Business Management and Strategy Flashcards
strategic management
ongoing process of innovation, advantage, value creation, and reassessment.
sole proprietorship
Most basic business structure. Owner is a single person who is the final authority for all decisions in the business. Any profits earned by the business belong to the owner, and owner has unlimited personal liability for all business decisions and activities.
partnership
Business owned by two or more people who share final authority for all business decisions and are jointly liable for the actions of the business. Partners are liable not only for their own individual actions but for the actions taken by their other partners as well. Profits are split according to ownership shares established at the beginning of the partnership.
general partnership (GP)
partners share responsibility for managing the business based on the partnership agreement
limited partnership (LP) or limited liability partnership (LLP)
Most partners are involved only as investors and have little input into daily operations of the business. These forms are commonly used for service business.
joint venture (JV)
similar to a GP but formed to manage a specific project or for a limited time frame
corporations
Defined by four characteristics:
1. liability is limited to assets owned by the corp.
2. life of the corp can extend beyond the life of its original owner/founder
3. central management structure
4. ownership may be transferred by selling stock.
Corporations sell stock to raise funds necessary to operate the business. Corporations are legal entities and may incur debts, sign contracts, and be sued in the same way as individuals.
stockholders or shareholders
Owners of stock. Free to sell the stock they own to other investors at any time. Can be individuals or other entities. Not involved in the daily operation of the business. May elect a board of directors to represent their interest with senior management. Liability is limited to assets owned by the corp, so stockholder liability is limited to the amount of stock owned by the individual investor.
limited liability company (LLC)
Cross between a general partnership and a corporation. Provides its owners with the liability protection of a corp with fewer operating restrictions. Exists for a finite period of time defined when organized, and can be extended by a vote of the owner/members when expires. May only have 2 of the 4 characteristics of a corp.
production
refers to the process by which businesses create the product or service offered to customers.
operations
encompasses all activities necessary to produce the goods or services of the business - think SIPOC
capacity - operations
includes determing how much of a product or service is able to be produced with the available inputs, as well as what changes in inputs are required by fluctuating customer demands
inputs
available materials, labor, and equipment
production layout - operations
way in which the goods or service will be produced (process or assembly line)
scheduling - operations
making sure that the products or services are available at times of peak customer demand
quality management - operations
QA ensures that the product or service meets acceptable standards
inventory management - operations
balance the cost of maintaining a large inventory with the need to satisfy customers by filling orders promptly
just-in-time (JIT) inventory management
purchasing smaller amounts of supplies more frequently to reduce inventories and ensure a steady supply of products for distribution
sales
includes near-term activites involved in transferring the product or service from the business to the customer
marketing
Incorporates longer-term functions necessary to promote and distribute products in the marketplace, provide support for sales staff, conduct research on product design, and determine appropriate pricing. Begins by identifying the target market.
Also responsible for determining what new products will be produced based on market research.
4 P’s of Marketing
- Product - what is the product or service, how will it look, packaging
- Price
- Placement - distribution - where will the customer find the product?
- Promotion - advertising, PR, selling, incentives
research and development (R&D)
Charged with designing new product offerings and testing them to make sure they do what they’re designed to do before they’re offered to the public. Includes redesigning old products to meet changing demands and developing products to create demand where none existed.
finance
Responsible for obtaining credit to meet the organization’s needs, granting credit to customers, investing and managing cash for maximum ROI, and establishing banking relationships for the org. Also does budgeting and planning
accounting
responsible for activities that record financial transactions within an org