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Intro to Business > Test 2 > Flashcards

Test 2 Flashcards

1
Q

Which form of business is the most common?

A

Sole Proprietors, but they have lower sales and income.

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2
Q

What are the greatest disadvantages of a sole proprietorship?

A

unlimited liability, lack of continuity

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3
Q

Describe taxation for Sole Propietorships

A

Advantage: there is no double taxation, like corporations. Disadvantage: higher rate than coroporations.

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4
Q

What is the difference between a general and limited partnership?

A

General partnerships: all members are general partners that completely share liability. Limited partnerships: one genearl partner with unlimited liabilty.

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5
Q

What are advantages of corporations?

A

limited liability, perpetual life

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6
Q

What are disadvantages of corporations?

A

double taxation, costly to start up

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7
Q

What is the definition of a small business?

A

usually less than 500 people, independently owned and operated, & not dominant in market

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8
Q

What are advantages of small businesses?

A

independence

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9
Q

What are disadvantages of small businesses?

A

high failure rate, under capitalized

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10
Q

What is the #1 reason for small business failure?

A

undercapitilization

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11
Q

What are three demographic trends for small businesses to consider?

A

Baby boomers, Gen Y/Millenials, Immigrants

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12
Q

What is preffered stock?

A

Special stock whose owners can claim profits before other stockholders can, but don’t generally have a say in running the company

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13
Q

What is common stock?

A

Stock whose owners have voting rights in the corporation, but they do not receive preferential treatment regarding dividends.

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14
Q

What is a joint venture?

A

A partnership established for a specific project or for a limited time

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15
Q

What is a S-Corp?

A

A corporation taxed as though it were a partnership (no double taxation) with restrictions on shareholders

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16
Q

What is an LLC? Why do some consider it the best form of business ownership?

A

provides limited liability, like a corporation, but is taxed like a partnership. It protects the members’ assets against lawsuits. It is considered to blend the best characteristics of corporations, partnership and sole proprietorships.

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17
Q

What is a Co-Op?

A

individuals or small businesses that have banded together to reap the benefits of belonging to a larger organization e.g. REI

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18
Q

What is a horizontal merger?

A

when firms that make and sell similar products merge

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19
Q

What is a vertical merger? What are the benefits

A

when companies operating at different, but related, levels of an industry merge. For example, it could be a company acquiring one of their suppliers. This would ensure that particular supply would be readily available or to help smooth out distribution issues.

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20
Q

What is a conglomerate merger?

A

when firms in unrelated industries merge

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21
Q

What is an acquisition?

A

purchase of one company by another

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22
Q

What is an LBO?

A

Leveraged Buyout-purchase in which a group of investors borrows money from banks to acquire a company, using assets of purchased company to guarantee repayment of loan

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23
Q

What is the biggest change that helps small businesses compete with corporations?

A

Technology

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24
Q

How will obamacare affect small businesses?

A

cutoff # for required healthcare will lead business to have fewer employees

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25
What percent of innovations are represented by small businesses?
55%
26
What sector is 80% of US jobs?
Service
27
What benefit do small manufactures have?
Excel at customization
28
40% of high-tech jobs are with who?
small businesses
29
What is franchising?
License to sell another's products or to use another's name in business, or both
30
What is a franchiser?
The company that sells a franchise
31
What is a franchisee?
The purchaser of a franchise
32
What is a breakeven point?
Point at which you cover all fixed costs and begin to make a profit
33
What is downsizing?
Also called rightsizing, acting small from inception e.g. Southwest Airlines
34
What is an intrapreneur?
individuals in large firms who take responsibility for the development of innovations within the organization
35
What are the responsibilities of managers?
Make decisions. Planning. Organizing. Staffing. Directing. Controlling
36
What are three components of a goal?
An attribute sought, a target to be achieved, a time frame
37
What are the three categories of planning?
Strategic, Tactical and Operational
38
Who is responsible for strategic plans?
Executive-level managers
39
What characterizes a tactical plan?
short-range, strategy implementation, usually a year or less
40
What characterizes an operational plan?
very short-term, actionable, specific, helps to achieve tactical plan
41
What characterizes a strategic plan?
long-range
42
What would require a business to increase organizaiton?
growth
43
What is a recruiter who solicits candidates who are currently employed called?
Head hunter
44
What are the five activities of controlling?
Measuring, Comparing against standards, identifying deviations, investigating causes, taking corrective action
45
Who is responsible for tactical planning?
Middle management
46
What are the first line management responsiblities?
supervise workers, oversee daily operations, operational planning, directing and controlling
47
What is an autocratic leader?
stimulate unskilled and unmotivated, most effective in crisis situation, decision makers
48
What is a democratic leader?
involve employees in decisions, employees generally require elss supervision
49
What is a free-rein leader?
employees work with minimal interference, usually highly skilled, trained and motivated employees will do well under this leadership
50
Where do mangers come from?
Hiring out of college, Hiring from an external organization, Internal promotion
51
What are the 6 steps to decision making?
1. Recognize and define the decision situation 2.Develop options 3. Analyze options 4. Select the best option 5. Implement the decision 6. Monitor the consequences
52
What is an organizational culture?
firm's shared values, beliefs, traditions, philosophies, rules and role models for behavior
53
What does an organizational culture ensure?
that members share values, observe common rules, and share problem solving approaches
54
What is an organizational structure?
the arrangement or relationship of positions within an organization
55
What are examples of formal expresssions of the organizational culture?
Mission statement, code of ethics, manuals
56
What are examples of informal expressions of the organizational culture?
dress code, work habits
57
What is specialization?
managerd divide labor into small specific tasks
58
Why specialize?
efficiency, ease of training, activities too numerous for one person
59
Where did the idea of specialization come from?
Adam Smith-Wealth of Nations e.g. pin factory and production capacity
60
What are the risks of specialization
boredem
61
What are the four types of depatmentalization?
Functional, Product, Geographical, Customer
62
What is responsibility?
obligation to peform task, regardless of delegation
63
What is accountability?
being held responsible for outcome of obligation
64
Is accountability the obligation to carry out the task?
No, false
65
What is a centralized organization?
Very little delegation, Authority is concentrated at top level
66
What is a decentralized organization?
decision making is delegated as far down on chain of command
67
What is a wide span of management?
directly supervises large number of employees
68
What is a narrow span of management?
directly supervises only a few employees
69
What are the four forms of organizational structure?
line, line-and-staff, multidvisional, matrix
70
What do the solid lines represent in a line-and-staff structure?
There is direct authority and reporting
71
What do the dotted lines represent in a line-and-staff structure?
They are staff relationships, that assist but do not report
72
What is a group?
common identity, common goal
73
What is a team?
complementary skills, common purpose, hold themselves mutually accountable
74
What is a committee?
permanent, formal, for a specific task
75
What is a task force?
temporary group, for particular change activity
76
What is a goal?
Satisfaction of need
77
What is a need?
difference between desired state and actual state
78
What is motivation?
explanation of why people behave the way they do
79
What is morale?
attitude towards job, employer or colleagues
80
High morale=
higher productivity, loyalty, lower abseenteeism and turnover
81
Lower morale=
higher absenteeism, turnover, lack of commitment
82
What is an intrinsic reward?
personal satisfaction or feeling of accomplishment
83
What is an extrinsic reward?
benefits, recognition, awards that you get from someone else
84
Who developed the classic theory of motivation?
Frederic Taylor & Lillian Gilbreth, early 20th century
85
What did the classic theory of motivation believe?
Money is the sole motivator for workers
86
Who conducted the Hawthorne studies?
Elton Mayo
87
What was Elton Mayo studying?
If lighting and sound affected productivity
88
What did the Hawthorne studies find?
Social and psychological factors influence productivity and morale
89
What did the Hawthorne studies instigate?
Concern for human relations
90
What was the purpose of job rotation?
alleviate boredem, motivate employee
91
What is an important consideration during recruiting?
Legality, Title VII of civil rights act, EEOC, ADA, age discriminiation, equal pay act
92
What are two unexpected consequences of flextime?
better sleeping habits, and physical activity
93
What are three ways to do flexible scheduling?
Flextime, compressed workweek and job sharing
94
What needs must be met first based on Maslow's theory?
bottom needs, before higher level
95
What are the two factors in Herzberg's theory?
Hygiene and motivational
96
What are hygiene factors?
work setting, wages, company policies, job security
97
What are motivational factors?
content of work itself, achievement, recognition, advancement
98
How do hygiene factors affect employee motivation?
absense>dissatisfaction presense>don't necessarily motivate
99
What does Theory X assume?
workers dislike work, must be forced to do jobs (autocratic)
100
What does Theory Y assume?
people like to work, will assume responsibility, will commit to objectives if there is reward (democratic)
101
What does Theory Z stress?
employee participation in all aspects of decision making, complementary with theory Y, ore personal, less formal (closer to free-rein)
102
What does Equity Theory assume?
how much people are willing to contribute depends on their assessment of the fairness of rewards
103
Under equity theory, what will employees do if they don't feel they're being treated fairly?
Steal of slack to level playing field
104
What does Expectancy Theory assume?
motivation depends on how likely they are to get something
105
What is job enlargement?
Adding tasks to job, counteract boredem
106
What is job enrichment?
using motivational factors, developed by Herzberg
107
What is a job analysis?
systematic determining pertinent info about job
108
What is a job description?
formal and writtin specs of the job
109
What is a job specification?
description job qualifications
110
What is recruiting?
formation of pool of qualified candidates
111
Where can you recruit from?
internal and external
112
What is selection?
collecting info about applicants: application, interview, testing, reference checking
113
How do you develope th workforce?
orientation, training, development
114
What are the two ways of assessing performance?
objective/quantitatie or subjective/qualitative
115
What is important to remember when assessing performance?
work environment
116
What are the three different ways to do wages?
Time, Piece, and Commission
117
What are traditional fringe benefits?
sick leave, pension plans, health plans, bonuses
118
What are soft benefits/perks?
on site child care, emphasizing work-life balance, food service etc
119
What is conciliation?
3rd party to continue talks
120
What is mediation?
3rd party to help resolve
121
What is arbitration?
3rd party to settle via legally binding solution
122
Why is it important to monitor decision making?
need to quickly make efficient changes
123
When does a multidivisional structure go into place?
as organizations grow larger and become mroe diversified
124
Where are wider spans of management possible?
Lower levels in the organization
125
Where are narrower spans of management usually?
Higher levels in the organization
126
What does testing help with in the selection process?
eliminates candidates who don't meet the job specifications
127
Why is diversity important?
increasingly diverse workforce reflects increasingly diverse customer base
128
What is imporant to remember in separation?
documentation
129
What is a business plan and why is it important?
a statement of the rationale for the business and a step-by-step explanation of how it will achieve its goals. It acts as a guide and reference document, provides an explanation of the business, includes an analysis of the competition usually, and provides income/expense estimates.
130
What demographic trends will have the most impact on small business in the future?
There is a growing number of immigrants, and studies predict that by 2050 1 in 5 will be an immigrant. Small businesses that specialize in ethic products and services, or have employees that are bi/multi-lingual will have an advantage in the market. The millennials/generation Y are a part of another demographic trend that will impact small businesses. They are concerned with things like direct timely feedback, frequent encouragement, and recognition. Virtual communication will be important to utilize with this group. Lastly, the baby boomers represent another demographic trend that will impact small businesses. They are generally wealthy, and will be in the market for travel, financial planning and health care.
131
What are sole proprietorships? Provide an example
Sole Proprietorships are businesses owned and operated by one individual. Many restaurants are sole proprietorships

Intro to Business (2 decks)

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