace and manage change. Leadership is creating a vision for others to follow, establishing corporate values and ethics, and transforming the way the organization does business in order to improve its effectiveness and efficiency. Good leaders motivate workers and create the environment for them to motivate themselves. Management is carrying out the leader's vision.

productivity in service sector vs manufacturing sector

One problem with the service industry is that an influx of machinery may add to the quality of the service provided but not to the output per worker. today's productivity measures in the service industry fail to capture the increase in quality caused by new technology productivity in the manufacturing sector is rising rapidly. In the service sector, productivity is growing more slowly because service workers—like teachers, clerks, lawyers, and barbers—have fewer new technologies available than there are for factory workers.

organizational structure of corporation

Owners/stockholders (elect board of directors) Board of directors (hire officers) Officers (CEO/CFO/etc) (set corporate objectives and select managers) Managers (supervise employees) Employees

profit vs nonprofit

Profit is the amount of money a business earns above and beyond what it spends for salaries and other expenses needed to run the operation A nonprofit organization is an organization whose goals do not include making a personal profit for its owners or organizers. Nonprofit organizations often do strive for financial gains, but they use them to meet their social or educational goals rather than for personal profit

outlook for small businesses and international market

Small and medium-sized business accounted for 99 percent of the growth in exporting firms in recent years. All this exporting is paying off. According to the International Trade Commission small exporting firms averaged 37 percent revenue growth during a recent five-year period compared to the decline of 7 percent for non exporting firms. many small businesses have difficulty getting started in global business. Why are so many missing the boat to the huge global markets? Primarily because the voyage includes a few major hurdles: (1) financing is often difficult to find, (2) would-be exporters don't know how to get started and do not understand the cultural differences between markets, and (3) the bureaucratic paperwork can threaten to bury a small business. Beside the fact that most of the world's market lies outside the United States, there are other good reasons for going global. Exporting can absorb excess inventory, soften downturns in the domestic market, and extend product lives. It can also spice up dull routines.

Adam Smith -- Invisible Hand Theory

Smith believed freedom was vital to the survival of any economy, especially the freedom to own land or property and to keep the profits from working the land or running a business.11 He believed people will work long and hard if they have incentives for doing so—that is, if they know they'll be rewarded. As a result of those efforts, the economy will prosper, with plenty of food and all kinds of products available to everyone. In Adam Smith's view, businesspeople don't necessarily deliberately set out to help others. They work primarily for their own prosperity and growth. Yet as people try to improve their own situation in life, Smith said, their efforts serve as an "invisible hand" that helps the economy grow and prosper through the production of needed goods, services, and ideas. Thus, the phrase invisible hand is used to describe the process that turns self-directed gain into social and economic benefits for all.

watchdogs

The U.S. Justice Department's antitrust division and other government agencies serve as watchdogs to guarantee competition in markets flows freely and new competitors have open access to the market.

Social changes

The U.S. population is going through major changes that are dramatically affecting how people live, where they live, what they buy, and how they spend their time. Furthermore, tremendous population shifts are leading to new opportunities for some firms and to declining opportunities for others. -More diverse population -increase in the number of older citizens -increase in number of single parent families

Fayol organizational theory

Unity of command. Each worker is to report to one, and only one, boss. The benefits of this principle are obvious. What happens if two different bosses give you two different assignments? Which one should you follow? To prevent such confusion, each person should report to only one manager. (Later we'll discuss an organizational plan that seems to violate this principle.) Hierarchy of authority. All workers should know to whom they report. Managers should have the right to give orders and expect others to follow. (As we discussed in Chapter 7, this concept has changed over time, and empowerment is often more important now.) Division of labor. Functions are to be divided into areas of specialization such as production, marketing, and finance. (This principle too is being modified, as you'll read later, and cross-functional teamwork is getting more emphasis.) Subordination of individual interests to the general interest. Workers are to think of themselves as a coordinated team. The goals of the team are more important than the goals of individual workers. (This concept is still very much in use.) Have you heard this concept being applied to football and basketball teams? Did you see this principle at work in the latest Super Bowl? Authority. Managers have the right to give orders and the power to enforce obedience. Authority and responsibility are related: whenever authority is exercised, responsibility arises. (This principle is also being modified as managers are beginning to empower employees.) Degree of centralization. The amount of decision-making power vested in top management should vary by circumstances. In a small organization, it's possible to centralize all decision-making power in the top manager. In a larger organization, however, some decision-making power, for both major and minor issues, should be delegated to lower-level managers and employees. Clear communication channels. All workers should be able to reach others in the firm quickly and easily. Order. Materials and people should be placed and maintained in the proper location. Equity. A manager should treat employees and peers with respect and justice. Esprit de corps. A spirit of pride and loyalty should be created among people in the firm.

real-time data

Up to the second, detailed data used to run a business.

Weber - Organizational Theory

Weber's principles of organization resembled Fayol's. In addition, Weber emphasized: Job descriptions. Written rules, decision guidelines, and detailed records. Consistent procedures, regulations, and policies. Staffing and promotion based on qualifications.

soical audit

a systematic evaluation of an organization's progress toward implementing socially responsible and responsive programs.

capitalism

all or most of the factors of production and distribution—such as land, factories, railroads, and stores—are owned by individuals. They are operated for profit, and businesspeople, not government officials, decide what to produce and how much, what to charge, and how much to pay workers. Foundations: -right to own property -right to own business and keep all profits -right to freedom of competition -right to freedom of choice

communism

an economic and political system in which the government makes almost all economic decisions and owns almost all the major factors of production

micropreneur

business owners interested in maintaining a balanced lifestyle while doing the kind of work they want to do.

B2B vs B2C transactions

business to business: Business-to-business (B2B) marketers include manufacturers; intermediaries such as retailers; institutions like hospitals, schools, and charities; and the government. business to consumer: consists of all the individuals or households that want goods and services for personal consumption or use and have the resources to buy them.

cooperative

co-op, is owned and controlled by the people who use it—producers, consumers, or workers with similar needs who pool their resources for mutual gain ex. the government sells wholesale power to electric cooperatives at rates 40 to 50 percent below the rates nonfederal utilities charge Land O' Lakes, Sunkist, Ocean Spray, Blue Diamond, Associated Press, Ace Hardware, True Value Hardware, Riceland Foods, and Welch's.

corporate values

corporate philanthropy includes charitable donations to nonprofit groups of all kinds corporate social initiative includes charitable donations to nonprofit groups of all kinds Corporate responsibility includes everything from hiring minority workers to making safe products, minimizing pollution, using energy wisely, and providing a safe work environment—essentially everything that has to do with acting responsibly within society Corporate policy refers to the position a firm takes on social and political issues.

intrapreneur

creative people who work as entrepreneurs within corporations. The idea is to use a company's existing resources—human, financial, and physical—to launch new products and generate new profits.

span of control

describes the optimal number of subordinates a manager supervises or should supervise

socialism

economic system based on the premise that some, if not most, basic businesses (e.g., steel mills, coal mines, and utilities) should be owned by the government so that profits can be more evenly distributed among the people.

ethical behavior

ethics as society's accepted standards of moral behavior, that is, behaviors accepted by society as right rather than wrong Compliance-based ethics codes emphasize preventing unlawful behavior by increasing control and penalizing wrongdoers. Integrity-based ethics codes define the organization's guiding values, create an environment that supports ethically sound behavior, and stress shared accountability.

mixed economy

exist where some allocation of resources is made by the market and some by the government. free-Market: market determines resources command: government determines resources

empowerment

giving employees the authority to make a decision without consulting the manager and the responsibility to respond quickly to customer requests

supervisory management

includes those directly responsible for supervising workers and evaluating their daily performance; they're often known as first-line managers (or supervisors) because they're the first level above workers.

social responsibility

is the concern businesses have for the welfare of society, not just for their owners. CSR goes well beyond being ethical. It is based on a commitment to integrity, fairness, and respect.

Factors of production

land, labor, capital, entrepreneurship, and knowledge

strategies used to reach global markets

licensing, exporting, franchising, contract manufacturing, international joint ventures and strategic alliances, foreign subsidiaries, and foreign direct investment.

master limited partnership

looks much like a corporation in that it acts like a corporation and is traded on the stock exchanges like a corporation, but is taxed like a partnership and thus avoids the corporate income tax.5 Master limited partnerships are normally found in the oil and gas industry

taking a firm private

management or a group of stockholders obtain all the firm's stock for themselves by buying it back from the other stockholders

free trade

movement of goods and services among nations without political or economic barriers.

centralized authority

occurs when decision making is concentrated at the top level of management

small business

one that is independently owned and operated, is not dominant in its field of operation, and meets certain standards of size in terms of employees or annual receipts; considered "small" only in relationship to other businesses in its industry

joint venture

partnership in which two or more companies (often from different countries) join to undertake a major project.

limited liability partnerships

partnership that limits partners' risk of losing their personal assets to only their own acts and omissions and to the acts and omissions of people under their supervision

contingency planning

process of preparing alternative courses of action the firm can use if its primary plans don't work out.

staffing

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

dumping

selling products in a foreign country at lower prices than those charged in the producing country.

business with greatest potential to make owner rich

small business

3 kinds of business ownership

sole proprietorship: A business owned, and usually managed, by one person partnership: A business owned, and usually managed, by one person corporation: A business owned, and usually managed, by one person

matrix-style teams

specialists from different parts of the organization work together temporarily on specific projects, but still remain part of a line-and-staff structure (see Figure 8.7). In other words, a project manager can borrow people from different departments to help design and market new product ideas

Demography

statistical study of the human population with regard to its size, density, and other characteristics such as age, race, gender, and income.

offshore outsourcing

the shift to primarily low-wage global markets

service sector

there are more high-paying jobs in the service sector than in the goods-producing sector. High-paying service-sector jobs abound in health care, accounting, finance, entertainment, telecommunications, architecture, law, software engineering, and more. Projections are that some areas of the service sector will grow rapidly, while others may have much slower growth

3 types of corporate mergers

vertical merger joins two firms operating in different stages of related businesses ex. soft drinks and artificial sweetener horizontal merger joins two firms in the same industry and allows them to diversify or expand their products ex. soft drink and mineral water conglomerate merger unites firms in completely unrelated industries in order to diversify business operations and investments ex. soft drinks and candy