Business Test #2

When 2 companies come together to form a new company.

ex: Sprint / Nextel

One company buys out another.

An attempt by stakeholders to purchase a company through borrowing.

When 2 companies in a supply chain come together.

ex: A restaurant buys a bakery.

When 2 competitors merge.

ex: If McDonald's merged with Burger King.

Corporation that has divisions that make different products.

ex: GE

• +"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

• +easy to start
• +more $ resources
• +benefits to specialization
• -unlimited liability
• -division of profits
• -disagreement among partners
• -limited life span

• Limited Partnership
• Limited Liability Partnerships
• Matter Limited Partnership

2 classes of partners -

• General Partner
• Limited Partner

No general partners.

Ownershares can be traded in the stock market.

• +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.

• +tax advantages
• +transferrable ownership, like a corporation
• -owndership limited to 100 shareholders
• -stock aid income restrictions

• +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)

• 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

• -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.)

• Training (for current position)
• Development (planning for the future)

Outlawed discrimination based on race, sex, religion, or national origin.

• 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.

Outlawed discrimination against those over 40.

• Required that pregnant women be treated like any other employee.
• Updated and expanded by Family and Medical Leave Act 1993 (FMLA)

• -Prohibits discrimination of those with disabilities.
• -Obligates organizations to extend reasonable accomodation.

(Can the job be performed without reasonable accomodation?)

• Update of CR 1964 (EEOC - Equal Opp Empl Commission)
• Places burden

Breaking a job down into it's basic components.

Lists the duties and responsibilities, it's working conditions, tools, materials, and info used to perform it.

Lists the skills, abilities, experience, and other qualifications needed to perform a job effectively.

Recruitment: attract people to a company.

Selection: Gather info and decide who will be hired.

• Evaluation
• Measures employees performance

• Planning
• Organizing
• Controlling
• Leading

• Planning - set goals/standards
• Organizing - prepare a structure, place employees adequately
• Controlling - measure results, monitor performance
• Leading - guide, motivate

• 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

• Strengths
• Weaknesses
• Opportunities
• Threats

• Strategic Planning
• Tactical Planning
• Operational Planning
• Contingency Planning

Setting of broad, long-range goals by top Managers. (Attacks entire company.)

The identification of specific, short-range objectives by lower level Managers.

Setting work standards and schedules.

Backup plans in case primary plans fail.

• Choose among 2 or more alternatives.
• It is the heart of mgmt.

• Define the situation.
• Collect info.
• Develop alternatives.
• Agreement (w/ those involved.)
• Decides what's best.
• Begin implementation.
• Follow up.

• Top Management (ex: CEO)
• Middle Management (ex: Directors)
• Supervisory Management (ex: Line Mgmt, Supervision)

• Autocratic - controlling; doesn't trust employees.
• Participative - employees & Mgrs work together.
• Free Rein - empowerment; allow employees to make decisions.

"Principles of Organization"

• 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)

• Job description
• Written rules, guidelines, detailed records
• Consistent procedures, regulations, policies
• Staffing & promotion based on qualifications

The optimal # of subordinates that a manager supervises.

• Centralized
• Narrow span control
• Low flexibility

• Decentralized
• Wide span of control
• High flexibility

• 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)

• 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.)

• 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.)