Final Exam (pre-midterm) Flashcards
(302 cards)
1
Q
Business
A
An organization that seeks profit by providing goods and services to satisfy society’s needs
2
Q
Goods
A
Are physical, tangible products that we can see and touch. Examples include tablets, clothing, food, cars etc
3
Q
Services
A
Are intangible offerings that we experience or use. Examples include hospitals, governments, lawyers, stylists etc
4
Q
Standard of living
A
The amount of products available, the wealth of the nation, and the lifestyle oppurtunities
5
Q
Quality of life
A
General level of human well-being and happiness including access to healthcare, education and food
6
Q
Risk
A
The chance that an investments actual return will be different than expected. Potential for losing resources (i.e. time, money) or be unable to accomplish organizational goals
7
Q
Revenue
A
The money a company earns from providing services or selling goods to A CUSTOMER
8
Q
Costs
A
Expenses for rent, salaries, supplies, transportation and many other items that a business incurs from creating and selling goods and services
9
Q
Profit
A
The money left over after all expenses are paid
10
Q
Not for profit organization
A
An organization that typically exists to achieve a social goal or goals as opposed to the usually business goal of profit.
Examples: Saskatoon Zoo Society, Big Brothers Big Sisters
11
Q
5 factors affect the business environment
A
Political
Economic and Competitive
Social
Technology
International
12
Q
Political
A
The 3 levels of government in Canada have different roles and responsibilities that affect business (e.g. taxation, banking, healthcare
13
Q
Economic and Competitive
A
Size and health of economy must be considered when making business decisions (e.g. when a nation’s economy or a business’s profits trend negatively) high levels of competition force businesses to cut costs, develop new products, increase marketing offers
14
Q
Social
A
Changes in demographics influences what’s products companies offer including age, gender, ethnicity, cultural diversity (e.g. diversity, baby boomers retiring)
15
Q
Technology
A
Technology innovation has changed how businesses produce and distribute goods and how we communicate (e.g. social media)
16
Q
International
A
Access to global markets increases competition and need to enhance skills (e.g. China leads in electronics manufacturing)
17
Q
Federal Government has the authority over
A
Money and banking
Trade regulations
External Relations
Defense
Criminal Law
Employment Insurance
Copyrights
Transportation
18
Q
Provincial and territorial governments
A
Protecting rights
Responsibilities: administration of labour laws, education, health and welfare, protection of property and civil rights, natural resources, environment
Labour laws include minimum working standards such as minimum wages, vacations, statutory holidays and over time
19
Q
Municipal governments
A
Delivering the services such as:
Water, sewer, waste collection
Encourages: economic development
BYLAWS= Regulation
20
Q
Governments as tax agents
A
Income taxes, sales taxes, property taxes and sin taxes
The federal government provides significant financial support to assist the provinces and territories to provide the program and services they are responsible for in the form of transfer payments
21
Q
Three main transfer payments (equalizing wealth) include
A
Canada’s health transfer (CHT)
Canada social transfer (CST)
Equalization program
22
Q
Governments as regulators
A
Protect Canadian interests
Create competition
Protect the consumer
Promote social programs
Protect the environment
23
Q
Governments as providers of essential services
A
Reliable National Defense
Transportation means: roads
Hospitals
Economic development
Safe drinking water
Effective Police service
24
Q
Patents
A
Gives an inventor the exclusive right to manufacture, use and sell an invention for 20 years.
Need to meet requirements of being new, unique and useful.
Protects authors, inventors and creators
Includes: printed material (books, magazine articles, lectures), works of art (art, photographs, and movies)
25
Trademark
A design, name or other distinctive mark that is used to identify products
Creates uniqueness in the minds of consumers
26
Consumerism
Reflects the struggle for power between buyers and sellers. Movement seeking to increase rights and power.
27
Consumer protection
Warranties
Product liability law
Competition act
28
Competition act
Parallel pricing
Quota selling
Market sharing
Product specialization
29
Bankruptcy
The legal act by which individuals or businesses that cannot meet their financial obligations are relieved of some, if not all, of their debt
30
Deregulation
The removal of rules and regulations governing business competition
31
Income taxes
Based on income of businesses and individuals
32
Property taxes
Imposed on real and personal property and based on an assessment
33
Payroll taxes
Collected by the employer and remitted to the federal government (Deductions)
34
Sales taxes
Levied on goods and services when they are sol (percentage of the price)
35
Excise taxes
Taxes imposed on specific items like gasoline, alcohol, and tobacco
36
Economic systems
Determine how wealth is made and distributed in a country
Affects business oppurtunities to make income and create wealth
Affects the choices of consumers and the prices they pay
37
Economy
The way in which people deal with the creation and distribution of wealth
38
Economics
The study of how society uses resources to produce and distribute goods and services
39
Macroeconomics
The sub-area of economics that focuses on the economy as a whole by looking at aggregate data for large group of people, companies or products
40
Microeconomics
The sub-area of economics that focuses on individual parts of the economy, such as households or business
41
Factors of production
Natural resources
Labour
Entrepreneurs
Knowledge
Capital
42
Natural resources
Commodities that are useful inputs in their natural state
43
Labour
Economic contributions of people
44
Entrepreneurs
Combination of natural resources, labour and capital to produce goods and services
45
Capital
Inputs used to produce goods and services and get them to the customers
46
Knowledge
The combined talents and skills of the workforce
47
Capitalism
An economic system in which individuals own and operate the majoring of business that provide goods and services
Invisible hand
48
Invisible hand
A term created by Adam Smith to describe how an individual’s personal gain benefits others and a country’s economy
49
Free- Market Economy
An economic system in which businesses and individuals decide what to produce and buy and the market determines prices and quantities sold
50
Mixed economy
An economic system where most land and business are privately owned but with various levels of government involvement
51
Command economy
An economic system in which the government decides what goods and services will be produced, how they will be produced, for whom available goods and services will be produced and who owns and controls the factors of production
52
Competition
Rivalry among businesses for sales to potential customers
Affect the number of choices and invidividual has and the prices he or she pays for products of an industry: helps business owners and employees to choose effective business strategies
53
Perfect competition
Large # of small firms, similar products, available information, low barriers to entry/exit
Examples: corn, wheat, peanuts, many agricultural products
54
Monopolistic competition
Many firms, differentiated substitutes, relatively easy entry
Examples: clothing, and shoes
55
Oligopoly
Few firms, large capital requirements (high barriers to entry)
Examples: automobiles, cereals
56
Monopoly
1 firm controls all industry sales, no entry of new firms
Examples: software protected by copyright, many local public utilities
57
Equilibrium price
Price at which the quantity demanded is exactly equal to the quantity supplied
58
Supply
The quantity of a product that producers are willing to sell at each of various prices
59
Demand
The quantity of a product that buyers are willing purchase at each of various prices
60
Economies fluctuate between high and low points resulting in business cycles consisting of four phases
Peak or Boom (economy is doing really well)
Recession (or contraction): two or more consecutive three-month periods of a decline in a country’s GDP
Depression
Expansion or recovery
61
Gross domestic product (GDP)
Total dollar value of all goods and services produced by all people within the boundaries of a country during a 1 year period. Growth in GDP increase employment and incomes (does not include exports)
62
Price Indexes
Inflation, disinflation, deflation, consumer price index (CPI), producer price index (PPI)
Average of prices of all the goods
63
Purchasing power
The value of what money can buy
All prices increased after COVID
64
Unemployment rate
Percentage of a country’s labour force unemployed at any time. Calculated as the number of unemployed divided by the number of people currently in the labour force (doesn’t include disabled people, retired or people choosing to stay at home)
65
Housing starts
One house for every 4 people
66
Commodity prices
What we buy in the wholesale market
Not the retail markets
67
Stock markets
Stock market is up means the economy is growing (people have enough money to invest in stock)
68
Inflation
Tracks the increase in general level of prices of goods and services over a period of time.
To a total of 3% it is good for the economy, when it exceeds that it isn’t good.
It’s always there
69
Why is inflation good?
Entrepreneurs more profitable and then cycles back into the economy
70
Deflation
Decrease in the price of goods and services; y the opposite of inflation
Employment goes down
71
Consumer price index (CPI)
A monthly index that measures the changes in the prices of a fixed basket of goods typically purchased by typical consumer in an urban area
72
Two types of inflation
Demand pull inflation
Cost push inflation
73
Demand Pull Inflation
When demand for goods and services is greater than the supply
74
Cost push inflation
Triggered by increases in production costs
Supplies price increases, minimum wage increases, raw materials increases
75
The future of politics and economics
Increased interest and investment in clean technology projects
Increased need for skilled labour- immigration and indigenous engagement
Governments are expecting more transparency in marketing, operations and corporate social responsibility
Capitalizing on public-private partnerships (P3s) to harness innovation and access to capital for public infrastructure projects
Lack of confidence in markets
76
77
Why do we need information for business
To make the right decisions
To be successful
78
How do we define a successful business
Encouraging Creativity and Innovation
Achieving Financial Performance
Gaining Employee Commitment
Meeting and Exceeding Customers’ needs
Providing Value- Quality products at a reasonable price
79
SWOT analysis
Strengths, Weaknesses (internal)
Oppurtunities, Threat (external)
80
Situational Analysis PESTEL
Political- can be related to taxes, or legal things that’s have a positive or negative impact on business.
Economic- If it goes into a depression, there is a negative affect on the business, how will you take action.
Social- you could be living in a society where no one is interested in your business
Technological- - products relating to technology
Environmental- no more plastics, animals not being used to test pharmaceutical drugs
Legal
81
Porters Five Forces
Forces that shape competition within an industry.
1. Risk of new entry by potential competitors.
2. Degree of rivalry among existing competition.
3. The bargaining power of buyers.
4. The bargaining power of suppliers.
5. The threat of substitute products. (Less substitutes, the threat is less. More substitutes, the threat is more)
82
3 most critical and obvious stakeholder groups
Owners of the business (or shareholders for a corporation)
Employees of the business (and their union)
Customers
83
Other stakeholders
Government
Special interest groups
The community surrounding the business
Supplies
Etc.
84
Ratio analysis
Help to answer many questions concerning the company’s cash flows, liquidity, funding, return on investments, payback, net investment and net annual return
85
Cost/benefit analysis
Compare the costs and benefits of a particular decision
86
Corporate Level Strategy
Vision
Mission
Business Level Strategy
87
Vision
Clear, concise picture of the company’s future direction (used to guide and inspire)
88
Mission
Clear, concise articulation of how the company intends to achieve its vision and how it is different from the competition
89
Business Level Strategy
Describes a company’s competitive position (market, product, service)
90
How much of Canadian trade is with the US
Almost 75%
Much to do with the auto industry
91
How much of our imports are from the US
57%
92
What natural resources do we export
Energy
Forestry
Agriculture and Fishinf
30+%
93
What places are becoming increasingly important as target markets for our exports
China
India and Brazil
94
Why do countries trade?
No one country can produce all the products that its people want and need.
Nations who cannot produce what they want and need will want to trade with countries who can and have a surplus.
Some countries have an abundance of natural resources but lack the technological know-how to retrieve them
Other countries have the technology but lack the natural resources
95
Free Trade
Is the movement of goods and services among nations without political or economic trade barriers
96
Why Nations Trade
Absolute Advantage
Comparative Advantage
97
Absolute Advantage
The ability to produce a specific product more efficiently than any other nation
Or a country is the only provider of a product
98
Comparative Advantage
The ability to produce a specific product more efficiently than any other product
The concept that a country should specialize in the products that it can produce most readily and cheaply, and trade these for goods that foreign countries can produce most readily and cheaply
99
Why “Go Global”?
Earn additional profits
Potential for cost savings
Possess exclusive market information
Leverage a unique product or technological advantage
Saturated domestic markers and excess capacity
100
Exports
Goods and services made in one country and sold to others
101
Imports
Goods and services that are bought from other countries
102
Balance of Trade
The difference between the value of a country’s exports and the value of its imports during a certain time
103
Trade surplus
A favourable balance of trade that occurs when a country exports more than it imports
104
Trade deficit
An unfavourable balance of trade that occur when a country imports more than it exports
105
Balance of payments
The difference between money coming into the country and money leaving the country
106
Currency exchange rate
Value of one currency in relation to another
Economic factors impact exchange-rate fluctuations
Interest rates
Inflation and economic strength
Balance of trade and trade flow
107
Exporting
Sell domestically produced goods to buyers in other countries
108
Licensing
The legal process allowing a company use a manufacturing process, franchise, trademark, patent, trade secret, or knowledge
109
Contract Manufacturing
A foreign company manufacturers private label goods under a domestic company’s brand
110
Joint ventures
Two or more businesses combine for a specific project or business venture
111
International Direct Investment
Active ownership of a foreign company/manufacturing/marketing facility
112
Fostering Global Trade
Anti dumping laws
World Trade Organization (WTO)
World Bank
International Monetary Fund (IMF)
113
Economic Community
Organization of countries formed to promote free movement of resources and products among member nations (also referred to as regional economic integration)
114
Also known as economic integration
European Union (EU)
United States- Mexico- Canada Agreement (USMCA)
Asia-Pacific Economic Cooperation (APEC)
115
Goals of economic communities
Reduce trade barriers
Increase flow of international r trade
Promote peaceful relationships between countries
Provide increased prosperity for the citizens of each member country
116
Barries to International Trade
Political considerations: nationalism, mistrust
Economic environment: infrastructure
Natural barriers: language difference, cultural differences, legal and regulatory differences
117
Tariff Barriers
Tariff
Protective Tariffs
118
Tariff
A tax imposed on imported goods
119
Protective tariffs
Make imports less attractive to buyers than domestic products
120
Non-tariff barriers
Import Quota
Embargo
Exchange Controls
Customs Regulations
121
Import Quota
Limit on the quantity of a certain good that can be imported
122
Embargo
A complete ban on imports or exports of a product
123
Exchange controls
Laws that require a company earning foreign exchange from its exports to sell the foreign exchange to a control agency
124
Customs Regulations
Regulations on products that are different from generally accepted international standards
125
If trade makes economic sense and global security sense, then why do we need international trade rules?
Because while trade is beneficial globally:
It creates winners and loser domestically (locally, regionally, nationally)
This creates political pressure to “protect” from trade/organization.
Thus national rivalries, economic instability and lack of economic development.
126
Fear of trade and globalization
Canadians have lost jobs because of imports a/production shifts
Others fear losing their jobs
Employers often threaten to export jobs when facing labour disputes with employees
Service and white-collar workers are increasingly seeing their operations moving offshore
Competition is beneficial for consumers but can hurt producers
Global Political/Economic unrest: we are interconnected
127
Benefits of globalization
Productivity grows faster with a comparative advantage
Global competition keeps prices down, less likely to face inflation
Open economy spurs innovation
Export jobs often pay more than other jobs available
128
The future of the Global marketplace
Canada- Exporting our technologies
Canada- Seeking new markets: resources, stable banking, business friendly
The Emergence of BRICS economic power
Currency fluctuations
Global Competition
Global Political/Economic Unrest
129
Sole Proprietorship
A business established, owned, operated and often financed by one person
130
Partnership
An association of two or more individuals who agree to operate a business together
131
Corporation
A legal entity with authority to act and have liability separate from its owners
132
Advantages of Sole Proprietorship
Ease of start/end
Few regulations
Be your own boss
Direct control
Pride of ownership
Retain Profit
No corporate taxation
133
Disadvantages of sole proprietorship
Unlimited liability
Limited financial resources
Management difficulties
Overwhelming time commitment
Trouble finding qualified employees
Limited (slow) growth
Limited lifespan (ends with owner)
134
Partnerships
General
Or Limited
135
General Partnership
A partnership in which all partners share in the management and profit each can act on behalf of the company and has unlimited liability for all its business obligations
136
Limited Partnership
A partnership with one or more general partners who have unlimited liability, and one or more limited partners whose liability is limited to the amount of their investment
137
General Partners
Partners who have unlimited liability for all of the company’s business obligations and who control its operations
138
Limited Liability Partnership (LLP)
A partnership in which each partner is protected from responsibility for the acts of other partners, and each party’s liability is limited to harm resulting from that party’s own actions
139
What is limited liability
You can only expand your business in a certain region
You can only have 2 owners
You are only responsible for the money that you have invested
Your insurance covers the cost of accidents
140
Advantages of partnerships
Easy to start
More access to capital (all partners)
Shared management, expertise
Longer survival
Shared risk
No corporate taxation
141
Disadvantages of partnerships
Unlimited liability (general partner)
Division of profits and tax
Potential disagreements among partners
Difficult in exiting/transferring/dissolving
142
Corporations
A legal entity with an existence and life seperate from its owners, who are not personally liable for the entity’s debts
Public
Private
Crown
143
Public Corporation
A corporation whose shares are widely held and available to the general public.
144
Private corporation
A corporation whose number of shareholders is limited; normally restricts the transfer of shares to third parties, and shares do not trade on a recognized stock exchange
145
Crown corporation
Government owned
146
Advantages of a corporation
Limited liability
Ability to attract financing
Size may be larger due to increased resources
Unlimited life
Ease of transfer of ownership
Ease of attracting employees
Separation of ownership from management
147
Disadvantages of corporation
Cost/complexity of formation
Double taxation of profits
Size may become too inflexible to new ideas
Termination difficult
Stockholder and board conflict
More government regulations
148
Cooperative
A legal entity typically formed by people with similar interests, such as suppliers or customers, to reduce costs and gain economic power; has limited liability, an unlimited lifespan, and elected board of directors and an administrative staff, all profits distributed to the member owners in proportion to their contributions
149
Purpose of Cooperatives
Primary focus is to meet the common need of the members
150
Control Structure of Cooperative
One member- one vote system
151
Allocation of profit in cooperatives
Based on how much they use the cooperative
152
Joint Ventures
Two or more companies form an alliance and agree to contribute resources to pursue a particular business project, sometimes for a specified time.
153
Mergers
Combination of two or more companies to form a new company, which often takes on a new corporate identity
154
Acquisitions
The purchase of a company by another company or by an investor group
155
Types of mergers
Horizontal
Vertical
Conglomerate
Hostile Takeover
156
Horizontal merger
Firms at the same stage of the same industry merge
157
Vertical Merger
Firms at different stages of the same industry merge
158
Conglomerate Merger
Firms in unrelated industries merge
159
Hostile takeover
Goes against the wishes of the target company’s management and board of directors
160
Why Mergers and Acquisitions (sometimes) dont work
COmpanies overpay to acquire another firm
Acquiring company over estimates cost savings and synergies
After merger, managers disagree about integrating operations
After merger, cost cutting obsession hurts business, costing top employees and customers
161
Life cycle framework phases
Phase I start up
Phase II Growth
Phase III Maturity
Phase IV revitalization/decline
162
What is an entrepreneur?
People with vision, drive, and creativity who are willing to take the risk of starting and managing a new business to make profit or to challenge the scope and direction of an existing company
163
Types of Entrepreneurs
Classic
Multipreneur
Intrepreneurs
164
Classic Entrepreneurs
Accept the risks that come with starting their own companies based on innovative ideas
165
Multipreneur
Start a series of companies
166
Intrepreneurs
Apply their entrepreneurial spirit within large corporation rather than starting companies of their own
167
Who is the entrepreneur of software
Steve Jobs
168
Walt Disney
The entrepreneur of Disney films and parks
169
Sam Walton
The entrepreneur of discount stores
170
Oprah Winfrey
Entrepreneur of media
171
Anita Roddick
Entrepreneur of cosmetics
172
Elon Musk
Entrepreneur of Cars, etc.
173
Ingvar Kamprad
Entrepreneur of home furnishings
174
Canadian Entreprenuers
John W. And Alfred Billes (Canadian Tire)
J.W. Sobey (Sobeys, IGA, Price Chopper)
Alban Leon (Leon’s Furniture Limited)
Kenneth Colin Irving (Irving Oil)
N. Murray Edwards (Canadian Natural Resources)
Brett Wilson (Prairie Merchant Corporation)
Jim Treliving (Boston Pizza)
Chip Wilson (Lululemon)
Tonia Jahshan (tea)
175
Entrepreneurial Characteristics
Self directed
Confident
Determined
Action Oriented
Creative
Energetic
Committed
Risk Endurance
Visionary
Ambitious
Tolerant of Uncertainty
Ability to learn quickly
Passionate
176
Why Entrepreneurship
New idea, process or product
Independence and lifestyle
Challenge and personal satisfaction
Family Pattern
Profit
Loss of job
Personal passion (hobby)
Immigration
Social enterprise
177
Entrepreneurial oppurtunities
Come from 3 major areas: technology advances, demographics and society, and economic changes
178
Age at start up
18-24 8%
25-34 71%
35-44 13%
45-54 6%
55+ 2%
179
Checklist for starting your own business
Indenting your reasons
Self-analysis
Personal Skills and experience
Finding a niche
Market analysis
Planning your start up
Finances
180
Business plan
Written document that describes the opportunity, goals and plans for a business
181
Purpose of a business plan
Communication tool- informs of potential to make profit
Management tool- helps to tack, monitor and evaluate progress
Planning tool- guides a business person through the various phases of business
182
Questions a business plan should answer
What exactly is the nature and mission of the new venture?
Why is this new business a good idea?
What are the goals and milestones for the business?
How much will the business cost?
183
Business model
Explain how the business will make money
184
Components of a business plan
Title page
Table of contents
Vision and Mission Statement
Company Overview
Human Resources plan
Marketing/Operations plan
Financial/Accounting plan
Appendices
Bibliography
185
Importance of small businesses
Almost 2.5 million self-employed people in Canada
Most small businesses in Canada are Canadian owned
Accounts for approximately 98% of all employers
Approximately 47% of all new jobs are created by small businesses
Employs 48% of the private labour force
Contributed to job creation and generates many new products/ideas
186
Advantages of staying small
React more quickly to the changing market forces
Develop and market ideas faster, with fewer financial resources and fewer people
Efficient operations keep costs down
Serve specialized markets
Offer a higher level of personal service
187
Disadvantages of staying small
Difficulties in obtaining adequate financing
Limited managerial skills may impact growth
Expensive to comply with regulations
Requires a major commitment by owner
High Failure rate
188
Two forms of fininacning
Debt
Equity
189
Debt
Burrowed funds that must be repaid with interest over a stated period
190
Equity
Funds raised through the sale of shares in the business
191
Types of investing
Angel
Venture capital
Crowdfunding
192
Angel investors
Private individual investors or groups of experienced investors who provide early-stage financing for start up businesses in exchange for ownership
193
Venture capital
Money invested in high growth companies that have significant potential
Often receive an ownership interest and a voice in management
Ex: Dragons Den
194
Crowdfunding
Inviting people to contribute to a business or project, via online platform (e.g. Kickstarter, Indiegogo)
Instead of ownership of the company, contributors receive a reward depending on level contributions
195
Franchises
A form of business based on a business arrangement between a franchisor, which supplies the product concept and the franchisee, who sells the goods and services of the franchisor in a certain geographic area
196
Advantages of Franchises
Be your own boss
Increased ability for the franchisor to expand
Recognized name, product and operating concept
Management and training assistance
Financial assistance
197
Disadvantages of Franchises
Loss of control
Cost of franchising
Restricted operating freedom
Overwhelming time commitment
198
Causes of business closures
Economic factors
Financial Causes
Lack of experience
personal reasons
199
Economic Factors (for business closure)
Business downturns and high interest rates, lack of contingencies, pandemic
200
Financial causes (for business closure)
Inadequate capital, low cash balances, pricing and high expenses
201
Lack of experience (for business closure)
Inadequate business knowledge, research, record keeping, time input, management experience and technical expertise
202
personal reasons (for business closure)
The owners may decide to sell the business or move on to other oppurtunities
203
What can we do to cope with challenges
Use outside consultants
Hire and retain employees
Go global with exports
204
Management
Coordination people and other resources to achieve the goals of an organization
205
Leadership
The relationship between a leader and the followers who want real changes, resulting in outcomes that reflect their shared purposes
206
Four Functions of Management
Planning
Organizing
Leading/Motivating
Controlling/Evaluating
207
Planning
Establishing organizational goals and deciding how to accomplish them:
Goals should be specific and measurable;e
Strategic planning process is developed by top management
208
Types of planning q
Strategic
Tactical
Operational
Contingency q
209
Strategic Planning q
Creating long-range (1 to 5 years) broad goals for the organization and determining what resources will be needed to accomplish those goals
210
Tactical planning
The process of beginning to implement a strategic plan by addressing issues of coordination and allocation of resources to different parts of the organization; has a shorter time frame (less than one year) and more specific objectives than strategic planning.
211
Operational planning
The process of creating specific standards, methods, policies, and procedures that are used in specific functional areas of the organization; helps guide and control the implementation of tactical plans
212
Contingency planning
Plans that identify alternative courses of action for very unusual or crisis situations; typically stipulate the chain of command, standard operating procedures, and communication channels the organization will use during an emergency
213
Setting Goals
Mission statement
Strategic planning process
Vision Statement
214
Mission Statement
A clear, concise articulation of how the company intends to achieve its vision-how it is different from into competition and the keys to its success
215
Strategic planning process
Establishing an organizations major goals and objective and allocating resources to achieve them
216
Vision statement
A clear and concise outline of an organization’s values and goals that it would like to achieve
217
Organizing
Dividing up the tasks- Division of labour
Grouping (jobs and employees)- departmentalization
Assigning (authority and responsibilities)- delegation
218
Areas of Management Specialization
Finance Manager
Operations Manager
Marketing Manager
Human Resources Manager
Administrative Manager
219
finance manager
Primarily responsible for an organization’s financial resources
220
Operations manager
manages the systems that convert resources into goods and services
221
Marketing Manager
Responsible for facilitating the exchange of products between an organization and its customers or clients
222
Human Resources manager
Charged with managing an organization’s Human Resources programs
223
Administrative manager
A manager who is not associated with any specific functional area, but who provides overall administrative guidance and leadership
224
managerial Skills fall into 3 basic categories
Conceptual- big picture
Technical- specific skills
Interpersonal- dealing with people
225
Decision making
The act of choosing one alternative from a set of alternatices
226
Leading/Motivating
Create a vision
Communicate the vision and rally others
Establish corporate values
Promote corporate values
Create a culture
Embrace change
227
Leadership styles
Autocratic
Participative
Laissez-faire
228
Autocratic leader
Directive with little input from subordinates
229
Participative leader
Share decision making and encourage discussion of issues and alternatives
230
Laissez-faire leader
Leader provides a basic vision, the necessary resources for the team and acts as an advisor
231
Power
The ability to influence others to behave in a particular way
232
Legitimate Power “The Position”
The process of directing, guiding, an motivating others toward the achievement of organizational goals
233
Reward power “The Goods”
Power that is derived from an individual’s control over rewards
234
Corrective Power “The Bad”
Power that is derived from an individual’s ability to threaten negative outcomes
235
Expert Power “The Skills”
Power that is derived from an individual’s extensive knowledge in one or more areas
236
Referent Power “The Respect”
Power that is derived from an individual’s personal charisma and the respect or admiration the individual inspires1
237
Why is structure important
Ability to respond
Formalize leadership
Improves efficiency
Codifies control and decision making
Empowers employees and influences culture
238
Division of Labor
Determining work activities and dividing up tasks
239
Departmentalization
Grouping jobs and employees
240
Centralization
The degree to which authority is centralized
241
Delegation
Assigning authority and responsibilities
242
Corporate culture
The inner customs, traditions and values of an organization
243
Employees empowerment
The process of giving employees increased autonomy and discretion to make desicions and control over the resources needed to implement those decisions
244
Reasons for empowerment
It leads to better decisions made by those closest to the customer
Fewer, busier managers
predominance of knowledge workers
Leads to more valuable and experienced employees
But workers need to be enabled to be empowered
245
Job design
Structuring the tasks and activities required to accomplish a business’s objectives into specific jobs so as to foster productivity and employee satisfaction
246
Job Specialization
Separation of all organizational activities into distinct tasks and assignment of tasks to different people
247
Job rotation
Systematic shifting of employees from one job to another to facilitate task variety
248
Centralization
The degree to which formal authority is concentrated in one area or level of the organization
249
Decentralization
The process of pushing decision-making authority down the organizational hierarchy
250
Advantages of centralization
Increased uniformity: less duplication, more efficiency, maximum control
Stronger corporate image
251
Disadvantages of centralization
Less responsive to customer
Less empowerment
Lots of policies and procedures
many layers/slower
252
Advantages of decentralization
Faster decision making
Ability to adapt to customers
Worker responsibility (empowerment)
Innovative
253
Disadvantages of decentralization
Loss of control
Complex distribution
Possible duplication
Less efficient
254
Organizational height
The line of authority
Extends from one level to the next
Top to bottom
Makes clear who reports to whom
255
Span of Management (control)
The number of employees a manager directly supervises:
-Narrow span (more levels) vs. Wide span (fewer levels)
Determined by: nature of tasks, location of workers, amount of interaction and feedback required, level of skill and motivation
256
Advantages of narrow span of control
High degree of control
Fewer subordinates may mean manager is more familiar with each individual
Close supervision can provide immediate feedback
257
Advantage of wide span of control
Fewer levels of management means increased efficiency and reduced costs
Increased subordinate autonomy leads to quicker decision making
Greater organizational flexibility
higher levels of job satisfaction because of employee empowerment
258
Disadvantage of narrow span of control
More levels of management, therefore more expensive
Slower decision making because of vertical layers
Isolation of top management
259
Disadvantage of wide span of control
Discouragement if employee autonomy
Less control
Possible lack of familiarity because of large number of subordinates
managers spread so thinly that they can provide necessary leadership or support
Lack of coordination or synchronization
260
Organization chart
A visual representation of the structured relationships among tasks, responsibilities and the people given the authority to do those tasks
261
Flat Organization
Few layers of management
Broad span of control
highly responsive to customer demands due to increased employee empowerment
262
Tall Organization
Many layers of management
Span of control limited
Costly to maintain
Lots of paperwork
Inefficient communication and decision making
Responsiveness to customer
263
Line structure
An organizational structure in which the chain of command goes directly from person to person throughout the organization
264
Staff Position
Individuals who provide administrative and support services that the line employees need to achieve the firm’s goals
265
Teams
A team based structure can increase individual and group motivation and performance
266
Cross-Functional Team
A team of individuals with varying specialties, expertise, and skills that are brought together to achieve a common task. Agile and collaborative but can be confusing
267
Acquisitions
Involves planning, job analysis, recruiting, selection, orientation
268
Maintenance
Involves employee relations, compensation, benefits
269
Development
Involves training and development, performance appraisal
270
Workplace diversity
The differences among people in the workforce in terms social background, of ethnicity, gender, religion, age, and physical or learning abilities and sexual orientation
271
Replacement chart
A list of key employees and their possible replacements within a company
272
Skills inventory
A database containing information on the skills and experience of all current employees
273
Internal Labour Market
Promotions and job transfers are the most common
274
External labour market
Qualified job candidates are not in the company
275
Employees recruitment and selection
Attract candidate pool
Screen candidates
interview candidates
Compare candidates
Check references
Make a job offer
276
Compensation
The monetary and non-monetary payment employees receive in return for their labour
277
Compensation plans must be
Competitive enough to attract new talent
Fair enough to keep existing talent from leaving the company
Reasonable enough so that the company can still make a profit
278
Fringe benefits
Forms of indirect compensation including pensions, health insurance, and vacation
279
Types of Compensation
Hourly wages
Salaries
piecework and commission
Profit sharing
Bonus
Fringe benefits
Accelerated commission schedule
280
Methods of training
On the job training
Simulation
Classroom teaching
Online training
281
Motivation
The drive to satisfy a need or want that influences how we behave
282
Rewards can be
Intrinsic
Extrinsic
283
Intrinsic motivation
Personal satisfaction felt when performance is good and goals are achieved
Pride, sense of achievement
284
Extrinsic motivation
Outside recognition of good work
Salary increase, promotion, public recognition
285
Alderfer’s ERG Theory
Existence - the concern for basic material existent
Relatedness- the concern for interpersonal relations
Growth- the concern for personal growth
286
Theory X
The concept of employee motivation generally consistent with Taylor’s scientific management; assumes that employees dislike work and will function only in a highly controlled work environment
287
Theory Y
A concept of employee motivation generally consistent with the ideas of the human relations movement; assumes responsibility and work toward organizational goals, and by doing so personal rewards are also achieved
288
Theory Z
A combination of North American and Japanese management practices that emphasizes teamwork and individual accountability to the team and organization
289
Herzberg’s Two factor theory
A motivation theory that suggests that satisfaction and dissatisfaction are separate and distinct dimensions
AKA motivation-hygiene theory
290
Reinforcement theory (motivation)
A means of modifying behaviour based on the premise that rewards behaviour is likely to be repeated, while punished behaviour is less likely to recur
291
Equity theory (motivation)
People are motivated to obtain and preserve equitable treatment for themselves
Based on perception: there are often errors
292
Expectancy theory (motivation)
The amount of effort employees exert depends on their expectations of the outcome- how much they want it and how likely they are to get it
293
Goal setting theory (motivation)
Suggests that employees are motivated to achieve challenging, attainable and specific goals that they and their managers establish together and receive feedback on
294
Labour Union
An organization that represents workers in dealing with management over issues involving wages, hours and working conditions
295
Strikes
Temporary work stoppages by employees, calculated to add force to their demands
296
Canada’s workforce that is unionized
Today, fewer than 30%
297
Three of Canada’s Largest Unions
Canadian Union of Public Employees (CUPE)
Unifor
National Union of Public and General Employees (NUPGE)
298
Labour contract
A written agreement between labour and management that is in force for a set period of time
299
Grievance procedures
A formally established course of action for resolving employee complaints against management
300
Collective bargaining
The process of negotiating a labour agreements that provide for compensation and working arrangement mutually acceptable to the union and to management
301
Mediation
The process of settling issues in which the parties present their case to a neutral mediator
302
Arbitration
The use of a neutral third party who conducts a formal hearing on an unresolved dispute, and then decides on a solution
