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