Business 198

E-Commerce

Buying & selling of goods over internet

Production

Creation of finished goods & services using factors of production: land, labor, capital, entrepreneurship, & knowledge

Enabling

Giving workers education & tools they need to make decisions

Transparency

Presentation of a company's facts & figures in a way that is clear & apparent to all stakeholders

Factors of Production

Resources used to create wealth; land, labor, capital, entrepreneurship, & knowledge

Merger

Result of 2 firms joining to form 1 company

Mixed Economies

Some allocation of resources is made by market & some by government

Socialism

Some basic businesses should be owned by government

Limited Liability Partnership

Speciality partnership

Master Limited Partnership

Speciality partnerships; avoids corporate income tax

Objectives

Specific, short-term statements detailing how to achieve organization's goals

Form Utility

Value producers add to materials in creation of finished goods & services

Oligopoly

A few competitors (ex autos, beverages) (a couple dozen competitors)

Job Specifications

A summary of minimal education & skills needed to do a particular job

General Partnership

All owners share in operating business & in assuming liability for debts. Has unlimited liability & active in managing

Stakeholders

All people who stand to gain or lose by policies & activities of a business & whose concerns business needs to address

Profit

Amount of $ a business earns above & beyond what it spends for salaries & other expenses needed to run operation

Standard Of Living

Amount of goods & services people can buy with $ they have

Productivity

Amount of output you generate given amount of input, such as # of hours you work

Profit Sharing Plans

Amount over certain % of profit is split between the employees

Corporation

A legal entity with authority to act & have liability apart from its owners

SWOT Analysis

A planning tool used to analyze an organizations strengths, weaknesses, opportunities, & threats

Continuous Process

A production process in which long production runs turn out finished goods over time

Intermittent Process

A production process in which production is short & machines are changed frequently to make different products

Six Sigma Quality

A quality measure that allows only 3.4 defects per million opportunities

Depression

A severe recession

Operations Management

A specialized are in management that converts or transforms resources (including human resources) into goods & services

Job Analysis

A study of what employees who hold various job titles do

Organization Chart

A visual device that shows relationships among people & divides organization's work; shows who reports to whom

Goals

Broad, long-term accomplishments an organization wishes to attain

Stock Options

Certificate for the right to buy the stock at certain amount per share

Risk

Chance an entrepreneur takes of losing time & $ on a business that may not prove profitable

Decision Making

Choosing among 2 or more alternatives

External Customers

Dealers, who buy products to sell to others, & ultimate customers (or end users), who buy products for own personal use

Flexible Manufacturing

Designing machines to do multiple tasks so that they can produce a variety of products

Market Price (Equilibrium Price)

Determined by supply & demand, this is negotiated price

Departmentalization

Divides organizations into separate units

Recovery

Economy stabilizes & starts to grow, leads to boom

Training & Development

Efforts to improve productivity by increasing an employee's ability to perform

Staff Personnel

Employees who advise & assist line personnel

Compressed Work Week

Employees work full # of work hours, but in fewer than standard # of days

Monopoly

Essentially 1 company (ex. DeBeers, Microsoft) (1 company 88% of sales)

Networking

Establishing & maintaining contacts with key managers in & out of organization & using those contacts to develop relationships

Technology

Everything from phones & copiers to computers, medical imaging devices, personal digital assistants, & various software programs that make business processes more effective, efficient, & productive

Fiscal Policy

Federal governments efforts to keep economy stable by increasing or decreasing taxes or government spending

Knowledge Management

Finding right info, keeping info in a readily accessible place, & making info known to everyone in firm

Development

Focuses on long-term skills

Training

Focuses on short-term skills

Participative (Democratic) Leadership

Leadership style that consists of managers & employees working together to make decisions

Autocratic Leadership

Leadership style that involves making managerial decisions without consulting others

Free-Rein Leadership

Leadership style that involves managers setting objectives & employees being relatively free to do whatever it takes to accomplish those objectives

Gross Domestic Product (GDP)

Total value of all final goods & services produced in a country in a given year

Goods

tangible products such as computers, food, etc

Critical Path

Sequence of tasks that takes longest time to complete

Hierarchy

Sequential ordering

Salary

Set amount of pay

Recruitment

Set of activities for obtaining right # of qualified people at right time

Monopolistic Competition

Several competitors (ex. clothing industry) (hundreds of competitors)

Fringe Benefits

Sick leave, vacation pay, pension, & health plans that provide additional compensation to employees beyond base wages

Limited Liability Companies (LLC)

Similar to S Corporation without eligibility requirements; very popular

Technical Skills

Skills that involve ability to perform tasks in a specific discipline or department

Conceptual Skills

Skills that involve ability to picture organization as a whole & relationship among its various parts

Human Relations Skills

Skills that involve communication & motivation; enable managers to work through & with people

Job Description

Specifies objectives of job, type of work, responsibilities & duties, working conditions & relationship to other jobs

Demography

Statistical study of human population with regard to its size, density, & other characteristics such as age, race, gender, & income

Recession

2 or more consecutive quarters of decline in GDP

Partnership

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

Gantt Chart

A bar graph that shows what projects are being working on & how much has been completed

ISO 14000

A collection of best practices for managing an organizations impact on environment

Materials Requirement Planning (MRP)

A computer-based operations management system that uses sales forecasts to make sure parts & materials are available when needed

Acquisition

1 company's purchase of property & obligations of another company

Limited Partnership

1 or more general partners & 1 or more limited partners

Limited Partner

An owner who invests money in business by enjoys limited liability

Planning

A management function that includes anticipating trends & determining best strategies & tactics to achieve organizational goals & objectives

Organizing

A management function that includes designing structure of organization & creating conditions & systems in which everyone & everything works together to achieve organization's goals & objectives

Staffing

A management function that includes hiring, motivating & retaining best people available to accomplish company's objectives

Controlling

A management function that involves establishing clear standards to determine whether o not an organization is progressing toward its goals & objectives, rewarding people for doing a good job, & taking corrective action if they are not

Program Evaluation & Review Technique (PERT)

A method for analyzing tasks involved in completing a given project

Enterprise Resource Planning (ERP)

A newer version of MRP, combines computerized functions into a single comprehensive & integrated software application Exs. Oracle, SAP, Peoplesoft

International Organization for Standardization (ISO)

A worldwide federation of national standards bodies

Capitalism

All or most of land, factories, stores, owned by individuals, not government & operated for profit

Cafeteria Style Benefits

Allow employees to choose benefits they want (up to a certain dollar amount)

Halo/Horn Effect

Allowing performances in specific areas to unfairly influence overall performance evaluation

Franchise Agreement

An arrangement whereby someone with a good idea for a business (franchisor) sells rights to use business name & sell product or service (franchise) to others (franchisees) in a given territory

Database

An electronic storage file for info

Vision

An encompassing explanation of why organization exists & where its headed

Performance Appraisal

An evaluation that measures employee performance against established standards in order to make decisions about promotions, compensation, training, or termination

Inverted Organization

An organization that has contact people at top & CEO at bottom of organization chart

Nonprofit Organization

An organization whose goals do not include making a personal profit for its owners or organizers

Mission Statement

An outline of fundamental purposes of an organization

Brainstorming

Coming up with as many solutions to a problem as possible in a short period of time with no censoring of ideas

ISO 9000

Common name given to quality management & assurance standards

Contrast Effect

Comparing 1 employee to another

Microeconomics

Concerns behavior of people & organizations in markets for particular goods or services

Macroeconomics

Concerns nations economy as whole

Quality

Consistently producing what customer wants while reducing errors before & after delivery

Outsourcing

Contracting with other companies (often in other countries) to do some or all functions of a firm, like its production or accounting tasks

Leading

Creating a vision for organization & guiding, training, coaching, & motivating others to work effectively to achieve organization's goals & objectives

Quality of Life

General well-being of a society in terms of its political freedom, natural environment, education, health care, safety, amount of leisure & rewards that add to satisfaction & joy that other goods & services provide

Similar-To-Me Effect

Generosity to those you feel are more like you

Flextime Plan

Gives employees some freedom to choose which hours to work as long as they work required #

360-Degree Review

Gives managers opinions from people at different levels to get a more accurate idea of worker's ability

Empowerment

Giving frontline workers responsibility authority, freedom, training, & equipment they need to respond quickly to customer requests

Communism

Government makes almost all economic decisions & owns almost all factors of production

Cross-Functional Self-Managed Teams

Groups of employees from different departments who work together on a long-term basis

Top Management

Highest level of management, consisting of president & other key company executives who develop strategic plans

Economics

How society employs resources to produce goods

Contingent Workers

Include part time & temporary workers, seasonal workers, independent contractors, interns, etc

Internal Customers

Individuals & units within firm that receive services from other individuals or units

Vertical Merger

Joins 2 firms in same industry & allows them to diversify or expand their products (competitors)

Job Sharing

Lets 2 or more part-time employees share on a full-time job

Middle Management

Level of management that includes general managers, & branch & plant managers who are responsible for tactical planning & controlling

Chain of Command

Line of authority

PMI

Listing all pluses for a solution in 1 column, all minuses in another, & implications in a 3rd column

Monetary Policy

Management of money supply & interest rates by Federal Reserve Band (Fed)

Mentors

Managers who supervise, coach & guide selected lower-level employees by acting as corporate sponsors

Supervisory Management

Mangers who are directly responsible for supervising workers & evaluating their daily performance

Gain-Sharing Plans

Manufacturing version of profit sharing plan

Climate Change

Movement of temperature of planet up or down over time

Identity Theft

Obtaining of individuals' personal info, such as Social Security & credit card #s, for illegal purposes

Loss

Occurs when a business's expenses are more than its revenues

Span of Control

Optimal # of subordinates a manager supervises or should supervise

Wide (Flat) Organization

Organization has large span of control

Narrow (Tall) Organization

Organization has small span of control

Sole Proprietorship

Owned & usually managed by 1 person

Process Manufacturing

Part of production process that physically or chemically changes materials

Assembly Process

Part of production process that puts together components

Bonus Plans

Pay above normal amount

Piecework System

Pay based on # of pieces completed

Commission Plans

Pay based on percentage of sales price (usually sales people)

Hourly Wage

Pay changes based on # of hours

Business Cycles

Periodic rises & falls that occur in economies over time

Human Resource Management (HRM)

Process of determining human resource needs & then recruiting, selecting, developing, motivating, evaluating, compensating, & scheduling employees to achieve organizational goals

Strategic Planning

Process of determining major goals of organization & policies & strategies for obtaining & using resources to achieve those goals

Tactical Planning

Process of developing detailed, short-term statements about what is to be done, who is to do it, & how it is to be done

Selection

Process of gathering info & deciding who should be hired (under legal guidelines) to fit needs of organization & individuals

Contingency Planning

Process of preparing alternative courses of action that may be used if primary plans don't achieve organization's objectives

Facility Location

Process of selecting a geographic location for a company's operations

Operational Planning

Process of setting work standards & schedules necessary to implement company's tactical objectives

Problem Solving

Process of solving everyday problems that occur. Less formal than decision making & usually calls for quicker action

Management Development

Process of training & educating employees to become good managers & tracking progress of their skills over time

Management

Process used to accomplish organizational goals through planning, organizing, leading, & controlling people & other organizational resources

Lean Manufacturing

Production of goods using less of everything compared to mass production

Just-In-Time (JIT) Inventory Control

Production process in which a minimum of inventory is kept & parts, supplies & other needs are delivered just in time to go on assembly line

Supply

Quantities of products businesses are willing to sell at different prices

Demand

Quantities of products consumers are willing to buy at different prices

Restructuring

Redesigning an organization so it can effectively & efficiently serve its customers

Invisible Hand

Self-directed gain leads to social & economic benefits for whole community

Business Environment

Surrounding factors that either help or hinder development of businesses

Mass Customization

Tailoring products to meet needs of individual customers

Production Management

Term used to describe all activities managers do to help their firms create goods

Purchasing

The function that searches for high quality material resources, finds best suppliers & negotiates best price for goods & services

Greening

Trend toward saving energy & producing products that cause less harm to environment

S Corporations

Unique government creation that looks like corporation by its taxed like sole proprietorships & partnerships (no double taxation)

Conglomerate Merger

Unites firms in completely unrelated industries in order to diversify business operations & investments

Computer-Integrated Manufacturing (CIM)

Uniting of computer-aided design with computer-aided manufacturing

Perfect Competition

Unlimited amount of competitors (ex. agriculture) (thousands of competitors)

Computer-Aided Design (CAD)

Use of computers in design of products

Computer-Aided Manufacturing (CAM)

Use of computers in manufacturing of products

Centralized Authority

When decision-making is concentrated at top level of management

Decentralized Authority

When decision-making is delegated to lower-level managers & employees more familiar with local conditions than headquarters

Organizational (Corporate) Culture

Widely shared values within an organization that foster unity & cooperation to achieve common goals

Entrepreneur

a person who risks time & money to start & manage a business

Conventional Corporation

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

Services

intangible products (i.e. products that can't be held in your hand) such as education, health care, etc

Business

any activity that seeks to provide goods & services to others while operating at a profit

Unlimited Liability

any debts or damages incurred by business are your debts, even if it means selling your home, care, or anything else

Boom

significant growth & prosperity

Revenue

total amount of money a business takes in during a given period by selling goods & services