Chapters 5-7 BUSN 1301 - 006
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This 4 page Class Notes was uploaded by Stephanie Romero on Tuesday October 13, 2015. The Class Notes belongs to BUSN 1301 - 006 at University of Texas at El Paso taught by John Hadjimarcou in Summer 2015. Since its upload, it has received 31 views. For similar materials see Intro to Global Business in Finance at University of Texas at El Paso.
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Date Created: 10/13/15
Exam 2 Review Corporation an artificial person created by law with most of the legal rights of a real person Including the rights to start and operate a business or buy or sell property to borrow money to sue or be sued and to enter into binding contracts Domestic corporation in the state in which it is incorporated Foreign corporation in any state in which it does business except the one in which it is incorporated Alien corporation chartered by a foreign government and conducting business in the US Common stock Stock owned by individuals or firms who may vote on corporate matters by whose claims on profit and assets are subordinate to the claims of others Preferred stock Stick owned by individuals or firms who usually do not have voting rights but whose claims on dividends are paid before those of commonstock owners ADVANTAGES Limited liability Ease of raising capital Ease of transfer of ownership Perpetua life Speciaized management DISADVANTAG ES Difficulty and expense of formation Government regulation and increased paperwork Conflict within the corporation Double taxation Lack of secrecy Small business independently owned and operated for profit and is not dominant in its field 997 of all businesses are considered small 33 are in retail transportation wholesale and communication 48 in medical and dental care watch TV and shoe repair financial services and restaurant meals 19 in construction mining and manufacturing Why some small businesses fail Lack of capital and cashflow problems lack of management skills and overexpansion Importance of small businesses Technological innovation Providing employment Competition and filling needs Franchise a license to operate an individually owned business as though it were part of a chain of outlets or stores Types of franchises A manufacturer authorizes retailers to sell a certain brand name item A producer licenses distributors to sell a product to retailers A franchisor supplies brand names techniques or services instead of a complete product ADVANTAGES franchisor Fast and well controlled distribution of its products No need to construct and operate its own outlets More working capital available for expanded production and advertising Franchising agreements maintain product and quality standards Motivated work force of franchisees Franchisee Opportunity to start a proven business with limited capital Guaranteed customers Franchisor available for advice and guidance Materials for local promotional campaigns and participation in national campaigns Cost savings when purchasing in cooperation with other franchisees DISADVANTAGES franchiser Failure of the franchisee to operate franchise properly Disputes with and lawsuits by franchisees over the terms of the franchise franchisee Franchisor retains a large amount of control over the franchisee s activities Franchisor opening competing franchises within the franchisee s market Planning establishing organizational foals and deciding how to accomplish them Mission statement of the basic purpose that makes an organization different from others Strategic planning The process of establishing an organizations major goals and objectives and allocating the resources to achieve them SWOT analysis the identification and evaluation of a firm s strengths weaknesses opportunities threats Core competencies approaches and processes that a company performs well and may give it an advantage over its competitors Types of plans plan an outline of the actions by which an organization intends to accomplish its goals and objectives strategic plan an organization s broadest plan a guide for major policy setting and decision making tactica plan a smaller scale plan to complement a strategy operational plan a plan to implement a tactical plan contingency plan a plan of alternative courses of action if the organization s other plans are disrupted or become ineffective Skills of successful managers conceptua skills analytic skills interpersonal skills technical skills technical skills Managerial decision making 1 Identifying the problem or opportunity 2 Generating alternatives 3 Selecting an alternative 4 Implementing and evaluating the solution TQM Total Quality Management the coordination of efforts directed at improving customer satisfaction increasing employee participation strengthening supplier partnerships facilitating an organizational atmosphere of continuous quality improvement Job specialization the separation of activities into distinct tasks and the assignment of different tasks to different people Departmentalization groupingjobs into manageable units by function by product by location by customer and combinations Delegation assigning part of a manager s work and power to other workers Flat management have wider spans of management and fewer levels and require managers to perform more administrative tasks and to spend more time supervising subordinates Tall management have narrow spans of management and many levels have higher administrative costs may distort internal communications during passage of communications through the multiple levels of organizations Wide high level of competence in managers and workers standard operating procedures few new problems flat organization Narrow psychical dispersion of subordinates manager has additional tasks high level of interaction required between manager and workers high frequency of new problems tall organization Matrix structure combines vertical and horizontal lines of authority usually by superimposing product departmentalization on functional departmentalization authority flows both down and across and employees on crossfunctional teams report to both the project manager in charge of the team and to their superiors in their homebase functional department Corporate culture the inner rituals trites heroes and values of a firm Grapevine informal communication network within an organization that is completely separate from and sometimes faster than the organizations formal communication channels and may be accurate or distorted managers should be aware and use appropriately Committees Types Ad hoc created for a specific short term purpose standing relatively permanent charged with performing some recurring task task force established to investigate a major problem or pending decision
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