Intro to Business - Study Guide #3
How does a corporation compare to a sole proprietorship and a partnership?
A corporation is a separate legal entity and is responsible for its own debts and obligations; it has separate liability from an owner's personal assets.
How do motivation and work environment encourage "flow"?
A creative environment: Keeps employees intellectually engaged Removes distractions so employees can do their best work Makes managers responsible for sparking creativity Eliminates the arbitrary distinctions between administrative "suits" and more abstract "creatives" Engages customers as creative partners
How does incorporating diversity affect the workforce?
A diverse workforce helps companies offer a broad range of viewpoints that are necessary to compete in a world that is more globalized. Such variety in viewpoints promotes creativity in problem solving with improved results.
What are the characteristics of not-for-profit organizations and cooperatives?
A not-for-profit organization (or nonprofit organization) is a business that does not seek a profit. Like not-for-profits, cooperatives don't exist to maximize profit. Instead, any profits generated are reinvested into the cooperative to continue to maintain and improve the business.
How are the strategic plan, the corporate vision, and the mission statement defined for a business?
A strategic plan points an organization to where it wants to be in the future and identifies how it will get there. The first step in creating a strategic plan is to establish the corporate vision. Mission statements reflect the personality of a company.
How do managers ensure that a business is on track and moving forward?
By controlling or monitoring
How are most companies organized?
By vertical organization, horizontal organization, matrix organization, inverted organization, network organization
What are the various identifiable leadership styles and traits, and how do they affect business leadership?
Challenge the process, inspire a shared vision, model the way, exhibit emotional intelligence, and enable others to act. They dictate what style of dress is appropriate at work, the work environment itself, rules for getting ahead and being promoted, what is valued, who is valued, and even what kind of work/life balance is expected.
What are the advantages of a sole proprietorship?
Ease of formation Great control Considerable flexibility to act quickly No specific corporate records to keep or reports to file No tax return Income and expenses flow through the personal tax return
What are the best ways to create, manage, and participate in teams?
Effective teams must be designed and managed thoughtfully. The modern workplace includes workers spanning many generations, and it takes care and insight to make them mesh well on a single team.
How does employee status change through promotions, termination, and retirement?
Employees increase their level of responsibility through promotion—taking on a job that has more responsibility and stature in a company or a department. Termination is when companies permanently lay off workers due to poor performance or a discontinued use for their services. Retirement occurs when employees decide to stop working on a full-time basis or stop working altogether.
What are the disadvantages of a sole proprietorship?
Exposure to personal liability Limited loan amount Income and expenses are included in personal tax return Harder to be sold There are a lot of paperwork and time involved
What are the advantages of a partnership agreement?
Formalizes the relationship between partners Helps settle conflicts Discourage misunderstandings
What processes are involved in Human Resource Management (HRM)?
HRM encompasses every aspect of the "human" in a business, including hiring, training, motivating, evaluating, and compensating personnel. In addition to the traditional functions, HRM also works through many challenges in today's workplace, such as diversity issues, work/life preferences, and global business considerations.
What are the different types of mergers and acquisitions, and why do they occur?
Horizontal merger. Two companies that share the same product lines and markets and are in direct competition with each other. Vertical merger. Two companies that have a company/customer relationship or a company/supplier relationship. Product extension merger. Two companies selling different but related products in the same market. Market extension merger. Two companies that sell the same products in different markets. Conglomeration. Two companies that have no common business areas merge to obtain diversification.
What are the disadvantages of a partnership agreement?
If a mistake or injustice is made, it can prejudice one or more partners
How is a corporation formed?
It is legally formed under state laws
What are the main theories of motivation, and how are they applied to the workforce?
Maslow's hierarchy of needs - suggests that humans have a hierarchy of needs, and that primary needs are met first, before higher-level needs are addressed. McClelland's "three needs" theory - there are three main motivators: 1. The need for achievement—to accomplish something difficult on your own 2. The need for affiliation—to form close personal relationships 3. The need for power—to be able to control the behavior of others Herzberg's motivator-hygiene theory - two factors influence a person's motivation: 1. Hygiene factors are factors such as a safe working environment, proper pay and benefits, and positive relationships with co-workers. 2. Motivator factors represent the second set of factors in Herzberg's theory.
Why do managers need tactical plans, operational plans, and contingency plans?
Middle management needs to generate tactical plans to carry out the goals of a company. The specifics of carrying out tactical plans are operational plans. Contingency planning is a set of plans that ensures that an organization will run as smoothly as possible during an unexpected disruption.
How have motivational theories and industrial psychology changed the work environment since the early twentieth century?
Modern workplaces are influenced by studies that have shown that today's workers value autonomy, mastery, and purpose more than they do economic rewards.
What is the significance of organizing?
Organizing is the process of structuring the capital, personnel, raw materials, and other resources to carry out a company's plans in a way that best matches the nature of the work.
What are the advantages of a partnership?
Share of initial and ongoing finances, management responsibilities, and workload More time available to increase sales, market the business, and generate income More interest in the profitability More motivation to succeed Coverage for vacations, illness, or personal issues Complementary skills
What are the disadvantages of a partnership?
Share of profit and control Different habits and styles Desire to take the business in a different direction
What are the levels of management?
Top Middle First-line
Contrast a C corporation, an S corporation, and a limited liability corporation
Unlike C corporations, S corporations do not pay corporate income taxes. Instead, the shareholders in an S corporation owe income taxes based on their proportionate share of business profits they receive and pay taxes through their own individual tax returns. However, S corporations must file a corporate tax return every year.
A good strategic plan a. determines the best way to accomplish goals of an organization. b. is specific and tactical. c. concentrates only on what is going on inside an organization, not outside an organization. d. is wide ranging.
a
A horizontal organization requires a. more use of collaborative teams. b. a strict chain of command. c. a tall organization chart. d. None of the above.
a
Amit Patel, as part of his compensation package, was offered an opportunity to purchase company shock at a later date but valued at the current, lower price. Which of the following is Amit given? a. Stock option b. Stock ownership plan c. Stock purchase plan d. None of the above
a
If Mom's outdoor clothing store combined with Dad's camping equipment store to form Mom & Dad's Outdoor Store, which of the following best describes the type of transaction that occured between the two companies? a. A vertical merger b. A product extension merger c. A horizontal merger d. A conglomeration
a
Jackson Eats is a partnership owned by Jesse and Robert Jackson. They need additional capital to expand to a new location, so they have decided to bring in Sean, who will not only contribute some capital but will also manage the new restaurant. Sean would best be considered a(n): a. general partner. b. limited partner. c. owner. d. None of the above.
a
Maslow's hierarchy of needs a. is a theory of why people are motivated. b. uses three factors to compute the motivation of a person in a situation. c. was developed to address the Hawthorne effect. d. was displaced when Theory Z was introduced.
a
SWOT analysis a. is an important part of developing a strategic plan. b. is one type of contingency planning. c. helps translate the tactical plan in instructions for employees. d. leads to an effective mission statement.
a
The Vroom model of motivational theory uses a. expectancy, instrumentality, and valence. b. Rorschach inkblot testing. c. openness, consciousness, extraversion, and neuroticism. d. visualization that leads to daydreaming and lost time.
a
The performance review process often included all of the following except a(n): a. evaluation of the employee's social standing in the work environment. b. assessment of performance as compared to defined standards. c. specific feedback on how to enhance positive performance. d. clear definition of expectations from the employee.
a
Theory Z is different than Theory X and Theory Y because a. it relies heavily on collaborative decision making. b. it is authoritarian and hard line. c. it is often seen in mass-manufactoring settings. d. managers believe people will seek out responsibility.
a
When interviewing candidates for an administrative assistant's job, which of the following interview questions is legally inadvisable? a. What church do you attend? b. What are your strengths and weaknesses? c. What are your hobbies? d. Who do you think will win the Super Bowl
a
Which is a benefit of cooperatives? a. The group power enables them to negotiate for goods and services at a favorable price. b. They are exempt from paying federal and state taxes. c. They are established to serve the public interest rather than make a profit. d. They provide services to peoplpe with a variety of interests and needs.
a
contingency planning
a set of plans that ensures that an organization will run as smoothly as possible during an unexpected disruption
technical skills
abilities and knowledge that enable employees to carry out the specific tasks required of a discipline or a department
SWOT analysis
analysis of strengths, weaknesses, and anticipated changes
visionary leader
are able to inspire others, believe in their own vision, and move people toward a shared dream
affiliative (or laissez-faire) leader
are more advisory in style, encouraging employees to contribute ideas rather than specifically directing their tasks
James Rodriguez wants to spend more time at home with his two-year-old granddaughter and is considering leaving the company. He could receive three month's pay and the same retirement package he will be eligible for in three years' time if he leaves now. This type of offer is called a(n) a. independent consultant status. b. worker buyout. c.retirement. d. compressed workweek
b
Julius knows how to identify the key problems on a project, examine alternatives, and implement a plan of action. His last performance review mentioned this when it read as follows: a. "Julius shows very polished interpersonal skills." b. "Julius has demonstrated excellent decision-making skills." c. "Julius exhibits advanced conceptual skills." d. "Julius has marketable skills that contribute to a project's success"
b
Shauna is the sales manager for a regional chain of bookstores. Shauna reports to the executive vice president of sales and marketing, and each sales manager reports to Shauna. Shauna would be considered a a. top manager. b. middle manager. c. first-line manager. d. Both b and c
b
Suzanne wanted to invest in her friends' new business, but cannot be involved in the daily management and activities of the business. If the business is structured as a partnership, Suzanne would be that kind of partner? a. A general partner b. A limited partner. c. A managing partner d. An unlimited partner
b
The AFL-CIO, the UAW, and the Teamsters are examples of a. illegal organizations. b. labor unions. c. labor relations. d. union locals.
b
The Q12 survey shows a. whether you have the personality to be succesful motivator. b. almost three-quarters of U.S. employees are not engaged at work. c. whether the work environment is set up to support the state of flow. d. whether extrinsic or intrinsic motivators are influential.
b
The four primary processes of management are a. planning, optimizing, leading, and controlling. b. organizing, controlling, planning, and leading c. prioritizing, leading, controlling, and organizing. d. planning, leading, organizing, and deciding.
b
The management team of Company A decides to offer to buy the stock from all the shareholders of Company B at a higher price than current market value. Company A is launching a a. proxy fight. b. tender offer. c. friendly acquisition d. friendly takeover
b
The organization you work for just hired a new CEO. Within the first week in her new position, the CEO drafted a memo for the board and members of senior management that defined the purpose of the business, as well as the basic goals and philosophies of the business. This document serves as a draft of a new a. vision. b. mission statement. c. goals and objectives statement. d. tactical plan.
b
The seven basic tools for monitoring a business include all of the following except a. Pareto analysis. b. Monte Carlo statistical simulations. c. scatterplots. d. cause-and-effect diagrams.
b
Which one of the following is NOT a reason to hire a contingent worker? a. To fill in for absent employees. b. Not enough office space for a full-time employee. c. To supplement staff during particularly busy times. d. To evaluate how a person performs on the job before hiring permanently.
b
With creative and abstract work, studies find that the principle motivators are a. financial incentives. b. autonomy, mastery, and purpose. c. competitive push for advancement. d. reduction in hours involved at work.
b
cooperatives
businesses that are owned and governed by members who use its products or services, not by outside investors
An example of Herzberg's hygiene factors is a. feeling of belonging. b. creativity. c. safe working environment. d. respect.
c
Extrinsic motivators include such things as a. knowing your supervisor cares about you. b. believing your opinion matters. c. knowing there is a large financial bonus for good work. d. working for a company whose mission is meaningful to you.
c
Teams improve creativity a. when the phenomenon of groupthink sets in. b. no matter what the makeup of the team. c, when best practices for selecting the team members and roles are followed. d. when individuals work with others who are just like them.
c
The controlling function of management is best described as a. keeping employees in line. b. watching employees carefully by monitoring e-mail and phone usage. c. measuring performance to make sure company plans are on track. d. All of the above
c
Trudy and Yvonne have come together to run Salford Children's Center, a place where parents on welfare can drop their children off to be cared for while the parents are looking for work. The center receives income from state and federal grants, and whatever is left over is put back into the center for additional resources. Salford Children's Center would best be described as a(n): a. partnership b. LLC c. not-for-profit organization d. sole proprietorship
c
Which of the following are actions that management can take when threatened with disgruntled employees walking out on their jobs? a. Hiring strikebreakers. b. Boycotting employees. c. Imposing a lockout. d. Both a and c.
c
What skills do managers need to be successful?
conceptual, technical, time management, interpersonal, and decision-making
Human resource planning consists of two main focuses: a. hiring and firing. b. creating job descriptions and creating job specifications. c. managing diversity and the relationship with unions. d. profiling the current workforce and forecasting future demand.
d
If you were concerned about protecting personal liability but still wanted to flow income and losses through to your personal taxes, which form of corporate structure would be best? a. A C corporation. b. A sole proprietorship c. A general partnership d. An LLC
d
Omar and Sam are physical therapists who work together. Their office is on the first floor of an apartment building Omar owns. They need protection of their personal assets. Which business structure would best suit their company? a. A general partnership b. A sole proprietorship c. A not-for-profit organization d. An LLC
d
Types of training required in some careers include a. an on-the-job mentor. b. time spent as an apprentice to a master. c. programmed learning. d. All of the above
d
Virtual teams are teams that a. are incomplete and need to be dissolved. b. communicate only through face-to-face meetings. c. primarily focus on technology-based projects. d. work in different physical locations.
d
When employees are motivated, a. they often take more time to be with their families. b. they often move on to other companies. c. net proftis tend to decline. d. they are more productive and creative.
d
Which of the following are benefits companies have experienced from employing a diverse workplace? a. Cultural differences add more perspectives and promote better problem solving. b. They fulfill expected affirmative action standards. c. Companies become more competitive in the global marketplace. d. All of the above
d
Which of the following is a reason for creating a new business as a C corporation? a. The owner's personal assets would be protected. b. The owner could raise greater sources of funds by selling shares of ownership. c. The corporation would continue to exist even if the owner left the business d. All of the above
d
Which would not be something that might describe a company's organization structure? a. Vertical b. Inverted c. Network d. Spiral
d
Why might a potential business owner want to establish a business as a sole proprietorship? a. The owner can use personal assets to satisfy any business liabilities. b. The owner can take into consideration the opinions of other business owners. c. The owner can generate a separate tax return for business expenses. d. The owner is not required to file legal paperwork to start up the business
d
democratic leader
delegates authority and involves employees in the decision-making process
operational plan
depend on daily or weekly schedules and focus on specific departments or employees. In an operational plan, first-line managers precisely determine the process by which tactical plans can be achieved.
hierarchy of needs
describes motivation as a response to a progressive set of needs for physiology, safety, belonging, esteem, and self-actualization
interpersonal skills
enable managers to interact with other people to motivate them
extrinsic motivators
external factors that generate engagement with the work, such as pay or promotion
unlimited liabilities
if business assets aren't enough to pay business debts, then personal assets can be used to pay the balance
total quality management (TQM)
integrated approach that focuses on quality from the beginning of the production process up through the final monitoring to detect and correct problems
intrinsic motivators
internal drives that come from the actual interest of the work or from a sense of purpose and value in the work being done
autocratic leader
makes decisions without consulting others
What are the objectives, structures, and future of labor unions in the global business environment?
objectives - began as a means to protect workers from the terrible injustices employers inflicted on their workers in the nineteenth century during the U.S. Industrial Revolution, and now to fight for better working conditions and employee rights structures - a group of workers must either have their employer voluntarily recognize them as a group or have a majority of workers form a bargaining unit for union representation. When a union forms, workers join and pay membership dues. In addition to dues, some unions create strike funds that help support workers should they strike. future - unions have begun to build alliances with unions in other countries and will need to transform themselves to survive the effects of globalization
double taxation
occurs when taxes are paid on the same asset twice
Theory Z
offers long-term employment with an emphasis on individual responsibility
How are employees trained?
orientation program - to integrate a new employee into the company. on-the-job training - employees learn skills by performing them apprentice training program - trains individuals through classroom or formal instruction and on-the-job training programmed learning approach - employee is asked to perform step-by-step instructions or respond to questions Simulation training - provides realistic job-task training Online training - allows employees to take college classes on the Internet at their convenience Electronic Performance Support Systems (EPSSs) - provide employees with information and training when they need it Managerial training - focuses on leadership, communication, teamwork, and relationship building skills management development programs - prepare management trainees to become managers within an organization off-the-job training and development techniques - require employees to participate in outside seminars, university-conducted programs, and corporate universities
closed corporation
owned, in most cases, by the company's founders, a management team, or a group of private investors
How are employees evaluated?
performance appraisal - evaluation of an employee's performance that gives feedback about how well an employee is doing, as well as where changes and improvements are needed performance management - an approach that combines goal setting, performance appraisals, and training and development into a unified and ongoing process
horizontal organization
power is distributed, with many people organized in teams or groups
Hawthorne effect
regardless of the experimental changes made, the production of the workers improved
Theory X
suggests a view of people as inherently disliking work and wanting to avoid it
expectancy theory
suggests that an individual's motivation can be described by the relationship between three psychological forces
Theory Y
suggests that people view work as being as natural as playing and resting
three needs theory
suggests there are three main motivators: 1. The need for achievement—to accomplish something difficult on your own 2. The need for affiliation—to form close personal relationships 3. The need for power—to be able to control the behavior of others
conceptual skills
the ability to think abstractly and to picture an organization as a whole and understand its relationship to the remainder of the business community
strategic plan
the main course of action created by top-level managers that sets the approach for achieving the long-term goals and objectives of an organization
vertical organization
the power belongs to a few, and most people are in positions where they obey a supervisor
controlling
the process by which managers measure performance and make sure the company's plans and strategies are being or have been properly carried out
What are the main components of compensating and scheduling employees?
time and effort
motivator-hygiene theory (or two factor theory)
two factors influence a person's motivation: 1. Hygiene factors are factors such as a safe working environment, proper pay and benefits, and positive relationships with co-workers. 2. Motivator factors represent the second set of factors in Herzberg's theory.
