MGT Exam 3

private accountant

-An accountant who works for a single firm, government agency, or nonprofit organization

job sharing

-An arrangement whereby two part-time employees share one full-time job.

Accounts receivable

-Are company assets often used as collateral for a loan; this process is called pledging and works as follows: A percentage of the value of a firm's accounts receivable pledged (usually about 75 percent) is advanced to the borrowing firm. -As customers pay off their accounts, the funds received are forwarded to the lender in repayment of the funds that were advanced.

reverse discrimination

-Discrimination against members of a dominant or majority group (e.g., whites or males) usually as a result of policies designed to correct previous discrimination against minority or disadvantaged groups.

assets

-Economic resources (things of value) owned by a firm.

short-term financing

-Funds needed for a year or less.

Fixed assets

-Items such as land, buildings, and equipment that are relatively permanent.

Current assets

-Items that can be converted to cash within one year

capital expenditures

-Major investments in either tangible long-term assets such as land, buildings, and equipment or intangible assets such as patents, trademarks, and copyrights.

Current liabilities

-Payments that are due in one year or less.

Long-term liabilities

-Payments that are not due for one year or longer

retained earnings

-The accumulated earnings from a firm's profitable operations that were reinvested in the business and not paid out to stockholders in dividends.

recruitment

-The set of activities used to obtain a sufficient number of the right employees at the right time

liabilities

-What the business owes to others (debts)

compressed workweek

-Work schedule that allows an employee to work a full number of hours per week but in fewer day

flextime plan

-Work schedule that gives employees some freedom to choose when to work, as long as they work the required number of hours or complete their assigned tasks.

training and development

-includes all attempts to improve productivity by increasing an employee's ability to perform. -A well-designed training program often leads to higher retention rates, increased productivity, and greater job satisfaction. -Training focuses on short-term skills, whereas development focuses on long-term abilities

Theory Z

-includes long-term employment, collective decision making, individual responsibility for the outcomes of decisions, slow evaluation and promotion, moderately specialized career paths, and holistic concern for employees (including family). -Theory Z views the organization as a family that fosters cooperation and organizational values. -A blend of American and Japanese management approaches -*Comparison of all theories on page 279*

Extrinsic reward

-is given to you by someone else as recognition for good work. -Pay increases, praise, and promotions are extrinsic rewards.

Bonds payable

-long-term liabilities; money lent to the firm that it must pay back.

A typical selection process has six steps:

1. *Obtaining complete application forms* -Although equal employment laws limit the kinds of questions that can appear, applications help reveal the applicant's educational background, work experience, career objectives, and other qualifications directly related to the job. 2. *Conducting initial and follow-up interviews* -A staff member from the human resource department often screens applicants in a first interview. If the interviewer considers the applicant a potential hire, the manager who will supervise the new employee may interview the applicant as well. It's important that managers prepare adequately for the interview to avoid selection decisions they may regret. No matter how innocent the intention, missteps such as asking about pregnancy or child care could later be evidence if the applicant files discrimination charges. 3. *Giving employment tests* -Organizations often use tests to measure basic competency in specific job skills like welding or firefighting, and to help evaluate applicants' personalities and interests. The tests should always be directly related to the job. Employment tests have been legally challenged as potential means of discrimination. Many companies test potential employees in assessment centers where they perform actual job tasks. Such testing can make the selection process more efficient and will generally satisfy legal requirements. 4. *Conducting background investigations* -Most organizations now investigate a candidate's work record, school record, credit history, and references more carefully than in the past to help identify those most likely to succeed. It is simply too costly to hire, train, and motivate people only to lose them and have to start the process over. 5. *Obtaining results from physical exams* -There are obvious benefits to hiring physically and mentally healthy people. However, according to the Americans with Disabilities Act, medical tests cannot be given just to screen out individuals. In some states, physical exams can be given only after an offer of employment has been accepted. In states that allow pre-employment physical exams, they must be given to everyone applying for the same position. Pre-employment testing to detect drug or alcohol abuse has been controversial, as has screening to detect carriers of HIV, the virus that causes AIDS. 6. *Establishing trial (probationary) periods* -Often an organization will hire an employee conditionally to let the person prove his or her value on the job. After a specified probationary period (perhaps six months or a year), the firm can either permanently hire or discharge that employee on the basis of supervisors' evaluations. Although such systems make it easier to fire inefficient or problem employees, they do not eliminate the high cost of turnover.

certified public accountant

-(CPA) An accountant who passes a series of examinations established by the American Institute of Certified Public Accountants (AICPA) -CPAs find careers as private or public accountants and are often sought to fill other financial positions within organizations.

Recruiting Assistance

-*Internal sources* include current employees who can be transferred or promoted or who can recommend others to hire. Using internal sources is less expensive than recruiting from outside and helps maintain employee morale. However, it isn't always possible to find qualified workers within the company -human resource managers also use *external sources* such as advertisements, public and private employment agencies, college placement bureaus, management consultants, Internet sites, professional organizations, referrals, and online and walk-in applications.

financial planning

-1) forecasting the firm's short-term and long-term financial needs (2) developing budgets to meet those needs, and (3) establishing financial controls to see whether the company is achieving its goals

cash budget

-A budget that estimates cash inflows and outflows during a particular period like a month or a quarter.

capital budget

-A budget that highlights a firm's spending plans for major asset purchases that often require large sums of money.

budget

-A financial plan that sets forth management's expectations and, on the basis of those expectations, allocates the use of specific resources throughout the firm

job enlargement

-A job enrichment strategy that involves combining a series of tasks into one challenging and interesting assignment.

job rotation

-A job enrichment strategy that involves moving employees from one job to another

secured loan

-A loan backed by collateral, something valuable such as property.

cost of goods sold (or cost of goods manufactured)

-A measure of the cost of merchandise sold or cost of raw materials and supplies used for producing items for resale.

job enrichment

-A motivational strategy that emphasizes motivating the worker through the job itself. -Work is assigned so that individuals can complete an identifiable task from beginning to end and are held responsible for successful achievement. -Job enrichment is based on *Herzberg's* higher motivators, such as responsibility, achievement, and recognition.

financial control

-A process in which a firm periodically compares its actual revenues, costs, and expenses with its budget. -Most companies hold at least monthly financial reviews as a way to ensure financial control.

certified management accountant (CMA)

-A professional accountant who has met certain educational and experience requirements, passed a qualifying exam, and been certified by the Institute of Certified Management Accountants.

accounting cycle

-A six-step procedure that results in the preparation and analysis of the major financial statements.

ledger

-A specialized accounting book or computer program in which information from accounting journals is accumulated into specific categories and posted so that managers can find all the information about one account in the same place. -In the ledger, they transfer (or post) information from accounting journals into specific categories so managers can find all the information about a single account, like office supplies or cash, in one place.

job analysis

-A study of what employees do who hold various job titles

trial balance

-A summary of all the financial data in the account ledgers that ensures the figures are correct and balanced.

financial statement

-A summary of all the financial transactions that have occurred over a particular period -Financial statements indicate a firm's financial health and stability, and are key factors in management decision making. -The key financial statements of a business are: 1. The balance sheet, which reports the firm's financial condition on a specific date. 2. The income statement, which summarizes revenues, cost of goods, and expenses (including taxes), for a specific period and highlights the total profit or loss the firm experienced during that period. 3. The statement of cash flows, which provides a summary of money coming into and going out of the firm. It tracks a company's cash receipts and cash payments.

job description

-A summary of the objectives of a job, the type of work to be done, the responsibilities and duties, the working conditions, and the relationship of the job to other functions.

management by objectives (MBO)

-A system of goal setting and implementation; it involves a cycle of discussion, review, and evaluation of objectives among top and middle-level managers, supervisors, and employees -MBO is most effective in relatively stable situations when managers can make long-range plans and implement them with few changes -The central idea of MBO is that employees need to motivate themselves.

promissory note

-A written contract with a promise to pay a supplier a specific sum of money at a definite time.

job specifications

-A written summary of the minimum qualifications required of workers to do a particular job.

annual report

-A yearly statement of the financial condition, progress, and expectations of an organization.

financial accounting

-Accounting information and analyses prepared for people outside the organization. -The information goes not only to company owners, managers, and employees, but also to creditors and lenders, employee unions, customers, sup- pliers, government agencies, and the general public.

government and not-for- profit accounting

-Accounting system for organizations whose purpose is not generating a profit but serving ratepayers, taxpayers, and others according to a duly approved budge

managerial accounting

-Accounting used to provide information and analyses to managers inside the organization to assist them in decision making -Managerial accounting is concerned with measuring and reporting costs of production, marketing, and other functions; preparing budgets (planning); checking whether or not units are staying within their budgets (controlling); and designing strategies to min- imize taxes.

bottom line

-After allocating for taxes we get to it -It is the net income (or perhaps net loss) the firm incurred from revenue minus sales returns, costs, expenses, and taxes over a period of time. -We can now answer the question, "Did the business earn or lose money in the specific reporting period?"

tax accountant

-An accountant trained in tax law and responsible for preparing tax returns or developing tax strategies.

certified internal auditor (CIA)

-An accountant who has a bachelor's degree and two years of experience in internal auditing, and who has passed an exam administered by the Institute of Internal Auditors.

Public accountant

-An accountant who provides accounting services to individuals or businesses on a fee basis. -Such services can include designing an accounting system, helping select the correct software to run the system, and analyzing an organi- zation's financial performance.

independent audit

-An evaluation and unbiased opinion about the accuracy of a company's financial statements. -Annual reports often include an auditor's unbiased written opinion.

performance appraisal

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

mentor

-An experienced employee who supervises, coaches, and guides lower-level employees by introducing them to the right people and generally being their organizational sponsor

Banks and Loans

-Are sensitive to risk, generally prefer to lend short-term money to larger, established businesses. -How much a business borrows and for how long depends on the kind of business it is, and how quickly it can resell the merchandise it purchases with a bank loan or use it to generate funds. -In a large business, specialists in a company's finance and accounting departments do a cash flow forecast. -Small-business owners generally lack such specialists and must monitor cash flow themselves

How are Generation X managers likely to be different from their baby boomer predecessors?

-Baby boomers tend to be willing to work long hours to build their careers and often expect their subordinates to do likewise. -Gen Xers (Millenials) may strive for a more balanced lifestyle and are likely to focus on results rather than on how many hours their teams work. Gen Xers tend to be better than previous generations at working in teams and providing frequent feedback. They usually are not bound by traditions that may constrain those who have been with an organization for a long time and are willing to try new approaches to solving problems.

fringe benefits

-Benefits such as sick-leave pay, vacation pay, pension plans, and health plans that represent additional compensation beyond base wage -Fringe benefits can include recreation facilities, company cars, country club memberships, discounted massages, special home mortgage rates, paid and unpaid sabbaticals, day care services, and executive dining rooms.

Home- based workers

-Can choose their own hours, interrupt work for child care or other tasks, and take time out for personal reasons. -Working at home isn't for everyone, it requires discipline to stay focused on the job and not be easily distracted.

operating expenses

-Costs involved in operating a business, such as rent, utilities, and salaries.

Accounts payable

-Current liabilities or bills the company owes others for merchandise or services it purchased on credit but has not yet paid for

Hawthorne Studies

-Elton Mayo and his colleagues from Harvard University came to the Hawthorne plant to test the degree of lighting associated with optimum productivity. -The workers in the test room thought of themselves as a social group. The atmosphere was informal, they could talk freely, and they interacted regularly with their supervisors and the experimenters. They felt special and worked hard to stay in the group. This motivated them. -The workers were included in planning the experiments. For example, they rejected one kind of pay schedule and recommended another, which was adopted. They believed their ideas were respected and felt engaged in managerial decision making. This, too, motivated them. -No matter the physical conditions, the workers enjoyed the atmosphere of their special room and the additional pay for being more productive. Job satisfaction increased dramatically.

contingent workers

-Employees that include part-time workers, temporary workers, seasonal workers, independent contractors, interns, and co-op students. -Contingent workers receive few benefits; they are rarely offered health insurance, vacation time, or company pensions. -They also tend to earn less than permanent workers do. On the positive side, many on temporary assignments are eventually offered full-time positions.

affirmative action

-Employment activities designed to "right past wrongs" by increasing opportunities for minorities and women. -Interpretation of the affirmative action law led employers to actively recruit, and in some cases give preference to, women and minority group members.

balance sheet

-Financial statement that reports a firm's financial condition at a specific time and is composed of three major accounts: assets, liabilities, and owners' equity. -One of the best measuring sticks is your balance sheet. First, add up everything you own—cash, property, and money owed you. These are your assets. Subtract from that the money you owe others—credit card debt, IOUs, car loan, student loans and the like. These are your liabilities. -The resulting figure is your net worth, or equity. -This is fundamentally what companies do in preparing a balance sheet: they follow the procedures set in the fundamental accounting equation.

statement of cash flows

-Financial statement that reports cash receipts and disbursements related to a firm's three major activities: operations, investments, and financing -*Operations* are cash transactions associated with running the business. -*Investments* are cash used in or provided by the firm's investment activities. -*Financing* is cash raised by taking on new debt, or equity capital or cash used to pay business expenses, past debts, or company dividend

long-term forecast

-Forecast that predicts revenues, costs, and expenses for a period longer than 1 year, and sometimes as far as 5 or 10 years into the future.

short-term forecast

-Forecast that predicts revenues, costs, and expenses for a period of one year or less.

cash flow forecast

-Forecast that predicts the cash inflows and outflows in future periods, usually months or quarters. -The company's sales forecast estimates projected sales for a particular period.

time-motion studies

-Frederick Taylor measured output over time -These were studies of the tasks performed in a job and the time needed for each. -This finding led to time-motion studies of virtually every factory job. -Led to efficiency

cafeteria-style fringe benefits

-Fringe benefits plan that allows employees to choose the benefits they want up to a certain dollar amount.

long-term financing

-Funds needed for more than a year (usually 2 to 10 years).

debt financing

-Funds raised through various forms of borrowing that must be repaid

gross profit (or gross margin)

-How much a firm earned by buying (or making) and selling merchandise.

hygiene factors

-In Herzberg's theory of motivating factors, job factors that can cause dissatisfaction if missing but that do not necessarily motivate employees if increased. -Company policy and administration, Supervision, Working conditions, Interpersonal relations (co-workers), Salary, status, and job security

motivators

-In Herzberg's theory of motivating factors, job factors that cause employees to be productive and that give them satisfaction. -Work itself, Achievement, Recognition, Responsibility, Growth and advancement

core time

-In a flextime plan, the period when all employees are expected to be at their job stations

What is the difference between high-context and low-context cultures?

-In high-context cultures, people build personal relationships and develop group trust before focusing on tasks. In low-context cultures, people often view relationship building as a waste of time that diverts attention from the task

Intangible assets

-Intangible assets are long-term assets that have no physical form but do have value. Patents, trademarks, copyrights, and goodwill are intangible assets.

off-the-job training

-Internal or external training programs away from the workplace that develop any of a variety of skills or foster personal development.

financial managers

-Managers who examine financial data prepared by accountants and recommend strategies for improving the financial performance of the firm. -Two key responsibilities are to obtain funds and to effectively control the use of those funds. -Controlling funds includes managing the firm's cash, credit accounts (accounts receivable), and inventory. -Finance is a critical activity in both profit-seeking and nonprofit organizations.

inventory turnover ratio

-Measures the speed with which inventory moves through the firm and gets converted into sales. -Idle inventory sitting in a warehouse earns nothing and costs money. -The more efficiently a firm sells or turns over its inventory, the higher its revenue. -ITR= costs of goods sold ($410,000) / total owner's equity ($215,000)= 1.9 times -A lower-than-average inventory turnover ratio often indicates obsolete merchandise on hand or poor buying practices.

What are some common characteristics of Millennials?

-Millennials tend to be adaptable, tech-savvy, able to grasp new concepts, practiced at multitasking, efficient, and tolerant. -They often place a higher value on work-life balance, expect their employers to adapt to them, and are more likely to rank fun and stimulation in their top five ideal-job requirements

equity financing

-Money raised from within the firm, from operations or through the sale of ownership in the firm (stock or venture capital

net income or net loss

-Revenue left over or depleted after all costs and expenses, including taxes, are paid.

Notes payable

-Short-term or long-term liabilities that a business promises to repay by a certain date.

scientific management

-Studying workers to find the most efficient ways of doing things and then teaching people those techniques.

Depreciation

-Systematic write-off of the cost of a tangible asset over its estimated useful life. -Under accounting rules set by GAAP and the Internal Revenue Service (which are beyond the scope of this chapter), companies are permitted to recapture the cost of these assets over time by using depreciation as an operating expense.

*Frederick Taylor*: The Father of Scientific Management

-Taylor's goal was to increase worker productivity to benefit both the firm and the worker. -The solution, he thought, was to scientifically study the most efficient ways to do things, determine the one "best way" to perform each task, and then teach people those methods. -This approach became known as *scientific management.* -Three elements were basic to Tay- lor's approach: time, methods, and rules of work.

return on sales

-Tells us whether the firm is doing as well as its competitors in generating income from sales. -We calculate it by comparing net income to total sales. -"Very Vegetarian" has a 7% return on sales ($49,000/ $700,000= 7%)

Dodd- Frank Wall Street Reform and Consumer Protection Act

-The Dodd-Frank Act increased financial regulation affecting accounting by increasing the power of the PCAOB to oversee auditors of brokers and dealers in securities markets.

orientation

-The activity that introduces new employees to the organization; to fellow employees; to their immediate supervisors; and to the policies, practices, and objectives of the firm.

ratio analysis

-The assessment of a firm's financial condition using calculations and interpretations of financial ratios developed from the firm's financial statements.

Theory X

-The assumptions management are: • The average person dislikes work and will avoid it if possible. • Because of this dislike, workers must be forced, controlled, directed, or threatened with punishment to make them put forth the effort to achieve the organization's goals. •The average worker prefers to be directed, wishes to avoid re has relatively little ambition, and wants security. •Primary motivators are fear and punishment -Theory X managers don't live to make their employees happy. -The natural consequence of these assumptions is a manager who is very busy and watches people closely, telling them what to do and how to do it

operating (or master) budget

-The budget that ties together the firm's other budgets and summarizes its proposed financial activities. -More formally, it estimates costs and expenses needed to run a business, given projected revenues. -The firm's spending on supplies, travel, rent, technology, advertising, and salaries is deter- mined in the operating budget, generally the most detailed a firm prepares.

Cash flow

-The difference between cash coming in and cash going out of a business.

liquidity

-The ease with which an asset can be converted into cash. -Speedier conversion means higher liquidity. -For example, an account receivable is an amount of money owed to the firm that it expects to receive within one year. -The formula for owners' equity, then, is assets minus liabilities.

income statement

-The financial statement that shows a firm's profit after costs, expenses, and taxes; it summarizes all of the resources that have come into the firm (revenue), all the resources that have left the firm (expenses), and the resulting net income or net loss

finance

-The function in a business that acquires funds for the firm and manages those funds within the firm -Finance activities include preparing budgets; doing cash flow analysis; and planning for the expenditure of funds on such assets as plant, equipment, and machinery.

equity theory

-The idea that employees try to maintain equity between inputs and outputs compared to others in similar positions.

goal-setting theory

-The idea that setting ambitious but attainable goals can motivate workers and improve performance if the goals are accepted, accompanied by feedback, and facilitated by organizational conditions.

The accounting system

-The inputs to an accounting system include sales documents and other documents. -The data are recorded, classified, and summarized. -Processing includes: 1. Entries are made into journals (recording) 2. The effects of these journal entries are transferred or posted into ledgers: classifying 3. All accounts are summarized -They're then put into summary financial statements such as the income statement and balance sheet and statement of cash flows.

financial management

-The job of managing a firm's resources so it can meet its goals and objectives.

auditing

-The job of reviewing and evaluating the information used to prepare a company's financial statements.

Intrinsic Reward

-The personal satisfaction you feel when you perform well and complete goals. -The belief that your work makes a significant contribution to the organization or to society is a form of intrinsic reward.

trade credit

-The practice of buying goods and services now and paying for them later. -It is the most widely used source of short-term funding, the least expensive, and the most convenient. -Small businesses rely heavily on trade credit from firms such as United Parcel Service, as do large firms such as Kmart or Macy's. -Business invoices often contain terms such as 2/10, net 30. This means the buyer can take a 2 percent discount for paying the invoice within 10 days. Otherwise the total bill (net) is due in 30 days.

double-entry bookkeeping

-The practice of writing every business transaction in two places.

*Chapter 11: Human Resource Management* human resource management (HRM)

-The process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organizational goals -The roles and responsibilities of HRM have evolved primarily because of two key factors: (1) organizations' recognition of employees as their ultimate resource and (2) changes in the law that rewrote many traditional practices. Let's explore bot

networking

-The process of establishing and maintaining contacts with key managers in and outside the organization and using those contacts to weave strong relationships that serve as informal development systems.

selection

-The process of gathering information and deciding who should be hired, under legal guidelines, to serve the best interests of the individual and the organization.

management development

-The process of training and educating employees to become good managers, and then monitoring the progress of their managerial skills over time

journal

-The record book or computer program where accounting data are first entered.

bookkeeping

-The recording of business transactions. - Accountants classify and summarize financial data provided by bookkeepers, and then interpret the data and report the information to management. -They also suggest strategies for improving the firm's financial condition and prepare financial analyses and income tax returns -A bookkeeper's first task is to divide all the firm's transactions into meaningful categories, such as sales documents, purchasing receipts, and shipping documents, being very careful to keep the information organized and manageable. -Bookkeepers then record financial data from the original transaction documents (sales slips and so forth) into a record book or computer program called a journal.

accounting

-The recording, classifying, summarizing, and interpreting of financial events and transactions to provide management and other interested parties the information they need to make good decision -Financial transactions include buying and sell- ing goods and services, acquiring insurance, paying employees, and using supplies.

Hawthorne effect

-The tendency for people to behave differently when they know they are being studied.

Owners' equity

-The value of what stockholders own in a firm (also called stockholders' equity). -The amount of the business that belongs to the owners minus any liabilities owed by the business

principle of motion economy

-Theory developed by Frank and Lillian Gilbreth that every job can be broken down into a series of elementary motion

Maslow's hierarchy of needs

-Theory of motivation based on unmet human needs from basic physiological needs to safety, social, and esteem needs to self-actualization needs -*Physiological needs*: Basic survival needs, such as the need for food, water, and shelter. -*Safety needs* The need to feel secure at work and at home. -*Social needs:* The need to feel loved, accepted, and part of the group. -*Esteem needs*: The need for recognition and acknowledgment from others, as well as self-respect and a sense of status or importance. -*Self-actualization needs*: The need to develop to one's fullest potential.

reinforcement theory

-Theory that positive and negative reinforcers motivate a person to behave in certain ways. -In other words, motivation is the result of the carrot-and-stick approach: individuals act to receive rewards and avoid punishment. *Positive reinforcements* are rewards such as praise, recognition, and a pay raise. -*Punishment* includes reprimands, reduced pay, and layoffs or firing. *Negative reinforcement* occurs when people work to escape the punishers. Escaping the punishment reinforces or rewards the positive behavior. -A manager might also try to stop undesirable behavior by not responding to it. This response is called *extinction* because managers hope the unwanted behavior will become extinct.

Theory Y

-This theory makes entirely different assumptions about people: • Most people naturally work toward goals to which they are committed. • The depth of a person's commitment to goals depends on the perceived rewards for achieving them. • Under certain conditions, most people not only accept but also seek responsibility. • People are capable of using a relatively high degree of imagination, creativity, and cleverness to solve problems. • In industry, the average person's intellectual potential is only partially realized. • People are motivated by a variety of rewards. Each worker is stimulated by a reward unique to him or her (time off, money, recognition, and so on). -Rather than authority, direction, and close supervision, Theory Y managers emphasize a relaxed managerial atmosphere in which workers are free to set objectives, be creative, be flexible, and go beyond the goals set by management.

on-the-job training

-Training at the workplace that lets the employee learn by doing or by watching others for a while and then imitating them.

vestibule training

-Training done in schools where employees are taught on equipment similar to that used on the job.

apprentice programs

-Training programs during which a learner works alongside an experienced employee to master the skills and procedures of a craft

online training

-Training programs in which employees complete classes via the Internet.

Engagement

-Used to describe employees' level of motivation, passion, and commitment. -Engaged employees work with passion and feel a connection to their company. -Disengaged workers have essentially checked out; they plod through their day putting in time, but not energy.

expectancy theory

-Victor Vroom's theory that the amount of effort employees exert on a specific task depends on their expectations of the outcome. (1) Can I accomplish the task? (2) If I do accomplish it, what's my reward? (3) Is the reward worth the effort?

Herzberg's Motivating Factors

-What creates enthusiasm for workers and makes them work to full potential? The most important factors were: 1. Sense of achievement. 2. Earned recognition. 3. Interest in the work itself. 4. Opportunity for growth. 5. Opportunity for advancement. 6. Importance of responsibility. 7. Peer and group relationships. 8. Pay. 9. Supervisor's fairness. 10. Company policies and rules. 11. Status. 12. Job security. 13. Supervisor's friendliness. 14. Working conditions. -*The best way to motivate employees is to make their jobs interesting, help them achieve their objectives, and recognize their achievement through advancement and added responsibility.*

CFO

-generally the second highest paid person in an organization and CFOs often advance to the top job of CEO. -However, financial management could also be in the hands of a person who serves as company treasurer or vice president of finance. -A comptroller is the chief accounting officer.

empowerment

-giving employees authority to make decisions and tools to implement the decisions they make. -For empowerment to be a real motivator, management should follow these three steps: 1. Find out what people think the problems in the organization are. 2. Let them design the solutions. 3. Get out of the way and let them put those solutions into action.

Soft benefits

-help workers maintain the balance between work and family life that is often as important to hardworking employees as the nature of the job itself. -These perks include on-site haircuts and shoe repair, concierge services, and free breakfasts. Freeing employees from errands and chores gives them more time for family— and work.

Return on equity

-indirectly measures risk by telling us how much a firm earned for each dollar invested by its owners. -We calculate it by comparing a company's net income to its total owners' equity. -Very Vegetarian's return on equity looks reasonably sound since some believe anything over 15 percent is considered a reasonable return: -return on equity= net income after tax ($49,000)/ total owner's equity ($213,000)= 23%

Job simulation

-is the use of equipment that duplicates job conditions and tasks so that trainees can learn skills before attempting them on the job. -It differs from vestibule training in that it duplicates the exact combination of conditions that occur on the job.

Liquidity ratios

-measure a company's ability to turn assets into cash to pay its short-term debts (liabilities that must be repaid within one year). -These short-term debts are of particular importance to the firm's lenders who expect to be paid on time. -Two key liquidity ratios are the current ratio and the acid-test ratio.

Profitability (performance) ratios

-measure how effectively a firm's managers are using its various resources to achieve profits. Three of the more important ratios are earnings per share (EPS), return on sales, and return on equity. - EPS is a revealing ratio because earnings help stimulate the firm's growth and provide for stockholders' dividends.

Leverage (debt) ratios

-measure the degree to which a firm relies on borrowed funds in its operations. -A firm that takes on too much debt could experience problems repaying lenders or meeting promises made to stockholders. -The debt to owners' equity ratio measures the degree to which the company is financed by borrowed funds that it must repay.

job simplification

-produces task efficiency by breaking a job into simple steps and assigning people to each.

The Americans with Disabilities Act of 1990 (ADA)

-requires employers to give applicants with physical or mental disabilities the same consideration for employment as people without disabilities. The ADA also protects individuals with disabilities from discrimination in public accommoda- tions, transportation, and telecommunications

Revenue

-the monetary value of what a firm received for goods sold, services rendered, and other payments (such as rents received, money paid to the firm for use of its patents, interest earned, etc.).

current ratio

-the ratio of a firm's current assets to its current liabilities. -This information appears on the firm's balance sheet.

The five steps in the human resource planning process are:

1. Preparing a human resource inventory of the organization's employees. -This inventory should include ages, names, education, capabilities, training, specialized skills, and other relevant information (such as languages spoken). It reveals whether the labor force is technically up-to-date and thoroughly trained. 2. Preparing a job analysis. -A job analysis is a study of what employees do who hold various job titles. It's necessary in order to recruit and train employees with the necessary skills to do the job. The results of job analysis are two written statements: job descriptions and job specifications. A job description specifies the objectives of the job, the type of work, the responsibilities and duties, working conditions, and the job's relationship to other functions. Job specifications are a written summary of the minimal education and skills to do a particular job. In short, job descriptions are about the job, and job specifications are about the person who does the job. 3. Assessing future human resource demand. -Because technology changes rapidly, effective human resource managers are proactive; that is, they forecast the organization's requirements and train people ahead of time or ensure trained people are available when needed. 4. Assessing future labor supply. -The labor force is constantly shifting: getting older, becoming more technically oriented, becoming more diverse. Some workers will be scarcer in the future, like biomedical engineers and robotic repair workers, and others will be oversupplied, like assembly-line workers. 5. Establishing a strategic plan. -The human resource strategic plan must address recruiting, selecting, training, developing, appraising, compensating, and scheduling the labor force.

fundamental accounting equation

Assets= Liabilities + Owners' equity; this is the basis for the balance sheet -However, if you borrow some money from a friend, you have incurred a liability. Your assets are now equal to what you owe plus what you own.