IUPUI BUS X100 Exam 2

Sole Proprietorship Advantages

Ease of start-up and closure Pride of ownership Retention of all profits No special taxes Flexibility of being your own boss

broad span of control disadvantages

Fewer chances for advancement, overworked managers, loss of control, less management expertise

corporations advantages

Limited liability Ability to raise more money for investment Size Perpetual life Ease of ownership change Ease of attracting talented employees Separation of ownership from management

partnership advantages

More capital, workload shared, loses shared, longer survival, easy to form, no special taxes

top management

Most important skill: conceptual.

First line management

Most important skill: technical.

Functional Team Structure

No cross-functional integration; employees remain within functional departments. (ie marketing stays on the marketing team)

External, helpful (SWOT)

Opportunities: conditions in the external environment that help the company's chance of achieving its goals

Environmental Scanning PESTLE Analysis

Process of systematically surveying and gathering data from internal and external sources. Focus on what's currently present or taking place in the world, not what "might" happen

Equal Pay Act of 1963

Requires that men and women be paid the same amount for doing the same job

centralized decision making advantages

Retailers can reduce overhead, i.e. fewer managers Coordinating efforts, it can achieve lower prices from suppliers Opportunity to have the best people making decisions

S corporation vs LLC

S corp is a tax classification that provides liablity protection and passes income through to owners. Limited Liability company is a structured business entity that helps shield owners from litigation -biggest difference: LLC is less paperwork!

strengths, weaknesses, opportunities, threats

SWOT terms

middle management

Technical, HR, and conceptual skills are EQUALLY important

Expectancy Theory

The amount of effort employees exert on a specific task depends on their expectations of the outcome

Herzeberg's Two Factor Theory

The inverse relationship between motivators and hygienic factors.

Operations Management

The management of systems or processes that create goods and/or provide services

C Corporation

The most common type of corporation, which is a legal business entity that offers limited liability (separate from the owners) to all of its owners, who are called stockholders

Organization Management

The process of planning, organizing, leading, and controlling the use and /or application of the organization's resources to achieve the goals of the organization.

External, hurtful (uncontrollable) (SWOT)

Threats: conditions in the external environment that hurt the company's chance to achieve its goals.

delegate

To divide up, especially responsibilities

president, vice president

Top management positions

Pregnancy Discrimination Act

U.S. act that prohibits discrimination on the basis of pregnancy, childbirth, or related medical conditions.

computer-aided manufacturing (CAM)

Using computers to operate and control machines and processes to manufacture a product.

Internal, hurtful (controllable)(SWOT)

Weaknesses: things the company doesn't do well

top

____ management is focused on developing missing and long term goals and strategic planning.

middle

_____management is focused on developing strategic, tactical, and operationsal plans for business units, conveying the importance of goals to first and front line-monitor and control.

First line

____management and non managements implements the plans to achieve organizational goals.

line organization

a chain-of-command system that establishes a clear line of authority flowing from the top down

multinational corporation

a company that is heavily engaged in international trade, beyond exporting and importing

Alien Corporation

a corporation chartered by a foreign government and conducting business in the United States

foreign corporation

a corporation in any state in which it does business except the one in which it is incorporated

domestic corporation

a corporation in the state in which it is incorporated

private company (closed corporation)

a corporation that is held by a limited number of shareholders and is not publicly traded.

intrinsic motivation

a desire to perform a behavior effectively for its own sake

extrinsic motivation

a desire to perform a behavior to receive promised rewards or avoid threatened punishment

Limited Liability Company (LLC)

a form of business ownership that offers both limited liability to its owners and flexible tax treatment -protects like a corporation -taxed like a partnership (or a corp) -no eligibility requirements for investments -fewer administrative tasks and less record keeping than a corp

fixed position layout

a layout that brings all resources required to create the product to a central location, allows workers to congregate around the product to be completed (like an airplane)

corporation

a legal entity that is separate and distinct from its owners (shields the owners from personal liability) (advantage: stock)

Supply Chain Management

a management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value

SWOT analysis

a planning tool used to analyze an organization's strengths, weaknesses, opportunities, and threats, that will affect the company's ability to achieve its goals.

Six Sigma Quality

a quality measure that allows only 3.4 defects per million opportunities

partnership

a voluntary agreement under which two or more people act as co-owners of a business for profit

cross-functional team

a work team composed of individuals from various functional specialties (ie marketing, finance, hr)

vision

an encompassing explanation of why the organization exists and where it's trying to head, long term goals

franchisee

an individual or business that is granted the right to sell another party's product

motivation

an internal process or drive that energizes, directs, and sustains behavior

line-and-staff organization

an organization system that has a clear chain of command but that also includes functional groups of people who provide advice and specialized services (ie marketing researchers, legal advisors, and HR)

Sole Proprietorship

business owned and operated by one person (advantage: no double taxation)

with top management

centralization concentrates decision-making authority where?

vertical merger (or acquisition)

combines firms at different levels in the production and marketing process to ensure adequate flow of raw materials and supplies or increase distribution (ie if a textile company merged with a cotton yarn manufactuer)

conglomerate merger (or acquisition)

combines unrelated firms to diversify, spur sales growth or spend a cash surplus (ie ebay and paypal, unrelated companies, but allows ebay users to pay in a different way)

Maintenance (hygiene) factors

company policy and administration, supervision, working conditions, interpersonal relations(co-workers), salary-status-and job security

maintenance (HR)

compensation, benefits, employee relations

quality

consistently producing what the customer wants while reducing errors before and after delivery to the customer

double taxation

corporate income is taxed twice. a corporation pays income taxes on its earnings, and when dividends are distributed to stockholders, the stockholders pay taxes a second time on the corporate dividends they receive

largest percentage of total receipts by businesses (US)

corporations create the

Lower-level managers

decentralization requires for decision-making responsibility and authority to be dispersed to who?

mission statement

defines the company's business, its objectives and its approach to reach thos objectives

mission

described in terms of who the organization is now and who it serves

Geographic Departmentalization

dividing an organization according to the areas of the country or the world served by a business

empowerment

giving frontline workers the responsibility, authority, freedom, training, and equipment they need to respond quickly to customer requests

self-managed teams

groups of employees with the authority and skills to manage themselves

tall organizational structure

has many levels of authority relative to company size. (Narrow span of control)

motivating and maitenance factors

herzeberg's two factors

personal liability

individual responsibility and accountability for actions or omissions

product layout (assembly line)

is used when all products undergo the same operations in the same sequence, workers only do a few tasks at a time

horizontal merger (or acquisition)

joins firms in the same industry that wish to diversify, cut costs, or offer expanded product lines (eg if coca-cola and pepsi merged)

participative (democratic) leadership

leadership style that consists of managers and employees working together to make decisions

autocratic leadership

leadership style that involves making managerial decisions without consulting others

corporation advantages

limited liability, ease of transfer of ownership, perpetual life, external sources of funds, expansion potential, easier to separate management from ownership

equity theory

looks at how employees' perceptions of fairness affect their willingness to perform. It assumes employees ask, "If i do a good job, will it be worth it?"

free-rein leadership

managers set objectives and employees are free to do whatever is appropriate to accomplish those objectives

centralized decision making

occurs when key decisions are made by top management

positive reinforcement

one of the most often used motivation techniques because the focus is purely positive-REWARD when a DESIRED behavior is exhibited

Functional Departmentalization

organizing work and workers into separate units responsible for particular business functions or areas of expertise

General Partnership

partnership in which partners share equally in both responsibility and liability

acquisition (HR)

planning, job analysis, recruiting, selection, orientation

company values

principles and practices that a business feels are important

acquisition

procedure in which one firm purchases the property and assumes the obligations of another

age discrimination act

prohibits discrimination against applicants and employees 40 years of age or older in hiring, promotion, termination, and other employment practices.

Americans with Disabilities Act

prohibits discrimination against the disabled

Civil Rights Act of 1964

protection against discrimination based on race, color, religion, sex, and national origin

restructuring

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

marketing slogan

short phrases used in advertising campaigns to generate publicity and unify a company's marketing strategy.

process layout

similar equipment and functions are grouped together (allows for flexibility)

largest percentage of US businesses

sole proprietorships are the

PERT Diagram

stands for Program Evaluation and Review Technique; a project schedule arranged in a diagram, estimates the time needed to complete each task, and identifies the minimum time needed to complete the total project

internal, helpful (SWOT)

strengths: things that the company does well/positive characteristics (SWOT)

mass customization

tailoring products to meet the needs of individual customers

virtual teams

teams that use computer technology to tie together physically dispersed members in order to achieve a common goal

process manufacturing

that part of the production process that physically or chemically changes materials

assembly process

that part of the production process that puts together components

Customer Departmentalization

the arrangement of jobs around the needs of various types of customers (ie consumers, manufacturers, institutions)

ISO 9001

the common name given to quality management and assurance standards

production

the creation of goods and services through transforming factors of production

product

the goods and services combination the company offers to the target market

chain of command

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

common stock

the most basic form of ownership, including voting rights on major issues, in a company

humans

the most valuable resource in any organization is

Product Departmentalization

the organization of jobs in relation to the products of the firm (ie marketing manager, then sub categories of trade books, textbooks, tech books)

franchisor

the originator of a trade name, product, methods of operation, and the like that grants operating rights to another party to sell its product

facility layout

the physical arrangement of resources (including people) in the production process

environmental scanning

the process of collecting information about forces in the marketing environment

Human Resource Management

the process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organizational goals

strategic planning

the process of determining the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals

tactical planning

the process of developing detailed, short-term statements about what is to be done, who is to do it, and how it is to be done

contingency planning

the process of preparing alternative courses of action that may be used if the primary plans don't achieve the organization's objectives

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

lean manufacturing

the production of goods using less of everything compared to mass production

Hawthorne effect

the tendency for people to behave differently when they know they are being studied

computer-aided design (CAD)

the use of computers in the design of products

Form Utility

the value producers add to materials in the creation of finished goods and services

reinforcement theory

theory that positive and negative reinforcers motivate a person to behave in certain ways

line/line and staff inflexibility

these organizational structures may suffer from inflexiblity. both allow for established lines of authority and communication and work well in organizations with stable environments and slow product development (ie household appliances), but today's economy is dominated by high-growth industries (ie aerospace).

development (HR)

training and development, performance appraisal

organization

two or more people who work together to achieve the goals of the group

sole proprietorship disadvantages

unlimited liability (risk of personal loss) limited financial resources management difficulties overwhelming time commitment few fringe benefits limited growth limited life span

Partnership Disadvantages

unlimited liability, division of profits, disagreements among partners, difficulty of termination

matrix organization challenges

violates traditional managerial principles. Normally a person can't work effectively for two bosses. Project teams are also not permanent, there is little chance for cross-functional learning because teams often work together so briefly.

Human, Material, Informational, Financial

what resources are managed?

centralized

when it is important to have reliability (ie compliance w/laws) or efficiency (ie replication of a task for different operating depts) then use _______ type of decision making

Decentralized

when it is important to have responsiveness to the customer use ______ type of decision making

organizational (corporate) culture

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

motivators

work itself, achievement, recognition, responsibility, growth and advancement

Franchise

A business established or operated under an authorization to sell or distribute a company's goods or services in a particular area

ISO 14001

A collection of the best practices for managing an organization's impact on the environment.

public company (open corporation)

A company that sells its stock to the general public.

limited partnership

A partnership with one or more general partners and one or more limited partners (limited partners do less and have less liability).

HR specialist

A person who has in-depth knowledge and expertise in a limited area of HR.

stock

A share of ownership in a corporation.

preferred stock

A special type of stock whose owners, though not generally having a say in running the company, have a claim to profits before other stockholders do.

Gantt Chart

A time and activity bar chart that is used for planning, managing, and controlling major programs that have a distinct beginning and end. Shows production managers what projects are being worked on and what stage they are in at any given time

S corporation

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

production management

All the activities managers do to help firms create goods.

HR Generalist

An individual who is able to perform multiple diversified human resources functions.

Just-in-time (JIT)

An inventory-management approach in which supplies arrive just when needed for production or resale

Matrix Organization

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

nonprofit corporation

An organization that does not pay taxes and does not exist to make a profit.

decentralized decision making

An organizational structure in which decision-making authority is delegated to lower-level managers more familiar with local conditions than headquarters management could be.

Flat Organizational Structure

An organizational structure that has only a few levels of management and emphasizes decentralization (broad span of control) (lower level employees can make faster decisions, but it is harder to manage every decision)

stockholder (shareholder)

An owner of one or more shares of a corporation

PESTLE analysis

Analysis of the external political, economic, social, technological, legal and environmental factors affecting a business

merger

Combination of two or more companies into a single firm -vertical -horizontal -conglomerate

control process steps

1. establish standards 2. measure performance 3. compare performance to standards 4. communicate results 5. if needed, take corrective action

5 tasks of leaders

1. communicate a vision and rally others around that vision 2. establish corporate values 3. promote corporate ethics 4. embrace change 5. stress accountability and responsibility

narrow span of control disadvantages

-Less empowerment -Higher costs -Delayed decision making -Less responsiveness to customers

decentralized decision making disadvantages

-Makes it more difficult for staff functions to be executed -can create jurisdictional disputes and conflicts over priorities -requires greater competence and expertise on the part of decision makers -decisions made by lower level manager can create problems of coordination and integration

narrow span of control advantages

-More control by top management -More chances for advancement -Greater specialization -Closer supervision

broad span of control advantages

-Reduced costs -More responsiveness to customers -Faster decision making -More empowerment

factors that affect facility location

-distance from customers -distance from suppliers -inexpensive resources -time to market -labor availability -quality of life

Corporation Disadvantages

-double taxation -cost of setup and report filing (paperwork!) -difficulties in terminating corporation -possible conflicts between management and board -double taxation (c-corp only)

Problems in franchising

-expensive franchise fees and future payments -linked to reputation and management of the franchise

LLC corporation characteristics

-limited personal liablity -corporation taxation -few ownership limitations -stock

LLC partnership characteristics

-no stock -no articles of organization -fewer reporting requirements -less paperwork than corporations

benefits of franchising

-prior performance record -recognizable company name -proven business model -tested management program -business training

matrix organization disadvantages

1. Costly and complex 2. Confuse employees about where their loyalty belongs-with the project manager or with their functional unit 3.It requires good interpersonal skills as well as cooperative employees and mangers to avoid communication problems 4. It may only be a temporary solution to a long-term problem

planning process steps

1. Define objectives 2. Compare current to objectives 3. Compare future alternatives 4. Analyze alternatives/make plan 5. Implement and evaluate

matrix organization advantages

1. Mangers have flexibility in assigning people to projects 2. Encourages inter-organizational cooperation and teamwork 3. It can produce creative solutions to product development problems 4. It makes efficient use of organizational resources

Four Functions of Management

1. Planning 2. Organizing 3. Leading 4. Controlling