BUS Midterm
Capitalism
all or most of the factors of production and distribution are privately owned and operated for profit
Line and Staff Organization
allows for back and forth communication line people= can make decisions staff people= cannot make decisions only advise
Importing
buying products from another country
Malthus
dismal science/resources will run out and the poor will overpopulate the government needs to be involved
Oligopoly
few sellers dominate the market
Cross Functional Organization
groups of employees from different departments who work together on a long-term basis
things that impact inventory
obsolescence pilferage damage
Mission Statement
outlines organizations purpose
Exporting
selling products to another country
Human Skills
skills that involve communication and motivation; they enable managers to work through and with people
Technical Skills
skills that involve the ability to perform tasks in a specific discipline or department
Conceptual Skills
skills that involve the ability to picture the organization as a whole and the relationship among its various parts
Franchising
someone with a good idea for a business sells the right for others to use it
Six Sigma Quality
standard of quality for many businesses allows 3.4 defects/million transactions
Types of skills
technical, human, conceptual
Price
tells companies how much they should produce (this is the key to a free market)
perfect competition
there are many sellers in a market and none is large enough to dictate the price of a product
absolute advantage
when a country produces a product more efficiently than all the others
technology makes businesses (3 things)
1. effective 2. efficient 3. productive
when in an ethical dilemma ask...
1. is it legal 2. is it balanced 3. how will this make me feel about myself
Line organization
An organization that has direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with all people reporting to only one supervisor.
LLP (Limited Liability Partnership)
Deals with liability for partners through 1. Partners are not held liable for each others actions 2. Liability is limited to losing only personal assets directly related to personal actions 3. When a partner is sued individually for malpractice it does not affect the other partners a. Ex is doctors office or law firm
Departmentalization and ways to divide
Divides organizations into separate units. ways to divide: by function by product, by process, ect
division of labor
Division of work into a number of separate tasks to be performed by different workers
economies of scale
The situation in which companies can reduce their production costs if they can purchase raw materials in bulk; the average cost of goods goes down as production levels increase.
factors of production and what are the two most important
1. Land 2. Labor 3. Capital 4. Entrepreneurship 5. Knowledge 4/5 are most important
Types of Leadership Styles
1. Participate= managers and employees decide together 2. Autocratic= manage decisions without others 3. free reign = employees are free to do what they want
4 Functions of management
1. Planning 2. Organizing 3. Leading 4. Controlling
4 Functions of management and which one is most important
1. planning 2. leading 3. organizing 4. controlling planning(goal setting) is most important
what percentage of businesses survive their first year?
80%
LLC (Limited Liability Company)
A company similar to an S corporation but without the special eligibility requirements. Pros: limited liability/choice of taxation Cons: no stock/ few incentives/ limited life span
joint Venture
A partnership in which two or more companies (often from different countries) join to undertake a major project. Pros: shared technology and risk Cons: 1 partner can learn the product and then steal the idea
Entrepreneurship
A person who risks time and money to start and manage a business
Operations Management
A specialized area in management that converts or transforms resources (including human resources) into goods and services.
decentralized organization
An organization structure in which decision-making authority is delegated to lower-level managers more familiar with local conditions than headquarters management could be.
Keynes
English economist who advocated the use of government monetary and fiscal policy to maintain full employment without inflation
JIT
Just in Time. A system that eliminates work-in-process (WIP) inventory by scheduling arrival of parts and assemblies for an operation at the time they are needed and not before. limits inventory
Objectives
Specific, short-term statements detailing how to achieve the organization's goals.
Goals
The broad, long-term accomplishments an organization wishes to attain.
market price
The point where supply and demand are equal
computer-integrated manufacturing (CIM)
The uniting of computer-aided design with computer-aided manufacturing.
Smith
The wealth of Nations and father of economics: believed in freedom and the idea that people will work hard if they are incentive's less government involvement
Vision
a broad explanation of why the company exists and where it is going
Sole Proprietorship
a business owned and managed by a single individual Pros: set your own hours/be your own boss Cons: unlimited liability/ limited financial resources
Corporate Social Responsibility
a business's concern for society's welfare
Licensing
a firm allows a foreign company to pay it a fee to make or distribute the firm's product or service
Corporation
a legal entity with authority to act and have liability apart from its owners Pros: limited liability /able to raise more money for investment Cons: high initial cost/extensive paperwork
Partnership
a legal form of business with two or more owners Pros: more financial resources/ shared knowledge and skills Cons: unlimited liability / division of profits
centralized organization
an organization structure in which decision-making authority is maintained at the top level of management
non-profit organization
an organization whose goals do not include making a personal profit for its owners or organizers used to reach social and educational goals
decision making
attempting to select the best alternative among several options
Fayol
created 14 principles of management uses the idea of top down management also developed division/ specialization of labor
integrity based
defines their values and creates environment with ethically sound behavior and accountability
Max Weber
developed pyramid management with top management, middle management, and front line workers
Intrapreneurship
entrepreneurship within an existing organization
Goals VS Objectives
goals = broad long term accomplishments objectives= short specific details of how to achieve goals ( this is a set vision/mission statement)
SWOT Matrix
internal Strengths internal Weaknesses potential Opportunities potential Threats
Microeconomics
looks at the behavior of people and organizations in markets EX: will people buy smaller cars when gas prices increases
matrix structure
most common but also costly to run. you can assign specific people to projects An organization in which specialists from different parts of the organization are brought together to work on specific projects but still remain part of a line-and-staff structure. Cons: issues of loyalty can arise as workers don't know who to answer to
Profit Organization
motive is to make a profit
Monopoly
one seller controls the total supply of a product or service and sets the price
What factors determine facility location?
partners/suppliers customers fiscally wise
compliance based
preventing unlawful behavior by increasing control
What is the difference between quality of life and standard of living?
quality of life is the general well being of society( safety, healthcare,ect) Standard of living is the amount of goods and services that people can buy
demand
quanity consumers will buy at a given price
supply
quantity businesses will sell at a given price
standard of living
refers to the amount of goods and services people can buy with the money they have
quality of life
refers to the general well-being of a society in terms of its political freedom, natural environment, education, health care, safety, amount of leisure, and rewards that add to the satisfaction and joy that other goods and services provide
Socialsim
some if not most should be owned by the government to distribute profits evenly
comparitive advantage
the ability to produce a good at a lower opportunity cost than another producer
Foreign Direct Investment
the buying of permanent property and businesses in foreign nations Pros: parent company maintains control Cons: they must commit to the deal with foreign funds
risk
the chance an entrepreneur takes of losing time and money on a business that may not prove profitable
Communism
the government makes almost all economic decisions and owns almost all the major factors of production
span of control
the less specialized the job the broader the span of control
Macroeconomics
the operation of a nations economy as a whole
Ethics
the standard for moral behavior that is accepted as right v wrong
Economics
the study of how society chooses to employ resources to produce goods and services and distribute them for consumption
production management
the term used to describe all the activities managers do to help their firms create goods
computer-aided design (CAD)
the use of computers in the design of products
computer-aided manufacturing (CAM)
the use of computers in the manufacturing of products
How did ford cut costs to produce his first car?
using economies of scale( company produces materials in bulk to reduce cost)