MGMT 159 McGraw Hill

advantages of sole proprietorships

ease of starting and ending, ability to be own boss, pride of ownership, no special taxes

disadvantages of sole proprietorships

unlimited liability, limited financial resources, management difficulties, overwhelming time commitment, few fringe benefits, limited growth

3 key elements of a general partnership

common ownership, shared profits and losses, right to participate in managing the operations of the business

main differences between general and limited partners

general partners are owners who have unlimited liability and are active in managing the company, limited partners are owners who have limited liability and are not active in company

unlimited liability

sole proprietors and general partners must pay all debts and damages caused by their business

limited liability

corporate owners and limited partners are responsible for losses only up to the amount they invest

master limited partnership

partnership that acts like a corporation but is taxed like a partnership

advantages of partnerships

more financial resources, shared management, pooled skills and knowledge, no special taxes

disadvantages of partnerships

unlimited liability, division of profits, disagreements among partners

corporation

state chartered legal entity with authority to act and have liability separate from its owners

advantages of corporations

limited liability, ability to raise more money for investment, size, perpetual life, ease of ownership change 

disadvantages of corporations

initial cost, extensive paperwork, double taxation, two tax returns, size, difficulty of termination

S corporations advantages 

limited liability and simpler taxes

advantages of limited liability companies

limited liability, choice of being taxed as partnerships or corporations, flexible ownership rules, flexible distribution of profits and losses, and operating flexibility

merger

result of two firms forming one company

leveraged buyouts

attempts by managers and employees to borrow money and purchase the company

franchise

arrangement to buy the rights to use the business name and sell its products or services in a given territory

franchisee benefits

getting management and marketing assistance, the pride of personal ownership

franchisee drawbacks

large start up costs, shared profits, management regulation, coattail effects, restrictions on selling

micropreneur

people willing to accept the risk of starting and managing the type of business that remains small, offers balanced lifestyle i

intrapreneuring

establishment of entrepreneurial centers within a larger firm where people can innovate and develop new product ideas internally

funds for someone wanting to start business

personal savings, family and business associates, banks and finance institutions, angel investors, crowdfunding, and venture capitalists 

advantages of small businesses over large businesses

small companies provide a wider variety of suppliers and can ship products more quickly, give more personal service

four primary functions of management

planning, organizing, leading and controlling

goals vs objectives

goals are broad, long term achievements, objectives are specific, short term plans

four types of planning

strategic planning, tactical planning, operational planning, contingency planning

six D’s in decision making

define the situation, describe needed info, develop alternatives, decide which alternative is best, do what is indicated, and determine whether the decision was a good one

Fayol’s basic principles

unity of command, hierarchy of authority, division of labor, subordination of individual interests to general interest

two organizational models

line organizations (defined responsibility) and line and staff organizations (safety)

organizational culture

widely shared values within an organization that foster unity and cooperation to achieve common goals

Frederick Taylor

one of the first people to study management, father of scientific management

theory X

average person dislikes work and will avoid it if possible, threatened with punishment to accomplish goals

theory Y

people like working and will accept responsibility for achieving goals if rewarded for doing so

Theory Z

long term employment, individual responsibility, collective decision making

goal setting theory

setting ambitions but attainable goals will lead to high levels of motivation and performance if the goals are accepted and accompanied by feedback

MBO

management by objectives, system of goal setting and implementationh

high context cultures

people build personal relationships and develop group trust before focusing on tasks

low context cultures

view relationship building as a waste of time

baby boomers 

tend to be willing to work long hours

gen x

strive for a more balanced lifestyle

millennials

adaptable, tech savvy, multitasking, work life balance

gen z

cautious and security minded but inspired to improve world, want practical benefits