MGT 11 Final Exam
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87 terms
Terms | Definitions |
|---|---|
 New Management Approaches | Focus on global competition, technology, customer expectations, better educated employees, and team-building |
| Management Skills | Technical; Human relations; conceptual skills |
| Four Classic Management Functions | Plan, Organize, Control, Direct |
| Plans | starts with a statement of vision and mission |
| Organizes | within micro (individual) or macro (corporate) level |
| Controls | auditing performance |
| Directs | communicating, promoting ethics, embracing change |
| Leadership Styles | Autocratic; Laissez-Faire; Democratic |
| Autocratic Leadership | "Do as I say" |
| Laissez-Faire Leadership | "Come to me only if there's a problem" |
| Democratic Leadership | "What does everybody think?" |
| Fayol's Principles of Organization | (a.k.a. Unity of Command) employees should be given non-conflicting orders from superiors; no one should have more than one supervisor; frustration and conflict will occur if this principle is not followed |
| Chain of Command Principle | organizations should have a well-defined chain of command; problems should be resolved at lowest level; "jumping" the chain is disruptive and ill-advised |
| Span of Control Principle | number of workers depends on capabilities of subordinates and manager; depends on complexity of job, geography, functional similarity, need for coordination, and planning demands |
| Bureaucracy | Max Weber believes the elements are regulations, promotions based on qualifications, and job descriptions; turns bad when rules and regulations override common sense |
| Tall Organization Definition | Centralized-decision making; strict adherence to principles of management; narrow span of control; unity of command is strictly followed; well defined chain of command |
| Tall Organization Pros & Cons | Pros: increased uniformity; stronger brand image; maximum managerial control; worked well during era of mass production Cons: over-reliant on rules; many decision making layers= slow response; costly; benefits managers not customers |
| Flat Organization Definition | Few layers of management; decentralized decision making (teams and workers); less rigid in following classic principles |
| W. Edwards Deming | Pioneered Total Quality revolution in the 1950s; sent to help rebuild Japan's economy post WWII; recognized that identifying defecting end product only was ineffective way to achieve quality products |
| Total Quality Principles | emphasize teamwork empower employees strive for constant improvement drive out fear of authority END RESULT: flatter more efficient organizations |
| Maslow's Hierarchy of Needs | Physiological/biological needs --> safety/security needs --> social needs --> esteem needs --> self-actualization |
| Frederick Herzberg | Noted that there is a difference between just being satisfied and being motivated (between liking your job and loving it); theory of Motivation-Hygiene |
| Motivation-Hygiene Theory | Motivators: comes from nature of work itself of job content (sense of achievement, challenge of work, responsibility, potential for growth) Potential Dis-satisfiers: (Hygiene factors) work environment, salary, benefits, supervisors, co-workers |
| Job Enrichment Theory | 1. re-design the job itself for the employee (job rotation, job enlargement) 2. bestow significance to the job 3. provide employees more autonomy 4. give and get better feedback |
| Equity Theory | equity= ownership & fairness perception is based on comparison to others; actuality is secondary; employer must be able to explain disparities |
| Market | noun: a group of consumers with an identified need verb: to market a product is to find and fill a need using a combination of the right product, price, placement, and promotion |
| Qualification for a Market | 1. desire 2. financial ability 3. authority to purchase the product |
| Business to Business Market | purchases are characterized by more rational decision-making; not swayed by advertising and sales |
| Business to Consumer Market | purchase often driven by combination of reason and emotion; advertising is very important |
| Four P's of Marketing | 1. Product 2. Price 3. Place 4. Promote |
| Approaches of Marketing | 1. Undifferentiated Approach- single product 2. Market Segmentation- demographics, psychographic (attitude & lifestyle), geographic, benefit (comfort, safety, health), frequent buyer |
| Pure risk | potential for loss with no potential for gain |
| Exposure to Risk | 1. accidental death or injury 2. losses to natural disasters 3. risk of being sued for negligence 4. risk of being robbed |
| Four Ways to Manage Risk | 1. Avoid exposure 2. Reduce the risk to minimize loss through education, regulation, technology, etc. 3. Transfer the risk to others (buying insurance) 4. Self-insure (deductible) |
| Criteria to be Insurable | 1. You must have an insurable interest 2. The loss must have a $ value 3. Loss must be accidental 4. Risk must be geographically dispersed 5. Chance of loss must be measurable/predictable |
| The Law of Large Numbers | If a large # of people are exposed the same risk, a predictable # of losses will occur during a given period of time; allows insurers to calculate chances that a loss will occur |
| Rule of Indemnity | Cannot collect more than the actual loss |
| Net worth | Assets-liabilities |
| 401k | an employer-provided savings/investment program, i.e., a benefit; up to 15% of salary; should diversify portfolio |
| Individual Retirement Account (IRA) | a way for someone to build a nest egg for retirement; can put in as much as $5k/year; taxes can be deferred until withdrawal |
| Roth IRA | money grows and can be withdrawn tax-free; recommended for new investors |
| Credit Card Advantages | 1. Convenient 2. Can be used in financial emergencies 3. Required to rent car, book flight, etc. |
| Credit Card Disadvantages | 1. Temptation to overspend 2. Will pay forever 3. Potential for poor credit ratings 4. High interest rates & annual fees |
| Considerations When Choosing a Credit Card | 1. Low interest rates 2. Compare yearly charges 3. Penalties 4. Benefits 5. Interest is on "balance due" not "average daily balance" 6. Grace Period |
| Pyramid of Wealth | Bottom: savings, CDs, money market funds, term life insurance (emergency funds accessible only when needed) Middle: growth stocks and mutual funds that accumulate during earning years Top: blue chip stocks; corporate and government bonds for income/distribution during retirement years |
| Mutual Funds | can start with a small amount; secret is to invest the same amount each month; growth stock for investors in their 20s |
| Common vs. Preferred Stock | Common: has voting rights Preferred: guarantees a dividend |
| Owner's Equity | consists of both stock and retained earnings |
| Debt Financing | borrowing and paying interest |
| When it's smart to borrow... | invest borrowed $ for a greater return on your investment |
| When it's not smart to borrow... | when the return is less than the amount borrowed |
| Secured Loans | secured by collateral; results in lower interest rates |
| Unsecured Loans | "signature loans," higher interest rates |
| Long-Term Debt Financing | comes from banks or bonds |
| Bonds | investors loan money when they buy them; collect regular interest payments; issuer pays investor annual interest rate and the entire amount upon maturity; interest is tax-deductible |
| Equity Financing Pros & Cons | capital is obtained from firm's own money or other investors Pros: Don't have to pay back; don't have to pay interest Cons: Weakens cash position; give up control |
| Factoring | Selling accounts receivable |
| Blue Chip vs. Penny Stock | Blue Chip: stock in one of the company's listed at the top of the DOW Penny: share in a company with low trade price |
| Buying stock "on margin" | buying stock with borrowed money |
| Fundamental Balance Equation | Assets = Liabilities + owner's equity |
| Current Assets | -cash -accounts receivable -short term notes -ending inventory (can be converted to cash quickly) |
| Fixed Assets | $ of buildings $ value of vehicles, equipment, etc. $ land |
| Intangible Assets | -goodwill -patents -copyrights |
| Current Liabilities | -accounts payable -short term notes -accrued salaries -accrued taxes |
| Long-term Liabilities | -long term notes (loans) -corporate bonds |
| Income Statement Formula | 1) Revenue - COGS = gross profit 2) Gross profit - expenses = net profit before taxes 3) NPBT - taxes = net profit |
| Revenue | what you received for what you sold |
| Liquidity Ratios | how quickly a firm can convert assets into cash |
| Current Ratio | Current Assets/ Current Liabilities |
| Acid Test | (cash + accts receivable + securities) / current liabilities |
| Leverage (Debt) Ratios | Total Liabilities / Owner's Equity |
| Profitability Ratios | EPS, Return on Sales, P/E ratio |
| Activity Ratios | COGS / Average Inventory Value |
| Bond Ratings | AAA to BBB = investment grade rating based on credit worthiness low rating = higher risk = higher interest rate |
| Capitalism | Unequal set of results; underlying assumption: wealth can be created; "invisible hand" |
| Command Economies | Where government largely determines what goods and services are produced, who gets them, and how the economy will grow |
| Democratic Socialism | Emphasizes social equality but results in very high taxation, less incentive to innovate, brain drain |
| Free-Market System | When the market largely determines what goods and services are produced, who gets them, and how the economy will grow |
| Federal Government Economic Goals | 1. Economic growth 2. Full employment 3. Stable prices |
| Economic Indicators | 1. GDP 2. Employment figures 3. Price stability |
| Federal Government Approach | 1. monetary policy- control US money supply 2. fiscal- taxing and spending |
| Supply & Demand | As supply increase, price decreases. As demand increases, price increase. |
| SMART Goals | Specific, Measurable, Attainable, Reasonable, Timeline |
| Workers Comp | State/Employer- provided insurance |
| Term Life Insurance | simple death protection |
| Whole Life Insurance | combination savings and insurance |
| Retained Earnings | money kept by a company (what is left after dividends, etc.) |
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