Lesson 1 Flashcards
CHAPTER 7
What is a Joint Venture?
A new organization formed by two or more companies, each retaining their independent identity while sharing ownership of the joint entity.
What is the difference between Licenses and Franchises?
Licensing grants permission to manufacture or sell a product, whereas franchising allows a business to operate under another company’s brand and business model.
What is a Consortium?
A short-term legal entity formed by multiple firms to accomplish a specific project.
What role do Agents play in business alliances?
Agents are used as a distribution channel to sell products or services on behalf of a company in a particular market.
Define a Strategic Alliance.
A partnership where two or more companies share resources to pursue shared strategies, without forming a new legal entity.
How is automation impacting the shape of the finance function?
Automation reduces the need for lower-level staff, emphasizing higher-value services like financial analysis and leadership roles.
What is the new mandate for the finance function?
The finance function is shifting towards management and business partnering, focusing on value creation and working closely with the CEO.
What are Shared Service Centers (SSCs)?
Centralized hubs that consolidate business operations (such as finance) to achieve cost savings, process standardization, and better control.
List two advantages of Shared Service Centers (SSCs).
- Cost savings through reduced headcount.
- Improved control and standardization of processes.
What is a major risk of implementing Shared Service Centers (SSCs)?
Consolidating systems and processes can be costly, time-consuming, and complex, potentially leading to resource constraints and HR issues.
What is outsourcing in business?
It is the practice of subcontracting business functions to external service providers for cost savings and access to specialized expertise.
What are two disadvantages of outsourcing?
- Loss of control over the outsourced function.
- Increased risk of data breaches and loss of internal expertise.
How do Service Level Agreements (SLAs) mitigate risks in outsourcing?
By setting clear expectations on service delivery, response times, and procedures for disaster recovery, which help manage outsourcing risks.
What is a Service Level Agreement (SLA)?
A legally binding contract between a company and an outsource provider that defines the level of service, targets, and response times.
