Intro to Bus Ch. 6-10
Why do small businesses have difficulty getting started in global business?
1. Financing is often difficult to find 2. Would-be exporters don't know how to get started and do not understand the cultural differences between markets 3. The bureaucratic paperwork can threaten to bury a small business
What are challenges of working at home?
1. Getting new customers 2. Keeping work and family separate 3. Abiding by city ordinances 4. Managing risk
What are the disadvantages of a high bureaucracy?
1. Less empowerment 2. Higher costs 3. Delayed decision making 4. Less responsiveness to customers
What are the advantages of a high bureaucracy?
1. More control by top management 2. More chances for advancement 3. Greater specialization 4. Closer supervision
What does Theory Y state?
1. Most people naturally like work 2. Most people work towards their goals 3. The depth of a person's commitment to goals depends on the perceived rewards for achieving them 4. Under certain conditions, most people seek responsibility 5. People are capable of using a relatively high degree of imagination, creativity, and cleverness to solve problems 6. People are motivated by a variety of rewards
Why do people take the entrepreneurial challenge?
1. Opportunity 2. Profit 3. Independence 4. Challenge
What are different ways to departmentalize?
1. Product 2. Function 3. Customer group 4. Geographic location 5. Process 6. Hybrid forms
What are some characteristics of an effective manager?
1. Results 2. WHEN (give employees a deadline then leave them alone) 3. Why 4. Follow up 5. Growth (of company, of group, and you)
What is the order of Abraham Maslow's hierarchy of needs from top to bottom?
1. Self-actualization needs (the need to develop to one's fullest potential) 2. Esteem needs 3. Social needs 4. Safety needs 5. Physiological needs
What are some examples of hygiene factors?
1. Supervision 2. Working conditions 3. Interpersonal relationships 4. Salary
What are the characteristics of a high bureaucracy?
1. Tall 2. Narrow span of control
What does theory X state?
1. The average person dislikes work and will avoid if possible 2. Workers must be forced, controlled, directed, or threatened with punishment to make them put forth effort to achieve the organization's goals 3. The average worker prefers to be directed, wishes to avoid responsibility, has relatively little ambition, and wants security 4. Primary motivators are fear and punishment
What 6 things should the mission statement address?
1. The organization's self-concept 2. Its philosophy 3. Its long-term survival needs 4. Its customers needs 5. Its social responsibility 6. The nature of its products or services
What are some characteristics of micro managers?
1. They care about HOW things should be done 2. NOW (impatient) 3. WHAT (what should be done) 4. They hover 5. Compliant (they get bent out of shape when you don't follow their orders, even if you're doing it right)
What are Fayol's principles?
1. Unity of command (one boss) 2. Hierarchy of authority 3. Division of labor (specialization) 4. Subordination of individual interests to the general interest (team first) 5. Authority (managers have the right to give orders and the power to enforce obedience) 6. Degree of civilization (traditional period; thought that goes into the shape of the period) 7. Clear communication channels (should be transparent and open communication) 8. Order (people and belongings should be kept orderly) 9. Equity (people should be treated equally) 10. Espirit de corps (spirit of the body, moral of the firm)
What are the characteristics of a low bureaucracy?
1. Wide, flat 2. Wide span of control
What are some examples of motivators?
1. Work itself 2. Achievement 3. Recognition 4. Responsibility 5. Growth and advancement
Small Business Administration (SBA)
A U.S. government agency that advises and assists small businesses by providing management training and financial advice and loans
Small business
A business that is independently owned and operated, is not dominant in it's field of operation, and meets certain standards of size in terms of employees or annual receipts
Entrepreneurial team
A group of experienced people from different areas of business who join to form a managerial team with the skills to develop, make, and market a new product
What are the two main entrepreneurial attributes?
Being a risk taker and working hard
Micropreneurs
Business owners who are interested in maintaining a balanced lifestyle while doing the kind of work they want to do
What is the top reason why employees voluntarily leave their jobs?
Disengagement
Who came up with the two managerial assumptions Theory X and Theory Y
Douglas McGregor
What does the "controlling" aspect of management entail?
Establishes clear standards to determine whether an organization is progressing toward its goals and objectives, rewarding people for doing a good job, and taking corrective action if not
What is job enrichment based on?
Herzberg's higher motivators such as responsibility, achievement, and recognition
When is autocratic leadership effective?
In emergencies when absolute followership is needed
What is the many constant in the lives of Gen Xers, Millennials, and Ge Zers?
Inconstancy
What is a disadvantage of online business?
It is easy for copycats to copy products
Is the management of charities, government agencies, churches, schools, and unions the same or different as the management of small and large businesses?
It is the same
Venture capitalist
May ask for a big stake in your company in exchange for the cash to start your business
What motivating factors did Frederick Herzberg come up with?
Motivators and hygiene factors
Mission statement
Outlines an organization's 6 fundamental purposes
Enterprise zones
Specific geographic areas to which governments attract private business investment by offering lower taxes and other government support
Management
The process used to accomplish organizational goals through planning, organizing, leading, and controlling people and other organizational resources (good management is a top-down approach)
What is the trend today in regards to span of control?
To expand the span of control
What are the two management approaches according to William Ouchi?
Type J and Type A
When do cross-functional teams work best?
When leadership is shared
Vision
a broad explanation of why the organization exists and where it's trying to go; gives the organization a sense of purpose and a set of values that unite workers in a common destiny
ISO 14001
a collection of the best practices for managing and organization's impact on the environment
materials requirement planning (MRP)
a computer-based operations management system that uses sales forecasts to make sure needed parts and materials are available at the right time and place
Business plan
a detailed written statement that describes the nature of the business, the target market, the advantages the business will have over competition, and the resources and qualifications of the owner
ISO
a nongovernmental organization established to promote the development of world standards to facilitate the international exchange of goods and services
six sigma quality
a quality measure that allows only 3.4 defects per million opportunities
job enrichment
a strategy that motivates workers through the job itself
hierarchy
a system in which one person is at the top of the organization and there is a ranked ordering from the top down of managers and others who are responsible to that person
virtual corporation
a temporary networked organization made up of replaceable firms that join and leave as needed
organization chart
a visual device that shows relationships among people and divides the organization's work
Entrepreneurship
accepting the risk of starting and running a business
staff personnel
advise and assist line personnel in meeting their goals; include people in marketing research, legal advising, IT, and HR
inverted organization
an organization that has contact people at the top and the chief executive officer at the bottom of the organization chart
bureaucracy
an organization with many layers of managers who set rules and regulations and oversee all decisions
SWOT analysis
analyzes the organization's strengths, weaknesses, the opportunities and threats it faces
Gantt chart
bar graph showing what projects are being worked on and what stage they are in at any given time
Type A
based on American culture, which includes a focus on individual rights and achievements
Hawthorne effect
based on Elton Mayo's experiments; people's tendency to behave differently when they know they're being studied
Type J
based on the culture of Japan, which includes a focus on trust and intimacy within the group and family
computer-aided manufacturing (CAM)
bring computers into the production process
decision making
choosing among two or more alternatives
scientific management
coined by Frederick Taylor; studies tasks performed in a job and the time needed for each; views people as machines
job enlargement
combines a series of tasks into one challenging and interesting assignment
brainstorming
coming up with as many solutions as possible in a short period of time with no censoring of ideas
benchmarking
compares an organization's practices, processes, and products against the world's best
computer-integrated manufacturing (CIM)
computers control the entire production process
quality
consistently producing what the customer wants while reducing errors before and after delivery to the customer
operations management
converts or transforms resources, including human resources like technical skills and innovation, into goods and services
flexible manufacturing
designing machines to do multiple tasks so they can produce a variety of products
formal organization
details lines of responsibility, authority, and position
expectancy theory
developed by Victor Vroom; states that employee expectations can affect motivation
strategic planning
done by top management and determines the major goals of the organization and the policies, procedures, strategies, and resources it will need to achieve them
engagement
employees' level of motivation, passion, and commitment
human relations skills
enable managers to work through and with people; include communication and motivation
hygiene factors
factors relating to the job environment that could cause dissatisfaction if missing but would not necessarily motivate employees if increased
motivators
factors that make employees productive and give them satisfaction
flat organizational structures
fewer layers of management and a broad span of control
extrinsic reward
given by someone else as recognition for good work
empowerment
giving employees the authority to make a decision without consulting the manager and the responsibility to respond quickly to customer requests
enabling
giving workers the education and tools they need to make decisions
cross-functional self-managed teams
groups of employees from different departments who work together on a long-term basis
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
Chief Operating Officer (COO)
implements CEO's changes
external customers
include dealers (who buy products to sell to others) and ultimate customers (end users) such as you and me
middle management
includes general managers, division managers, and branch and plant managers who are responsible for tactical planning and controlling
supervisory (first line) management
includes those directly responsible for supervising workers and evaluating their daily performance
internal customers
individuals and units within the firm that receive services from other individuals or units
Chief Executive Officer (CEO)
introduces change into an organization
participative (democratic) leadership
involves managers and employees working together to make decisions
equity theory
looks at how employees' perceptions of fairness affect their willingness to perform
job rotation
makes work more interesting and motivating by moving employees
autocratic leadership
making managerial decisions without consulting others
free-rein leadership
managers set objectives and employees are free to do whatever is appropriate to accomplish those objectives
tall organizational structures
many layers of management and small span of control
control function
measures performance relative to planned objectives and standards, rewards people for work well done, and takes corrective action when necessary
enterprise resource planning (ERP)
newer version of MRP; combines the computerized functions of all the divisions and subsidiaries of the firm into a single integrated software program that uses a single datebase
Chief Financial Officer (CFO)
obtain funds, plans budgets, collects funds, etc.
centralized authority
occurs when decision making is concentrated at the top level of management
decentralized authority
occurs when decision making is delegated to lower-level manager and employees more familiar with local conditions than hq management could be
Incubators
offer new businesses in the critical stage of early development low-cost offices with basic services such as accounting, legal advice, and secretarial help
job simplification
produces task efficiency by breaking a job into simple steps and assigning people to each
intermittent process
production run is short and the producer adjusts machines frequently to make different products
assembly process
puts together components to make a product
staffing
recruiting, hiring, motivating, and retaining the best people available to accomplish the company's objectives
restructuring
redesigning an organization so it can be more effectively and efficiently serve its customers
line personnel
responsible for directly achieving organizational goals, and include production workers, distribution people, and marketing personnel
goal-setting theory
says setting ambitious but attainable goals can motivate workers and improve performance if the goals are accepted and accompanies by feedback, and if conditions in the organization pave the way for achievements
departmentalization
setting up individual departments to do specialized tasks
conceptual skills
skills that involve the ability to picture organizations as a whole and the relationship among its various parts
matrix organization
specialists from different parts of the organization work together temporarily on specific projects, but still remain part of a line-and-staff structure
Objectives
specific, short-term statements detailing how to achieve the organization's goals
mass customization
tailoring products to meet the needs of individual customers
knowledge management
tasks include finding the right information, keeping it in a really accessible place, and making information known to everyone in the organization
technical skills
the ability to perform tasks in a specific discipline or department
production management
the activities that help firms create goods
Goals
the broad, long-term accomplishments an organization wishes to attain
ISO 9001
the common name given to quality management and assurance standards
production
the creation of finished goods and services using the factors of production (land, labor, capital, entrepreneurship, and knowledge)
economies of scale
the fact that companies can reduce their production costs by purchasing raw materials in bulk, which makes the average cost of goods decrease as production levels rise
purchasing
the function that searches for high-quality material resources, finds the best suppliers, and negotiates the best price for quality goods and services
core competencies
the functions that the organization can do as well as or better than any other organization in the world
top management
the highest level, consists of the president and other key company executives who develop strategic plans (CEO, COO, CFO)
employee experience
the level of satisfaction at every step along an employee's path throughout their time with a company
chain of command
the line of authority that moves from the top of the hierarchy to the lowest level
span of control
the optimal number of employees a manager supervises or should supervise
intrinsic reward
the personal satisfaction you feel when you perform well and complete goals
facility layout
the physical arrangement of resources, including people, to most efficiently produce goods and provide services for customers
process manufacturing
the physical or chemical change of materials
real time
the present moment when an event takes place
tactical planning
the process of developing detailed, short-term statements about what is to be done, who is to do it, and how
contingency planning
the process of preparing alternative courses of action the firm can use if its primary plans don't work out
facility location
the process of selecting a geographic location for a company's operations
operational planning
the process of setting work standards and schedules necessary to implement the company's tactical objectives
statistical process control (SPC)
the process of taking statistical samples of product components at each stage of the production process and plotting those results on a graph
statistical quality control (SQC)
the process some managers use to continually monitor all phases of the production process to assure that quality is being built into the product from the beginning
informal organization
the system that develops spontaneously as employees meet and form cliques, and relationships outside the formal organization
computer-aided design (CAD)
the use of computers to design products
form utility
the value producers add to materials in the creation of finished goods and services
program evaluation and review technique (PERT)
users analyze the tasks to complete a given project, estimate the time needed to complete each task, and compute the minimum time needed to complete the whole project
networking
uses communications technology and other means to link organizations and allow them to work together on common objectives
lean manufacturing
using less of everything than in mass production (less human effort, less manufacturing space, less investment in tools, less engineering time to develop a new product)
just-in-time (JIT) inventory control
when supplies deliver raw materials just as production begins
organizational (corporate) culture
widely shared values within an organization that provide unity and cooperation to achieve common goals
high-context culture
workers build personal relationships and develop group trust before focusing on tasks
low-context cultures
workers view relationship building as a waste of time that diverts attention away from tasks
telecommunication
working from home via computer
The Theory of Social and Economic Organizations
wrote by Max Weber; felt that firms would do well if employees did what they were told and the less decision making the better
What does the "planning" aspect of management entail?
1. Anticipating trends and determining the best strategies to achieve goals 2. Major goal is to please customers
What organizational issues do firms have to make decisions about?
1. Centralization vs. decentralization 2. Span of control 3. Tall vs. flat structures 4. Departmentalization
What does the "leading" aspect of management entail?
1. Creating a vision for the organization and communicating, guiding, training, coaching, and motivating others to achieve goals and objectives in a timely manner 2. Empower employees by giving them freedom to be self-directed and self-motivated
What is the rational decision making model?
1. Define the situation 2. Describe and collect needed information 3. Develop alternatives 4. Decide which alternative is best 5. Do what is indicated 6. Determine whether the decision was a good one and follow up
What does the "organizing" aspect of management entail?
1. Designing the structure of the organization and creating systems where everyone and everything work together to achieve goals 2. Many of today's organizations are being designed around pleasing the customer at a profit, so they must remain flexible
What are 2 other names for enterprise zones?
1. Empowerment zones 2. Enterprise communities
What does a business plan consist of?
1. Executive summary 2. Company background 3. Management team 4. Financial plan 5. Capital required 6. Marketing plan 7. Location analysis 8. Manufacturing plan 9. Appendix
Angel investors
Private investors who invest their own money in potentially hot new companies before they go public
Market
Consists of consumers who have unsatisfied wants and needs who have resources to buy
Intrapreneurs
Creative people who work as entrepreneurs within corporations by using a company's existing resources to launch new products
management by objectives (MBO)
Peter Drucker's system of goal setting and implementation; it involves a cycle of discussion, review, and evaluation of objectives among top and middle-level managers, supervisors, and employees.
Small Business Investment Company (SBIC) Program
Private investment companies licensed by the SBA to lend money to small businesses