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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
Q

What percent of innovations are represented by small businesses?

A

55%

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26
Q

What sector is 80% of US jobs?

A

Service

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27
Q

What benefit do small manufactures have?

A

Excel at customization

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28
Q

40% of high-tech jobs are with who?

A

small businesses

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29
Q

What is franchising?

A

License to sell another’s products or to use another’s name in business, or both

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30
Q

What is a franchiser?

A

The company that sells a franchise

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31
Q

What is a franchisee?

A

The purchaser of a franchise

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32
Q

What is a breakeven point?

A

Point at which you cover all fixed costs and begin to make a profit

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33
Q

What is downsizing?

A

Also called rightsizing, acting small from inception e.g. Southwest Airlines

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34
Q

What is an intrapreneur?

A

individuals in large firms who take responsibility for the development of innovations within the organization

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35
Q

What are the responsibilities of managers?

A

Make decisions. Planning. Organizing. Staffing. Directing. Controlling

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36
Q

What are three components of a goal?

A

An attribute sought, a target to be achieved, a time frame

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37
Q

What are the three categories of planning?

A

Strategic, Tactical and Operational

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38
Q

Who is responsible for strategic plans?

A

Executive-level managers

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39
Q

What characterizes a tactical plan?

A

short-range, strategy implementation, usually a year or less

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40
Q

What characterizes an operational plan?

A

very short-term, actionable, specific, helps to achieve tactical plan

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41
Q

What characterizes a strategic plan?

A

long-range

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42
Q

What would require a business to increase organizaiton?

A

growth

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43
Q

What is a recruiter who solicits candidates who are currently employed called?

A

Head hunter

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44
Q

What are the five activities of controlling?

A

Measuring, Comparing against standards, identifying deviations, investigating causes, taking corrective action

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45
Q

Who is responsible for tactical planning?

A

Middle management

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46
Q

What are the first line management responsiblities?

A

supervise workers, oversee daily operations, operational planning, directing and controlling

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47
Q

What is an autocratic leader?

A

stimulate unskilled and unmotivated, most effective in crisis situation, decision makers

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48
Q

What is a democratic leader?

A

involve employees in decisions, employees generally require elss supervision

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49
Q

What is a free-rein leader?

A

employees work with minimal interference, usually highly skilled, trained and motivated employees will do well under this leadership

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50
Q

Where do mangers come from?

A

Hiring out of college, Hiring from an external organization, Internal promotion

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51
Q

What are the 6 steps to decision making?

A
  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
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52
Q

What is an organizational culture?

A

firm’s shared values, beliefs, traditions, philosophies, rules and role models for behavior

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53
Q

What does an organizational culture ensure?

A

that members share values, observe common rules, and share problem solving approaches

54
Q

What is an organizational structure?

A

the arrangement or relationship of positions within an organization

55
Q

What are examples of formal expresssions of the organizational culture?

A

Mission statement, code of ethics, manuals

56
Q

What are examples of informal expressions of the organizational culture?

A

dress code, work habits

57
Q

What is specialization?

A

managerd divide labor into small specific tasks

58
Q

Why specialize?

A

efficiency, ease of training, activities too numerous for one person

59
Q

Where did the idea of specialization come from?

A

Adam Smith-Wealth of Nations e.g. pin factory and production capacity

60
Q

What are the risks of specialization

A

boredem

61
Q

What are the four types of depatmentalization?

A

Functional, Product, Geographical, Customer

62
Q

What is responsibility?

A

obligation to peform task, regardless of delegation

63
Q

What is accountability?

A

being held responsible for outcome of obligation

64
Q

Is accountability the obligation to carry out the task?

A

No, false

65
Q

What is a centralized organization?

A

Very little delegation, Authority is concentrated at top level

66
Q

What is a decentralized organization?

A

decision making is delegated as far down on chain of command

67
Q

What is a wide span of management?

A

directly supervises large number of employees

68
Q

What is a narrow span of management?

A

directly supervises only a few employees

69
Q

What are the four forms of organizational structure?

A

line, line-and-staff, multidvisional, matrix

70
Q

What do the solid lines represent in a line-and-staff structure?

A

There is direct authority and reporting

71
Q

What do the dotted lines represent in a line-and-staff structure?

A

They are staff relationships, that assist but do not report

72
Q

What is a group?

A

common identity, common goal

73
Q

What is a team?

A

complementary skills, common purpose, hold themselves mutually accountable

74
Q

What is a committee?

A

permanent, formal, for a specific task

75
Q

What is a task force?

A

temporary group, for particular change activity

76
Q

What is a goal?

A

Satisfaction of need

77
Q

What is a need?

A

difference between desired state and actual state

78
Q

What is motivation?

A

explanation of why people behave the way they do

79
Q

What is morale?

A

attitude towards job, employer or colleagues

80
Q

High morale=

A

higher productivity, loyalty, lower abseenteeism and turnover

81
Q

Lower morale=

A

higher absenteeism, turnover, lack of commitment

82
Q

What is an intrinsic reward?

A

personal satisfaction or feeling of accomplishment

83
Q

What is an extrinsic reward?

A

benefits, recognition, awards that you get from someone else

84
Q

Who developed the classic theory of motivation?

A

Frederic Taylor & Lillian Gilbreth, early 20th century

85
Q

What did the classic theory of motivation believe?

A

Money is the sole motivator for workers

86
Q

Who conducted the Hawthorne studies?

A

Elton Mayo

87
Q

What was Elton Mayo studying?

A

If lighting and sound affected productivity

88
Q

What did the Hawthorne studies find?

A

Social and psychological factors influence productivity and morale

89
Q

What did the Hawthorne studies instigate?

A

Concern for human relations

90
Q

What was the purpose of job rotation?

A

alleviate boredem, motivate employee

91
Q

What is an important consideration during recruiting?

A

Legality, Title VII of civil rights act, EEOC, ADA, age discriminiation, equal pay act

92
Q

What are two unexpected consequences of flextime?

A

better sleeping habits, and physical activity

93
Q

What are three ways to do flexible scheduling?

A

Flextime, compressed workweek and job sharing

94
Q

What needs must be met first based on Maslow’s theory?

A

bottom needs, before higher level

95
Q

What are the two factors in Herzberg’s theory?

A

Hygiene and motivational

96
Q

What are hygiene factors?

A

work setting, wages, company policies, job security

97
Q

What are motivational factors?

A

content of work itself, achievement, recognition, advancement

98
Q

How do hygiene factors affect employee motivation?

A

absense>dissatisfaction presense>don’t necessarily motivate

99
Q

What does Theory X assume?

A

workers dislike work, must be forced to do jobs (autocratic)

100
Q

What does Theory Y assume?

A

people like to work, will assume responsibility, will commit to objectives if there is reward (democratic)

101
Q

What does Theory Z stress?

A

employee participation in all aspects of decision making, complementary with theory Y, ore personal, less formal (closer to free-rein)

102
Q

What does Equity Theory assume?

A

how much people are willing to contribute depends on their assessment of the fairness of rewards

103
Q

Under equity theory, what will employees do if they don’t feel they’re being treated fairly?

A

Steal of slack to level playing field

104
Q

What does Expectancy Theory assume?

A

motivation depends on how likely they are to get something

105
Q

What is job enlargement?

A

Adding tasks to job, counteract boredem

106
Q

What is job enrichment?

A

using motivational factors, developed by Herzberg

107
Q

What is a job analysis?

A

systematic determining pertinent info about job

108
Q

What is a job description?

A

formal and writtin specs of the job

109
Q

What is a job specification?

A

description job qualifications

110
Q

What is recruiting?

A

formation of pool of qualified candidates

111
Q

Where can you recruit from?

A

internal and external

112
Q

What is selection?

A

collecting info about applicants: application, interview, testing, reference checking

113
Q

How do you develope th workforce?

A

orientation, training, development

114
Q

What are the two ways of assessing performance?

A

objective/quantitatie or subjective/qualitative

115
Q

What is important to remember when assessing performance?

A

work environment

116
Q

What are the three different ways to do wages?

A

Time, Piece, and Commission

117
Q

What are traditional fringe benefits?

A

sick leave, pension plans, health plans, bonuses

118
Q

What are soft benefits/perks?

A

on site child care, emphasizing work-life balance, food service etc

119
Q

What is conciliation?

A

3rd party to continue talks

120
Q

What is mediation?

A

3rd party to help resolve

121
Q

What is arbitration?

A

3rd party to settle via legally binding solution

122
Q

Why is it important to monitor decision making?

A

need to quickly make efficient changes

123
Q

When does a multidivisional structure go into place?

A

as organizations grow larger and become mroe diversified

124
Q

Where are wider spans of management possible?

A

Lower levels in the organization

125
Q

Where are narrower spans of management usually?

A

Higher levels in the organization

126
Q

What does testing help with in the selection process?

A

eliminates candidates who don’t meet the job specifications

127
Q

Why is diversity important?

A

increasingly diverse workforce reflects increasingly diverse customer base

128
Q

What is imporant to remember in separation?

A

documentation

129
Q

What is a business plan and why is it important?

A

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
Q

What demographic trends will have the most impact on small business in the future?

A

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
Q

What are sole proprietorships? Provide an example

A

Sole Proprietorships are businesses owned and operated by one individual. Many restaurants are sole proprietorships

Intro to Business (2 decks)

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