BUS 105 2

What is a cooperative?

A cooperative is a form of business that is owned and controlled by the people who use it—producers, consumers, or workers with similar needs who pool their resources for mutual gain. Cooperatives are a major force in agriculture and other industries today.

What's the difference between a limited partner and a general partner?

A general partner is an owner who has unlimited liability and can be active in managing the firm. A limited partner is an owner who invests money in the business, but does not have any management responsibility or liability for losses beyond his or her investment.

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.

Name and describe five alternative compensation techniques.

Alternative compensation techniques include: (1) commission Plans - rewarding employees with a percentage of sales, (2) bonus plans - rewarding employees with payment based on achievement of a predetermined goal, (3) profit sharing plans - giving employees the ability to share in a percentage of the company's profit, (4) gain-sharing plans - bonus is based on improvements over previous performance, and (5) stock options - granting employees shares of stocks based on performance.

What are the various ways a firm can departmentalize?

An organization can elect to departmentalize in the following ways: customer group, product, functional, geographic, process, and hybrid.

Explain the distinction between what Herzberg called motivators and hygiene factors.

As Herzberg studied the results of his research study, he concluded that motivators made employees productive and gave them satisfaction. These factors related to job content. Hygiene factors related to the job environment and could, if left unattended, cause employee dissatisfaction but would not provide long-term motivation. Hygiene factors include such things as pay and working conditions.

Explain the principles of equity theory.

Equity theory looks at how employee's perceptions of fairness affect their willingness to perform. Employees will try to balance or maintain equity between what they put into the job and what they get out of it, comparing those inputs and outputs to those of others in similar positions.

What are ethics?

Ethics are society's accepted standards of behavior, in other words behaviors accepted by society as right rather than wrong.

How do ethics differ from legality?

Ethics reflect people's proper relationships with one another. Legality is narrower in that it refers to laws we have written to protect ourselves from fraud, theft, and violence.

What are the principles of management outlined by Fayol?

Fayol's principles of management are: -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

What are some of the advantages and disadvantages of partnerships?

Some of the advantages of partnerships are: More financial resources, shared management and pooled/complementary skills and knowledge, longer survival, no special taxes. Disadvantages of partnerships include: Unlimited liability (for general partners), division of profits, disagreements among partners, difficulty of termination.

What are some of the changes happening in management today?

Some of the changes in management today include: Managers are more facilitators than bosses; managers tend to emphasize team-building; managers tend to be younger, fewer attended elite schools, and more are women; and managers will conduct more business globally.

What is an inverted organization?

Some service-oriented organizations have elected to turn the traditional organizational structure upside down. An inverted organization has employees who come into contact with customers at the top of the organization and the chief executive officer at the bottom. A manager's job is to assist and support frontline people, not tell them what to do.

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

Span of control refers to the number of subordinates a manager supervises. Generally, 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'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 the process top management uses to determine the major goals of the organization, and the policies, procedures, strategies, and resources the organization will need to achieve them. Tactical planning is the process of developing detailed, short-term statements about what is to be done, who is to do it, and how. This type of planning is typically completed by managers at lower levels of the organization whereas strategic planning is done by the top managers. The final type of planning is operational. Operational planning is the process of setting work schedules and standards necessary to complete the organization's tactical objectives. This type of planning is the department manager's tool for daily and weekly operations.

Draw a diagram of Maslow's hierarchy of needs. Label and describe the parts.

Students should be able to draw and label Maslow's hierarchy.

What opportunities are available for starting a global franchise?

Successful franchising in global markets offers the same opportunities as in domestic markets. However, franchisors 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's the EEOC and what was the intention of affirmative action?

The Equal Employment Opportunity Commission was created by the Civil Rights Act. The EEOC was permitted to issue guidelines for acceptable employer conduct in administering equal employment opportunity. Affirmative action is the most controversial policy of the EEOC and was designed to "right past wrongs" by increasing opportunities for minorities and women.

What are the six steps in the selection process?

The six steps in the selection process are: (1) obtaining complete application forms, (2) conducting initial and follow-up interviews, (3) giving employment tests, (4) conducting background investigations, (5) obtaining results from physical exams, and (6) establishing trial period.

What did Title VII of the Civil Rights Act of 1964 achieve?

Title VII prohibits discrimination in hiring, firing, compensating, apprenticeships, training, terms, conditions, or privileges of employment based on race, religion, creed, sex, or national origin. At a later date age discrimination was added to the act.

Evaluate expectancy theory. When could expectancy theory apply to your efforts or lack of effort?

Victor Vroom created the expectancy theory. His central premise was the amount of effort employees exert on a specific task depends on their expectations of the outcome. He contends that employees will ask three specific questions before committing maximum effort: Can I accomplish the task? If I do accomplish it, what's my reward? Is the reward worth the effort? Like goal-setting theory the key to expectancy theory is setting attainable goals. If the goal is not attainable employees will simply give up, thus reducing motivation.

What did Weber add to the principles of Fayol?

Weber added: -Job descriptions -Written rules, decision guidelines and detailed records -Consistent procedures, regulations and policies -Staffing and promotion based on qualifications.

What are the six steps to follow in establishing an effective ethics program in a business?

(1) Top management must adopt and unconditionally support an explicit corporate code of conduct; (2) Employees must understand that expectations for ethical behavior begin at the top and that senior management expects all employees to act accordingly; (3) Managers and others must be trained to consider the ethical implications of all business decisions; (4) An ethics office must be set up with which employees can communicate anonymously; (5) Outsiders such as suppliers, subcontractors, distributors, and customers must be told about the ethics program; (6) The ethics code must be enforced with timely action if any rules are broken

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

A Gantt chart is a scheduling mechanism used by manufacturers for measuring production progress. This chart will give management a clear idea as to the status of the project and how much has been completed at any given time.

What is a social audit, and what kinds of activities does it monitor?

A social audit is a systematic evaluation of an organization's progress toward implementing socially responsible and responsive programs. Many feel a social audit should measure workplace issues, the environment, product safety, community relations, military weapons contracting, international operations and human rights, and respect for the rights of local people.

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

Before buying a franchise be sure to check a company's (franchisor's) resources and reputation. There are many franchising scams. The checklist in this chapter gives advice about things to consider before buying a franchise.

What are compliance-based and integrity-based ethics codes?

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.

Who is considered a contingent worker, and why do company hire such workers?

Contingent workers include part-time workers, temporary workers, seasonal workers, independent contractors, interns and co-op students. Contingent workers are sometimes hired in an uncertain economic climate, when full-time workers are on leave, when there is peak demand for labor or products and finally when quick service is necessary.

What are the five steps in the control process?

Controlling incorporates: (1) setting clear standards, (2) monitoring and recording performance, (3) comparing performance with plans and standards, (4) communicating results and deviations to employees, and (5) providing positive feedback for a job well done and taking corrective action when necessary.

What is corporate social responsibility, and how does it relate to each of a business's major stakeholders?

Corporate social responsibility (CSR) is the concern businesses have for the welfare of society, not just for their owners. CSR defenders believe that businesses owe their existence to the societies they serve and cannot succeed in societies that fail. CSR must be responsible to all stakeholders, not just investors in the company.

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

Division of labor is dividing tasks among workers to complete a job. Job specialization is dividing tasks into smaller jobs.

Briefly explain the managerial attitudes behind Theories X, Y and Z.

Douglas McGregor developed Theories X and Y after observing that managers' attitudes fall into one of two different assumptions. Theory X assumes the following: People dislike work and will avoid work, workers must be forced, controlled, directed or threatened with punishment to make them work toward the organization's goals, the average worker prefers to be directed, wishes to avoid responsibility, has little ambition and wants security, and the primary motivators are fear and money. Theory Y managers have completely different views on managing people. Theory Y managers believe: Most people like to work, the depth of a person's commitment to goals depends on the perceived rewards for achieving them, under certain circumstances people will seek responsibility, employees tend to be imaginative, creative, and clever, and employees are motivated by a variety of rewards. Theory Z was developed by William Ouchi of UCLA and is a blending of American management style, Theory A, with Japanese management style, Theory J, into Theory Z.

What does accommodations mean in the Americans with Disabilities Act of 1990?

Employers are required to make "reasonable accommodations" for employees with disabilities, such as modifying equipment or widening doorways.

How does enabling help achieve empowerment?

Enabling is the key to successfully empowering employees. Enabling means giving workers the education and the tools they need to make decisions.

What are the benefits and challenges of flextime? Telecommuting? Job sharing?

Flextime benefits include allowing employees to adjust to work/life demands. Challenges of flextime include not being applicable for all businesses, making communication more difficult, and creating the possibility of resentment if employees abuse the system. Telecommuting benefits include cost saving for employers and allows employees to manage work/life demands. Challenges of telecommuting include that it requires disciplined employees to stay focused and communication with employees may suffer. Job sharing benefits include employment opportunities for those who cannot (or prefer not to) work full-time, reduced absenteeism and tardiness, retention of experienced workers and ability to schedule workers during peak times. Challenges of job sharing include the need to hire, train, motivate, and supervise at least twice as many employees.

What is form utility?

Form utility is the value producers add to materials in the creation of finished goods and services. For example, when a company transforms raw steel into the body of an automobile they are creating form utility.

What are the similarities and differences between Taylor's time-motion studies and Mayo's Hawthorne studies?

Frederick Taylor's time-motion studies measured output. Taylor inspired the Hawthorne studies. Originally Elton Mayo wanted to determine the optimal level of lighting necessary to increase production on the factory floor which is a type of scientific management. He later determined that people who were empowered worked harder. Ultimately Mayo's study brought about behavioral management.

What is the difference between goals and objectives?

Goals are broad, long-term accomplishments an organization wishes to attain. Objectives are specific, short-term statements detailing how the organization will achieve the organization's goals.

How are U.S. businesses demanding socially responsible behavior from their international suppliers?

Many U.S. businesses now demand that international suppliers do not violate U.S. human rights and environmental standards.

What's human resource management?

Human resource management is the process of determining the needs of the organization and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organizational goals.

Why do organizations outsource functions?

In the past organizations have often tried to do all functions themselves, maintaining departments for each function including: accounting, finance, marketing, and production. If an organization is not able to efficiently perform the function themselves they will outsource the function. Outsourcing is the process of assigning various functions, such as accounting, production, security, maintenance, and legal work, to an outside firm. The goal is to retain the functions that the organization considers its core competencies.

Why is it important to adjust motivational styles to individual employees? Are there any general principles of motivation that today's managers should follow?

In today's multicultural workplace managers cannot use one motivational formula for all employees. While they must adjust motivational styles, it is essential that managers give all employees the keys to do a good job: the tools, right information, and the right amount of cooperation. Motivating employees across cultures and generations can be simple, if managers acknowledge a job well done.

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

In today's rapidly changing business environment, managers must think of planning as a continuous process. The SWOT analysis is an important part of the planning process as it evaluates an organization's strengths, weaknesses, opportunities and threats.

When faced with ethical dilemmas, what questions can you ask yourself that might help you make ethical decisions?

It helps to ask the following questions when faced with an ethical dilemma: Is the proposed action legal? Is it balanced? Would I want to be treated this way? How will it make me feel about myself?

Why is it unlikely that there will be a single set of international rules governing multinational companies soon?

It's unlikely there will be a single set of international rules governing multinational companies because of the widespread disparity among global nations as to what constitutes ethical behavior. For example, a gift in one culture can be a bribe in another. In some nations child labor is expected and an important part of a family's standard of living. The fairness of adhering to U.S. standards of ethical behavior is not as easy as you may think.

Why do many small businesses avoid doing business globally?

Key reasons why many small businesses avoid doing business overseas include: (a) financing is often difficult to find, (b) would-be exporters don't know how to get started and do not understand the cultural differences between markets, and (c) the bureaucratic paperwork can threaten to bury a small business.

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

Limited liability companies have become a popular way to form a business since all fifty states now recognize LLCs. Some of the advantages of LLCs are: Limited liability, choice of taxation (can be taxed as a partnership or corporation), flexible ownership rules, flexible distribution of profit and losses, operating flexibility.

What's the difference between line and staff personnel?

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

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

Management is the process to accomplish organizational goals through planning, organizing, leading, and controlling people and other organizational resources.

What are the major criteria for facility location?

Managers must always consider the customer and the impact on customers' ability to use the company's services and to communicate about their needs. Other criteria that need to be considered include: labor costs, availability of resources, access to transportation, proximity to customers, suppliers, crime rates, quality of life for employees and the cost of living, to mention but a few.

What have U.S. manufacturers done to regain a competitive edge?

Manufacturers have regained a competitive advantage by focusing on the following: The needs of customers, maintaining a close relationship with suppliers to make sure they are meeting customer needs, practicing continuous improvement, focusing on quality, saving on costs through better site selection, using new technologies, adopting new production techniques.

What is mass customization?

Mass customization is the process of tailoring products to meet the demands of a large number of individual customers. One example of this process is NIKEiD which allows customers to design athletic shoes by choosing from a variety of colors and designs.

What's the difference between MRP and ERP?

Materials requirement planning or (MRP) is a computer-based operations management system that uses sales forecasts to make sure 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 divisions and subsidiaries of the firm into a single integrated software program that uses a single database.

How do micropreneurs differ from other entrepreneurs?

Most entrepreneurs are committed to the quest for growth in their business. Mircorpreneurs know they can be content even if their companies never appear on a list of top-ranked businesses. Many micropreneurs are home-based businesses.

What factors make it difficult to recruit qualified employees?

Some factors that make it difficult to recruit qualified employees include: organizational policies that demand promotions from within, union regulations, and low wages.

What's the difference between internal and external customers?

Not all customers come from outside the organization. Internal customers are defined as individuals and business units within the firm that receive services from other individuals or units. For example, the field salespeople are the internal customers of the marketing research units that prepare market reports for them. External customers are more traditional and include dealers, who buy products and sell to others, and ultimately customers, who buy products for their own personal use.

Name and describe four training techniques.

Off-the-job training occurs away from the workplace and consists of internal or external programs to develop any of a variety of skills or to foster personal development. An apprenticeship program involves a student or apprentice working alongside an experienced employee to master the skills and procedures of a craft. Vestibule training or near-the-job training is done in a classroom with equipment similar to that used on the job so employees learn proper methods and safety procedures before assuming a specific job assignment. Job simulation is the use of equipment that duplicates job conditions and tasks so trainees can learn skills before attempting them on the job.

What's just-in-time inventory control?

One major expense in the production process is the holding of parts. The goal of just-in-time inventory is to eliminate or reduce that cost. Just-in-time inventory systems keep a minimum of inventory on the premises and only deliver parts just as they are needed on the factory floor.

What is organizational culture?

Organizational or corporate culture is the widely shared values within an organization that create unity and cooperation. Usually the culture of an organization is passed to employees via stories, traditions, and myths.

Why are organizations becoming flatter?

Over the last 25 years businesses have adopted flatter organizations with fewer layers of management and a broader span of control in order to quickly respond to customer demands. A flatter organization gives lower-level employees the authority and responsibility to make decisions directly affecting customers.

What problems may emerge when firms try to implement participative management?

Participative management if implemented properly can be successful, but like everything in life, there are benefits and weaknesses to this type of management style. One problem with this approach is that it is difficult to implement and workers may spend more time formulating suggestions than actually solving the problem at hand.

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

Process manufacturing physically or chemically changes materials, such as turning sand into glass or computer chips. The assembly process puts together components to create a product. For example, cars are made through an assembly process that puts together the frame, engine and other parts. Continuous process involves long production runs turning out finished goods over time. For example, a plant that makes plastic cups is run on a continuous process. Rather than using long runs, an intermittent process involves short runs that respond directly to specific customer orders. An example of this process would include manufacturers of men's custom business suits.

What are Six Sigma quality, the Baldrige Award, ISO 9000 and ISO 14000?

Six Sigma is a quality-control standard which sets a benchmark of no more than 3.4 defects per million opportunities. The Baldrige Award was created in 1987 to promote a standard for overall quality in the following areas: manufacturing, services, small business, education, and health care. The award was named after Malcolm Baldrige, the late U.S. secretary of commerce. The International Organization for Standardization or ISO is a worldwide federation of national standards bodies from more than 140 countries. This nongovernmental organization establishes global measures for the quality of individual products. ISO 9000 is the common name given to quality management and assurance standards, while ISO 14000 is a collection of the best practices for managing an organization's environmental impact.

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

Small businesses have several advantages over large businesses in global markets. These include: (a) global buyers often enjoy dealing with individuals rather than with large corporate bureaucracies, (b) small companies can usually begin shipping much faster, (c) small companies can provide a wide variety of suppliers, and (d) mall companies can give global customers personal service and undivided attention because each overseas account is a major source of business for them.

What are the advantages and disadvantages of departmentalization?

The advantages of departmentalization include: Departmentalization may reduce costs, since employees should be more efficient; employees can develop skills in depth and progress within a department as they master more skills; the company can achieve economies of scale by centralizing all the resources it needs and locating various experts in that particular area; employees can coordinate work within the function; and top management can easily direct and control various departments' activities. The disadvantages of departmentalization include: Communication is inhibited; employee's may identify with their department's goals rather than the organization's; the company's response may be slowed by departmentalization; employees tend to be narrow specialists; department members may engage in groupthink and may need input from the outside to become more competitive.

What are the six steps in a performance appraisal?

The six steps in a performance appraisal are: (1) establishing performance standards, (2) communicating those standards, (3) evaluating performance, (4) discussing results with employees, (5) taking corrective action, and (6) using the results to make decisions.

How did Mayo's findings influence scientific management?

The findings at Hawthorne plant in Cicero, Illinois, completely changed how people thought about employees and motivation. One finding was that money was not a primary motivator. These new assumptions led to to many theories about the human side of motivation.

What are the five steps in human resource planning?

The five steps in human resource planning are: (1) preparing a human resource inventory of the organization's employees, (2) preparing a job analysis, (3) assessing future human resource demand, (4) assessing future labor supply, and (5) establishing a strategic plan.

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 four functions of management?

The four functions of management are planning, organizing, leading, and controlling.

What does the government do to promote entrepreneurship?

The government helps by creating enterprise and promise zones, offering tax breaks, enacting the JOBS Act (discussed further in Chapter 19), and "investor visas."

What advantages do compensation plans such as profit sharing offer an organization?

The hope is that profit sharing plans will motivate employees to think like owners.

Explain goal-setting theory.

The idea behind goal-setting theory is the process of setting attainable goals to motivate employees and improve performance. The key to goal-setting theory is that the goals must be accepted and accompanied by feedback to truly be effective.

What do you call the integration of CAD and CAM?

The integration of CAD and CAM is referred to as computer-integrated manufacturing or CIM.

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

The main difference between matrix-style organization and cross-functional teams is that cross-functional teams tend to be long-lived as compared to the temporary and fluid nature of teams in a matrix-style organization.

What led companies to focus on operations management rather than production?

The nature of business has changed dramatically in the past twenty years forcing companies to focus on operations management. One change is the shift from a manufacturing economy to one dominated by the service industry. Operations management is a more specialized area of management that converts resources into useful outputs.

What are the nine sections in the business plan outline?

The nine key sections are: (a) executive summary, (b) company background, (c) management team, (d) financial plan, (e) capital required, (f) marketing plan, (g) location analysis, (h) manufacturing plan, and (i) appendix.

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

The primary advantages of sole proprietors are: Ease of starting and ending the business, being your own boss, pride of ownership. leaving a legacy, retention of company profits, no special taxes. Disadvantages include: Unlimited liability, limited financial resources, management difficulties, overwhelming time commitment, few fringe benefits, limited growth, limited life span.

Name and describe four training techniques. What's the primary purpose of a performance appraisal?

The primary purpose of a performance appraisal is to determine whether workers are doing an effective and efficient job, with a minimum of errors and disruptions.

Why are people willing to take the risks of entrepreneurship?

The primary reasons people are will to take the risk of entrepreneurship are: (a) opportunity to share in the American dream; (b) profit, the potential to become wealthy and successful; (c) independence, becoming you own boss; and (d) challenge, the desire to take a chance.

What are the six Ds in decision making?

The six Ds in decision making are: Define the situation Describe and collect needed information Develop alternatives Develop agreement among these involved Do what is indicated and start the implementation Determine whether the decision was a good one and follow up

What are several steps firms can take to increase internal communications and thus motivation?

To increase communication managers can: Reward listening across the organization, train supervisors and managers to listen using effective questioning techniques, remove barriers to communication, avoid vague and ambiguous communication, make it easy to communicate, and ask employees what is important to them. Focusing on communication is important, but managers can also focus on job enrichment, such as skill variety and task significance.

What must U.S. companies do to continue to strengthen the country's manufacturing base?

To strengthen the nation's manufacturing base will require an adjustment and recognition of the new realities in manufacturing. This will require focusing on new technologies, such as the green ventures discussed in your textbook.

What are the advantages of entrepreneurial teams?

Whereas an entrepreneur has to wear many hats and take huge responsibility, a team allows members to combine creative skills with production and marketing skills right from the start. Having a team can also ensure more cooperation and coordination later among functions in the business.

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

With unlimited liability, the sole proprietor is liable for all debts and obligations of the business and must pay them even if it means selling your home, car, or whatever else you own.