Companies Flashcards
(28 cards)
Why do companies prioritize regular operations over innovation?
Companies devote most of their capital and human resources to regular operations to cover costs and make a profit for their owners.
Innovation often requires significant investment, which may not yield immediate returns.
What is the top priority when a position in a company becomes vacant?
To fill it with someone who can take over the position smoothly and quickly.
Delays in filling positions can lead to larger operational problems and costs.
What are the potential costs of not filling high-level positions effectively?
Not filling high-level positions can end up costing the company huge amounts.
High-level positions often have a greater impact on company performance.
How does the level of responsibility affect employee compensation?
Employees get paid more for having more responsibility, which translates to more cost to the company if the job is not done well.
Higher responsibility typically correlates with higher salaries.
What do companies prioritize when looking to fill a vacant position?
Companies look for candidates with relevant experience.
Experience becomes more important than educational history soon after leaving the education system.
What is the preferred method for filling a position within a company?
Promoting someone already employed by the company who has the necessary experience.
This is preferred because their character is already known.
What is the second-best choice for filling a vacant position?
Finding someone known through industry connections who has the necessary experience.
This method also provides insight into the candidate’s character.
What is the third option for filling a vacancy?
Using a personnel placement company (headhunter) to find industry candidates with relevant experience.
Personnel companies often provide character guarantees for their candidates.
What is the least favored method for filling a position?
Advertising the position publicly and selecting candidates through a self-determined process.
This method involves many unknowns and uncertainties.
What should someone consider when looking to advance their career?
Build up experience, learn new things, and seek new challenges.
Staying in a position where no new skills are gained may signal it’s time to move on.
What should you do if your current employer does not offer a transfer or promotion?
Consider leaving for another company that will provide the desired position.
Having mastered your current role is essential before making this decision.
Why is it important to build a network of contacts in your industry?
Building a network can provide support and opportunities for career advancement.
Networking should begin as soon as you start working, or even earlier.
What is a company?
A company is a legal entity that may own physical things and comes into existence within a particular country and its legal system.
What is required for a new company to come into existence?
A new company must be registered, which requires a name, an address, capital in its own bank account, an outside accountant, and an owner or owners.
What role do the owners of a company play?
The owners appoint a director to run the company and decide how the capital is to be used.
What happens if owners are unhappy with the company’s management?
If the owners are unhappy, they can appoint new directors.
What must a company do in relation to the legal system?
The company must obey the rules and laws of the legal system it exists in.
What is the primary purpose of companies?
Companies exist to add value to physical or mental inputs.
When does a company incur costs?
A company incurs costs in making products or services before it receives any income from selling them.
How does a company determine if it has added value?
A company determines if it has added value by assessing customer response, including how many products/services it can sell and at what price.
What does it mean if a company ‘loses money’?
If a company loses money, it means it did not add value to the inputs, as judged by consumers.
What happens if a company consistently fails to add value?
If a company consistently fails to add value, it will lose money consistently, leading to a decrease in capital.
What occurs if a company runs out of capital?
If a company runs out of capital and cannot obtain more, it will go bankrupt and cease to exist.
