Unit 1 Flashcards
Sole Proprietorship (Owned)
Owned by only one person
What fraction do sole proprietorships makeup in the US
3/4
Disadvantage of Sole Proprietorship
unlimited liability
Partnership (owned)
2+ who shared risks and rewards
Partnership Agreement
- Job description/duty/responsibility
- financial investment
- ownership %/profit share
Producer
a business that gathers raw products in their natural state
Producer examples
Agriculture, mining, fishing, forestry
Processors
change raw materials into more finished products
Processors examples
paper mills, oil refineries, smelting plants
Manufacturers
businesses that make finished products out of processed goods
Manufacturers examples
Bakery: bread from wheat
Furniture: table from word
Intermediaries
a business that moves goods from one business to another. Buys/stores/resells.
Wholesaler
distributes goods
retailer
purchases goods from a wholesaler and resells them to the consumer or final buyer.
Wholesaler example
clothing store buys jackets from a manufacturer
Retailer example
record stores or auto dealers
Services
Provide services or skill rather than goods
Services example
law firms, medical clinics, taxi companies
Management plan
divides a company into different departments run by different managers
Organizational chart
show how the business is structured and who is in charge of whom
line of authority
A way to organize management
Centralized organization
puts authority in one place, with top management
Decentralized organization
gives authority to a number of different managers to run their own departments
Departmentalization
divides responsibility among specific units or departments
Informal structure
easier for small businesses
Top-level managers
are responsible for setting goals and planning for the furture
Top-level managers examples
president, vice president, CEO
Middle managers
carry out decisions of top management
Middle managers examples
plant managers, regional managers, department heads
operational managers
responsible for the daily operations of the business
operational managers examples
Supervisors, office managers, crew leaders
4 functions of management
planning/staffing, organizing, controlling, leading
Planning/staffing
setting realistic goals
Organizing
Assign managers to different tasks and coordinate their activities
Leading
create a vision to inspire employees
Controlling
Keeping company on track and making sure goals are met
Advantages of being a manager
payed more good ones are respected influence over how employees do things authority control options
Disadvantages of being a manager
get most of the blame and criticism
mistakes are costly
a lot of pressure
hard to form relationships with lower level workers
leadership
providing direction and vision for a company
Motivation
requires initiative, a goal, enthusiam
initiative
desire to take action and get things done
confidence
need self-confidence, the more convinced you are the more confident employees will be of you
Communication
vision and confidence (human relations)
human relations
the ability to communicate with people
integrity
holding principles like honesty, loyalty, and fairness
Autocratic leadership
when you like to run everything yourself and answer to no one.
Democratic leadership
managers and employees work together to make decisions.
Free-Rein
requires the leader to set goals for your managers and employees and then leave them alone to do their jobs (delegating)
Delegating
giving managers and employees the power to tun things and make decisions
self managed teams
work groups supervise themselves
where did self managed teams start?
japan
what type of business was Henry Ford?
Autocratic
Self managed: organization
- each team member has special skill
2. team selects a team leader
Sole Proprietorship startup
hard-money from friends/family/yourself
Partnership startup
hard-money from owners
corporation startup
easy-stocks
Franchise start-up
investment pay annual fee/%
Non-profit start-up
like corporate/funding from bank
cooperative start-up
pool resources with others to share exapnses
Sole Proprietorship taxes
owners pay
Partnership taxes
owners pay
corporation taxes
corporation is taxed
franchise taxes
owner
nonprofit taxes
none
cooperative taxes
less than normal corprations
Sole Proprietorships liability
unlimited
partnerships liability
unlimited
corporation liability
limited
franchise liability
limited
nonprofit liabilty
limited
cooperative liabilty
shared liabilty
Sole Proprietorship Decision maker
owner
Partnership decision maker
partners decide breakdown w/contract
Corporation decision maker
board of directors
Franchise decision maker
made by corporate
Nonprofit decision maker
board of directors
Cooperative decision maker
share facilities/ marketing
Corporation
a business owned by many people but treated by law as one person
Franchise
a contractual agreement to sell a company’s products or services in a designated area
Nonprofit
a type of business that focuses on providing a service rather than making a profit
Cooperative
an organization owned and operated by its members for the purpose of saving money on the purchase of certain goods and services
stock
shares of ownership in your corporation
