Business 198
E-Commerce
Buying & selling of goods over internet
Production
Creation of finished goods & services using factors of production: land, labor, capital, entrepreneurship, & knowledge
Enabling
Giving workers education & tools they need to make decisions
Transparency
Presentation of a company's facts & figures in a way that is clear & apparent to all stakeholders
Factors of Production
Resources used to create wealth; land, labor, capital, entrepreneurship, & knowledge
Merger
Result of 2 firms joining to form 1 company
Mixed Economies
Some allocation of resources is made by market & some by government
Socialism
Some basic businesses should be owned by government
Limited Liability Partnership
Speciality partnership
Master Limited Partnership
Speciality partnerships; avoids corporate income tax
Objectives
Specific, short-term statements detailing how to achieve organization's goals
Form Utility
Value producers add to materials in creation of finished goods & services
Oligopoly
A few competitors (ex autos, beverages) (a couple dozen competitors)
Job Specifications
A summary of minimal education & skills needed to do a particular job
General Partnership
All owners share in operating business & in assuming liability for debts. Has unlimited liability & active in managing
Stakeholders
All people who stand to gain or lose by policies & activities of a business & whose concerns business needs to address
Profit
Amount of $ a business earns above & beyond what it spends for salaries & other expenses needed to run operation
Standard Of Living
Amount of goods & services people can buy with $ they have
Productivity
Amount of output you generate given amount of input, such as # of hours you work
Profit Sharing Plans
Amount over certain % of profit is split between the employees
Corporation
A legal entity with authority to act & have liability apart from its owners
SWOT Analysis
A planning tool used to analyze an organizations strengths, weaknesses, opportunities, & threats
Continuous Process
A production process in which long production runs turn out finished goods over time
Intermittent Process
A production process in which production is short & machines are changed frequently to make different products
Six Sigma Quality
A quality measure that allows only 3.4 defects per million opportunities
Depression
A severe recession
Operations Management
A specialized are in management that converts or transforms resources (including human resources) into goods & services
Job Analysis
A study of what employees who hold various job titles do
Organization Chart
A visual device that shows relationships among people & divides organization's work; shows who reports to whom
Goals
Broad, long-term accomplishments an organization wishes to attain
Stock Options
Certificate for the right to buy the stock at certain amount per share
Risk
Chance an entrepreneur takes of losing time & $ on a business that may not prove profitable
Decision Making
Choosing among 2 or more alternatives
External Customers
Dealers, who buy products to sell to others, & ultimate customers (or end users), who buy products for own personal use
Flexible Manufacturing
Designing machines to do multiple tasks so that they can produce a variety of products
Market Price (Equilibrium Price)
Determined by supply & demand, this is negotiated price
Departmentalization
Divides organizations into separate units
Recovery
Economy stabilizes & starts to grow, leads to boom
Training & Development
Efforts to improve productivity by increasing an employee's ability to perform
Staff Personnel
Employees who advise & assist line personnel
Compressed Work Week
Employees work full # of work hours, but in fewer than standard # of days
Monopoly
Essentially 1 company (ex. DeBeers, Microsoft) (1 company 88% of sales)
Networking
Establishing & maintaining contacts with key managers in & out of organization & using those contacts to develop relationships
Technology
Everything from phones & copiers to computers, medical imaging devices, personal digital assistants, & various software programs that make business processes more effective, efficient, & productive
Fiscal Policy
Federal governments efforts to keep economy stable by increasing or decreasing taxes or government spending
Knowledge Management
Finding right info, keeping info in a readily accessible place, & making info known to everyone in firm
Development
Focuses on long-term skills
Training
Focuses on short-term skills
Participative (Democratic) Leadership
Leadership style that consists of managers & employees working together to make decisions
Autocratic Leadership
Leadership style that involves making managerial decisions without consulting others
Free-Rein Leadership
Leadership style that involves managers setting objectives & employees being relatively free to do whatever it takes to accomplish those objectives
Gross Domestic Product (GDP)
Total value of all final goods & services produced in a country in a given year
Goods
tangible products such as computers, food, etc
Critical Path
Sequence of tasks that takes longest time to complete
Hierarchy
Sequential ordering
Salary
Set amount of pay
Recruitment
Set of activities for obtaining right # of qualified people at right time
Monopolistic Competition
Several competitors (ex. clothing industry) (hundreds of competitors)
Fringe Benefits
Sick leave, vacation pay, pension, & health plans that provide additional compensation to employees beyond base wages
Limited Liability Companies (LLC)
Similar to S Corporation without eligibility requirements; very popular
Technical Skills
Skills that involve ability to perform tasks in a specific discipline or department
Conceptual Skills
Skills that involve ability to picture organization as a whole & relationship among its various parts
Human Relations Skills
Skills that involve communication & motivation; enable managers to work through & with people
Job Description
Specifies objectives of job, type of work, responsibilities & duties, working conditions & relationship to other jobs
Demography
Statistical study of human population with regard to its size, density, & other characteristics such as age, race, gender, & income
Recession
2 or more consecutive quarters of decline in GDP
Partnership
2 or more people legally agree to become co-owners of a business
Gantt Chart
A bar graph that shows what projects are being working on & how much has been completed
ISO 14000
A collection of best practices for managing an organizations impact on environment
Materials Requirement Planning (MRP)
A computer-based operations management system that uses sales forecasts to make sure parts & materials are available when needed
Acquisition
1 company's purchase of property & obligations of another company
Limited Partnership
1 or more general partners & 1 or more limited partners
Limited Partner
An owner who invests money in business by enjoys limited liability
Planning
A management function that includes anticipating trends & determining best strategies & tactics to achieve organizational goals & objectives
Organizing
A management function that includes designing structure of organization & creating conditions & systems in which everyone & everything works together to achieve organization's goals & objectives
Staffing
A management function that includes hiring, motivating & retaining best people available to accomplish company's objectives
Controlling
A management function that involves establishing clear standards to determine whether o not an organization is progressing toward its goals & objectives, rewarding people for doing a good job, & taking corrective action if they are not
Program Evaluation & Review Technique (PERT)
A method for analyzing tasks involved in completing a given project
Enterprise Resource Planning (ERP)
A newer version of MRP, combines computerized functions into a single comprehensive & integrated software application Exs. Oracle, SAP, Peoplesoft
International Organization for Standardization (ISO)
A worldwide federation of national standards bodies
Capitalism
All or most of land, factories, stores, owned by individuals, not government & operated for profit
Cafeteria Style Benefits
Allow employees to choose benefits they want (up to a certain dollar amount)
Halo/Horn Effect
Allowing performances in specific areas to unfairly influence overall performance evaluation
Franchise Agreement
An arrangement whereby someone with a good idea for a business (franchisor) sells rights to use business name & sell product or service (franchise) to others (franchisees) in a given territory
Database
An electronic storage file for info
Vision
An encompassing explanation of why organization exists & where its headed
Performance Appraisal
An evaluation that measures employee performance against established standards in order to make decisions about promotions, compensation, training, or termination
Inverted Organization
An organization that has contact people at top & CEO at bottom of organization chart
Nonprofit Organization
An organization whose goals do not include making a personal profit for its owners or organizers
Mission Statement
An outline of fundamental purposes of an organization
Brainstorming
Coming up with as many solutions to a problem as possible in a short period of time with no censoring of ideas
ISO 9000
Common name given to quality management & assurance standards
Contrast Effect
Comparing 1 employee to another
Microeconomics
Concerns behavior of people & organizations in markets for particular goods or services
Macroeconomics
Concerns nations economy as whole
Quality
Consistently producing what customer wants while reducing errors before & after delivery
Outsourcing
Contracting with other companies (often in other countries) to do some or all functions of a firm, like its production or accounting tasks
Leading
Creating a vision for organization & guiding, training, coaching, & motivating others to work effectively to achieve organization's goals & objectives
Quality of Life
General well-being of a society in terms of its political freedom, natural environment, education, health care, safety, amount of leisure & rewards that add to satisfaction & joy that other goods & services provide
Similar-To-Me Effect
Generosity to those you feel are more like you
Flextime Plan
Gives employees some freedom to choose which hours to work as long as they work required #
360-Degree Review
Gives managers opinions from people at different levels to get a more accurate idea of worker's ability
Empowerment
Giving frontline workers responsibility authority, freedom, training, & equipment they need to respond quickly to customer requests
Communism
Government makes almost all economic decisions & owns almost all factors of production
Cross-Functional Self-Managed Teams
Groups of employees from different departments who work together on a long-term basis
Top Management
Highest level of management, consisting of president & other key company executives who develop strategic plans
Economics
How society employs resources to produce goods
Contingent Workers
Include part time & temporary workers, seasonal workers, independent contractors, interns, etc
Internal Customers
Individuals & units within firm that receive services from other individuals or units
Vertical Merger
Joins 2 firms in same industry & allows them to diversify or expand their products (competitors)
Job Sharing
Lets 2 or more part-time employees share on a full-time job
Middle Management
Level of management that includes general managers, & branch & plant managers who are responsible for tactical planning & controlling
Chain of Command
Line of authority
PMI
Listing all pluses for a solution in 1 column, all minuses in another, & implications in a 3rd column
Monetary Policy
Management of money supply & interest rates by Federal Reserve Band (Fed)
Mentors
Managers who supervise, coach & guide selected lower-level employees by acting as corporate sponsors
Supervisory Management
Mangers who are directly responsible for supervising workers & evaluating their daily performance
Gain-Sharing Plans
Manufacturing version of profit sharing plan
Climate Change
Movement of temperature of planet up or down over time
Identity Theft
Obtaining of individuals' personal info, such as Social Security & credit card #s, for illegal purposes
Loss
Occurs when a business's expenses are more than its revenues
Span of Control
Optimal # of subordinates a manager supervises or should supervise
Wide (Flat) Organization
Organization has large span of control
Narrow (Tall) Organization
Organization has small span of control
Sole Proprietorship
Owned & usually managed by 1 person
Process Manufacturing
Part of production process that physically or chemically changes materials
Assembly Process
Part of production process that puts together components
Bonus Plans
Pay above normal amount
Piecework System
Pay based on # of pieces completed
Commission Plans
Pay based on percentage of sales price (usually sales people)
Hourly Wage
Pay changes based on # of hours
Business Cycles
Periodic rises & falls that occur in economies over time
Human Resource Management (HRM)
Process of determining human resource needs & then recruiting, selecting, developing, motivating, evaluating, compensating, & scheduling employees to achieve organizational goals
Strategic Planning
Process of determining major goals of organization & policies & strategies for obtaining & using resources to achieve those goals
Tactical Planning
Process of developing detailed, short-term statements about what is to be done, who is to do it, & how it is to be done
Selection
Process of gathering info & deciding who should be hired (under legal guidelines) to fit needs of organization & individuals
Contingency Planning
Process of preparing alternative courses of action that may be used if primary plans don't achieve organization's objectives
Facility Location
Process of selecting a geographic location for a company's operations
Operational Planning
Process of setting work standards & schedules necessary to implement company's tactical objectives
Problem Solving
Process of solving everyday problems that occur. Less formal than decision making & usually calls for quicker action
Management Development
Process of training & educating employees to become good managers & tracking progress of their skills over time
Management
Process used to accomplish organizational goals through planning, organizing, leading, & controlling people & other organizational resources
Lean Manufacturing
Production of goods using less of everything compared to mass production
Just-In-Time (JIT) Inventory Control
Production process in which a minimum of inventory is kept & parts, supplies & other needs are delivered just in time to go on assembly line
Supply
Quantities of products businesses are willing to sell at different prices
Demand
Quantities of products consumers are willing to buy at different prices
Restructuring
Redesigning an organization so it can effectively & efficiently serve its customers
Invisible Hand
Self-directed gain leads to social & economic benefits for whole community
Business Environment
Surrounding factors that either help or hinder development of businesses
Mass Customization
Tailoring products to meet needs of individual customers
Production Management
Term used to describe all activities managers do to help their firms create goods
Purchasing
The function that searches for high quality material resources, finds best suppliers & negotiates best price for goods & services
Greening
Trend toward saving energy & producing products that cause less harm to environment
S Corporations
Unique government creation that looks like corporation by its taxed like sole proprietorships & partnerships (no double taxation)
Conglomerate Merger
Unites firms in completely unrelated industries in order to diversify business operations & investments
Computer-Integrated Manufacturing (CIM)
Uniting of computer-aided design with computer-aided manufacturing
Perfect Competition
Unlimited amount of competitors (ex. agriculture) (thousands of competitors)
Computer-Aided Design (CAD)
Use of computers in design of products
Computer-Aided Manufacturing (CAM)
Use of computers in manufacturing of products
Centralized Authority
When decision-making is concentrated at top level of management
Decentralized Authority
When decision-making is delegated to lower-level managers & employees more familiar with local conditions than headquarters
Organizational (Corporate) Culture
Widely shared values within an organization that foster unity & cooperation to achieve common goals
Entrepreneur
a person who risks time & money to start & manage a business
Conventional Corporation
a state-chartered legal entity with authority to act & have liability separate from its owners (its stockholders)
Services
intangible products (i.e. products that can't be held in your hand) such as education, health care, etc
Business
any activity that seeks to provide goods & services to others while operating at a profit
Unlimited Liability
any debts or damages incurred by business are your debts, even if it means selling your home, care, or anything else
Boom
significant growth & prosperity
Revenue
total amount of money a business takes in during a given period by selling goods & services
