Chapters 6, 7, 14 Flashcards
Management
-achieve an organization’s objectives
-using its resources effectively and efficiently in a changing environment
Objectives of businesses (4)
Profit, competitive advantage, efficiency, and growth
Planning
-determining the organization’s objectives
-how to accomplish them
-First function of management
Organizing
-The structuring of resources and activities
-accomplish objectives in an efficient and effective manner
Staffing
The hiring of people to carry out the work of the organization
Controlling
-evaluating and correcting activities
-keep the organization on course
Directing
Motivating and leading employees to achieve organizational objectives
Mission
The statement of an organization’s fundamental purpose and basic philosophy
Goals
The result a firm wishes to achieve
Objectives
results desired by an organization derived from the mission
Strategic plans
Plans that establish the long-range objectives and overall strategy or course of action by which a firm fulfills its mission (long range)
Tactical plans
-short-range plans
-implement activities and objectives specified in the strategic plan (short range)
Operational plans
-very short term plans
-specify what actions individuals, work groups, or departments need to accomplish in order to achieve the tactical plan and ultimately the strategic plan (very short term)
Contingency plan
An element in planning that deals with potential disasters such as product tampering, oil spills, fire, earthquake, computer viruses, or airplane crash (disaster like covid)
Levels of management
-First line (supervisors)
-Middle (Division manager)
-Top (President/CEO)
Management level
6.3
Management functions
planning/ organizing/ staffing/ controlling/ directing
Employee empowerment
employees are provided with the ability to take on responsibilities and make decisions about their job
6 steps of the decision making process
-Recognize and define the decision situation
-develop options
-analyze options
-select the best option
-implement the decision
-monitor the consequences
organizational culture
A firm’s shared values, beliefs, traditions, philosophies, rules, and role models for behavior
organizational structure
The arrangement of positions within an organization
Departmentalization
Groups jobs into working units called departments, units, groups, or divisions
Departmentalization types (4)
-geographic region (grouping of jobs based on location)
-customer (Grouping of jobs around customer needs)
-function (grouping of jobs with similar functions)
-product (organization of jobs in relation to products)
Delegation of authority
Not only giving tasks to employees but empowering them to do whatever is necessary to carry out the task
degree of centralization
-The extent to which authority is delegated throughout an organization
-centralized
-decentralized
Span of management
-Number of subordinates who report to a particular manager
-narrow span
-wide span
Committees
A permanent, formal group that performs a specific task
task force
A temporary group of employees responsible for bringing about a particular change
project teams
run their own operation and have total control over their work project
downward communication
The traditional flow of communication from upper organizational levels to lower organizational levels
upward communication
Flows from lower to higher levels of the organization
Accounting
The recording, measurement and interpretation of financial information
CPA
-An individual who has been state certified to provide accounting services ranging from the preparation of financial records and the filing of tax returns to complex audits of corporate financial records
-certified public accountant
Managerial accounting
-internal use of accounting statements by managers
-planning and directing the organization’s activities.
Accounting equation
Assets = Liabilities + Owners’ Equity
Owner’s equity
-Equals assets minus liabilities and reflects historical values
-Owners investment within that company
Accounting cycle (4)
Step one: examine source documents
Step two: record transactions
Step three: post transactions
Step four: prepare financial statements
Income statement
Shows an organization’s profitability over a period of time
revenue
The total amount of money received from the sale of goods and services, as well as from related business activities
Cost of goods sold
-The amount of money spent to buy or produce the products sold during the income statement period
-Cost of goods sold = Beginning inventory + interim purchases − Ending inventory
Net income
The total profit (or loss) after all expenses, including taxes have been deducted from revenue
Balance sheet
A “snapshot” of an organization’s financial position at a given moment
Assets (current)
Assets used or converted into cash within the course of a calendar year
Assets (long)
-Land and equipment
-benefits company over time
Liabilities (current)
A firm’s financial obligation to short-term creditors, which must be repaid within one year
Liabilities (long)
-What you owe over time
-Bond
Statement of cash flow
How the company’s cash changed from the beginning of the accounting period to the end
Financial statement
-Income
-balance sheet
-Cash flow
Ratio analyses
Calculations that measure an organization’s financial health
-Data from the income sheet and balance sheet
