Chapter 3 (Business Management and Strategy)

Question 1

Creating a Code of Ethics must have

Answer 1

Honesty
Integrity
Confidentiality
Conflicts of Interest
Insider Information
Gifts
Personal Use of Company Assets
Workplace Privacy
Fairness

Question 2

What is corporate responsibility (CR)?

Answer 2

business behavior that is focused on building external strategic relationships

Question 3

What is sustainability?

Answer 3

behavior that doesn’t deplete the resources used to achieve an outcome

Question 4

What is Enterprise Risk Management (ERM)?

Answer 4

practice of forecasting possible risks to the organization and taking steps to mitigate their impact on operations

Question 5

Examples of ERM include…

Answer 5

HR Audits (SPHR); Insurance policies, Employee handbooks, Litigation Statistics, Other (UI rates, safety standards)

Question 6

Change Management could include

Answer 6

Reengineering
Corporate Restructuring
Workforce Expansion
Workforce Reduction
Mergers and Acquisitions (SPHR)
Offshoring and Outsourcing Decisions and Management

Question 7

What are line functions?

Answer 7

Ex. Operations and Sales; which make decisions about operating needs

Question 8

What are staff functions?

Answer 8

Ex. HR and Finance; which don’t make operating decisions but do advise line managers

Question 9

What is a centralized organization?

Answer 9

decision making authority is concentrated at higher level in the organization

Question 10

What is decentralized organization?

Answer 10

decision making authority is delegated to lower levels

Question 11

What is span of control?

Answer 11

number of employees one manager can directly supervise

Question 12

Examples of External Business Environment

Answer 12

Technological Developments
Industry Changes
Economic Environment
Labor Pool
Legal and Regulatory Activity

Question 13

Types of Business Structures

Answer 13

Sole Proprietorship (one person has all the authority)
Partnership (two or more people share authority)
*General (GP) - partners share responsibility
*Limited (LP) - most partners are only investors
*Joint Venture (JV) - manage specific project/time
Corporation
*liability limited to assets owned by corporation
*life of corporation can extend beyond life of its owner
*central management structure
*ownership may be transferred freely by selling stock
Limited Liability Company (cross between a GP and a corporation and provides owners with the liability protection of a corporation with fewer operating restrictions)

Question 14

Organizational Functions include…

Answer 14

Products and Operations
Sales and Marketing
Research and Development
Finance and Accounting
Information Technology
People/Employees

Question 15

What are the four “P’s” of marketing?

Answer 15

Product
Price
Placement
Promotion

Question 16

What are the life cycles of an organization?

Answer 16

Start-Up
Growth
Maturity
Decline

Question 17

Strategic Planning includes the following steps…

Answer 17

Planning to plan
Environment scanning
Strategy formulation
Strategy implementation
Develop a budget (SPHR)
Strategy evaluation (SPHR)

Question 18

Environmental scans identify…

Answer 18

General business environment
Industry practice & development
Technological advances
Economic environment
Changes in the labor force population
Legal and Regulatory environment

Question 19

Strategy formulation include…

Answer 19

Vision statement
Mission statement
Core competencies
Corporate values statement

Question 20

What is the SMART model?

Answer 20

Goals are:

Specific, Measurable, Action-Oriented, Realistic, Time-Bound

Question 21

What are tactical goals?

Answer 21

describes what will be accomplished to achieve the strategy

Question 22

What is an action plan?

Answer 22

breaks down tactical goal into steps to be taken to accomplish the tactical goal

Question 23

What does the Human Capital Management Plan consist of?

Answer 23

HR statement of strategic direction
Desired results or goals
Objectives
Action plans
Communication plan
Measurement

Question 24

What are the functions of operations?

Answer 24

• Capacity (how much product is available)
• Production layout (way in which goods/services will be produced)
• Scheduling (make sure available at times of peak customer demand)
• Quality Management (ensures acceptable standards are met)
• Inventory Management (cost of maintaining inventory vs. the need to satisfy customers)
• Technology (improve quality and amounts produced)
• Facility Location (best places for facilities)
• Cost Control (provide quality products at lowest possible cost)

Question 25

What is prima facie violation includes the following four elements…

Answer 25

1. The employee was engaged in a protected activity
2. The employer knew or suspected that the employee was engaged in the protected activity
3. The employee suffered an unfavorable employment action
4. Sufficient circumstances existed to infer that a contributing factor to the unfavorable action was the employee’s participation in the protected activity

Question 26

Audit committees have the responsibility to establish processes to facilitate confidential reports of possible violations. The elements of an effective process include…

Answer 26

• A clear policy statement or code of business conduct identifying specific steps for employees to follow if they discover unlawful or unethical activity
• Training for employees to help them recognize the difference between lawful and unlawful activity
• Training for mangers on how to handle employee reports, maintain confidentiality and prevent retaliation
• A system for tracking complaints, maintaining records, verifying follow-up and resolving the complaint
• Development of an investigative process before it’s needed
• A record-retentation system for documents gathered during an investigation

Question 27

Examples of HR Metrics…

Answer 27

Business Impact Measures
Balance Scorecard
Tactical Accountability Measures
*HR expenses as a percent of operating expenses
*HR expenses as a percent of total revenue
*Ratio of total employees to HR staff
*HR department expenses per employee