Topics to Study for Exam 2
Pert Diagrams
Analyzing tasks, estimating time, and identifying minimum time for project completion
Leveraged Buyout
Attempt to buyout stockholders of a company by borrowing necessary funds
Gantt Charts
Bar graph showing project progress and stage at any given time
ISO 14001
Best practices for managing an organization's impact on the environment
Decentralization Advantages
Better adaptation to customer wants, more empowerment of workers, faster decision making, higher morale
Merger
Combining two firms in the same industry
Franchisor
Company that sells the rights to use the business name to sell a product or service
Benchmarking
Comparing an organization's practices, processes, and products against the best
Centralized Decision-Making Authority
Concentrates decision-making authority in upper management
Quality
Consistently producing what the customer wants with minimal errors
Production
Creation of finished goods and services using factors of production
Human Resource Management
Determining, developing, motivating, evaluating, and compensating employees
Line Structure
Direct vertical structure where employees report to their superior
Decentralized Decision-Making Authority
Disperses decision-making responsibility and authority to lower levels of the organization
Articles of Organization
Documents required to start an LLC
Sole Proprietorship Advantages
Easy to start and end, avoids double taxation, individual accountability
Matrix Organization Advantages
Extra managers, more flexibility, cross functionality, knowledge sharing, efficiency
Corporation
Form of business with limited liability and ability to raise money selling stock
Limited Liability Company (LLC)
Form of business with limited liability and choice of taxation
Partnership
Form of business with shared financial and managerial resources
Sole Proprietorship
Form of business with unlimited personal liability
C-Corporation
Form of corporation subject to double taxation
S-Corporation
Form of corporation taxed as personal income
Limited Partnership
Form of partnership with limited liability for some partners
General Partnership
Form of partnership with unlimited liability for all partners
Centralization Advantages
Greater top-management control, more efficiency, simpler distribution system, stronger brand/corporate image
Customer Type Departmentalization
Groups workers by customer type (i.e., consumers, commercial users, manufacturers, institutions)
Functional Departmentalization
Groups workers by function (i.e., Design, Accounting, Production, Marketing)
Product Departmentalization
Groups workers by product (i.e., trade books, technical books, college texts)
Geographic Location Departmentalization
Groups workers by region
Product
Item or service that serves a customer's need or want
LLC Differences from S-Corps
LLC does not sell stock, LLC can avoid double taxation only with at least 2 members or choosing to be taxed as a corporation, LLC not limited to 100 shareholders, LLC has no citizenship restrictions
Franchising Disadvantages
Large start-up costs, shared profit, management regulation
Decentralization Disadvantages
Less efficiency, complex distribution system, less top-management control, weakened corporate image
Centralization Disadvantages
Less responsiveness to customers, less empowerment, interorganizational conflict, lower morale away from headquarters
C-Corporation Advantages
Limited liability, raise money by selling stock, potentially perpetual life
S-Corporation Advantages
Limited liability, raise money by selling stock, potentially perpetual life, avoids double taxation
LLC Similarities to Corporations
Limited liability, taxed as a corporation if desired, length of company's life can be perpetual
S-Corporation Disadvantages
Limited to 100 shareholders, shareholders must be U.S. citizens or residents
Chain of Command
Line of authority from top to lowest level in a hierarchy
Line-Staff Structure
Line structure with added specialists and extra managers for guidance and support
Franchising Benefits
Management and marketing assistance, personal ownership, nationally recognized name
Supply Chain Management
Managing the movement of resources and information through the supply chain
LLC Similarities to Partnerships
May be hard to terminate, financial resources limited to partners' capital and loans
Horizontal Merger
Merging two firms in the same industry to diversify or expand products
Vertical Merger
Merging two firms operating in different stages of related businesses
LLC Advantages
Not limited to 100 owners, no citizenship restrictions, fewer meeting/reporting requirements
Conglomerate Acquisition
One company buying another from a completely unrelated industry
Acquisition
One firm purchasing the assets and operations of another firm
Vertical Acquisition
One firm purchasing the assets and operations of another firm in a different stage of the same or related industry
Horizontal Acquisition
One firm purchasing the assets and operations of another firm in the same industry
Franchisee
Person who buys a franchise
Process Manufacturing
Physically or chemically changing materials in the production process
Acquisition
Process of selecting, training, and developing employees
Lean Manufacturing
Production of goods using less resources than mass production
LLC Disadvantages
Provides limited liability, can opt to be taxed as a corporation, no stock
Assembly Process
Putting together components in the production process
ISO 9001
Quality management and assurance standards
Six Sigma Quality
Quality measure allowing only 3.4 defects per million opportunities
Restructuring
Redesigning an organization for more effective and efficient service
Facility Location
Selecting a geographic location for a company's operations
Partnership Advantages
Shared financial and managerial resources, avoids double taxation
Personal Liability by Business Type
Sole Proprietorship: unlimited liability, General Partnership: all owners share liability, Limited Partnership: General Partner has unlimited liability, Limited Partner has liability limited to amount invested, C-Corporation: limited liability, S-Corporation: limited liability, LLC: limited liability
Operations Management
Specialized area in management that converts resources into goods and services
Matrix Organizational Structure
Structure where employees report to both a project manager and a functional manager
Flat Organization Structure
Structure with few layers of management and broad span of control
Tall Organization Structure
Structure with many layers of management and narrow span of control
C-Corporation Disadvantages
Subject to double taxation, can be costly to form
Mass Customization
Tailoring products to meet the needs of individual customers
Functional Team Structure
Team where all members belong to the same functional department
Self-Managed Team Structure
Team where employees manage themselves and leadership is designated, shared, or rotated
Virtual Team Structure
Team where members are geographically dispersed but communicate electronically
Cross-Functional Team Structure
Team where members come from different functional departments
Delegate
To entrust decision-making authority to a less senior employee
Empower
To give frontline workers the responsibility, authority, freedom, training, and equipment they need to respond quickly to customer requests
Matrix Organization Disadvantages
Unclearly defined roles, conflict between project and functional managers, slower decision making
Conglomerate Merger
Uniting firms in completely unrelated industries to diversify operations and investments
Partnership Disadvantages
Unlimited personal liability for general partners, disagreements among partners
Sole Proprietorship Disadvantages
Unlimited personal liability, limited financial and managerial resources
Computer-Aided Design and Manufacturing
Use of computers in the design and manufacturing of products
Form Utility
Value added to materials in the creation of goods and services
Organizational Culture
Widely shared values within an organization that provide unity and cooperation