MGT111 Final Exam

Conceptual skills

The ability to picture the organization as a whole and the relationship among its various parts.

Trade deficit (unfavorable)

When the value of a country's imports exceeds that of its exports.

Baby Boomers prefer

meetings and conference calls.

Scientific management

(Frederick Taylor) Studying workers to find the most efficient ways of doing things and then teaching people those techniques. Three key elements to increase productivity: • Time. • Methods of work. • Rules of work.

Corporation

A legal entity with authority to act and have liability separate from its owners.

Partnership

A legal form of business with two or more owners.

Import Quota

A limit on the number of products in certain categories that a nation can import.

Steps Involved in P E R T

1. Analyzing and sequencing tasks. 2. Estimating the time needed to complete each task 3. Drawing a PERT network illustrating the first two steps. 4. Identifying the critical path. • Critical path — The sequence of tasks that takes the longest time to complete.

Advantages of Sole Proprietorships

1. Ease of starting and ending the business. 2. Being your own boss. 3. Pride of ownership. 4. Leaving a legacy. 5. Retention of company profits. 6. No special taxes.

Four phases of long-term business cycles:

1. Economic boom — Business is booming. 2. Recession — Two or more consecutive quarters of decline in the GDP. 3. Depression — A severe recession, usually accompanied by deflation. 4. Recovery — When the economy stabilizes and starts to grow, eventually leading to an economic boom.

Roosevelt's Four Additional Freedoms to Understanding Free-Market Capitalism

1. Freedom of speech and expression. 2. Freedom to worship in your own way. 3. Freedom from want. 4. Freedom from fear.

Disadvantages of Franchises

1. Large start-up costs. 2. Shared profit. 3. Management regulation 4. Coattail effects. 5. Restrictions on selling. 6. Fraudulent franchisors.

Advantages of LLCs

1. Limited liability. 2. Choice of taxation. 3. Flexible ownership rules. 4. Flexible distribution of profits and losses. 5. Operating flexibility.

Advantages of Franchises

1. Management and marketing assistance. 2. Personal ownership. 3. Nationally recognized name. 4. Financial advice and assistance. 5. Lower failure rate.

Disadvantages of LLCs:

1. No stock 2. ownership is nontransferable. 3. Fewer incentives. 4. Taxes. 5. Paperwork.

Five types of watchdogs:

1. Socially conscious investors. 2. Socially conscious research organizations. 3. Environmentalists. 4. Union officials. 5. Customers

Four Basic Rights to Understanding Free-Market Capitalism

1. The right to own private property. 2. The right to own a business and keep all that business's profits. 3. The right to freedom of competition. 4. The right to freedom of choice.

Disadvantages of Sole Proprietorships

1. Unlimited liability — The responsibility of business owners for all debts of the business. 2. Limited financial resources. 3. Management difficulties. 4. Overwhelming time commitment 5. Few fringe benefits. 6. Limited growth. 7. Limited life span.

Five reasons to start your business right away:

1. You have potential for long-term returns! 2. You don't have a mortgage or kids to take care of. 3. You can survive on little funds and work long hours. 4. No disruption to your career path. It hasn't started yet! 5. You're more adaptable and have higher risk tolerance at a younger age.

Crowdfunding

A large group of individuals provide donations in support of a company or product.

Sole proprietorship

A business owned, and usually managed, by one person.

Small business

A business that is independently owned and operated, is not dominant in its field of operation, and meets certain standards of size (set by the Small Business Administration) in terms of employees or annual receipts. • Businesses are "small" in relation to other businesses in their industries. • There are over 30 million small businesses in the United States.

I S O 14001

A collection of the best practices for managing an organization's impact on the environment

State capitalism

A combination of freer markets and some government control. • China has experienced rapid growth using state capitalism.

Foreign subsidiary

A company owned in a foreign country by another company, called the parent company. • Primary advantage: Parent company maintains complete control over its technology or expertise. • Primary disadvantage: Must commit funds and technology within foreign boundaries.

Embargo

A complete ban on the import or export of a certain product, or the stopping of all trade with a particular country. • Political disagreements can lead to embargos.

Franchising

A contractual agreement whereby someone with a good idea for a business sells others the rights to use the name and sell a product or service in a given territory in a specified manner. • Large and small franchisors can be successful in foreign countries. • Franchisors need to adapt their products to the countries they serve.

Absolute advantage

A country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries.

Comparative advantage

A country should sell to other countries those products that it produces most efficiently and buy from other countries those products that it cannot produce as effectively or efficiently.

Injunction

A court order directing someone to do something or to refrain from doing something.

Business plan

A detailed written statement that describes the nature of the business, the target market, the advantages the business will have in relation to competition, and the resources and qualifications of the owner(s). • Forces potential owners to be specific about what they will offer. • Mandatory for talking with bankers or investors. • A good plan takes a long time to prepare. • A good executive summary catches interest and tempts potential investors to read on. • Getting the plan into the right hands is almost as important as getting the right information in it.

Contract Manufacturing

A foreign company's production of private-label goods to which a domestic company then attaches its own brand name or trademark; part of the broad category of outsourcing .Can help companies: • Experiment in a new market without incurring heavy start-up costs such as building a manufacturing plant. • Temporarily meet an unexpected increase in orders.

Inflation

A general rise in the prices of goods and services over time

Licensing

A global strategy in which a firm (the licensor) allows a foreign company (the licensee) to produce its product in exchange for a fee (a royalty).

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.

Gross output (GO)

A measure of total sales volume at all stages of production.

Job enrichment

A motivational strategy that emphasizes motivating the worker through the job itself.

General partnership

A partnership in which all owners share in operating the business and in assuming liability for the business's debts.

Limited partnership

A partnership with one or more general partners and one or more limited partners.

SWOT analysis

A planning tool used to analyze an organization's strengths, weaknesses, opportunities, and threats.

Small Business Investment Company (S B I C)

A program through which private investment companies licensed by the S B A lend money to small businesses. • Must have a minimum of $5 million in capital and can borrow up to $2 from the SBA for each $1 of capital it has. • Keeps defaults low by identifying a business's trouble spots early, giving entrepreneurs advice, and rescheduling loan payments.

Six Sigma quality

A quality measure that allows only 3.4 defects per million opportunities.

Common Markets

A regional group of countries that have a common external tariff, no internal tariffs, and a coordination of laws to facilitate exchange; also called a trading bloc.

Disinflation

A situation in which price increases are slowing (the inflation rate is declining).

Deflation

A situation in which prices are declining

Stagflation

A situation when the economy is slowing but prices are going up anyhow.

Operations Management

A specialized area in management that converts or transforms resources (including human resources) into goods and services. Includes: • Inventory management. • Quality control. • Production scheduling. • Follow-up services.

Job analysis

A study of what is done by employees who hold various job titles.

Hierarchy

A system in which one person is at the top of an organization and there is a ranked or sequential ordering from the top down.

Tariffs

A tax imposed on imports. • Protective tariffs — Import taxes. • Revenue tariffs — Raise money for government.

Yellow-Dog Contracts

A type of contract that required employees to agree as a condition of employment NOT to join a union.

Strike

A union strategy in which workers refuse to go to work; the purpose is to further workers' objectives after an impasse in collective bargaining.

Organization chart

A visual device that shows relationships among people and divides the organization's work; it shows who reports to whom.

Small-Business Success and Failure

About half do not last five years. Some reasons for failure are: • Managerial incompetence. • Inadequate financial planning • Choosing the wrong type of business.

Home-Based Franchises

Advantages: • Relief from commuting stress. • Extra family time. • Low overhead expenses. Disadvantages: • Isolation. • Long hours.

Open shop agreement

Agreement in right-to-work states that gives workers the option to join or not join a union, if one exists in their workplace.

North American Free Trade Agreement (N A F T A)

Agreement that created a free-trade area among the United States, Canada, and Mexico; passed in 19 93. • Its attempts to boost job growth, fight poverty, improve environmental controls, and close the wage gap between Mexico and the United States largely failed.

Benefits of Free Markets

Allows for open competition among companies. • Provides opportunities for poor people to work their way out of poverty.

Fixed-position layout

Allows workers to congregate around the product.

Secondary boycott

An attempt by labor to convince others to stop doing business with a firm that is the subject of a primary boycott; prohibited by the Taft-Hartley Act. illegal

Lockout

An attempt by management to put pressure on unions by temporarily closing the business.

Producer Price Index (PPI)

An index that measures the change in prices at the wholesale level.

American Federation of Labor (A F L)

An organization of craft unions that championed fundamental labor issues; founded in 1886.

Craft union

An organization of skilled specialists in a particular craft or trade.

Bureaucracy

An organization with many layers of managers who set rules and regulations and oversee all decisions. • It can take weeks or months for information to pass down to lower-level employees. • Bureaucracies can annoy customers. • Some companies are reorganizing to let employees make decisions to please customers.

Tall organization structure

An organizational structure in which the pyramidal organization chart would be quite tall because of the various levels of management

Flat organization structure

An organizational structure that has few layers of management and a broad span of control.

Mission statement

An outline of the fundamental purposes of an organization, including: • The organization's self-concept. • Its philosophy. • Its long-term survival needs. • Its customer needs. • Its social responsibility.

General partner

An owner (partner) who has unlimited liability and is active in managing the firm.

Limited partner

An owner who invests money in the business but does not have any management responsibility or liability for losses beyond the investment.

Insider trading

An unethical activity in which insiders use private company information to further their own fortunes or those of their family and friends. • Unethical behavior does financial damage to a company and investors are cheated. • S E C adopted a new rule called Regulation F D ("fair disclosure").

Generations

Baby Boomers (1946 to 1964) Generation X (1965 to 1980) Generation Y or Millennials (1980 to 1995) Generation Z (1995 to 2009) Generation Alpha (born after 2010)

maslow's hierarchy of needs

Bottom-up: (level 1) Physiological Needs (level 2) Safety needs -->and Security (level 3) Social needs-->Relationships, Love and Affection (level 4) Esteem needs (level 5) Self Actualization needs

Core inflation

CPI minus food and energy costs.

Incubators

Centers that offer new businesses low-cost offices with basic business services. • Combination of private and public sectors.

Brainstorming

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

Human relations skills

Communication and motivation; they enable managers to work through and with people.

Economies of scale

Companies can reduce their production costs by purchasing raw materials in bulk. • The average cost of goods decreases as production levels rise.

Benchmarking

Compares an organization's practices, processes, and products against the world's best. • Can lead to competitive advantage. • If a company can't do as well as the best, they can outsource it.

Quality

Consistently producing what the customer wants while reducing errors before and after delivery to the customer.

Intrapreneurs

Creative people who work as entrepreneurs within corporations. Intrapreneurs use a company's existing resources to launch new products for the company. • Examples include: 3M's Post-it Notes, Apple's Mac computer, Sony's PlayStation.

External customers

Dealers, who buy products to sell to others, and ultimate customers (or end users), who buy products for their own use.

Free market

Decisions about what and how much to produce are made by the market. • Consumers send signals about what they like and how they like it. • Price tells companies how much of a product they should produce. • If something is wanted but hard to get, the price will rise until more products are available.

Integrity-based ethics codes

Define the organization's guiding values, create an environment that supports ethically sound behavior, and stress a shared accountability among employees.

Formal organization

Details lines of responsibility, authority, and position • Often slow and bureaucratic, but it helps guide the lines of authority

Strategic planning

Determining the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals.

Tactical planning

Developing detailed, short-term statements about what is to be done, who is to do it, and how it is to be done.

Command economies

Economic systems in which the government largely decides what goods and services will be produced, who will get them, and how the economy will grow.

Free-market economies

Economic systems in which the market largely determines what goods and services get produced, who gets them, and how the economy grows.

Compliance-based ethics codes

Emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers.

Max Weber and Organizational Theory

Employees just need to do what they're told. In addition to Fayol's principles, Weber emphasized: • Job descriptions. • Written rules, decision guidelines, and detailed records. • Consistent procedures, regulations, and policies. • Staffing and promotion based on qualifications.

Staff personnel

Employees who advise and assist line personnel in meeting their goals. • Includes marketing research, legal advising, IT, and human resource management.

Line personnel

Employees who are part of the chain of command that is responsible for achieving organizational goals. • Have authority to make policy decisions.

Micropreneurs

Entrepreneurs willing to accept the risk of starting and managing a business that remains small, lets them do the work they want to do, and offers them a balanced lifestyle. • More than half of U.S. micropreneurs are home-based.

Knowledge management

Finding the right information, keeping the information in a readily accessible place, and making the information known to everyone in the firm. • Keeps people from duplicating the work. • The rise of big data requires determining what is most important.

Unions

Fought to get rid of child labor and establish safety laws and minimum wage • An employee organization that has the main goal of representing members in employee-management bargaining over job-related issues. • Labor unions responsible for protecting employees from intolerable work conditions and unfair treatment, and to secure some say in the operation of their jobs • Unions have lost economic and political power, and membership has declined.

Capitalism

Free market economy • An economic system in which all or most of the factors of production and distribution are privately owned and operated for profit. • U.S., England, Australia, Canada

Cafeteria-style fringe benefits

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

The Increase in the Number of Single-Parent Families.

Growth of single-parent households has encouraged businesses to implement programs such as family leave and flextime

Line organization

Has direct two-way lines of responsibility, authority, and communication running from the top to the bottom, with all people reporting to only one supervisor. • There are no specialists or legal, accounting, human resource, or information technology departments • Line managers issue orders, enforce discipline, and adjust the organization to changes.

Top management

Highest level, consisting of the president and other key company executives who develop strategic plans. • C E O, C O O, C F O, C I O.

Staffing

Hiring, motivating, and retaining the best people available to accomplish the company's objectives. • Staffing is critical, especially in the Internet and high-tech areas. • Many people are not willing to work at companies unless they are treated well with fair pay.

Middle management

Includes general managers, division managers, and branch and plant managers who are responsible for tactical planning and controlling.

Internal customers

Individuals and units within the firm that receive services from other individuals or units.

Venture capitalists

Individuals or companies that invest in new businesses in exchange for partial ownership of those businesses.

Whistleblowers

Insiders who report illegal or unethical behavior. An ethics office must be set up with which employees can communicate anonymously.

Hygiene factors

Job factors that can cause dissatisfaction if missing but that do not necessarily motivate employees if increased.

Industrial unions

Labor organizations of unskilled or semiskilled workers in mass-production industries such as automobiles and mining.

Monopolistic competition

Large number of sellers produce very similar products that buyers nevertheless perceive as different.

Right-to-work laws

Legislation that gives workers the right, under an open shop, to join or not join a union if it is present. • The Taft-Hartley Act of 19 47 granted states the power to outlaw union shop agreements.

P M I

Listing all the pluses for a solution in one column, all the minuses in another, and the implications in a third column.

Continuous process

Long production runs turn out finished goods over time.

Autocratic leadership

Make managerial decisions without consulting others. • Effective in emergencies or with new, unskilled workers.

Participative or democratic leadership

Managers and employees work together to make decisions. • Usually increases job satisfaction.

Perfect competition

Many sellers but none is large enough to dictate the price of a product.

Socialism

Mix of gov. and state control --> not as concerned w/ profit/loss • An economic system based on the premise that some, if not most, basic businesses should be owned by the government so that profits can be more evenly distributed among the people. • Entrepreneurs run smaller businesses. • Citizens are highly taxed. • Government is more involved in protecting the environment and the poor.

Consumer price index (CPI)

Monthly statistics that measure the pace of inflation or deflation

Vision

More than a goal; an encompassing explanation of why the organization exists and where it's trying to go.

United States-Mexico-Canada Agreement (U S M C A)

New agreement to replace N A F T A; ratified in 2020. • Goals: • Create level playing field for U.S. workers with improved rules. • Modernize and strengthen food and agriculture trade in North America. • Support modern economy. • Introduce new rules on digital trade, anticorruption, and good regulatory practices.

Contingency planning

Preparing alternative courses of action that may be used if the primary plans don't achieve the organization's objectives.

Angel investors

Private individuals who invest their own money in potentially hot new companies before they go public.

Outsourcing

Process whereby one firm contracts with other companies to do some or all of its functions. • U.S. firms have outsourced payroll functions, accounting, and manufacturing for years. • With the growth of global markets, companies have been shifting to offshore outsourcing — outsourcing with other countries. • There are some quality issues.

Workers are grouped/departmentalized by skills and expertise to specialize their skills by...

Product. • Function. • Customer group. • Geographic location. • Process. • Some firms use a combination of departmentalization techniques to create hybrid forms.

Age Discrimination in Employment Act (ADEA):

Protects workers 40 and over from employment and workplace discrimination in hiring, firing, promotion, layoff, compensation, benefits, job assignments, and training.

Agency shop agreement

Says employers may hire nonunion workers; employees are not required to join the union but must pay a union fee.

Union shop agreement

Says workers do not have to be members of a union to be hired, but must agree to join the union within a prescribed period.

Dumping.

Selling products in a foreign country at lower prices than those charged in the producing country. • Dumping is prohibited in U.S

Operational planning

Setting work standards and schedules necessary to implement the company's tactical objectives.

Process layout

Similar equipment and functions are grouped together.

Extrinsic rewards

Something given to you by someone else as recognition of good work. • Pay raises. • Praise. • Promotions.

Matrix organization

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. • Emphasis is on product development, creativity, special projects, rapid communication, and interdepartmental teamwork.

Enterprise zones

Specific geographic areas to which governments try to attract private business investment by offering lower taxes and other government support.

Objectives

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

Closed shop agreement

Specified workers had to be members of a union before being hired; outlawed in 19 47.

Time-motion studies

Studies of which tasks must be performed to complete a job and the time needed to do each task. • Efficiency became the standard for setting goals.

Modular layout

Teams of workers produce more complex units of the final product.

Technical skills

The ability to perform tasks in a specific discipline or department.

Expectancy Theory

The amount of effort employees exert on a specific task depends on their expectations of the outcome. Employees ask: • Can I accomplish the task? • What's my reward? • Is the reward worth the effort?

Goals

The broad, long-term accomplishments an organization wishes to attain.

Foreign direct investment (F D I)

The buying of permanent property and businesses in foreign nations.

I S O 9001

The common name given to quality management and assurance standards.

Balance of payments

The difference between money coming into a country (from exports) and money leaving the country (from imports) plus money flows from other factors such as tourism, foreign aid, military expenditures, and foreign investment.

Knights of Labor

The first national labor union; formed in 18 69. • Knights offered membership to all private working people but fell from prominence after a riot during a labor rally in Chicago.

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. • Facilitated by organizational conditions.

Conglomerate merger

The joining of firms in completely unrelated industries.

Vertical merger

The joining of two companies in different stages of related businesses.

Horizontal merger

The joining of two firms in the same industry. • Mergers between competitors must prove to the Federal Trade Commission (FTC) that the new combined company does not limit competition unfairly

Chain of command

The line of authority that moves from the top of the hierarchy to the lowest level.

Span of control

The optimum number of subordinates a manager supervises or should supervise. • When work is standardized, broad spans of control are possible. • The appropriate span narrows at higher levels of the organization. • The trend today is to reduce middle managers and hire better low-level employees.

Microeconomics

The part of economics study that looks at the behavior of people and organizations in particular markets.

Macroeconomics

The part of economics study that looks at the operation of a nation's economy as a whole.

Process manufacturing

The part of the production process that physically or chemically changes materials

Assembly process

The part of the production process that puts together components.

Intrinsic rewards

The personal satisfaction you feel when you perform well and complete goals • Pride in your performance. • Sense of achievement.

Transparency

The presentation of the company's facts and figures in a way that is clear and apparent to all stakeholders.

Problem solving

The process of solving the everyday problems that occur; less formal than decision making and usually calls for quicker action.

Adam Smith's Invisible hand

The process that turns self-directed gain into social and economic benefits for all. • As people improve their own situation in life, they help the economy prosper through the production of goods, services, and ideas and charitable donations. • However, poverty rate in U.S. remains high.

Collective bargaining

The process whereby union and management representatives form a labor-management agreement, or contract, for workers.

Lean Manufacturing

The production of goods using less of everything compared to mass production Compared to others, lean companies: • Take less human effort. • Take less manufacturing space. • Require less investment in tools. • Require less engineering time to develop a new product.

Intermittent process

The production run is short and the machines are changed frequently to make different products.

Supervisory management

Those directly responsible for supervising workers and evaluating their daily performance.

Limited liability

The responsibility of a business's owners for losses only up to the amount they invest; limited partners and shareholders have limited liability.

Economics

The study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals.

Informal organization

The system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority outside the formal organization.

Hawthorne effect

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

Computer-integrated manufacturing (C I M)

The uniting of computer-aided design with computer-aided manufacturing. • C I M is expensive, but it drastically reduces the time needed to program machines to increase production.

Computer-aided design (C A D)

The use of computers in the design of products.

Computer-aided manufacturing (C A M)

The use of computers in the manufacturing of products.

Exchange rate

The value of one nation's currency relative to the currencies of other countries. • High value of the dollar — Dollar is trading for more foreign currency; foreign products become cheaper. • Low value of the dollar — Dollar is trading for less foreign currency; foreign goods become more expensive. • Floating exchange rates — Currencies float in value depending on the supply and demand for them in the global market.

Form utility

The value producers add to materials in the creation of finished goods and services.

principle of motion economy

Theory that every job can be broken down into a series of elementary motions. • Scientific management viewed people largely as machines that needed to be properly programmed.

"The dismal science."

Thomas Malthus believed that if the rich had most of the wealth and the poor had most of the population, resources would run out.

Core competencies

Those functions that the organization can do as well as or better than any other organization in the world.

Civil Rights Act of 1964

Title VII prohibits discrimination in hiring, firing, compensation, apprenticeships, training, terms, conditions, or privileges of employment based on: • Race. • Religion. • Creed. • Sex. • National origin. • Age. • Sexual orientation. • Gender identity.

Balance of trade

Total value of a nation's exports compared to its imports over a particular period.

Congress of Industrial Organizations (C I O)

Union organization of unskilled workers; broke away from the A F L in 19 35 and rejoined in 19 55. In 19 55, C I O and A F L groups formed the A F L-C I O. • Today, A F L-C I O has affiliations with 55 unions and about 12.5 million members.

Primary boycott

When a union encourages both its members and the general public not to buy the products of a firm involved in a labor dispute.

Decentralized authority

When decision-making authority is delegated to lower-level managers more familiar with local conditions than headquarters management could be.

Centralized authority

When decision-making authority is maintained at the top level of management at the company's headquarters.• It can limit the flexibility to immediately respond to regional or local market changes and trends.

Trade surplus (favorable)

When the value of a country's exports exceeds that of its imports.

Cooling-off period

When workers in a critical industry return to their jobs while the union and management continue negotiations

Diversity in Franchising

Women own about half of U.S. companies, yet ownership of franchises is about 35 percent Minorities own less than 19 percent of businesses, yet over 30 percent of franchises are minority-owned.

Assembly line layout

Workers do only a few tasks at a time.

Strikebreakers

Workers hired to do the jobs of striking workers until the labor dispute is resolved; called scabs by unions.

Contingent workers

Workers who do not have the expectation of regular, full-time employment. • Includes part-time workers, temporary workers, seasonal workers, independent contractors, interns, and co-op students.

double taxation

a corporation pays income taxes on its earnings, and when dividends are distributed to stockholders, the stockholders pay taxes a second time on the corporate dividends they receive

Small Business Development Centers (S B D C)

are funded jointly by the federal government and individual states. • Help evaluate the feasibility of ideas, develop business plans, and complete the funding application—for no charge.

Low-context cultures

believe relationship building distracts from tasks.

affirmative action

employment activities designed to "right past wrongs" by increasing opportunities for minorities and women.

Communism

gov. owns all resources and businesses • An economic and political system in which the government makes almost all economic decisions and owns almost all the major factors of production. • Prices don't reflect demand, which may lead to shortages of items, including food and clothing. • Most communist countries today suffer severe economic depression.

Quid pro quo sexual harassment

involves threats like "Go out with me or you're fired." An employee's job is based on submission.

Hostile work environment sexual harassment

is conduct that interferes with a worker's performance or creates an intimidating or offensive work environment.

Community development financial institutions (C D F Is)

loan money and provide counseling, especially for lower-income communities.

Revenue - cost =

profit/loss

High-context cultures

require relationships and group trust before performance.

Herzberg's motivators

responsibility, achievement, and recognition.

Small Business Administration (S B A)

— A U.S. government agency that advises and assists small businesses by providing management training and financial advice and loans. • Started a microloan program in 1991 providing very small loans to small-business owners. • The program judges worthiness based on the borrowers' integrity and soundness of their business ideas.

Free-rein leadership

— Managers set objectives and employees are relatively free to do whatever it takes to accomplish those objectives. • Most successful when supervising professionals

Cooperative (Co-Op)

• A business owned and controlled by the people who use it—producers, consumers, or workers with similar needs who pool their resources for mutual gain. • Serve one billion members worldwide. • Members democratically control the business by electing a board of directors that hires professional management. • Other cooperatives are formed to give members more economic power as a group than they have as individuals, such as a farm cooperative.

Program Evaluation and Review Technique (P E R T)

• A method for analyzing the tasks involved in completing a given project, estimating the time needed to complete each task, and identifying the minimum time needed to complete the total project. • Developed in the 19 50s for constructing nuclear submarines.

Just-in-Time (J I T) Inventory Control

• A production process in which a minimum of inventory is kept on the premises and parts, supplies, and other needs are delivered just in time to go on the assembly line • To work effectively, the process requires excellent coordination with suppliers.

Conventional (C) Corporation

• A state-chartered legal entity with authority to act and have liability separate from its owners (its stockholders). • Enables many people to share in ownership.

Social Auditing

• A systematic evaluation of an organization's progress toward implementing socially responsible and responsive programs.

S Corporations

• A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships. • Have shareholders, directors, and employees, plus the benefit of limited liability. • Profits are taxed only as the personal income of the shareholders.

Drug Abuse and Drug Testing

• Alcohol is the most widely used drug, with 6.4 percent of full-time employees considered heavy drinkers. • Over 8 percent of workers aged 18-49 use illegal drugs and are more likely to be in workplace accidents • Drug abuse costs the U.S. economy $820 billion in lost work, health care costs, crime, traffic accidents, and other expenses • Over 60 percent of major companies drug test new employees.

Franchising Agreement

• An arrangement whereby someone with a good idea for a business (franchisor) sells the rights to use the business name and sell a product or service (franchise) to others (franchisees) in a given territory. • Can be formed as a sole proprietorship, a partnership, or a corporation.

Contrary to Malthus, some macroeconomists believe a large population can be a resource.

• An educated population is highly valuable. • Business owners provide jobs and economic growth for their employees and communities as well as for themselves.

Performance Appraisal

• An evaluation that measures employee performance against established standards in order to make decisions about promotions, compensation, training, or termination • A 360-degree review gives managers opinions from people at different levels to get a more accurate idea of the worker's abilities. • Continuous performance reviews allow workers to receive and give continuous, real-time feedback that help employees meet goals (or leave the company) faster.

May need outside advice in legal, tax, accounting, marketing, or finance

• An experienced lawyer who knows and understands small businesses can help with leases, contracts, partnership agreements, and protection against liabilities. • Consider an independent marketing research study. • Commercial loan officers and insurance agents are important resources.

Frederick Herzberg's Motivational Research

• Asked: What creates enthusiasm for workers and makes them work to full potential? • Herzberg found job content factors were most important to workers—workers like to feel they contribute to the company. • Job environment factors maintained satisfaction, but did not motivate employees.

Gantt Chart

• Bar graph showing production managers what projects are being worked on and what stage they are in at any given time. • Allows managers to determine which tasks are on time and which are behind, so that adjustments can be made to stay on schedule.

Fringe Benefits

• Benefits such as sick-leave pay, vacation pay, pension plans, and health plans that represent additional compensation to employees beyond base wages. • Health care has been the most significant increase in fringe benefit costs. • Fringe benefits include incentives like company cars, paid and unpaid sabbaticals, day care and elder care services, student loan debt payment, etc. • Soft benefits include on-site haircuts, free meals at work, concierge services, etc.

Reasons for growth of home-based businesses:

• Computer technology has leveled the playing field. • Corporate downsizing has led many to venture on their own. • Social attitudes have changed. • New tax laws have loosened restrictions on deducting expenses for home offices.

Building an Organization from the Bottom Up

• Create a division of labor. • Divide tasks through job specialization. • Set up teams or departments (departmentalization) • Allocate resources. • Assign specific tasks. • Establish procedures. • Develop an organization chart. • Adjust to new realities.

Flexible Manufacturing

• Designing machines to do multiple tasks so that they can produce a variety of products. • Machines and robots build, test, and package parts.

Generation X in the workplace

• Desire economic security but focus more on career security than job security • Good motivators as managers due to emphasis on results rather than work hours • Tend to be flexible and good at collaboration and consensus building. • Very effective at giving employee feedback and praise. • Gen Xers prefer e-mail and will choose meetings only if there are no other options.

Characteristics of organizations based on the principles:

• Employees have no more than one boss; lines of authority are clear. • Rigid organizations that often don't respond to customers quickly.

The Negative Consequences of Socialism

• Few incentives for businesspeople to take risks. • Brain drain — The loss of the best and brightest people to other countries. • Fewer inventions and less innovation because the reward is not as great as in capitalistic countries.

Adam Smith and the Creation of Wealth

• Freedom was vital to any economy's survival. • Freedom to own land or property and the right to keep the profits of a business is essential. • People will work hard if they believe they will be rewarded.

Challenges of home-based businesses:

• Getting new customers is difficult. • Managing your time requires self-discipline. • Work and family tasks are sometimes not separated. • Government ordinances may restrict your business. • Homeowner's insurance may not cover business-related claims.

Qualifications for S corporations

• Have no more than 100 shareholders. • Have shareholders that are individuals or estates, and who (as individuals) are citizens or permanent residents of the U.S. • Have only one class of stock. • Derive no more than 25% of income from passive sources. • If an S corporation loses its S status, it may not operate under it again for at least 5 years.

Progress in the Agricultural and Manufacturing Industries

• In the 18 00s, the agricultural industry led economic development. • Technology, like the harvester and cotton gin, made large-scale farming successful.• This led to fewer farmers with larger farms. • Industrialization in the 19th and 20th centuries moved jobs from farms to factories.• • As technology improved productivity, fewer workers were needed in factories.

Disadvantages of Corporations

• Initial cost. • Extensive paperwork. • Double taxation. • Two tax returns. • Size. • Difficulty of termination • Possible conflict with stockholders and board of directors

Management by Objectives (M B O)

• Involves a cycle of discussion, review, and evaluation of objectives among top and middle-level managers, supervisors, and employees. • Managers formulate goals in cooperation with everyone in the organization. • Need to monitor results and reward achievement.

1972 Equal Employment Opportunity Act (EEOA)

• It strengthened the Equal Employment Opportunity Commission (EEOC) by giving it broad powers. • Right to issue workplace guidelines for acceptable employer conduct. • Can mandate specific recordkeeping procedures. • The power of enforcement for its mandates. • Enforces affirmative action

Limited Liability Companies

• L L Cs are similar to an S corporation but without the special eligibility requirements • More than half of new business registrations in some states are L L Cs.

Considerations for moving facilities to a new location:

• Labor costs. • Availability of resources. • Time to market, including access to transportation and proximity to suppliers and customers .• Quality of life for employees. • Need to train or retrain local workforce.

factors of production:

• Land • labor • capital • entrepreneurship • knowledge

Limitations of Free Markets

• Leads to inequality as business owners and managers usually make more money and have more wealth than lower-level workers. • People may start to let greed drive them.

Advantages of Corporations

• Limited liability. • Ability to raise more money for investment. • Size. • Perpetual life. • Ease of ownership change. • Ease of attracting talented employees. • Separation of ownership from management.

Control Function

• Measures performance relative to planned objectives. • Rewards people for work well done. • Takes necessary corrective action.

Advantages of Partnerships

• More financial resources. • Shared management and pooled/complementary skills and knowledge. • Longer survival. • No special taxes.

Examples of ways to increase resources:

• New energy sources. • New ways of growing foods. • New ways of creating goods and services. • Nanotechnology, 3D printing, 4D technology

Violence and Bullying in the Workplace

• O S H A reports homicides account for 9 percent of all workplace deaths • Companies have taken action to deal with potential problems by using focus groups and restraining orders. • According to the Workplace Bullying Institute (W B I), bullying at work involves "repeated, health-harming mistreatment." • Workplace bullying involves psychological and verbal abuse and tends to target the strongest employees.

Management training includes:

• On-the-job coaching. • Understudy positions. • Job rotation. • Off-the-job courses and training.

Four Major Reasons Why People Take the Entrepreneurial Challenge

• Opportunity. • Profit. • Independence. • Challenge.

Most Common Training and Development Activities

• Orientation. • On-the-job training. • Apprenticeships. • Off-the-job training. • Online training. • Vestibule training. • Job simulation.

Advantages of global trade for small businesses

• Overseas buyers enjoy dealing with individuals. • They can usually begin shipping much faster. • They provide a wide variety of suppliers. • They can give more personal service and attention.

Public Sector Labor Unions

• Public sector union members work for governments as teachers, firefighters, police officers, etc. • Union membership in the public sector stands at 34 percent compared to 6.2 percent in the private sector.

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. • Passage in 2008 of Americans with Disabilities Amendments Act expanded protection. • 2011 saw regulations that widen the range of disabilities covered by the ADA and shift the burden of proof of disability from employees to employers.

Elton Mayo and the Hawthorne Studies

• Researchers studied worker efficiency under different levels of light. • Productivity increased regardless of light condition. • Researchers decided it was a human or psychological factor at play.

What Does It Take to Be an Entrepreneur?

• Self-directed. • Self-nurturing. • Action-oriented. • Highly energetic. • Tolerant of uncertainty.

Progress in Service Industries

• Since the mid-19 80s, the service industry generated almost all the increases in employment. • There are more high-paying jobs in service industries.

The Benefits of Socialism

• Social equality. • Free education. • Free health care. • Free child care. • Longer vacations. • Shorter work weeks. • Generous sick leave.

Mass Customization

• Tailoring products to meet the needs of individual customers • More manufacturers are learning to customize. • Mass customization exists in the service sector too.

Generation Z in the workplace:

• Tend to be cautious and security-minded. • Inspired to improve the world. • Are resilient and pragmatic. • Are tech-savvy. • Want to be a part of a community within the workplace. • Place emphasis on practical benefits, such as health care. • Gen Zers prefer face-to-face meetings and shy away from phone calls.

Millennials in the workplace:

• Tend to be impatient, skeptical, blunt, and expressive. • Are tech-savvy and able to grasp new concepts.] • Able to multitask and are efficient. • Are tolerant. • Place a high value on work-life balance. • Fun and stimulation are key job requirements. • Tend to job surf due to the state of the economy. • Millennials prefer to use technology to communicate, particularly through social media.

Executive Compensation

• The average total C E O compensation (salary, bonuses, and incentives) is $17.2 million, compared to just over $56,000 for the average worker. • C E O compensation used to be determined by a firm's profitability or increase in stock price. • Now, executives receive stock options and restricted stock that's awarded even if the company performs poorly.

Equity Theory

• The idea that employees try to maintain equity between inputs and outputs compared to others in similar positions. • Workers often base perception of their outcomes on a specific person or group. • Perceived inequities can lead to lower productivity, reduced quality, increased absenteeism, and even resignation.

Unemployment Rate.

• The number of civilians at least 16 years old who are unemployed and tried to find a job within the prior four weeks. • Real unemployment rate is comprised of those included in the standard unemployment rate plus those who are underemployed, discouraged, and marginally attached.

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. • HRM's role has grown because of: • Increased recognition of employees as a resource. • Changes in law that rewrote old workplace practices.

Networking

• The process of establishing and maintaining contacts with key managers in one's own organization and other organizations 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, for the best interests of the individual and the organization. • Steps in the selection process: 1. Obtaining complete application forms. 2. Conducting initial and follow-up interviews. 3. Giving employment tests. 4. Conducting background investigations. 5. Obtaining results from physical exams. 6. Establishing trial (probationary) periods.

Recruitment

• The set of activities used to obtain a sufficient number of the right people at the right time. • CEO's biggest challenge • Human resource managers use both internal and external sources to recruit employees. • Small businesses often make use of web sources like GlassDoor, Indeed, and LinkedIn to recruit employees.

• Gross Domestic Product (GDP).

• The total value of final goods and services produced in a country in a given year • As long as a company is within a country's border, their numbers go into the country's GDP (even if they are foreign-owned). • When the GDP changes, businesses feel the effect.

Maslow's Hierarchy of Needs explained

• Theory of motivation based on unmet human needs from basic physiological needs to safety, social, and esteem needs to self-actualization needs. • Believed motivation arises from need. • Needs that have already been met do not motivate. • If a need is filled, another higher-level need emerges.

Legal and Regulatory Forces Affecting Trading in Global Markets

• There's no global system of laws.• Laws may be inconsistent. • U.S. businesses must follow U.S. laws while conducting global business. • Organization for Economic Cooperation and Development (O E C D) and Transparency International fight to end corruption and bribery in foreign markets and have had limited success.

Training focuses on short-term skills, where as development focuses on long-term abilities.

• Three steps: 1. Assessing organizational needs and employee skills to determine training needs. 2. Designing training activities to meet identified needs. 3. Evaluating the training's effectiveness.

Fayol's Principles of Organization

• Unity of command. • Hierarchy of authority. • Division of labor. • Subordination of individual interests to the general interest. • Authority. • Degree of centralization. • Clear communication channels. • Order. • Equity. • Esprit de corps

Disadvantages of Partnerships

• Unlimited liability. • Division of profits. • Disagreements among partners. • Difficulty of termination

Pay Equity

• Women earn 81 percent of what men earn. • This disparity varies by profession, experience, level of education, age, location, and other factors. • Women earn almost 60 percent of the bachelor's and master's degrees awarded, and more doctoral degrees. • Women are underrepresented in managerial positions.

The Increase in the Number of Older Citizens.

•People aged 65 to 74 are currently the richest demographic group. •Retired people will be draining the economy of wealth due to Social Security.