Intro to Business Module 2

Chapter 5-8 study question

Angel Investors

Individual investors or groups of experienced investors who provide financing for star-up businesses by investing their own funds

Business Plan

A formal written statement that describes in detail the idea for a new business and how it will be carried out;

includes:

• a general description of the company

• the qualifications of the owner(s)

• A description of the product or service

• Analysis of the marked

• Financial plan

Dept

A form of business financing consisting of borrowed funds that must be repaid with interest over a stated time period.

Entrepreneurs

People with vision, drive, and creativity who are willing to take the risk of starting and managing a business to make a profit, or greatly changing the scope and direction of an existing firm.

Equity

A form of business financing consisting of funds raised through the sale of stock (Ownership) in a business

Intrapreneurs

Entrepreneurs who apply their creativity, visions, and risk-taking within a large corporation, rather than starting a company of their own

Small Business

includes

• under 500 employees that is independently managed

• Owned by an individual or a small group of investors

• based locally

• not a dominant company in its industry

Small Business Administration (SBA)

A government agency that speaks on behalf of small business

Helps with

• starting and managing small businesses

• advises them in the areas of finance and management

• helps people win federal contracts

Small Business Investment Company (SBIC)

Privately owned and managed investment companies that are licensed by the Small Business Administration and provide long-term financing for small businesses

Venture Capital

Financing is obtained from venture capitalists, investment firms that specialize in financing small, high-growth companies and receive an ownership interest and a voice in management in return for their money.

Autocratic Leaders

Directive leaders who prefer to make decisions and solve problems on their own with little input from subordinates

Coercive Power

Power that is derived from an individual’s ability to threaten negative outcomes

Conceptual Skills

A manager’s ability to view the organization as a whole, understand how the various parts are interdependent, and assess how the organization relates to its external environment.

Consensual Leaders

Leaders who encourage discussion about issues and then require that all parties involved agree to the final decision.

Consultative Leaders

Leaders who confer with subordinates before making a decision but who retain the final decision-making authority

Contingency plans

Plans that identify alternative courses of action for very unusual or crisis situations; typically stipulate; typically stipulate the chain of command, standard operating procedures, and communication channels the organization will use during an emergency

Controlling

The process of assessing the organization’s progress towards accomplishing its goals

Includes

• Monitoring the implementation of a plan

• Correcting deviations from the plan

Corporate Culture

The set of attitudes, values, and standards that distinguishes one organization from another

Decisional roles

A manager’s activities as an

• entrepreneur

• resource allocator

• conflict resolver

• negotiator

Democratic leaders

Leaders who solicit input from all members of the group and then allow the members to make the final decisions through a vote

Effectiveness

The ability to produce the desired result or good

Efficiency

Using the least amount of resources to accomplish the organization’s goals

Empowerment

The process of giving employees increased autonomy and discretion to make decisions, as well as control over the resources needed to implement those decisions.

Expert Power

Power that is derived from an individual extensive knowledge in one or more areas

Free-rein (laissez-faire) leadership

A leadership style in which the leader turns over all authority and control to subordinates

Global management skills

A managers ability to operate in diverse cultural environments

Human relation skills

A managers interpersonal skills that are used to accomplish goals through the use of human resources

Informational roles

A managers activities as an informational gathered, and information disseminator, or spokesperson for the company

Interpersonal roles

A managers activities as a figurehead, company leader, or liaison

Leadership

The process of guiding and motivating others towards the achievement of organizational goals

Leadership style

The relatively consistent way that individuals in leadership positions attempt to influence the behavior of others

Legitimate power

Power that is derived from and individual’s position in an organization

Management

The process of guiding

• the development

• maintenance

• allocation

  of resources to attain organizational goals

Middle management

Managers who design and carry out tactical plans in specific areas of the company.

Missions

An organization’s purpose and reason for existing; its long-term goals

Missions statements

A formal document that states an organizations purpose and reason for existing and describes its basic philosophy

Nonprogrammed decisions

Responses to infrequent, unforeseen, or very unusual problems and opportunities where the manager does not have a precedent to follow in decision-making

Operational planning

The process of creating specific standers, methods problems, and opportunities where the manager does not have a precedent to follow in decision- making

Organizing

The process of coordinating and allocating a firm’s resources in order to carry out its plans.

Participative leaders

Leaders who share decision-making with group members and encourage discussion of issues and alternatives

Includes:

• Democratic Styles

• Consensual Styles

• Consultative Styles

Planning

The process of deciding what needs to be done to achieve organizational objective

Identifying when and how it will be done

determining who should do it

Power

The ability to influence others to behave in a particular way

Programmed decisions

Decisions made in response to frequently occurring routine situations

Referent power

Power that is derived from an individual’s personal charisma and the respect and/or admiration the individual inspires

Rewards power

Power that is derived from an individual’s control over rewards

Situational leadership

Selecting a leadership style based on the maturity and competency level of those who will complete the task

Strategic planning

The process of creating long-range (1-5 years), broad goals for the organization and determining what resources will be needed for accomplish those goals

Supervisory (first-line) management

Managers who design and carry out operation plans for the ongoing daily activities on the firm

Tactical planning

The process of beginning to implement a strategic plan by addressing issues of coordination and allocating resources to different parts of the organization; has a shorter time frame (less than one year) and more specific objectives than strategic planning

Technical Skills

A managers specialized areas of knowledge and ecpertise, as well as the ability to apply that knowledge

Top management

The highest level of managers, who develop strategic plans.

Includes

• CEO

• President

• Vice president

Authority

Legitimate power, granted by the organization and acknowledged by employees, that allows an individual to request action and expect compliance.

Centralization

The degree to which formula authority is concentrated in one area or level of an organization. Top management makes most of the decision

Chain of Command

The line of authority extends from one level of an organization’s hierarchy to the next, from top to bottom, and makes clear who reports to whom.

Committee structure

An organizational structure in which authority and responsibility are held by a group rather than an individual

Cross-Functional team

Members from the same organizational level but from different functional areas

Customer departmentalization

Departmentalization that is based on the primary type of customer served by the organizational unit

Decentralization

The process of pushing decision-making authority down the organizational hierarchy

Delegation of Authority

The assignment of some degree of authority and responsibility to persons lower in the chain of command.

Departmentalization

The process of grouping jobs together so that similar or associated task and activities can be coordinated

Division of labor

The process of dividing work into separate jobs and assigning task to workers

Formal organization

The order and design of relationships within a firm

Consist of two or more people working together with a common objective and clarity of purpose

Functional departmentalization

Departmentalization that is based on the primary functions performed within an organizational unit

Geographic departmentalization

Departmentalization that is based on the geographic segmentation of the organizational units

Group cochesiveness

The degree to which group members want to stay in the group and tend to resist outside influences

Informal Organization

The Network of connections and channels of communication based on the informal relationships of individuals inside and organization

Line Organization

An organizational structure with direct, clear lines of authority and communication flowing from the top managers downward.

Line positions

All positions in the organization are directly concerned with producing goods and services and that is directly connected from top to bottom

Line-and-staff organization

An organizational structure that includes both line and staff positions

Managerial Hierarchy

The level of management within an organization;

Typically includes

• Top managements

• Middle management

• Supervisory management

Matric Structure (Project management)

An organizational structure that combines functional and product departmentalization by bringing together people from different functional areas of the organization to work on a special project

Mechanistic Organization

An organizational structure that is characterized by

• relatively high degree of job specialization

• rigid departmentalization

• many layers of management

• Narrow spans of control

• centralized decision-making

• long chain of command

Organic Organization

An organizational structure that is characterized by

• relatively low degree of job specialization

• rigid departmentalization

• many layers of management

• narrow spans of control

• centralized decision-making

• long chains of command

Organization

The order and design of relationships within a firm

Consist of two or more people working together with a common objective and clarity of purpose

Organization Chart

A visual representation of the structured relationship among tasks and the people given the authority to do those tasks.

Problem- solving teams

usually members of the same department who meet regularly to suggest ways to improve operations and solve specific problems

Process departmentalization

Departmentalization that is based on the production process used by the organizational unit

Product Departmentalization

Departmentalization that is based on the goods or services produced or sold by the organizational unit

Reengineering

The complete redesign of business structure and processes in order to improve operations

Self-managed work teams

Teams without formal supervision that plan, select alternatives, and evaluate their own performance

Span of control

The number of employees a manager directly supervises; also called span of management

Specialization

The degree to which task are subdivided into smaller jobs

Staff positions

Positions in an organization helped by individuals who provide the administrative and support services that line employees need to achieve the firm’s goals

Virtual Corporation

A network of independent companies linked by information technology to share skills, cost, and access to one another’s market; allows the companies to come together quickly to exploit rapidly changing opportunities

Work Groups

The groups that share resources and coordinate efforts to help members better perform their individual jobs

Work Teams

Like a workgroup but also requires the pooling of knowledge, skills, abilities, and resources to achieve a common goal.

Affirmative action Programs

Programs established by organizations to expand jobs opportunities for women and minorities

Agency shop

Workers dont have to join a union but must pay union dues

Apprenticeship

A form of on-the-job training that combines specific job instructions with classroom instruction.

Arbitration

Settling labor-management disputes through a third party. The decision is final and binding

Collective bargaining

Negotiating a labor agreement

Competitive advantage

A set of unique features of an organization that are perceived by customers and potential customers as significant and superior to the competition

Conciliation

Negotiation process in which a specialist in labor-management negotiations acts as a go-between for management and union and helps focus on the problems

Contingent worker

Person who prefers temporary employment, either part-time or full-time

Equal Employment Opportunity Commission (EEOC)

Processes discrimination complaints, and issues regulation regarding discrimination, and disseminates information

Federation

A collection of unions banded together to achieve common goals.

Grievance

A formal complaint by a union worker that management has violated the contract

Human resource (HR) management

The process of hiring, developing, motivating, and evaluating employees to achieve organizational goals.

Human resource planning

Creating a strategy for meeting current and future human resource needs

Incentive pay

Additional pay for attaining a specific goal