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.