Exam 2 Buis

Studies have indicated that partnerships are four times more likely to succeed than

sole proprietorships

The responsibility of the owner of a sole proprietorship for all of the debts of the business __ liability

unlimited

What are some of the disadvantages of a corporation?

- double taxation -costing of forming a corporation

Which of the following characteristics are needed to become a successful entrepreneur?

-action-oriented -intiative -tolerant of uncertainity

All organizations require the following

-capital -planning -information management

Supervisory managers are those directly responsible for

-workers daily perfermence -evaluating first line workers daily performance

Venture capitalists may ask for a large stake in your small business - as much as ___ percent which could cause you to lose control of the business.

60

LLC's are considered to have operational flexibility because while they must submit articles of organization, they are not required to:

Keep minutes or hold annual meetings

A __ partnership has partners who do not share in operating the business.

Limited

When there is one or more general partners and one or more limited partners, the firm is

Limited partnership

Franchises are expanding internationally to access additional __that have new customers and to increase their profit potential.

Market

Limited liability is considered an advantage of forming a LLC because:

Personal assests are protected

A unique government creation that looks like a corporation but is taxed like a sole proprietorship or partnership is called __ corporation

S

Bruce is meeting with his accountant to choose whether his LLC is to be taxed as a partnership or a corporation. This advantage of forming an LLC is called:

choice of taxation

When Fayol refers to subordination of individual interests to the general interest, he believes that workers are to think of themselves as a(n):

cooridination team

a Corporation is a legal __ with authority to act and have liability separate from its owners

entity

__ team is a group of experienced people from different areas of business who join together to form a managerial team with the skills needed to develop, make, and market a new product.

entrepreneurial

Individuals who possess such attributes as being self-directed, action-oriented, and tolerant of uncertainty can make excellent __ like bill gates and steve jobs

entrepreneurs

Which of Fayol's principles states that a manager should treat employees and peers with respect and justice?

equity

The __ cost of incorporating can be expensive because of the need for accountants and lawyers.

initial

Many franchises are expanding internationally because

it is expensive to adapt prodcuts

__ is finding the right information, keeping information in a readily accessible place, and making the information known to everyone in the firm.

knowledge managment

Don wanted to incorporate his business and liked the attributes of an S-corporation, however, he did not feel the eligibility requirements would work for his purposes. He is likely to choose to form a __ company

limited liability

a __ ___is an outline of the fundamental purpose and basic philosophy of an organization.

mission statment

LLCs can be taxed as __ or __ which allows the business owners to choose their method of taxation.

partnerships or corporations

A SWOT Analysis is a(n) Blank______ tool used to analyze an organization's strengths, weaknesses, opportunities, and threats.

planning

Tactical planning deals with

setting annual budgets and deciding on activities to meet strategic objectives

A business that is owned and managed by one person is

sole proprietorship

Tactical planning is usually done by

teams of lower level mangers -lower level mangers

Because of the poor publicity at a fellow franchise location, you notice that sales at your location have decreased. The impact of the poor publicity on your company is referred to as

the coattail effect

After working for a large auto manufacturing company for over 20 years, Silvia decided to start her own auto accessory store. While facing new challenges every day, Silvia enjoys being free to manage her company as she desires. This example illustrates

why people take the risks of entrepreneurship

Which are considered disadvantages of incorporating

- extensive paperwork -double taxation -intial cost

What are the advantages of the LLC form of organization

- flexible ownership rules -limited liability -choice of taxation

Which of these are advantages of a limited liability companies?

- flexible ownership rules -limited liability -choice of taxation

During strategic planning, top managers decide

- geographic areas in which to compete -which customers to serve -what products or services to sell

Which of the following tasks are associated with the leading function of management?

- guiding and motivating employees -clarifying policies to reach objectives

In terms of operating flexibility, what are three things that LLCs are not required to do?

- hold annual meetings -file written resolutions -keep minutes

Home-based franchises have many advantages

- low overheard expenses -relief from the stress of commuting

A mission statement outlines the organization's fundamental purposes. It should address which of the following?

- nature of the product -organizations self concept -customers need

Top management sets the vision for the organization and may work with others to establish a mission statement that outlines its

- product or service offering -self-concept

The Small Business Administration (SBA) is the U.S. government agency that advises and assists small businesses by

-providing managment training -proviinf loans -providing financial advice

is where one company purchases the property and obligations of another

acquisition

An advantage of the separation of ownership from management in corporations is that the company can raise money from investors but the investors

are not involved daily operations

An advantage of the separation of ownership from management in corporations is that the company can raise money from investors but the investors

are not involved in daily operations

According to Fayol, all workers should be able to reach each other quickly and easily through clear

communication channels

An organization structure in which decision-making authority is maintained at the top level of management is called a(n) ______ organization.

centralized

the rapidly evolving business environment requires the management of ___ in the organization to repond to it

change

When the actions of others with the same franchise as yours have an impact on your future growth and profitability, this is an example of __ effects

cottail

some companies create ___ structures because the sales department has geographic departments, production is organized by function, and marketing is organized by customer groups.

hybrid

In a general partnership, all partners share the responsibility for operating the business and assume __ for the buisness debts

liability

an s corporation has the liability protections of a corporation but is taxed

like a partnership or sole proprietorship

A small retail chain called Bike Away has found it cheaper and more efficient to have Paychex process their payroll and tax work. This is an example of:

outsourcing

Fill in the blank question. The present moment or the actual time in which an event takes place is called

real time

If you start and manage a landscaping business on your own, you have likely started a

sole proprietorship

The short-term statements about what is to be done, who will do it, and when are set by managers at lower levels of the organization are known as __ plan

tatical

the definition of __ __states: the process of developing detailed, short-term statements about what is to be done, who is to do it, and how.

tatical states

What happens if a borrower takes out a loan from a community development financial institution (CDFI) and fails to repay the loan?

the CDFI and theborrower renegotiate the loan with more favorable terms

straegic planning is done by __ level of mangmen

top

Centralized authority occurs when decision making is done:

top level mangment

when each worker is to report to only one bss it is an example of which foyl principle

unity of comand

The disadvantage of sole proprietorships is that any debts or losses incurred by the business are your debts because you and the business are legally one and you have

unlimited Liability

The disadvantage of sole proprietorships is that any debts or losses incurred by the business are your debts because you and the business are legally one and you have

unlimited liability

Select the characteristics of an entrepreneurial team that will be developing and marketing a new product

- a group of experienced people -members have complementary skills and are creative -each from different areas of buisness

When organizing a firm, top managers:

- allocate resources -assign tasks -establish procedures

The tasks managers perform to organize a firm to achieve its goals include

- allocating resources -establishing procedures -assigning taks

Among the hurdles small businesses must overcome in starting to operate globally are

- difficulty finding financing -bureauractic paperwork -understanding cultural differences

Rank the order in which members of a corporation are chosen in order to separate ownership from management. Start at the top of the managerial hierarchy.

- owners/stockholders elect board of directors -board of directors hire officers of the corporation -officers hire manager of the corporation -managers hire employees

Leaders in traditional organizations who direct employees are likely to

-provide preformance feedback -explain routines -give specific assignments

What are two characteristics that define goals?

-they are ling-term -they are broad

identify the principles of henri fayols book general and industrial mangment from the following

-unity of comand -divsion of labor -hierarchy of authority

__ is a management function that includes anticipating trends and determining the best strategies and tactics to achieve organizational goals and objectives.

.

the ___ ____ ____ is the job title of the person responsible for obtaining funds and planning budgets in an organization.

Chief financial officer

To keep track of daily sales, expenses, profits, inventory control, customer records, and payroll a small business needs a good

accounting system

A corporation is formally formed with

articles of incorporation and bylaws

If you want bankers or other investors to provide capital for your business venture, it is essential that you have a(n) Blank______ before you talk with them

buisness plan

In addition to the articles of incorporation, a corporation has _ ,which describe how the firm is to be operated from both legal and managerial points of view

bylaws

According to Fayol's order principle, ______ and ______ should be placed and maintained in the proper location.

capital; labor

the fayol principle called degree of ___ states that the amount of decision-making power vested in top management should vary by circumstances.

captialization

Which of Fayol's principles states that all workers should be able to reach others in the firm quickly and easily?

clear comunication channels

If a software company and a snack food company merged, it would be called __ merger

conglomerate

All consumers with unsatisfied wants and needs who have both resources and the willingness to buy are:

customers

is at the heart of all the management functions because it requires managers to choose among two or more alternatives.

decision making

The process of setting up individual departments to do specialized work is:

departmentalization

Included in the comprehensive business plan, the ______ plan provides five-year projections for income, expenses, and funding sources.

financial

One of the most important advantages of the sole proprietor form of ownership is that a business owner:

finds it easier to start and end the buisness

Many minority business owners prefer __ because it offers business connections and support.

franchise

Many minority business owners prefer a(n) because it offers business connections and support.

franchise

What term defines the broad, long-term accomplishments an organization wishes to attain?

goals

___ are long-term accomplishments an organization wishes to attain. ______ are short-term statements detailing how to achieve the organization's goals

goals; objectives

The Financial Plan part of a business plan should show how you plan to fund the business at various stages of the company's

growth

The principle of organizational structure where one person is at the top and the other managers are ranked sequentially from the top down is called:

heiracrchy

The organization structure that creates a chain of command with one person at the top and others in ranked order to the bottom is a

hierachy

Under which Fayol principle does it state that all workers should know to whom they report?

hierarchy of authority

The concept that states all workers should know to whom they report and that managers have the right to give orders is referred to as the

hierarchy;command

The joining of two firms in the same industry is __ merger

horizontal

When a soft drink company and a mineral water company merge and then are able to supply a variety of drinking products they have formed a(n) _ merger

horizontal

the __ cost of incorporating can be expensive because of the need for accountants and lawyers.

initial

Because investors want to be protected against any possible mishaps, it is also a good idea to include a description of __ coverage on the company background portion of the buisness plan

insurance

Using communications technology to link organizations and allow them to work together on common objectives is called:

interacting

A manufacturer who uses just-in-time inventory management shares information in real time with its supplier. This is an example of transparency between firms using __ technology

internet

The start-up costs of filing for incorporation are high because:

lawyers and accountants are needed to do the complex filings

Good ___ motivate workers and create an environment for them to motivate themselves.

leaders

the best way to define __ is all consumers with unsatisfied wants and needs who have both resources and the willingness to buy.

market

Fill in the blank question. Economies of scale work best in a company that makes large quantities of goods using

mass production

The result of two firms (usually corporations) combining to form one company is called a

merger

The result of two firms joining to form one is called

merger

When two firms join together to form one new company, it is called

merger

The definition of ______ states: specific, short-term statements detailing how to achieve the organization's goals.

objectives

Technical skills are the ability to

perform tasks such as filing tax forms or assembling a keyboard

__ is a key managment function because the success of the other functions depends on it

planning

UPS is an organizational partner that does much of the shipping for L.L.Bean by sharing information electronically in

real time

Which is a true statement about the principles of organization?

regardless of the buisness size the principles are similar

The line organization has direct lines of ______ that extend from the top manager to employees at the lowest level of the organization.

responsibility, communication, authority

For a business to grow, prosper, and create economic opportunity, many people have to be willing to invest money in it. An advantage of a corporation is its ability to raise money through the sale of

shares

Corporations can raise large amounts of money, take advantage of economies of scale, and hire experts in all areas of operation. This can be summarized as __ advantage

size

A productive corporate culture is one where there is mutual

trust

If your company's debts or damages are solely your responsibility you could be experiencing the disadvantage associated with owning a sole proprietorship

unilimited liability

A merger that joins two companies involved in different but related levels of an industry is a(n) _ merger

vertical

a ___ gives the organization a sense of purpose and a set of values that unite workers in a common destiny.

vision

a companys __is a broad explanation of why the organization exists and where it is trying to go.

vision

A mission statement should address an organization's

- self-concept -customers needs

Which of the following are part of a situation analysis (SWOT)?

- strengths -weakness opportunities

What four items are addressed in a business plan?

- the target market -the nature of the buisness -any competitive advantages the buisness has -qualifications of owners

What are two reasons a firm would use a SWOT analysis?

- to evaluate the strengths and wekaness of a company resources -to evaluate a companys ability to pursue market opportunities and defend against threats

Which three tasks are associated with the organizing function of management?

-Recruiting, selecting, training, and developing employees Preparing a structure showing lines of authority and responsibility Allocating resources, assigning tasks, and establishing proced

Which of following are true about the advantages and disadvantages of being a franchise owner

-While the upfront costs of a franchise may be steep, a franchise has a better chance of succeeding than starting a business from scratch -Having a nationally recognized name for your business in a franchise can help with marketing and awareness

Select the reasons why size is an advantage of the corporation

-build modern facilities -attract experts for hire - acquire the latest equipment

external customers include

-dealers -end user

Regardless of the size of the organization the principles of organizing include:

-deciding what work needs to be done -dividing up the tasks to be done -a hierarchy of authority

Which three tasks are associated with the management function known as organizing?

-designs the structure of the organization -places employees and resources where they will be effective in achieving the organization's goals -creates an organization chart showing lines of responsibility and authority

In which two situations is autocratic leadership effective?

-emergencies -working with new unskilled workers

Which three managers would be classified as middle management?

-general managers -division managers -plant managers

An organization that sets its vision hopes to achieve what two objectives?

-giving the organization a set of values -giving the organization a sense of purpose

Line managers are those who have the authority to:

-issue orders -enforce discipline -adjust to chnaging condition

the tasks of knowledge mangers include

-keeping information in a readily accessible place -finidng the right information -making information known to everyone in organization

Organizations reorganize to empower frontline workers to:

-let them know they are valuable assests to the orgination -serve customers more efficiency -demonstrate and trust to frontline workers

Identify the four ways to structure an organization.

-line organization -cross-functional self managed teams -mine and staff orginization -matrix-style organization

Since entrepreneurs can't compete with larger firms' pay and benefits, what are three ways they can motivate employees?

-maintain good employee relations -be respectful of employees opinions -provide more challenging opportunities to learn

Today's trend is to expand the span of control because:

-organization sav eby reducing the number f middle mangers -the owrkforce is better educated at all levles

Select those items considered fringe benefits that people working for a company are likely to receive, but a sole proprietor has to develop on his own

-paid sick or vacation leave time -paid health insurance -a pension plan

A cross-functional team that is working on the development of a new prosthetic device for amputees should include: Multiple select question.

-parts and suppliers for medical devices -amoutes who will use it -product desghners

Advantages of a positive corporate culture include:

-people whi enjoy working togeher to be productive -trust between employees -emphasizing servie to toher sespecially custoemrs

Management is the process used to accomplish organizational goals by the use of which four functions?

-planning -leading -organizing -controlling

The tasks of the Chief Financial Officer include

-planning budgets -collecting funds -obtaining funds

Community Development Financial Institutions (CDFI) have been successful because they

-provide counseling on improving cash flow -maintained financial discpline other leanders lack -offer counseling o marketing strategies

What three items are included in the "Management Team" section of a business plan?

-resumes of current and propsed executives -job descriptions of litsted positions -an organizationa; chart

Important decisions to be made while designing an organization include:

-span of control -departmentilization -degree fo centrilization

Control function of management

-takes corrective action when necessary -measures performance relative to the planned objectives and standards -rewards people for work well done

Select all attributes that make the initial cost of incorporating a disadvantage

-the high cost of hiring lawyers and accountants for the complex filing needed -high start-up costs associated with documentation

According to Fayol, all workers should be able to reach each other quickly and easily through clear

-unity of command -a hierarchy ofauhtority -managers can enforce their orders

An inexpensive marketing research study may help you determine which of the following?

-what is an effective strategy for reaching your target market -where to locate -whom to select as your target maket

The most important things investors want to know are what makes the product more desirable than what's already available and whether or not the product can be patented. In which section of the business plan should investors look to find this information?

Marketing plan

The owner of a sole proprietorship is responsible for developing any fringe benefits they have.

True

What is the "Executive Summary" component of a business plan?

a short description of the buisness aling with major goals and objectives

The ______ section of a business plan describes company operations to date (if any), potential legal considerations, and areas of risk and opportunity. This portion also summarizes the firm's financial condition, and includes past and current balance sheets, income and cash flow statements.

company background

The joining of firms in completely unrelated industries is __ merger

conglomerate

An important decision to be made while designing a responsive organization is about the size of the span of

control

the __ function of management measures performance relative to the planned objectives and standards, rewards people for work well done, and takes corrective action when needed.

control

A state-chartered legal entity with authority to act and have liability separate from its owners

corporation

Which Fayol principle states that the amount of decision-making power vested in top management should vary by circumstances?

degree of cetnralization

What is a good tactic for entrepreneurs to implement in order to keep a new company growing?

delegate authority to employees

Giving workers explicit instructions to meet the goals and objectives of the organization is __

directing

Once the department manager determines the work that needs to be done, the next step is dividing the tasks among department employees. This step is known as:

division of labor

according to fayol the __of __ principle states that functions are to be divided into areas of specialization.

division;labor

The owner of a small lawn-mowing business separates the job functions of the business into mowing, edging, and trimming so she can assign the tasks to different workers. What process is exemplified by this action?

divsion of labor

In economies of scale, a company buys raw materials in bulk so that the average cost of goods goes __ as the production levels increase

down

by developing __ ____ ___company can reduce its production costs if it can purchase raw materials in bulk; the average cost of goods goes down as production levels increase.

economies of scale

A good business plan takes a lot of time to write, but you have only a few minutes to convince readers not to throw it away. This is why your __executive , Correct Unavailable summary is very important.

executive

As organizations adopt empowerment, reduce the number of middle managers, and hire more talented and better educated lower-level employees the trend today is to Blank______ the span of control.

expand

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

external

Corporations must be large in size to benefit from the advantages of incorporating.

false

In a limited partnership, the liability of the limited partners is unlimited and personal assets are at risk.

false

Partnerships are less likely to survive than sole proprietorships

false

_____ organization structures respond to customer demands faster because its lower-level employees have authority and responsibility for making decisions

flat

Ed has decided to purchase and follow a business format by becoming a franchisee. ___ ___ he will sign gives him the right to use the business name and sell the products of the firm.

franchise agreement

Franchisors often use technology to meet the needs of both their customers and their_because technology makes communication faster and more widespread.

franchisees

Mark, Cal and Aidan have decided to form a business where all owners will share in operating the business and in assuming liability for the business debts. They are most likely forming ___ partnership

general

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

general partnership

the definition of __ ___ skills states: skills that involve communication and motivation; they enable managers to work through and with people.

human relations

A firm that has a marketing department organized geographically and a production process organized by function has which type of departmental structure?

hybrid

Match the characteristics to whether they describe a leader or a manager.

leaders -embrace and mange change -estalcishes corparte values and ethics managers -strive to produce order and stability -carries out the vision of the company

In an organization, Blank______ establish a vision and corporate values, while Blank______ carry out that vision.

leaders; managers

__is creating a vision for the organization and guiding, training, coaching, and motivating others to work effectively to achieve the organization's goals and objectives.

leading

An advantage of the corporate form of business is that limited liability allows it to

limit unlimited suns of money

The responsibility for a loss only up to the amount invested __ liability

limited

The responsibility for a loss only up to the amount invested is___ liability

limited

Stockholders' liability for losses only up to the amount they invest is called

limited liability

The form of business ownership called _______ protects the person's personal assets from the debts of the business.

limited liability

Those directly responsible for achieving the organization's production goals by issuing orders and enforcing discipline are ______ managers.

line

Methods of structuring organizations to produce large amounts of goods is ___ ___

mass production

Four organizational designs include: line, line and staff, ______, and cross-functional teams.

matrix

in a __organization, project managers are in charge of teams made up of members from several departments

matrix

If an organization temporarily borrows its specialists from different functional areas to accomplish a common project, it is implementing what type of organization?

matrix organization

Which level of management includes general managers, division managers, and branch and plant managers who are responsible for tactical planning and controlling

middle managment

the __ should address the organization's self-concept, its philosophy, long-term survival needs, customer needs, social responsibility, and the nature of the product or service.

missions statement

Using communications technology and other means to link organizations and allow them to work together on common objectives is referred to as

networking

__ is a short-term statement that details how to achieve the organization's goals.

objective

A(n) __ is a specific, short-term statement of how to achieve the organization's long-term _____.

objective : goals

What function of management designs the structures and systems in which everyone works together to achieve the organization's goals and objectives?

oragnizing

The principles of bureaucracy which brought consistent application of rules and procedures to organizations were proposed by

order

A key advantage of a home-based franchise is low __costs, which can be ongoing. These are the costs associated with rent, utilities, and other fixed costs

overhead

An LLC submits a written operating agreement, similar to __ agreement, describing how the company is to be operated.

partnership

Termination of a partnership is difficult without __ agreement

partnership

Directive leaders are often needed in organizations with workers who lack __ and __ needed to do the job

skills and experience

Wayne is starting a small business, but needs help with management training, financial advice, and loans. He should contact the

small business administration

The part of the management function of organizing that includes hiring, motivating, and retaining the best people is

staffing

Shareholders are not liable for the debts of a corporation beyond the money they invest in it by buying company

stock

a corporation can sell __ to anyone who is interested to raise more money for investment.

stock

Shareholders are not liable for the debts of a corporation beyond the money they invest in it by buying company __

stocks

The definition of ______ ______ states: the process of determining the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals.

strategic planning

The process of determining the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals is called

strategic planning

Under which Fayol principle do workers think of themselves as a coordinated team?

subordination of individual interest to the general interest

Under which Fayol principle do workers think of themselves as a coordinated team?

subordination of indivual interest to the general interest

In addition to unity of command, hierarchy of authority, and division of labor, Henri Fayol's organizational principles included __ of __ intrest

subordination:indiviual

the definition ___ management or first-line management states: managers who are directly responsible for supervising workers and evaluating their daily performance.

supervisory

In an organization, _____ establish a vision and corporate values, while Blank______ carry out that vision.

supervispry mangment

an advantage of partnerships is a longer __ rate than sole proprietorships, because they become more disciplined and the business's life is based on all the partners

survival

Which task is associated with the organizing function of management?

taking corrective action

The definition of ______ ______ states: skills that involve the ability to perform tasks in a specific discipline or department.

technical skills

Most entrepreneurs do not get their ideas from a flash of inspiration; they come more from their passions or looking at problems

true

In a sole proprietorship, any debts or damages incurred by the business are your personal debts and you must pay them. This disadvantage is known as

unlimited liability

Phil invests in new businesses in exchange for partial ownership in those businesses. Phil is a(n)

venture captialist

A merger between a soft drink company and an artificial sweetener maker could be considered __ merger

vertical

A temporarily networked organization made up of replaceable firms that join and leave as needed is called __ organization

virtual

Although there are many functions that are important in both the start-up and management phases of the business, what two functions are considered to be primary concerns?

aaccounting and marketing

a partnership ___ can spell out the requirements of terminating a partnership.

agreement

Understanding where to locate your business, who your target market is, and how to reach them, can be accomplished through

an inexpensive market research study

Many people do not like working for someone, so being your own __ is an advantage of sole proprietorships.

boss

A cross-functional team that includes suppliers, distributors, and customers goes beyond organizational

boundaries

Totals that are shown in the Capital Required portion of a business plan should be the same as the ones shown in the __ __ staement

cash flow