Midterms - Honors Business Management

Market Economy

• Resources owned privately

• Decisions made by individuals

• Prices set through supply, demand, and economic status/health

*entrepreneurs; driven by profit, supply, and demand; promotes innovation; can cause inequality and potential for monopolies

Command economy

• Resources owned by the government

• Officials that work to maintain and execute the plans of the government

• Prices are set by a central government authority

*run by government; driven by customer satisfaction and the goals of the government; can be inefficient

Land (factor of production)

• natural resources

Labor (factor of production)

• human work (employees)

Capital (factor of production)

• Buildings, technology, tools

Types of business ownership

• sole proprietorship

  • all aspects of the business are owned and controlled by one person, but it increases risk as it all falls on one person

• partnership

• corporation

• franchise (basic idea)

Domestic firm

• based in one country

• only has to deal with taxes and currency for one country

• better understanding of the local economy (supply, demand, customer needs/wants)

• larger competition and dependent on the health of a sole economy

Multinational corporation

• based in multiple countries

• global markets = greater reach, growth, and profit

• has to deal with the complexities of multiple taxation policies, currencies, and international laws/restrictions

Exporting

sending goods to another place

Importing

receiving goods from another place

Outsourcing

hiring an external company/business to perform tasks/operations

*allows a business to focus on core goals and reduce cost

Licensing

claiming intellectual property and selling it to others (licensees), allowing them to create from those ideas/products while giving the licensor a cut of profit

*allows licensor to expand their ideas and products (usually internationally) with little to no risk and still make a profit

• patents (inventions, formulas)

• trademarks (names, characters, brands)

• copyright (art, music, movies)

Functions of managment

• planning

• organizing

• implementing

• controlling

Levels of managment

• top management

  • CEO

• middle management

  • branch/regional managers

• front-line (supervisory) management

  • supervisors (day-to-day supervision)

Organizational structure

clarifies who reports to whom (lines of communication/management)

Management roles

• communicator

• relationship-builder

• decision maker

Strategic planning

defining a company’s long term vision, setting clear goals, and creating actionable strategies

Characteristics of effective goals

• clear

• measurable

• specific

• achievable

Unity of command (management principles)

each employee reports to only one manager

Span of control (management principle)

the number of employees a manager is responsible for

• large number means less supervision (possibly worse quality work), but greater efficiency

• small number means more supervision, but less efficiency

Authority and accountability basics (management principles)

authority - the right to command /decide responsibility

accountability - being held responsible for the outcome

Autocratic (leadership style)

no room for discussion - given concrete instructions to follow

Democratic/participative (leadership styles)

discussion with employees on decisions - allows for employees to feel included

Open leadership/Laissez-faire (leadership style)

little to no supervision - employees are given basic guidelines before handling situations on their own

Leadership characteristics

• positive communication skills

• ability to problem-solve

• creativity

Maslow’s Hierarchy of Needs

• Self-actualization: the desire to be the best that you can

• Esteem: self-esteem, respect, strength, freedom

• Love & acceptance: friends, family, intimacy

• Safety: feeling safe in one’s home, workplace, and around people

• Physiological needs: air, water, food, shelter, etc.

Positive corrective actions for managers

• re-training employees

• re-distributing responsibility

• giving clear, specific feedback

Management tools

• Management Information System (MIS)

• schedules

• budgets

Management Information System (MIS)

A computer-based system that stores, organizes, and provides information about a business

Problem-solving process

• identify the problem

• analyze possible solutions

• pick the best solution

• implement it and evaluate results

How technology improves management

• allows for more detailed data analytics that make decision-making faster, easier, and better decisions

• allows for quicker and more accurate project tracking, with managers being able to see an automated status of projects rather than manually create their own

Delegation

• the distribution of tasks and responsibility among employees

• increases productivity and efficiency by dividing the workload and defining the tasks that need to be completed

Sustainability

• when a company uses renewable energy to reduce pollution