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PHR Certification > Module 1: Business Management & Module 1.1A: Organizational Structure & Leadership > Flashcards

Module 1: Business Management & Module 1.1A: Organizational Structure & Leadership Flashcards

1
Q

What is Business Management?

A

Using information about organization in business environment to reinforce expectations, influence decision making, and avoid risks.

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2
Q

What is a Vision Statement?

A
  • Inspirational & aspirational
  • Future-focused on organization

Ex) Company’s vision is to invent an innovative product & launch it globally in 5 years

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3
Q

What is a Mission Statement?

A

The present, processes, and customers

Ex) Company’s mission is to open an office in NYC before the end of year.

Strategy - Combination of Short & Long-Term goals to achieve mission.

  • Policies & Procedures for company
  • Contract with client
    Must be balanced with business needs and legal requirements
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4
Q

Company’s Strategic Plan

A

Roadmap for company to achieve its mission and vision

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5
Q

What are Values?

A
  • Define Ethics
  • Code of Conduct (Behavior)
  • What’s important to your company & what sets you apart

Ex) Think about your own life & what’s important - honesty, integrity, compassion, and kindness

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6
Q

3 Examples Business Management is Important to HR

A

1) Mission: Create policies & procedures for the company

If you misunderstand the mission, you might create something that is misaligned.

Ex) You were entered into a contract with a client to complete work at a specific time so you hired 30 people in 30 days. Job requirement is to post jobs internally 10 days before recruiting externally. There needs to be a balance between legal requirements & business needs.

2) Company Strategy: HR helps organization achieve its strategies through its people.

Ex) When HR creates strategy, it’s critical that it needs to be aligned with overall company strategy and buy in of leadership.

3) Work in HR is to bring company’s value to life.

Ex) Ethics is doing the right thing when no one is watching. Ethics & global compliance training is assigned every year so values kept top of mind. HR is a safe place to share concerns and values not just conversational, they are the fabric of our organization.

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7
Q

What is Ethics?

A

HR ensure policies and procedures also include compliance. We understand policies, write them, and must always hold ourselves to the highest standards of ethical behavior.

Phrase - “Walk the Talk”

We can’t credibility ask people to comply if we are not willing to consistently model what that means.

The most important investment you can make is yourself - Warren Buffett

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8
Q

What is an Organization?

A

A group of individuals united around a specific purpose, engaged in the pursuit of achieving a set of common goals

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9
Q

What is Human Capital?

A

The value added to an organization by skills, knowledge, and talent of its employees

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10
Q

What is the role of Human Resources?

A

HR maximizes the value added to the organization by its employees

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11
Q

How does HR fulfill its role?

A

Through staffing, they are responsible for ensuring positions are filled in a timely manner and people are a good fit for the organization.

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12
Q

What are some of HR’s functions?

A

1) HR must have a thorough understanding of the organization’s vision, mission, goals, and objectives
2) HR functions include compensation and benefits, compliance, employee relations, recruitment, and safety.
3) HR could be responsible for the acquisition of new technology, design and implementation of rewards programs, employee development opportunities, as well as increasing employee engagement and innovation

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13
Q

What is the Adamson Act 1916?

A

US Federal Law passed in 1916 that established an 8 hour workday with additional pay for overtime for interstate railroad workers.

Enacted by the 64th US Congress

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14
Q

What is the Scientific Management Theory of 1911?

A

Fredrick Taylor believed efficiency is achieved by matching a motivated worker with a job that utilized his or her individual capabilities.

The best way to motivate employees was through money.

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15
Q

Who was known for the Scientific Management Theory?

A

Fredrick Taylor

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16
Q

What is the Fair Labor Standards Act (FLSA) 1938?

A

US Labor Law that created the right to a minimum wage, and “time-and-a-half” overtime pay when people worked over 40 hours a week.

FLSA also prohibits child labor.

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17
Q

What was the Equal Pay Act of 1963?

A

Required organizations to ensure all employees were treated equally.

US Labor Law amending the Fair Labor Standards Act, aimed at abolishing wage disparity based on sex. It was signed into law on June 10, 1963, by John F. Kennedy as part of his New Frontier Program.

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18
Q

What was the Civil Rights Act of 1964?

A

US civil rights and labor law that outlaws discrimination based on race, color, religion, sex, national origin, sexual orientation and gender identity.

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19
Q

What is the Internal Revenue Service (IRS)?

A

Defines business entities based on who owns and is legally responsible for a business.

Ex) How taxes are paid, how business losses are deducted, and who is liable for the business’ actions and debts

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20
Q

What is a Sole Proprietorship?

A

Businesses with a single owner who is solely accountable for the business.

Income is reported as personal income and subject to self-employment taxes.

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21
Q

What is a Partnership?

A

When two or more people share ownership of a business entity.

The business itself is not subject to income tax. Income as personal income tax and are responsible for self-employment taxes.

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22
Q

What is a Corporation?

A

A corporation is owned and funded by shareholders through the sale of stocks.

Corporation is responsible for taxes, debts, and its actions. They are also subject to taxes on profits and
income taxes on their distributed shares of profits.

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23
Q

What is a Limited Liability Corporation (LLC)?

A

LLC offers owners the liability protection of a corporation without requiring the sale of stocks.

Report share of earnings as personal income tax and are subject to self-employment taxes.

A few states require at least two members to grant an LLC designation.

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24
Q

What is an S-Corporation?

A

S-Corporation is owned by shareholders who have individual tax liability for the business, akin to a partnership.

Report their share of the corporation’s profits and losses on their personal income taxes. Business itself is not taxed on profits.

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25
Q

What is a Business Element?

A

Key components of an organization

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26
Q

What are the 5 key components of an organization?

A

1) Products/Services
2) Competitors
3) Customers/Clients
4) Technology Use
5) Organizational Culture

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27
Q

What is a Product?

A

A product may be a tangible item, such as a jewelry, a cell phone, or a computer.

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28
Q

Can a product be an intangible item?

A

Yes

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29
Q

What are Intangible Services?

A

Professional jewelry cleaning, cellular service, or Internet access

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30
Q

Who is a Recipient of a product or service?

A

Organization’s customers or clients

31
Q

Who is a Competitor?

A

Organization that offers similar products and services and targets the same customers.

32
Q

How can you avoid a Competitor?

A

You cannot avoid a competitor, but you can stand apart from the competition in a way that attracts customers.

33
Q

What is an Organizational Culture?

A

An organization’s culture is formed by its values, beliefs, and actions.

An organization that identifies giving back as a core value and provides opportunities for employees to volunteer or matches donations, is creating a culture of giving.

34
Q

What is Technology Use?

A

The way an organization chooses to incorporate technology impacts everything from product fulfillment and customer experience to employee development and payroll.

As technology continues to advance, organizations must adapt and evolve with it.

35
Q

What are the organization’s Internal Functions and Departments?

A

1) Production (Operations)
2) Information Technology (IT)
3) Marketing
4) Accounting
5) Research & Development (R&D)

36
Q

What is the role of Production?

A

Also known as Operations or Supply Chain Management makes the organization’s product.

Production involves understanding organizational capacity, monitoring inventory, creating a production schedule based on peak times or seasons, ensuring quality, and controlling the cost of production.

37
Q

What is the role of Marketing?

A

Marketing is responsible for how the organization presents itself and its products to the public.

Marketing includes product packaging and pricing as well as determining how to promote the product and where it should be sold.

They are usually combined with sales. Sales are focused on encouraging people to make a purchase.

38
Q

What is the role of Finance/Accounting?

A

Finance is responsible for ensuring an organization has the financial resources needed to meet its goals.

Tasks include creating financial models based on forecasted needs, setting prices, and reporting on financial health.

Accounting is responsible for keeping an organization’s financial records. Ex) Accounts payable and receivable, budget preparation, payroll, and more.

39
Q

What is the role of Research & Development (R&D)?

A

R&D is responsible for continuous adaptation and innovation.

Tasks include designing new products, redesigning established products, and prototype testing.

R&D is frequently a function of the marketing department. Work done by R&D is usually informed by market research, customer feedback, or technological advancements.

40
Q

What is the role of Information Technology (IT)?

A

The IT function within an organization varies greatly by industry and organization size.

IT exists to help the organization achieve goals through the data management and leveraging technological solutions.

41
Q

Who is a Stakeholder?

A

Anyone who has an interest in the success or failure of an organization.

Stakeholders may be inside (internal) or outside (external) of the organization.

Ex) Individuals - employees, investors, owners, shareholders
Organizations - vendors & creditors
Other Groups - local communities & unions

42
Q

Who are Internal Stakeholders?

A

Cross-functional stakeholders that represent different functions within the organization.

They have unique goals that contribute to the organization’s goals. Occasionally, their goals seem to conflict.

Ex) Technology may want to invest in new software to achieve its goal of maximizing efficiency. However, finance may have a goal to reduce spending.

HR will need to build relationships with the cross-functional stakeholders, find a resolution and encourage collaboration.

43
Q

How can HR motivate collaboration with cross-functional stakeholders?

A

Through rewards such as acknowledgement, bonuses, and wages

44
Q

What is an Organizational Chart?

A

A chart that shows 4 distinct dimensions of the organizational structure.

1) Reporting Hierarchy
2) Labor Division
3) Control Span
4) Line and staff positions

45
Q

What is the role of an Organizational Structure?

A

Determines the hierarchy of authority within the organization.

The structure of an organization can simplify decision making, establish reporting lines, and encourage efficiency by streamlining processes.

46
Q

What is the role of an Organizational Design?

A

Defines how the different functions within it work together.

47
Q

What is the role of a Reporting Hierarchy?

A

Establishes responsibility for employee performance and management. It represents the chain of command within an organization from the top down, beginning with senior executives.

48
Q

What is the role of a Labor Division?

A

Depicts who is responsible for different tasks within an organization. It clarifies which teams or employees are accountable for which processes.

Ex) New employee orientation is the responsibility of HR while in others there is a training department that may handle it instead.

49
Q

What is the role of a Control Span?

A

Establishes how many employees are supervised by a single manager.

Ex) When a supervisor manages several employees, the supervisor has a wide span of control.

A supervisor who only manages a few employees has a narrow control span.

50
Q

What are Staff Positions?

A

Responsible for advisory or support functions, including HR, IT, and Accounting. They are depicted using a dotted line.

Positions that support the organization directly by generating revenue, such as sales, production, and marketing positions are represented by a solid line on an organizational chart.

51
Q

What is a Clear Line of Authority?

A

Referred to as a traditional structure

52
Q

What are the 4 Traditional Structures?

A

The most common traditional structures are functional, divisional, matrix, and hybrid structures.

53
Q

What is a Functional Structure?

A

The most common organizational structure is a functional structure which facilitates specialization.

Ex) HR, Finance, Marketing, Sales, Production

54
Q

What is a Divisional Structure?

A

Departments or divisions are based on product market or industry.

This structure benefits organizations with multiple products or services that require distinct support.

AKA Geographic Structure

55
Q

What is a Matrix Structure?

A

A combination of functional and divisional structures, a matrix structure facilitates cross-functional resource sharing and collaboration.

In a matrix structure, employees typically report to a functional as well as a division manager.

56
Q

What is a Hybrid Structure?

A

A hybrid structure combines specific components from other structures into a unique organizational design.

An organization with a hybrid structure may utilize a functional structure for HR and finance, while also having divisional product specific departments.

57
Q

What is Human Capital Management?

A

Strategies for recruiting, developing, managing, and retaining employees.

58
Q

Benefits & Compensation

A

HR is responsible for the selection of group health coverage and retirement savings fund options.

HR determines compensation and may be responsible for payroll functions as well.

59
Q

Employee Development

A

HR is responsible for ensuring all employees have the skills, tools, and training necessary to perform their jobs.

Additionally, HR creates and implements employee growth and development opportunities.

60
Q

Employee Relations

A

HR is responsible for maintaining productive relationships between an organization and its employees. Gauging employee engagement and satisfaction, as well as responding to and resolving grievances or conflicts are all part of employee relations.

61
Q

Recruitment & Staffing

A

An increasing competitive and diverse workforce means organizations must be competitive to secure top talent.

HR is responsible for recruiting, hiring, and retaining high potential employees as well as ensuring organizational staffing needs are met.

62
Q

Workplace Safety

A

A safe workplace is essential. In fact, the Occupational Safety and Health Act (OSHA) of 1970 federally mandated employee safety. HR is responsible for OSHA compliance.

Additionally, if on-the-job injuries do occur, HR handles workers’ compensation.

63
Q

What is the role of an HR Specialist?

A

A specialist is an HR professional who is an expert in a specific HR function. They can focus on any HR function - compliance, benefits, or recruiting.

64
Q

What is the role of an HR Generalist?

A

A generalist is an HR professional who handles multiple HR functions.

65
Q

What is the role of an HR Shared Services?

A

Refer to the centralization of administrative functions within an organization.

66
Q
  1. Which organizational structure might include components from all three of the other organizational structures?
A

Hybrid

67
Q
  1. Which organizational structure is most likely to group employees only by physical region?
A

Divisional

68
Q
  1. Which organizational structure is most likely to have employees reporting to two managers?
A

Matrix

69
Q

Which of the following is not an example of a stakeholder?

A

A. Employee
B. Shareholder
C. Supplier
D. Customer

Answer: Customer

70
Q

To develop strategic relationships with key stakeholders, HR practioners should first:

A

Spend time with the organization’s leaders to learn more about the organization and its challenges.

71
Q

To develop strategic relationships with key stakeholders, HR practitioners should first:

A

Spend time with the organization’s leaders to learn more about the organization and its challenges.

72
Q

Strategic HR places responsibility for managing people with:

A

Line managers

73
Q

The most effective way for HR to strengthen its relationships with key leaders is by:

A

Building credibility

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