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ARE 5.0 _ FL _ Prac Mgmt > Shell 1 - Business Management > Flashcards

Shell 1 - Business Management Flashcards

1
Q

What are the five areas of “business operations”?

A
  • “business organization” - “office organization” - “ethical standards” - “human resources” - “business development”
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2
Q

What is “business organization”?

A

“The legal structure of an architectural firm” The type of business entity.

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3
Q

What are the 5 (8) basic types of business organization?

A
  • Sole Proprietorship - General Partnership -or- Limited Partnership - Corporation (C-Corp and S-Corp) - LL Company -or- LL Partnership - Joint Venture
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4
Q

What are the main aspects of a Sole Proprietorship?

A
  • Owned by an individual - Easy to set up (easy to get a business license) - Owner has total control over the company - Business expenses and losses can be deducted from taxable income of the company. - Owner is personally liable for company’s wrong-doing and debts. - All owners assets as at stake when company is sued. - Company’s credit and reputation are tied directly to the individual owner - Hard to sell when you are done running it / die
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5
Q

What are the main aspects of a General Partnership?

A
  • Two or more “general partners” share management, profits, and risks. - Each partner is personally liable for company debts and wrong-doing - Partners usually invest directly in the company - All (“general”) partners have a say in controlling the company (consensus) - Relatively easy to form - Partners are liable for each other’s actions - Profits are taxed individually as income to each partner
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6
Q

What are the main aspects of a Limited Partnership?

A
  • Same as General Partnership, except there is at least one “general partner” and at least one “limited partner” - Limited partners: - - Share in profits - - Invest in the company - - Are only liable to the extent of their investment - - Do not have a say in controlling the company - Also relatively easy to form
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7
Q

What are the main aspects of a C Corporation?

A
  • Exists as a legal entity separate from it’s owners. - Relatively complex and costly to set up and maintain; many regulations - Shareholders own the company in shares and elect the directors - Directors have a fiduciary responsibility to act in the best interest of the Corporation; they make broad decisions; they elect officers. - Officers carry out day-to-day management of the Corporation. - Corp can retain some of it’s profits as income - Shareholders are not liable if the company is sued - Easy to raise capital through stock and through the Corporation’s credit rating - Corporations are taxed at a lower rate, but shareholders are taxed again on their dividends
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8
Q

What are the main aspects of an S Corporation?

A
  • Same aspects as a C-Corp - Shareholders don’t get dividends; profits are distributed directly to shareholders - Corporation does not retain any profits; therefore no tax on corporate profits - Is limited to “small business corporations” - Must be a domestic company with fewer than 100 shareholders
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9
Q

What are the main aspects of a Professional Corporation?

A
  • Similar to a corporation - Different rules in different states - Usually liability is limited to the professional who committed the act
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10
Q

What are the main aspects of a LL Company and a LL Partnership?

A
  • They are the same, but an LLC has one member and an LLP has multiple partners - Easier to set up than a corporation, but more complex to set up than a partnership (more regulations) - Like a corporation, liability is limited (only your investment in the company is at stake) - Not a separate entity, not taxed separately - Members are taxed individually on their share of the profits - Non-members are able to manage the company
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11
Q

What are the main aspects of a Joint Venture?

A
  • A temporary association of two or more people / companies for the purpose of completing a project or specific goal - Usually dissolved after the project / goal is achieved - Should be based on a written agreement defining roles, responsibilities, sharing of profits / losses, and project delivery method - Treated like a partnership; not a separate entity for tax or legal reasons - Usually based on a “teaming agreement” / “memorandum of understanding” that defines the partnership if the project is awarded
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12
Q

What is a Teaming Agreement?

A
  • Also called a “memorandum of understanding” - Drawn up before the project is awarded - Can be used to market the team, while trying to win a project - Not a formal business organization, but is used to define the formal partnership once the project is awarded
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13
Q

What is the Standard of Care”?

A
  • The level of skill and diligence that an architect exercise in the same context (same community, time frame, situation, and set of known facts). - Defines a level of care that an architect must reasonably deliver. - Same time frame refers to the time the decision was made, not the time it was litigated.
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14
Q

What kinds of things constitute raising the Standard of Care?

A
  • Terminology in the contract like “to the highest standards” - Architect promising or guaranteeing certain results to the client - Architect taking responsibility for things that are not in the contract
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15
Q

What are the three components of Office Management?

A
  • Work Organization - Support Staff - Regulations governing the practice of Architecture
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16
Q

What is Department Organization of a firm?

A
  • Staff are organized into departments - Each department specializes in in a different phase or function. - Ex: { marketing ; design ; specifications ; contract documents ; CA } - Project is worked on by each dept’ as needed - Also called Horizontal Organization or Flat Organization
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17
Q

What are the benefits / drawbacks of Department Organization of a firm?

A
  • Overall efficiency - Allows employees to specialize and get very good at one aspect - Promotes standardization and process-refinement - Economies of scale; saves money on labor - Can make a company inflexible - Can make a company resistant to innovation - Inter-departmental communication can be difficult - Employees are less well-rounded
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18
Q

What is Studio Organization of a firm?

A
  • Organized around “Studios”: groups of employees that follow a project from start to finish - Each “Studio” must have within it most of the expertise to complete the project - “Studios” may be formed or dismantled as new projects come in or may persist - Works best with a strong Project Manager role - Sometimes called Vertical Organization or Tall Organization
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19
Q

What are the benefits / drawbacks of Studio Organization of a firm?

A
  • “Studios” can specialize in a type of project (e.g. residential, commercial) - Close communication between team members; possibility of group synergy
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20
Q

What types of Support Staff are there?

A
  • Administrative assistants - Receptionist - Bookeeping / Billing / Finance - Marketing staff - Model builders - IT management
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21
Q

What types of authorization might a company need in order to do business in a jurisdiction:

A
  • Always need a local business license - Corporation: registered in the State in which it practices - Some States require a Certificate of Authorization in order to offer public services - LLC Certificate may be required
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22
Q

What is an SS-4 form? How is it used?

A

IRS form for “Application for Employer Identification Number”. EIN is used to file payroll taxes.

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23
Q

What is a W-4 form? How is it used?

A

IRS form for “Employee’s Withholding Allowance Certificate”. Filled out by each employee. A copy must be sent to IRS.

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24
Q

What tax requirements are there on Sole Proprietorships and some Partnerships?

A
  • File State and Federal income tax estimates each quarter. - Pay self-employment tax, to cover SS and Medicare taxes.
25
Q

What additional taxes might be on company goods and supplies in some States?

A
  • “Use tax” on goods purchased from out-of-State. Basically a sales tax. Must file a “Use Tax Certificate”. - “Personal property tax” on furniture of equipment purchased for the company.
26
Q

What other taxes might be on a company from the local jurisdiction?

A
  • City income tax - Employment tax - Occupational privilege tax - Use tax - Property tax
27
Q

What types of government regulations are there for Architectural companies?

A
  • Must obtain a local business license - Might need additional business certificates / ID numbers - File and pay Local, State, and Federal taxes - Maintain a professional license
28
Q

What are the requirements to maintain a professional license?

A

Different in every State, but usually includes: - Re-register annually (or biannually) - Continuing education credits - Have passed the NCARB requirements, IDP program, and ARE - May also have to pass additional State professional exams

29
Q

What standards are there for defining ethics for architects?

A
  • Local and State laws concerning architectural practice - Historical practice ethics - AIA (or other professional association) standards
30
Q

How does the AIA Code of Ethics and Professional Conduct apply to archiects?

A
  • Technically only applies to AIA members - Can be used to determine reasonable Standard of Care in litigation
31
Q

What are the six Canons of the AIA Code of Ethics?

A
  • Canon I: General Obligations - Canon II: Obligations to the Public - Canon III: Obligations to the Client - Canon IV: Obligations to the Profession - Canon V: Obligations to Colleagues - Canon VI : Obligations to the Environment
32
Q

What are the aspects of Canon I of the AIA Code of Ethics?

A

General Obligations: - maintain and improve own skill - seek to improve architectural design standards - seek to improve society and the environment - exercise learned professional judgement - respect human rights - not discriminate

33
Q

What are the aspects of Canon II of the AIA Code of Ethics?

A

Obligations to the Public: - uphold the law - never participate in bribery - never help a client with fraud - promote and serve the public interest - give pro bono services - participate in civil activities - promote public appreciation of architecture

34
Q

What are the aspects of Canon III of the AIA Code of Ethics?

A

Obligations to the Client: - serve the client’s best interest - exercise unbiased judgement - don’t except work beyond your ability - avoid conflicts of interest - be truthful in professional communications - keep the client informed on their project - maintain client confidentiality

35
Q

What are the aspects of Canon IV of the AIA Code of Ethics?

A

Obligations to the Profession: - uphold the integrity of the profession - be honest and fair - don’t seal documents for which you don’t have responsible control - be honest about your qualifications and work you have completed

36
Q

What are the aspects of Canon V of the AIA Code of Ethics?

A

Obligations to Colleagues: - respect the rights of colleagues - acknowledge colleagues’ accomplishments and contributions - provide associates and employees with adequate working conditions - support colleagues through educations, internships, and careers

37
Q

What are the aspects of Canon VI of the AIA Code of Ethics?

A

Obligations to the Environment: - be environmentally responsible - promote sustainable design in their own work - advocate sustainable design in other trades - use sustainable practices in your own firm - encourage others to use sustainable practices

38
Q

What can you NOT ask about in a job interview?

A
  • Age - Date of birth - Marital status - National origin - Race - Maiden name
39
Q

What Federal laws apply to hiring in firms with 15 or more employees (but should be followed by all firms)?

A
  • Civil Rights Act of 1964 - Equal Opportunity Act of 1972 - Civil Rights Act of 1991 - Americans with Disabilities Act
40
Q

What traits on which are you not allowed to discriminate when hiring?

A
  • Sex - Race - Color - Religion - National origin - Disabilities
41
Q

What are the aspects that should be spelled out on an employment contract?

A
  • employee work duties - compensation - benefits - working conditions - termination procedures - policies on moonlighting - may include a non-compete clause
42
Q

What aspects does the IRS use to define an independent contractor?

A

behavioral control, financial control, and relationship between worker and employer.

43
Q

What are the aspects of good management and communication?

A
  • rigorous business plan - rigorous financial plan - clear personnel policies - rigorous management procedures - communicate these things to employees - allow for employee complaints and suggestions
44
Q

Other than compensation, what benefits can an employer offer?

A
  • Flextime (flexible star and end times) - Office-Sponsored Events - Floating Holidays (optional extensions to common holidays) - Sabbaticals - Flexible Days Off - Compensation Alternatives (paid expenses) - Annual Performance Bonuses - Profit Sharing - Wellness Programs - Company Vehicle - Community Involvement (time off for) - Paid Professional Dues - Office Amenities (creature comforts) - Continuing Education - Extra Family Medical Leave
45
Q

What are some guidelines for employee evaluations?

A
  • Must be standardized for all employees of same level (unbiased) - As much as possible based on objective and measurable criteria - Performance should be measured more on outcome than on specific actions taken to get there - Give the employee an sense of how they are doing - Give the employee guidelines for improvement - If they are not meeting expectations, give them definite steps for achieving that - More constructive than critical - Use standard forms if possible - More than one reviewer, if possible - Based on consistent actions, not outlier occurrences - Provide written summary, if possible
46
Q

What are the main aspects of a Quality Control Circle?

A
  • Group of employees who meet to resolve issues related to their work - Ongoing group, not based on a specific need that comes up - Can solve project issues or work on general improvement to the firm
47
Q

What are three ways of increasing employee participation in the firm?

A
  • Quality Control Group - Study Group - Employee Stock Ownership Plan (ESOP)
48
Q

What is the National Labor Relations Act about?

A

Allows employees to organize into unions and protects employee form unfair labor practices.

49
Q

What is the Equal Pay Act about?

A

Requires equal pay for employee with the same responsibilities and experience.

50
Q

What is the Employee Eligibility Verification Act about?

A

Requires employee to verify employees’ right to work in the US by maintaining the I-9 form for at least 3 years, and 1 year after termination.

51
Q

What is the Wages and Fair Labor Standards Act (FLSA) about?

A

Establishes minimum wage, overtime pay, employment recordkeeping, and child labor laws

52
Q

What is the Occupational Safety and Health Act (OSHA) about?

A

Requires safe work environments. Requires sanitary offices with first aid kits, MSDS sheets, and fire extinguishers.

53
Q

What is the Health Insurance Portability and Accountability Act (HIPAA) about?

A

Protects the privacy of individuals’ health care information

54
Q

What is the Employee Retirement Income Security Act (ERISA) about?

A

Set minimum standards for pension plans.

55
Q

What is the Consolidated Omnibus Budget Reconciliation Act (COBRA) about?

A

For 20 or more employees. Must continue group health insurance coverage if employment ends (except in case of gross misconduct), working hours change, or employment changes.

56
Q

What is the Civil Rights Act of 1991 about?

A

For 15 or more employees. Cannot discriminate based on sex, race, color, religion, or national origin.

57
Q

What is the Age Discrimination Act of 1967 (ADEA) about?

A

For 15 or more employees. Cannot discriminate based on age of persons over 40.

58
Q

What is the Family Medical Leave Act (FMLA) about?

A

For 50 or more employees. Must give 12 weeks of unpaid leave for child, spouse, or parent care without consequence to employment.

59
Q

What elements can be part of a firms marketing plan?

A
  • Person-to-person networking - Corporate identity / branding - Brochures - Website - Social media - Standard presentation - Public advertising - Past client recommendations - Public relations (positive public image of the firm): - - Press releases - - Publishing (articles) - - Organize seminars / workshops - - Involvement in local service / politics

ARE 5.0 _ FL _ Prac Mgmt (3 decks)

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