Business Test #2

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  1. What is a Merger?
    When 2 companies come together to form a new company.

    ex: Sprint / Nextel
  2. What is an Acquisition?
    One company buys out another.
  3. Leveraged Buy Out
    An attempt by stakeholders to purchase a company through borrowing.
  4. Vertical Merger
    When 2 companies in a supply chain come together.

    ex: A restaurant buys a bakery.
  5. Horitzontal Merger
    When 2 competitors merge.

    ex: If McDonald's merged with Burger King.
  6. Conglomerate
    Corporation that has divisions that make different products.

    ex: GE
  7. Sole Proprietership
    • +"DBA"
    • +little paperwork
    • +owner has full control
    • +owner gets all profits
    • +owner is only taxed once
    • -unlimited liability
    • -limited financial resources
    • -owner must be 'jack of all trades'
    • -limited life span
    • -time committed
  8. Partnerships
    • +easy to start
    • +more $ resources
    • +benefits to specialization
    • -unlimited liability
    • -division of profits
    • -disagreement among partners
    • -limited life span
  9. Type of Partnerships are ____, ____, ____ .
    • Limited Partnership
    • Limited Liability Partnerships
    • Matter Limited Partnership
  10. Limited Partnership
    2 classes of partners -

    • General Partner
    • Limited Partner
  11. Limited Liability Partnerships
    No general partners.
  12. Matter Limited Partnership
    Ownershares can be traded in the stock market.
  13. Corporations
    • +limited liability
    • +easy to transfer ownership
    • +much easier to finance
    • +easy to attract talent stock incentives (stock options)
    • +unlimited life
    • -double taxation
    • -more paperwork, costs
    • -corporate government issues (Board of Directors)

    **Corporation is a separate legal entity.
  14. S Corporation
    • +tax advantages
    • +transferrable ownership, like a corporation
    • -owndership limited to 100 shareholders
    • -stock aid income restrictions
  15. Limited Liability Company (LLC)
    • +limited liability; like a partnership
    • +ownership rules more flexible than Chapter S
    • +flexible distribution of profits/losses
    • +operation: more flexible than a corporation
    • -ownership is difficult to transfer
    • -limited life span (mostly structured - 30 years)
    • -fewer incentives for members (owners)
    • -owners must pay FICA taxes (social security)
  16. Franchises
    • Not a business; more like a contractual agreement.
    • Turn-key operation (ready to go, no construction)
    • +Mgmt and marketing assisiting
    • +personal ownership
    • +Nationally recognized name (ex: McDonald's, IHOP)
    • +more sources of capital
    • +lower failure rate
    • -large startup/ongoing costs
    • -Mgmt regulation
    • -coattail effects from other franchises
    • -franchise solely responsible for most legal claims
  17. Co-Operative
    • -A business owned and controlled by the people who use it.
    • -# of people or businesses come together for a common cause.

    (ex: New York co-op apartments.)
  18. Human Resource Management consists of what two things?
    • Training (for current position)
    • Development (planning for the future)
  19. Civil Rights Act 1964 (title VII)
    Outlawed discrimination based on race, sex, religion, or national origin.
  20. 2 kinds of Sexual Harrassment
    • Quid Pro Quo (for this, for that) - sexual activity required for getting or keeping job related benefit.
    • Hostile Work Environment - someone'e behavior, what they say/do, creates hostile work environment.
  21. Age Discrimination Act 1967
    Outlawed discrimination against those over 40.
  22. Pregnancy Discrimination Act 1979
    • Required that pregnant women be treated like any other employee.
    • Updated and expanded by Family and Medical Leave Act 1993 (FMLA)
  23. Americans with Disabilities Act (ADA) 1990, updated 2008
    • -Prohibits discrimination of those with disabilities.
    • -Obligates organizations to extend reasonable accomodation.

    (Can the job be performed without reasonable accomodation?)
  24. Civil Rights Act 1991
    • Update of CR 1964 (EEOC - Equal Opp Empl Commission)
    • Places burden
  25. What is: Job Analysis ?
    Breaking a job down into it's basic components.
  26. What is: Job Description ?
    Lists the duties and responsibilities, it's working conditions, tools, materials, and info used to perform it.
  27. What is: Job Specification ?
    Lists the skills, abilities, experience, and other qualifications needed to perform a job effectively.
  28. Recruitment vs. Selection
    Recruitment: attract people to a company.

    Selection: Gather info and decide who will be hired.
  29. What is a: Performance Appraisal ?
    • Evaluation
    • Measures employees performance
  30. What are: 4 functions of management ?
    • Planning
    • Organizing
    • Controlling
    • Leading
  31. Briefly describe:

    • Planning - set goals/standards
    • Organizing - prepare a structure, place employees adequately
    • Controlling - measure results, monitor performance
    • Leading - guide, motivate
  32. Describe: Mission Statement
    • Outlines the organizations fundamental purposes.
    • Addresses organization's:

    • Self concept
    • It's philosophy
    • Long term needs
    • Customer needs
    • Social responsibility
    • Nature or product of service
  33. SWOT Analysis

    analyzes the organization's: ___, ___, ___, ___
    • Strengths
    • Weaknesses
    • Opportunities
    • Threats
  34. 4 types of Planning are:
    • Strategic Planning
    • Tactical Planning
    • Operational Planning
    • Contingency Planning
  35. Strategic Planning consists of:
    Setting of broad, long-range goals by top Managers. (Attacks entire company.)
  36. Tactical Planning consists of:
    The identification of specific, short-range objectives by lower level Managers.
  37. Operational Planning consists of:
    Setting work standards and schedules.
  38. Contingency Planning consists of:
    Backup plans in case primary plans fail.
  39. Define: Decision Making
    • Choose among 2 or more alternatives.
    • It is the heart of mgmt.
  40. Decision Making Model
    • Define the situation.
    • Collect info.
    • Develop alternatives.
    • Agreement (w/ those involved.)
    • Decides what's best.
    • Begin implementation.
    • Follow up.
  41. What are the 3 levels of Management?
    • Top Management (ex: CEO)
    • Middle Management (ex: Directors)
    • Supervisory Management (ex: Line Mgmt, Supervision)
  42. What are the 3 Leadership Styles?
    • Autocratic - controlling; doesn't trust employees.
    • Participative - employees & Mgrs work together.
    • Free Rein - empowerment; allow employees to make decisions.
  43. What did Henry Fayol develop?
    "Principles of Organization"
  44. What does Henry Fayol's, "Principal of Organization," consist of?
    • Unity of Command (employees report to one boss)
    • Hierarchy of Authority (employees know who they report to)
    • Division of Labor (divide jobs by specialization)
    • Subordination of Individual Interests (workers view themselves as a team)
    • Authority (Mgrs give orders, enforce obedience)
    • Degree of Centralization (Amt of decision making power rested in Top Mgmt should vary by circumstance)
    • Clear communication
    • Order (materials & ppl s/b placed & maintained)
    • Equity (treat employees with respect)
    • Espirit de Corps (spirit of pride & loyalty created among ppl)
  45. Max Weber - Organizational Theory
    • Job description
    • Written rules, guidelines, detailed records
    • Consistent procedures, regulations, policies
    • Staffing & promotion based on qualifications
  46. What is the: Span of Control ?
    The optimal # of subordinates that a manager supervises.
  47. Tall Organizational Structure
    • Centralized
    • Narrow span control
    • Low flexibility
  48. Flat Organizational Structure
    • Decentralized
    • Wide span of control
    • High flexibility
  49. 5 types of Departmentalization
    • Functional (focuses on what ppl do)
    • Geographic (divisions in diff locations)
    • Customer (depts based on customer needs)
    • Product (divisions focused on products)
    • Process (based on what a company does)
  50. What are the 3 types of Organizational Models?
    • Line Organizations (an organization that has 2-way lines of responsibility, authority, and communication from top to bottom. - Fayol's theory)
    • Line and Staff Organization (an expansion of the line organization where line employees responsible for organizational goals are assessed and advised by staff employees w/ special skills/knowledge.)
    • Matrix Organization (where teams are formed & team members report to 2 or more Mgrs.)
  51. What are the 3 Organizational Designs for the 21st century?
    • Team Organization (relies almost exclusively on project type teams - these teams tend to be cross-fictional and self-managed w/ little or no underlying functional hierarchy.)
    • Virtual Organization (has little or no formal structure - this type of organization has few fulltime employees and outsources the work.)
    • Learning Organization (focuses on employee training and development while continuing to transform itself to changing needs and demands.)
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Business Test #2
Business test 2
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