Intro to Business- Module 3
In a partnership, why is shared business responsibility considered a disadvantage?
A bad business decision by one partner can jeopardize the personal resources of the other partner.
Vertical merger
A merger between companies operating at different but related levels of an industry
Horizontal merger
A merger between firms that make and sell similar products to the same customers
_______ managers handle the staffing function and deal with employees in a formalized manner.
Human Resource
Three activities likely to be performed by first-line managers
Implementing the plans of middle management Supervising workers performance Supervising daily company operations
Sole Proprietorship Tax
Individual income is taxed.
Partnership Tax
Individual owners' income is taxed.
Which of the following statements is true about knowledge?
It is the ability to understand information.
Which of the following best describes the network effect?
It refers to the notion that the value of a network increases with the number of users.
The interpersonal type of managerial role includes which three specific roles?
Liaison Leadership Figure
Which of the following is an advantage of the corporate form of business ownership?
Limited liability
How is taxation handled in partnerships?
Partners pay taxes at the income tax rate for individuals.
Competitive Advantage
Percentage sales or market share increase
the activities managers engage in so as to reach the organization's objectives.
Planning Organizing Controlling Directing
This is a corporation whose stock anyone may buy, sell, or trade.
Public corporation
CPO
Responsible for managing the privacy concerns of the organization
True or false: Specialized professionals in fields like accounting are often hired by sole proprietors who lack knowledge in that area.
True
Partnership characterization
Two or more owners
S Corporation characterization
Up to 100 shareholders
A mission statement outlines the organization's fundamental purposes. It should address which five of the following?
Who are our customers? What is our operating philosophy? Who are we? What are our core competencies and competitive advantages? What are our responsibilities with respect to being a good steward?
A(n) ______ is where one company purchases the property and obligations of another.
acquisition
The purchase of one company by another, usually by buying its stock, is a(n) ____________
acquisition
Managers utilize many tools to help organize their work, including a(n) _____, which contains both specific and vague items, covering short-term goals and long-term objectives.
agenda
This is defined as being similar to a calendar, containing both specific and vague items, that covers short-term goals and long-term objectives.
agenda
The only legal condition to dissolving a sole proprietorship is that ______.
all financial obligations must be paid or resolved
The selling of a corporation's stock on public markets for the first time is known as ______.
an initial public offering
Monique and her team have identified a problem, defined it, and developed a variety of options. The next step is to _________ each option for its practicality since some options will be discarded because of a lack of resources, legal restrictions, ethical considerations, or other constraints.
analyze
The owner of a small electronic store starts each day by telling the three employees what has to be done and how to do it. She uses her authority and economic rewards to get employees to comply with their directions. The owner of this business exhibits a(n) _____ leadership style.
autocratic
______ leadership is a leadership style that involves making managerial decisions without consulting others.
autocratic
A dataset comprised of extremely large amounts of complex data would best be described as ________.
big data
A _____ is/are elected by the stockholders to oversee the general operation of the corporation and set its long-range objectives.
board of directors
In public corporations the CEO's boss is the firm's _____.
board of directors
In a leveraged buyout, employees, managers, or investors finance the purchase of the company by ______.
borrowing against its assets
The various services offered by Google, such as Gmail (e-mail), Google Drive (word processing), or Google Calendar, are good examples of ________.
cloud computing
Although owners of __________ stock do not get any preferential treatment with regard to dividends, they do get some say in the operation of the corporation.
common
The right to vote for the board of directors is given to ______ stockholders.
common
Joe and Megan know how to use a computer. Which of the following describes this fact?
computer literate
A person using ______ skills has the ability to think in abstract terms and see how parts fit together to form the whole.
conceptual
All organizations must consider the possibility of unplanned disasters and create _____, which specify how the company will handle a variety of unplanned situations.
contingency plans
Jasmine needs to correct a quality control issue with her company's product. Clear standards for quality exist, and she has measured present performance against these standards. Jasmine has discovered a deviation where the company is not meeting the standard and is now investigating the causes of those deviations. What function of management is Jasmine involved in?
controlling
A business owned and controlled through pooled resources by the people who use it is a(n) ______.
cooperative
Based on the information in the articles of incorporation, the state issues a _____ ______ to the company.
corporate charter
Nadine manages the quality control department for her company. Recently Nadine became aware of a quality problem with one of the company's products. After studying the issue Nadine determined the quality of raw materials used in the product was deficient and began looking at changing suppliers. Which step in the decision-making process did Nadine exemplify when she determined the quality of raw materials was substandard?
define the situation
The first step of the decision-making process not only recognizes a situation, it also ______.
defines the situation
Stan recognizes that his employees who work at the production level have ideas and knowledge he does not have, thus Stan holds weekly meetings where he asks for his employees' ideas on solving the problems. Stan is a _____ leader.
democratic
______ leadership is a leadership style that consists of managers and employees working together to make decisions.
democratic
Production and operations managers ______.
develop and administer the activities involved in transforming resources into goods, services, and ideas ready for the marketplace
Jose started a small business two years ago. His primary objective is to increase his company's market share. Jose's objective is focused on _____.
developing a competitive advantage
During which stage of the the decision-making process is brainstorming used?
developing options
A global project called One Laptop per Child is attempting to distribute low-cost laptop computers to children in developing countries around the world in an attempt to shrink the ________.
digitally divided
Fatima is manager for a retail organization. Her favorite part of the job is working one-on-one with employees, motivating them to excel, and encouraging them in their work. Fatima enjoys the _____ function of her management job.
directing
On which two management functions do first-line managers spend the majority of their time?
directing and controlling
Companies that assemble people from different backgrounds to solve problems facing the firm are realizing that ______.
diversity often results in better solutions
Maria manages a team of highly skilled computer programmers. For the most part, her employees are self-directed and need very little support from Maria. Maria is there to answer questions and provide resources, but otherwise leaves her team to do their work. Maria exhibits a _____ style of leadership.
free-rein
A key disadvantage of the partnership form of business is ______.
friction between partners
A _________ partnership is a partnership that involves a complete sharing in both the management and the unlimited liability of the debts of the business.
general
The two main types of partnerships.
general & limited
The two major types of partnerships are ______.
general and limited
A partnership where all owners share in operating the business and in assuming unlimited liability for the business's debts is a(n) ______.
general partnership
Walmart set a __________ when it decided to improve its reputation as an environmental company (an attribute sought) by improving the fuel efficiency of its truck fleet by 25% (a target to be achieved) within two years (a time frame).
goal
To be successful, company _______ should be specific; containing an attribute sought, a target, and a time frame.
goals
Brainstorming is a technique in which ______.
group members suggest ideas to solve problems
________ refers to physical computer equipment, such as the computer monitor, central processing unit, or keyboard.
hardware
If two companies that both make water valves for plumbing contractors merge, it would be an example of a ______ merger.
horizontal
A merger of two firms that sell similar products to the same customers is a(n) ______.
horizontal merger
Which skills are defined as the ability to deal with people, both inside and outside the organizations?
human relation skills
The three types of mergers are differentiated by analyzing whether the companies merging are in the same, related, or different _______
industry
In a partnership, the liability of limited partners is limited to their ______.
initial investment
A private corporation that needs more money to expand or to take advantage of opportunities may have to obtain financing by "going public" through a(n) _______, that is, becoming a public corporation by selling stock so that it can be traded in public markets.
initial public offering
One advantage of a partnership is that ______.
it is easy to create
It is easy to start a sole proprietorship because ______.
it may only require a simple permit or license to start
A partnership established for a specific project or for a limited time is called ______.
joint venture
The term of the business being dependent on the life of the business owner is referred to as ______.
lack of continuity
Managers at ABC company have noticed declining profits for one of its products. This is an example of a warning sign of a potentially _____-scale decision.
large
The startup costs of filing for incorporation are high because ______.
lawyers and accountants are needed to do the complex filings
Perpetual ______ for a corporation means that the death of one owner does not end the corporation.
life
Stockholders' liability for losses only up to the amount they invest is called ______ liability.
limited
Which discipline is the process of planning, organizing, leading, and controlling people and organizational resources in order to accomplish the goals of the organization?
management
______ can be defined as a process designed to achieve an organization's objectives by using its resources effectively and efficiently in a changing environment.
management
A sole proprietor needs skills in which of the following?
marketing, finance, and personnel management
When two firms join together to form one new company, it is called a(n) ______
merger
A ______ is an outline of the fundamental purpose and basic philosophy of an organization.
mission statement
June is working as part of the strategic planning team in her organization. Currently, the team is developing a clear statement explaining the organization's reason for existence. June's team is writing a _____.
mission statement
As an entity, cooperatives are not set up to make ________
money
After managers have implemented a decision, they must determine whether it has accomplished the desired result, this is called ______.
monitoring
Joseph makes a point of spending time each week building relationships and sharing information with his colleagues. Joseph is involved with ____.
networking
______ involves building relationships and sharing information with colleagues who can help managers achieve the items on their agendas.
networking
All profits from a sole proprietorship belong exclusively to the ______.
owner
True or False: Effective implementation of a decision to abandon a product, close a plant, purchase a new business, or something similar requires planning.
True
If a chemical company merged with a textile manufacturer, it would be an example of a ______.
conglomerate merger
As a legal entity, _____________ have many of the rights, duties, and powers of a person, such as the right to receive, own, and transfer property.
corporations
The situation known as "double taxation" only occurs with which form of business ownership?
corporations
In _______ managers identify potential threats to the organization and its stakeholders, and make plans for the organization to deal with these threats.
crisis management
This is a special type of stock whose owners, though not generally having a say in running the company, have a claim to profits before other stockholders do.
preferred
Of the two types of stock, owners of _________ stock receive preferential treatment regarding dividends.
preffered
A ____________ corporation is owned by just one or a few people who are closely involved in managing the business.
private
Selection of the best option in decision making is often a _____ procedure because many situations do not lend themselves to quantitative analysis.
subjective
Decisions to add products, acquire companies, sell unprofitable business segments, and move into foreign markets are made by _____ managers.
top
Positions such as Chief Executive Officer, President, Vice President, and Chief Financial Officer are examples of __________ positions.
top management
The highest level of management is _____ and consists of the president and other key company executives who develop strategic plans and have overall responsibility for the organization.
top management
Conglomerate merger
A merger between two firms in unrelated industries
Name the three key elements in a goal.
A target to be achieved An attribute sought A time frame
Why is planning a key management function?
Accomplishing the other functions depends heavily on having a good plan.
______ skills refer to the ability to identify relevant issues and recognize their importance, understand the relationships between them, and perceive the underlying cause of the situation.
Analytical
Corporation characterization
Any number of shareholders
Select the three items that are usually listed in the articles of partnership.
Authority and responsibility of each partner, How profits will be distributed, & Contribution (money or assets) of each partner
Having carefully chosen partners with different skills and knowledge can help a partnership succeed because ______.
no one person has all of the skills needed it allows people to specialize in a particular area
After working for years at one of the big accounting firms, Nadine has decided to go into business for herself. She has opened up her own accounting and tax preparation firm. While she is the only accountant right now, Nadine hopes to hire more people in the future. Nadine's business can be defined as a ______.
sole proprietorship
Which legal document sets forth the basic agreement between partners?
Articles of partnership
Which of the following is considered an advantage of corporations?
Ease of transfer of ownership
True or false: An advantage of partnerships is that all the partners are responsible for the business actions of all the other partners.
False
When a manager attends an award banquet, he or she is acting in which interpersonal role?
Figure
Which of the following is NOT one of the three general types of plans an organization uses to meet its objectives?
Functional plans
What are four common objectives of organizations?
Growth Efficiency Competitive advantage Profit
Which type of manager handles all items related to staffing?
Human resource managers
Efficiency
Making the best use of the organization's resources
CEO
Manages the overall strategic direction of the company
______ managers are responsible for planning, pricing, and promoting products and making them available to customers through distribution.
Marketing
Which type of manager is responsible for making decisions about product features, name, price, and packaging, as well as planning the best distribution strategy for the product?
Marketing managers
Profit
Money and assets left over after paying off business expenses
What are two advantages to the partnership form of ownership?
More skills and knowledge are available & More financial resources are available
three items included in the staffing function of management
Motivation and training Compensation and benefits Recruiting and hiring
Which of the following best characterizes middle managers?
Narrowly focused, spends the most time organizing
Sole proprietorship characterization
One owner
The steps of the decision making process in order from top to bottom.
Recognizing and defining the decision situation Developing options to resolve the situation Analyzing the options Selecting the best option Implementing the decision Monitoring the consequence of the decision
COO
Responsible for the daily operations of the company
Of the following forms of business ownership, which is relatively easy and inexpensive to form?
Sole proprietorship
Which form of business allows for the greatest degree of secrecy?
Sole proprietorship
Which form of business ownership is directly linked to the life of its owner and his or her ability to work?
Sole proprietorship
______ are businesses owned and operated by one individual, and are the most common form of business organization in the United States.
Sole proprietorships
______ have fewer financial resources since they are limited to what the owner is able to borrow.
Sole proprietorships
This type of plan may include plans to add products, purchase companies, sell unprofitable segments of the business, issue stock, and move into international markets.
Strategic plan
Which of the following statements is TRUE regarding tactical plans?
Tactical plans should be periodically reviewed and updated.
What skills are most needed by first-line managers and are least critical to top-level managers?
Technical skills
Corporation Tax
The business and shareholders are taxed
Which of the following is an advantage of a sole proprietorship?
The business can easily be dissolved.
Why is it critical that managers monitor the consequences of their decisions?
The decision was not implemented properly and thus the desired result was not achieved. The decision may have been the wrong decision and thus not achieved the desired result. The situation may have changed since the decision was made.
Camille and Rosa have decided to open a business together. Which of the following is true for their business?
The pooled financial resources and talents of the partners will be an advantage to the business.
How are the members of a board of directors selected?
They are elected by the stockholders of the corporation.
Which of the following is TRUE of S corporations?
They are taxed like a partnership.
Identify a true statement about the function of knowledge workers.
They create, modify, and/or synthesize knowledge as a fundamental part of their jobs.
After developing a list of possible courses of action, managers should ______.
analyze the options
Skills that involve the ability to picture the organization as a whole and the relationship among its various parts are _____ skills.
conceptual
A legal document that the state issues to a company based on information the company provides in the articles of incorporation is called a ______.
corporate charter
The company (or individual) that wants to acquire or take over another company is known as a(n) _____ ______
corporate raider
Which of the following deal with potential disasters such as product tampering, oil spills, fires, earthquakes, a computer virus, or an airplane crash?
crisis management contingency plans
What is the first step in the decision-making process?
define the decision station
When the corporation pays a tax on its profits and individual stockholders each pay tax on dividends distributed by the corporation, it is called ______.
double taxation
Managers who have decided to eliminate a significant number of employees from the organization are engaging in _____.
downsizing
Employee __________ occurs when employees are provided with the ability to take on responsibilities and make decisions about their jobs.
empowerment
Identify a key factor of globalization.
evolution of technology
The network effect refers to the notion that the value of a network is based on the number of networks being used.
false
True or false: There is a set formula for all partnerships to divide profits.
false
Liberty lockworks is contemplating opening a new plant in the Southeast United States. The company needs to know if it has the capital to make such an investment and if so, will it affect the organization's overall goals. This type of decision would fall under the responsibility of a ______ manager.
financial
In the decision-making process, once the best option has been selected, the option must be __________.
implemented
Which of the following is a governmental challenge of operating in the digital world?
import and export regulations
Which of the following is an economic change brought about by globalization enabled by information technology?
increase in the outsourcing of labor
The ends or results desired by an organization, which derive from the organization's mission, are called _______.
objectives
Jake works in production for his company. Each week his work group is assigned a production quota to ensure enough product is available to meet the goals of the company. A production quota is an example of a(n) _____ plan.
operational
Of the two types of stock, owners of _____________ stock receive preferential treatment regarding dividends.
preferred
Which of the following refers to the actions specific individuals, work groups, or departments need to accomplish in order to achieve the company's tactical plan?
operational planning
A website asking you for permission to send you a weekly newsletter is an example of __________.
opt in
The structuring of resources and activities to accomplish objectives in an efficient and effective manner describes the management function of ______.
organizing
Managers are engaged in the ______ function of management when they review plans and determine what activities are necessary to implement them; then, divide the work into small units and assign it to specific individuals, groups, or departments.
organzing
Which of the following best explains the process of moving business processes or tasks to another company?
outsourcing
An association of two or more persons who carry on as co-owners of a business for profit is the definition of a(n) __________
partnership
_____________ do not pay taxes when submitting the organization's tax return to the Internal Revenue Service; the tax return simply provides information about the profitability of the organization and the distribution of profits.
partnerships
All of the following are advantages of partnerships, EXCEPT ______.
partnerships have unlimited liabilities for the debts incurred by the business
When a corporation is separate from its owners and does not terminate with the death of one owner, the corporation has ______.
perpetual life
Top managers spend the majority of their time on the ______ function of management.
planning
Which function of management is a crucial activity as it lays the foundation for all other management functions?
planning
Having a partner may share the risk, but it also means sharing _______, because each partner must be rewarded for their participation in the business.
profit
A good mission statement should address all of the following topics EXCEPT ______.
profit targets
This type of corporation is owned and operated by the federal, state, or local government.
quasi-public corporation
An advantage of a sole proprietorship is that the owner ______.
retains all profits
After all possible courses of action have been analyzed, management must first ____ the best one.
select
Companies that practice employee empowerment use managers for ______.
setting goals making major decisions guiding employees
________ refer(s) to a program or set of programs that tell the computer to perform certain tasks
software
Roland wanted to earn extra income, so he signed on with Uber as a driver. Since Roland is not considered an employee of Uber but rather an independent contractor, his new business venture would be called a _______.
sole proprietorship
The owner of a _______ has complete control over the business and can make decisions on the spot without anyone else's approval.
sole proprietorship
The ______ function of management includes hiring people to carry out the work of the organization. It includes determining what skills are needed for specific jobs, recruiting people for positions, and motivating and training employees in preparation for higher level jobs in the firm.
staffing
Corporations issue shares of ________ to shareholders and they can sell or trade them to other people without causing the termination of the corporation.
stock
A ______ planning process determines the course of action that a firm will use to fulfill its overall strategy and mission.
strategic
In order for strategic, long-term, plans to become reality, organizations must develop _____ plans, which are designed to implement the objectives specified in the strategic plans.
tactical
the three general types of plans an organization uses to meet its objectives.
tactical, strategic, & operational
A manager with ______ expertise has skills that involve specialized knowledge and training needed to perform jobs that are related to particular areas of management.
technical
Knowing how to use, and train others to use, a specific computer program is an example of __________ expertise.
technical
A network of a broad range of physical objects that can automatically share data over the Internet is called ________.
the Internet of Things
Public corporations must file reports with ______, the government regulatory agency that regulates securities such as stocks and bonds.
the Securities and Exchange Commission
Information systems were described in this chapter as ____________.
the combination of people and information technology that create, collect, process, store and distribute useful data
The term urbanization is best described as ________.
the movement of rural populations to urban areas
In a sole proprietorship, the possibility that competitors can obtain trade secrets is minimized because _______.
the sole proprietor does not have to discuss publicly his or her operating plans
The ultimate decision-making responsibility for long-range goals, such as acquiring a company, entering a new market, or developing a new product, belongs to ______.
top managers
Advances in cloud computing (think Gmail, Evernote, or DropBox) allow for accessing e-mails, files, notes, and the like from different devices, enhancing portability and mobility in computing.
true
An information system is a combination of hardware, software, and telecommunications networks that people build and use to collect, create, and distribute data.
true
An information system is the combination of people and information technology that create, collect, process, store and distribute useful data.
true
Effective implementation of a decision to abandon a product, close a plant, purchase a new business, or something similar requires planning
true
Knowledge is the ability to understand information, form opinions, and make decisions or predictions based on the information.
true
When each general partner is liable for the debts of the firm, no matter who was responsible for causing the debt, this is called ______ liability.
unlimited
As a sole proprietor, Ellie enjoys many advantages. Which of the following is NOT one of them?
unlimited liability
In a sole proprietorship, any debts or damages incurred by the business that cannot be paid by the business are your personal debts and you must pay them. This disadvantage is known as ______.
unlimited liability
The joining of two companies involved in different but related levels of an industry is called a(n) _______ merger.
vertical
Funds available for a sole proprietorship are limited to ______.
what the owner can provide
A key advantage of a sole proprietorship is that ______.
you have flexibility and control over the business