Business X 100 Ch.5 & Ch.8 Vocab/Test questions

Limited Liability Company (LLC)

A company similar to an S corporation but without the special eligibility requirements.

Franchisor

A company that develops a product concept and sells others the rights to make and sell the products.

S corporation

A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships.

Bureaucracy

An organization with many layers of managers.

Flat Organizational Structures

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

General partner

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

unlimited liability

Any debts or damages incurred by the business are your debts, even if it means selling your home, car or anything else.

Departmentalization

Divides organizations into separate units.

What are the three main types of partnerships?

Limited, general, master limited.

acquisition

One company's purchase of the property and obligations of another company.

Rank the forms of business ownership based on ease of starting. Put the easiest form at the top

Sole proprietorship, Partnership, Corporation.

Merger

The result of two firms joining to form one company.

formal organization

The structure that details lines of responsibility, authority, and position; that is, the structure shown on organization charts.

informal organization

The system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority outside the formal organization; that is, the human side of the organization that does not appear on any organization chart.

decentralized authority

When decision-making is delegated to lower-level managers and employees more familiar with local conditions than headquarters is.

Partnership

When two or more people legally agree to become co-owners of a business.

Sole Proprietorship

a business owned and managed by one person.

Because owners are only responsible for losses up to the amount they have invested in a corporation, limited liability is considered:

a major advantage

The result of the increase in the rate of change in the business environment from causes such as natural disasters and global competition has been that companies must:

adapt to new technologies, change more quickly than ever before

centralized authority

decision making is concentrated at the top level of management

The current trend in organizations is to ____ the span of control.

expand

An advantage of a ______ organization structure is that lower level employees have authority to respond more quickly to customer needs.

flat or decentralized

Many minority business owners prefer the ______ form of business ownership because it offers business connections and support.

franchise

Limited Partnership

has one or more general partners and one or more limited partners.

Horizontal Merger

joins two firms in the same industry and allows them to diversify or expand their products

Economies of scale

the fact that companies can reduce production costs by purchasing in bulk.

What are two reasons that franchises are attractive to minority populations?

they provide personal ownership of a business, some offer financial support to aspiring business owners.

core competencies

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

Networking

using communications technology and other means to link organizations and allow them to work together on common objectives

organization chart

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

Which country is the most popular target for U.S.-based franchises to enter the global market?

Canada

Benchmarking

Compares an organization's practices, processes and products against the world's best.

Of the various forms of business ownership, a _____ is an easy way for two individuals to conduct business.

Partnership

restructuring

Redesigning an organization so that it can more effectively and efficiently serve its customers.

Corporation

a legal entity with authority to act and have liability apart from its owners

franchise agreement

an arrangement whereby someone with a good idea for a business sells the rights to use the business name and sell a product or service to others in a given territory

The reasons why companies decide to decentralize include:

being more responsive to customer needs, adapting more rapidly to changes in the competitive environment

Remaining __ is the key to an organization's success in changing times.

flexible

Vertical Merger

joins two firms operating in different stages of related businesses

Individuals who start and manage a business are concerned with risk. They may choose to incorporate to decrease ______.

personal liabilities

digital natives

young people who have grown up using the Internet and social networking.

Four ways to structure an organization

1. Line Organizations 2. Line-and-Staff Organizations 3. Matrix-Style Organizations 4. Cross-Functional Self-Managed Teams

Master Limited Partnership (MLP)

A partnership that looks much like a corporation (in that it acts like a corporation and is traded on a stock exchange) but is taxed like a partnership and thus avoids the corporate income tax.

Franchisee

A person who buys a franchise

hierarchy

A system in which one person is at the top of the organization and there is a ranked or sequential ordering from the top down of managers who are responsible to that person.

Name the corporation types:

Alien, Domestic, Foreign, Closed, Open, Quasi-public, Professional, nonprofit, Multinational.

General Partnership

All owners share in operating the business and in assuming liability for the business's debts.

Matrix Organization

An organization in which specialists from different parts of the organization work together temporarily on specific projects, but still remain part of a line and staff structure.

inverted organization

An organization that has contact people at the top and the chief executive officer at the bottom of the organization chart.

line organization

An organization that has direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with all people reporting to only one supervisor.

tall organization structures

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

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

Control

Which are attributes of a conventional corporation? (Check all that apply)

Corporate liability is separate from owners, it is state chartered, it is a legal entity.

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

Corporation (Conventional)

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

General Partnership

Which statement regarding a self-managed team is accurate?

It is empowered to make decisions without management approval.

Name the Seven types of partnerships?

Limited partnership, General partnership, Master limited partnership, General partner, Limited partner, Limited liability, Limited liability partnership.

Limited Liability Partnership

Limits partners' risk of losing their personal assets to the outcomes of only their own acts and omissions and those of people under their supervision.

Which is a true statement about the principles of organization?

Regardless of the business size the principles are similar.

organizational (or corporate) culture

Widely shared values within an organization that provide unity and cooperation to achieve common goals.

Conventional (C) Corporation

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

Virtual corporation

a temporary network, made of replaceable firms that join and leave as needed.

Leveraged Buyout (LBO)

an attempt by employees, management, or a group of investors to purchase an organization primarily through borrowing.

limited partner

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

Responsive Organizations:

centralization vs. decentralization, span of control, tall vs. flat, departmentalization.

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, recognizing employee strengths.

Staff Personnel

employees who advise and assist line personnel in meeting their goals, and include those marketing research, legal advising, information technology, and HR management.

An agreement that gives a business the right to use a business's name and sell a product or service in a given area is a(n) ______.

franchise

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 a(n) ______.

general partnership

cross-functional self-managed teams

groups of employees from different departments who work together on a long-term basis

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

Because of the evolving business environment, including more global competition, technological innovations, and changing customer expectations, what has become a critical management function?

learning how to manage change.

An S corporation has the liability protections of a corporation but is taxed ______.

like a partnership or sole proprietorship

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

limited

Many smaller businesses elect to form a corporation because of the two main advantages of ____ liability and possible tax advantages.

limited

When there is one or more general partners and one or more limited partners, the firm is a(n) ______.

limited partnership

A large organization might use a flat organization structure in order to ______.

match the flexibility of small firms

Two software companies each hold a small percentage of the market. To gain recognition and increase market share, these companies decide to join together to form one company. This move is known as ______.

merger

cooperative (co-op)

owned and controlled by the people who use it - producers, consumers, or workers with similar needs who pool their resources for mutual gain

Line personnel

responsible for directly achieving organizational goals, and include production workers, distribution people, and marketing personnel.

If a team is empowered to make decisions without management approval then it is said to be ______.

self managed

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

stock

limited liability

the limited partners' liability for the debts of the business is limited to the amount they put into the company; their personal assets are not at risk

chain of command

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

Span of Control

the optimal number of subordinates a manager supervises or should supervise

Real time

the present moment or the actual time in which something takes place

Franchise

the right to use a specific business's name and sell its products or services in a given territory

Many franchises are expanding internationally because ______.

there are large new markets available

Conglomerate Merger

unites firms in completely unrelated industries in order to diversify business operations and investments.