12. A key advantage of employee stock ownership plans is that the company gets a tax advantage equal to the fair market value of the shares that are transferred to the trustee.

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Accounting 101 Final Study guide – Flashcards 115 terms

Jennifer Hawkins

115 terms

Preview

Accounting 101 Final Study guide – Flashcards

question

Know the 3 forms of business entities

answer

Sole proprietorship- A single owner Partnership- has two or more parties as co-owners each is an owner Corporation- Owned by stockholders, or shareholders, who own stock representing share of ownership in the corporation.

question

Definition of Revenues

answer

Increase in retained earnings from delivering goods or services to customers or clients.

question

Definition of Expenses

answer

Decrease in retained earnings that results from operations; the cost of doing business

question

Internal Users

answer

Users of accounting information are those individuals directly involved in managing and operating the organization

question

External Users

answer

Users of accounting information are NOT directly involved in running the organization

question

FASB - responsible for GAAP (accounting principles)

answer

Financial Accounting Standards Board -set accounting standards

question

Accounting Equation

answer

Assets=Liabilities + Stockholder's equity

question

Know the 3 activities that business engage in and give examples of each activity.

answer

Financing: creates revenues, stocks Investing: increase/decrease long-term activities, plants equipment Operating: loans, pay dividends, repurchase its own stock, selling

question

The International Accounting Standards Board is responsible for developing a single set of worldwide accountings standards (IFRS)

answer

...

question

These standards will help companies to reduce accounting costs, make it easier to acquire foreign companies, and facilitate comparisons between foreign companies.

answer

IFRS- International Accounting Standards Board

question

Know the primary objective of financial reporting

answer

Provide financial information about the reporting entity that is useful to existing and potential investors, lenders, and other creditors in making decision.

question

What makes information relevant?

answer

Comparability, verifiability, timeliness, and understandability. It must be capable of making a difference to the decision maker, having predictive or confirming value. It must be material, which means it must be important enough to the informed user.

question

Financial information should be understandable to whom

answer

Existing and potential investors, lenders and other creditors, those willing to spend the necessary time to understand it.

question

Balance Sheet

answer

lists assets, liabilities and owners' equity Tells what obligations will be due in the future

question

Income Statement

answer

revenues minus expenses equal net income Summarizes results, operations for a period of time

question

Net Income =

answer

Revenues - Expenses Single most important item on financial statement

question

Assets are recorded at historical/original cost because

answer

it is objective and verifiable

question

Review various source documents. Source documents indicate a transaction has occurred. Ex: Invoice, check, time card, shipping/receiving documents.

answer

A piece of paper that has been used to record a transaction

question

Owner invests in business

answer

Cash increases, Stockholders equity (common stock) increases

question

Purchases supplies for cash

answer

Cash Decreases, Supplies increase

question

Purchase supplies on account

answer

Supplies increase, Accounts payable (liabilities) increases

question

Earn a revenue and receive a promise of cash at a later date

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Accounts receivable increases, retained earnings increase

question

Left Side

answer

Debit

question

Right Side

answer

Credit

question

Initial recording of transaction is made in a journal/general journal (called journal entry, journalizing).

answer

The entry is then posted to ledger/general ledger.

question

Know what is meant by a double-entry accounting system

answer

Accounting records the dual effects on the entity. Each transaction affects at least two accounts. You give something, you receive something in return.

question

What is the purpose of a trial balance?

answer

A trial balance lists all accounts with their balances, assets first, then liabilities and stockholders' equity. Shows whether total debits equal total credits.

question

Accounts Receivable

answer

Money owed to a business by its clients (customers or debtors) and shown on its balance sheet as an asset

question

Accounts Payable

answer

Money owed by a business to its suppliers shown as a liability on a company's balance sheet

question

When is revenue recognized with respect to accrual accounting?

answer

When cash is earned

question

When is revenue recognized with respect to cash basis accounting?

answer

When cash is received

question

When are adjusting entries required?

answer

The end of the account period. When the accounts on the trial balance need to be brought up to date

question

Supplies

answer

Debit - Supplies Expense Credit - Supplies (Revenue) To record supplies for the month.

question

Unearned Revenues/Advance Payments

answer

Debit - Advance Payments Receivables(unearned service revenue) Credit - Advance Payments Revenues (Service revenue) To record unearned revenues but not yet received.

question

Depreciation

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Debit - Depreciation Expense Credit - Accumulated Depreciation To record depreciation for the month.

question

Accrued Salaries and wages

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Debit -Wage and Salary Expense Credit - Wages and Salary Payable To record wages and salaries owed.

question

Closing entries: Revenue and expense accounts are closed to Retained Earnings at the end of the year.

answer

They balance back to zero at the end of the year

question

What is a cash equivalent?

answer

Investments such as time deposits, certificates of deposit, or high-grade government securities that are considered so similar to cash that they are combines with cash for financial disclosure purposes on the balance sheet.

question

Which asset is most liquid?

answer

Cash

question

Deposits in transit

answer

Add to Bank Statement

question

Outstanding Checks

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Subtract from Bank Statement

question

Service Charges

answer

Subtract from books

question

Interest Earned

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Add to books

question

Errors

answer

Add to Bank Statement

question

Review controls over cash, especially for cash sales

answer

-Segregation of duties -Proper authorization -Adequate documents and records -Physical controls

question

Can a foolproof Internal Control system be designed?

answer

question

What accounting function can be performed only by a CPA?

answer

Auditing Functions

question

Know and explain credit terms - i.e. 2/10, n/30

answer

2/10: 2 percent cash discount pay within 10 days n/10: Entire balance is due within 30 days

question

FOB shipping point

answer

Require the buyer to pay for the shipping costs

question

FOB destination point

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Require the seller to pay for the costs of shipping for merchandise to the buyer

question

Who owns the inventory when it is in transit?

answer

Shipping is buyer Destination is shipper

question

Accounts Receivable

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Short-term, within the current cycle. Sale with a verbal promise to pay

question

Notes Receivable

answer

Long-term, past the current cycle. Liability resulting from the signing of a promissory note

question

2 methods for accounting for Bad Debts

answer

Direct Write off method, and Allowance Method

question

Calculate Net Realizable Value of Accounts Receivable

answer

=Accounts receivable - allowance for uncollectible accounts (bad debts)

question

Calculate interest for notes receivable

answer

Principal*Annual interest rate*time period =interest

question

Gross Profit=

answer

Sales - Cost of goods sold

question

Notes to Financial Statements

answer

provide full disclosure

question

Example of the matching principle

answer

Inventory is an asset/current asset. When inventory is sold, it becomes an expense (cost of goods sold).

question

Multiple-step Income Statement (which includes Gross Profit) is generally used by

answer

merchandisers and retailers

question

What is indicated by the inventory turnover ratio?

answer

Cost of goods sold Measures the number of times a company sells its inventory during the year. How rapidly inventory is sold

question

FIFO

answer

First in first out

question

LIFO

answer

Last in Last out

question

Weighted Average

answer

Same Unit cost to all units available

question

Specific Identification

answer

Matching unit cost with the actual units sold

question

If FIFO is used ending inventory =

answer

Newest inventory remains

question

If LIFO is used ending inventory =

answer

Oldest inventory remains

question

Who would use Specific Identification?

answer

Jewelers, auto sales, real estate, antiques

question

Explain Lower of Cost or Market

answer

Based on the principles of relevance and representational faithfulness. LCM requires that inventory be reported in the financial statements at whichever is lower-the inventory's historical cost or its market value. The business reports ending inventory at its LCM value on the balance sheet.

question

Book value of an asset =

answer

Cost minus Accumulated Depreciation

question

Which property, plant, and equipment asset is not depreciated?

answer

Land

question

In order to calculate depreciation, what three items need to be known?

answer

Cost, estimated useful life, estimated residual value

question

Depreciation

answer

The process of allocating the cost of a long-term tangible asset over its useful life

question

Amortization

answer

The process of allocating the cost of a limited life or intangible asset over its useful life

question

Single line=

answer

(cost-residual value)/useful life, in years

question

Units of production=

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(cost-residual value)/useful life, in units of production

question

Double Declining=

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(1/useful life, in years) x 2

question

Figure gain/loss

answer

(difference between BV and amount realized)

question

What is a parent

answer

An investor with 50% or more in another company, investor

question

What is a subsidiary

answer

The investee

question

Know definition of current liability and give examples

answer

An obligation that will be satisfied within the next operating cycle or within one year if the cycle is shorter than a year Known Amounts: Accounts payable, short-term notes payable, unearned revenues, accrued expenses

question

Current ratio =

answer

current assets divided by current liabilities

question

Know what a contingent liability is and give examples

answer

Contingent liability: A potential loss that may occur at some point in the future. Examples: outcome of a lawsuit, tax disputes, alleged violations of environmental protection laws

question

Know definition of long-term liability and give examples

answer

Obligations that are net satisfied within 1 year. Leases, bonds

question

Callable Bonds

answer

Bonds that may be redeemed or retired before their specified due date

question

Convertible bonds

answer

Bonds that can be converted into common stock at a future time

question

Debenture bond

answer

Unsecured bond-bonds backed only by the good faith of the borrower

question

Premium Bond

answer

A bond issued at a price above its face (par) value

question

Discount Bond

answer

A bond issued at a price below its face (par) value

question

Discount on Bonds Payable is what type of account?

answer

Contra liability account

question

What is a capital lease? What is recorded in the accounting records for a capital lease?

answer

Capital lease: long-term noncancelable debt. The rights of the considered property should be recorded on the balance sheet.

question

Retained Earnings represent

answer

Earnings that have not been distributed to stockholders

question

Par Value is

answer

Face value. An arbitrary amount assigned by a company to a share of its stock

question

Why do investors purchase preferred stock?

answer

They receive their dividends and assets before common stockholders

question

Know cumulative feature

answer

The right to dividends in arrears before the current-year dividend is distributed

question

If $1 par value stock is sold for $20, by what amount is Cash increased, by what amount is Common Stock increased, and by what amount is Additional Paid-in Capital increased

answer

Cash is increased - $20 Common Stock increased - $1 Additional Paid-in Capital increased -$19

question

Treasury Stock

answer

A company's own stock that it has issued and later reacquired

question

Why would corporations buy Treasury Stock

answer

-Has issued all it's authorized stocks and needs some stock for distribution -Business wants to increase net assets by buying its stock low and hoping to resell it for higher price. -Avoid a take over by an outside party

question

How is Treasury Stock recorded

answer

Contra account decreases Stockholder's equity

question

A company must have __________ and __________ to pay dividends.

answer

Must have enough cash to pay the dividend and enough retained earnings to declare the dividend.

question

Two important dates for dividends are

answer

Declaration Date: Dividends are declared Payment Date: Payment of dividends

question

Know effect of stock dividend

answer

Stock dividends increase the stock account and decreases Retained Earnings

question

Know effect of stock split

answer

An increase in the number of authorized, issued, and outstanding shares of stock coupled with a proportionate reduction in the stock's par value

question

Net Income =

answer

Revenues - Expenses

question

What is the purpose of the Statement of Cash Flows?

answer

Show where cash came from (receipts) and where it was spent (payments)

question

Indirect Method

answer

Reconciles from net income to net cash provided by operating activities

question

Direct Method

answer

Reports all cash receipts and cash payments from operating activities

question

Liquidity is

answer

Measure of how quickly an item can be converted to cash

question

Profitability is

answer

How well management is using company resources to earn a return on the funds invested by various groups

question

Working capital =

answer

Current assets - Current liabilities

question

How are common-size income statements created?

answer

Each item is expressed as a percentage of the revenue (net sale) amount Divide everything by the net sale amount

question

Which ratio assesses capital structure and risk in a corporation?

answer

Debt to Equity ratio = Total liabilities / Total Stockholders' Equity

question

Inventory turnover

answer

A measure of the number of times inventory is sold during a period. Cost of goods sold/average inventory=Inventory turnover

question

Accounts receivable turnover

answer

A measure of the number of times accounts receivables are collected in a period Net sales/Average Net receivables= Accounts receivable turnover

question

Earnings per share (EPS)

answer

Amount of a company's net income earned for each share of its outstanding common stock (Net income - Preferred Dividends)/Average # shares of common stock outstanding=EPS

STUDY

Benefits And Drawbacks Business Management Employee Stock Ownership Plan Job Characteristics Model Operations Management Organizational Behavior Organizational Psychology Personal Growth And Development

Org behavior ch 5 quiz – Flashcards 10 terms

Darren Farr

10 terms

Preview

Org behavior ch 5 quiz – Flashcards

question

Which of the following is a disadvantage of job specialization? A) It undermines work quality by disassociating job incumbents from the overall product or service. B) Job incumbents of specialized jobs produce lower quality results because they master their work faster than do employees in jobs with many and varied tasks. C) Employees are given highly specific tasks, which directly leads to decreased P-to-O expectancy. D) It requires shorter work cycles. Employees have less variety of tasks to juggle, which leads to increase in the number of work hours.

answer

A) It undermines work quality by disassociating job incumbents from the overall product or service.

question

The concept of _____ is employed in the distributive justice rule. A) motivation B) individual needs C) equity D) goal setting E) performance feedback

answer

C) equity

question

Which type of feedback do employees prefer when they want to learn about their progress toward goal accomplishment? A) Nonsocial feedback sources B) Multisource feedback C) Customer surveys D) Nonverbal communication E) Positive feedback

answer

A) Nonsocial feedback sources

question

Goal setting is most effective when: A) goals are measured in quantitative, qualitative, and cost terms. B) the goals do not stretch the employee's abilities and motivation. C) the goal statements are general rather than specific. the intensity of employee effort is minimal. D) it does not compel people to increase the persistence of their effort.

answer

A) goals are measured in quantitative, qualitative, and cost terms.

question

A(n) _____ is the best reinforcement schedule for motivating employees. A) continuous reinforcement schedule B) variable ratio schedule C) fixed schedule D) extinction E) avoidance of consequence

answer

B) variable ratio schedule

question

According to the expectancy theory, a skill development training program would: A) have no effect on employee motivation. B) mainly increase the effort-to-performance expectancy. C) mainly increase the performance-to-outcome expectancy. D) mainly increase the valence of pay increases and other organizational outcomes. E) mainly alter the comparison other.

answer

B) mainly increase the effort-to-performance expectancy.

question

Expectancy theory states that employees: A) have different needs at different times. B) can use personal expectations to reduce work-related stress. C) can motivate themselves through power. D) base their work effort on the performance level they expect. E) compare their inputs and outcomes to other people.

answer

D) base their work effort on the performance level they expect.

question

Which of the following is found in Maslow's needs hierarchy? A) Domination B) Frustration-regression C) Desire to know D) Aesthetic beauty E) Self-actualization

answer

E) Self-actualization

question

Drives: A) refer only to the secondary needs of individuals. B) are emotions that energize individuals to act on their environment. C) include only the basic physiological essentials of individuals. D) are the secondary sources of employee motivation. E) are innate and universal to human beings.

answer

E) are innate and universal to human beings.

question

Employee engagement is usually described in terms of _____. A) self-esteem B) self-concept C) self-efficacy E) self-enhancement F) self-verification

answer

C) self-efficacy

STUDY

Business Management Employee Stock Ownership Plan Management Principles Of Management Time And Motion Studies

Principles of Management Leadership – Flashcards 239 terms

Jessica Forbes

239 terms

Preview

Principles of Management Leadership – Flashcards

question

Effective, Efficient, and Ethical are the 3 E's of a good plan.

answer

3 E's

question

The subordinates manager has the right to expect the subordinate to perform the job delegated to him or her and that the manager has the right to take corrective action if the subordinate fails to do so.

answer

Accountability

question

Another name for the Quick Ratio

answer

Acid Test

question

A common business strategy focused on growth through the purchase of other businesses. Smuckers is a good example.

answer

Acquisition

question

After the job is done the team can dissolve-contrast with department.

answer

Adjourning

question

A concept advocated by Henri Fayol (1841-1925) suggesting that there are common principles of management that apply to all types of businesses.

answer

Administrative Management

question

Taking positive steps to correct previous injustices and prejudices especially toward qualified minorities, women, persons with disabilities, and verterans.

answer

Affirmative Action

question

A manager with authority to act for the organization or some part of it.

answer

Agent

question

When planners do so much analysis that they fail to make a timely decision.

answer

Analysis Paralyses

question

Typically a wealth investor worth over $1 million who is willing to invest money to help a startup business. Some, such as a family member, may do it for free but most expect a share of the ownership and eventually a higher rate of return than the stock market provides.

answer

Angel Investor

question

An organization of 21 Pacific Rim countries seeking free trade and economic cooperation.

answer

Asia-Pacific Economic Cooperation (APEC)

question

An agreement among several nations in Southeast Asia aimed at promoting peace and free trade among nations, such as Vietnam, Indonesia, Thailand, etc.

answer

Association of Southeast Asian Nations (ASEAN)

question

Those who lead best derive their power from the consent of their followers.

answer

Authentic Leadership Theory

question

A person with authority has the power and right to make decisions, give orders, draw on resources, and do whatever is necessary to fulfill the responsibility of his or her managerial position.

answer

Authority

question

A financial report summarizing a company's assets, liabilities, and stockholders' equity at a specific point in time using the formula: Assets = Liabilities + Stockholders' Equity.

answer

Balance Sheet

question

A concept advocated by Elton Mayo (1880-1949) and others focusing on the psychological and sociological aspects of human behavior with regard to worker productivity and job satisfaction.

answer

Behavioral Approach to Management

question

Having compassion for others.

answer

Benevolence

question

Person who swindled his clients out of $65 billion

answer

Bernie Madoff

question

Describes huge retail stores, such as, Walmart and Costco that typically have very large but plain looking stores and compete on price.

answer

Big Box Store

question

The Boston Consulting Group (BCG) matrix classifies all units of a large business into the categories of cows, dogs, question marks, and stars.

answer

Boston Consulting Group Matrix

question

The Big Four in terms of newly advanced economic development.

answer

Brazil, Russia, India, and China (BRIC)

question

A concept advocated by Max Weber (1864-1920) suggesting organizations should be run by formal rules and procedures and that workers should advance based upon their performance instead of family connections.

answer

Bureaucracy

question

The use of rules, regulations, and formal authority to guide the performance of employees.

answer

Bureaucratic Control

question

A hierarchical organization delineated by clear lines of authority, written rules, and administrator who strictly enforced the rules.

answer

Bureaucratic Structure

question

A subset of the field of ethics focused on the ethical issues facing business leaders.

answer

Business Ethics

question

Where your passion, talent, and cause greater than yourself intersect.

answer

Calling

question

Planned Costs to build or buy large items such as buildings or large equipment that would not be a part of the ordinary costs of doing business.

answer

Capital Budget

question

Report providing summary of cash flowing in and out of the business during a specific period such as a quarter (three months) or year.

answer

Cash Flow Statement

question

An agreement between the U.S. and several Central American countries to promote free trade.

answer

Central America Free Trade Agreement (CAFTA)

question

Important decisions are made at the top of the organization with little or no input from below.

answer

Centralized Organization

question

In The Shannon & Weaver Communication Model the vehicle that carries the message from the transmitter to the receiver.

answer

Channel

question

Leaders use their charm to lead others.

answer

Charismatic Leadership Theory

question

Control employees impose on themselves based upon agreed-upon norms, values, shared goals, and trust.

answer

Clan Control

question

Former Chairman of Enron who committed suicide in 2002.

answer

Cliff Baxter

question

A common business strategy focused on doing one thing (or few things) exceptionally well. Starbucks is a good example.

answer

Concentrate

question

Chinese philosopher who lived around 550 B.C. and defined moral courage.

answer

Confucius

question

A common business strategy focused on the purchase of other unrelated businesses. General Electric is a good example.

answer

Conglomerate Diversification

question

Which leadership approach to use is contingent (depends upon) elements of the leader's personality, the task, workers, and the level of power of the leader.

answer

Contingency Theory of Leadership

question

A person who typically thinks and acts contrary to popular or accepted opinion.

answer

Contrarian

question

Any process that directs the activities of individuals toward the achievement of the organizations goals.

answer

Control

question

One firm signs a legal contract with a business in another country to make their products there.

answer

Cooperative Contracts

question

The procedures that link the various parts of an organization to achieve the organizations overall mission.

answer

Coordination

question

The expectation that a corporation in return for privileges grated by the state government and lows that encourage business investment, will exhibit good citizenship and support charities and the arts.

answer

Corporate Social Responsibility

question

In business a Cow is a business unit with low potential for market growth but your company maintains a large share of the market for the product.

answer

Cow

question

Current Ratio = current assets divided by current liabilities

answer

Current Ratio

question

Total Liabilities divided by Shareholders' Equity.

answer

Debt-To-Equity Ratio

question

many decisions are made at lower levels and people further down the organizational hierarchy feel empowered.

answer

Decentralized Organization

question

Assignment of responsibilities to a subordinate.

answer

Delegation

question

In The Shannon & Weaver Communication Model the person who receives the transmitted message.

answer

Destination

question

A common business strategy focused on setting your product apart from the competition, typically the basis of quality instead of price. Cadillac is an example.

answer

Differentiate

question

Where a large organization is composed of many different units that work on different tasks using diverse skills and work methods.

answer

Differentiation

question

The condition of being different, not all alike, and includes differences as to color, religion, age, disability status, military experience, sexual orientation, economic class, educational level, gender, race, ethnicity, and nationality.

answer

Diversity

question

Basing your ethics and choices of behavior on God's commandments.

answer

Divine Command

question

Belief that kings and queens derive their right to rule from the will of God.

answer

Divine Right of Kings

question

The assignment of different tasks to different people or group.

answer

Division of Labor

question

An organizational structure organized such divisions as product type, customer type, or geographic region.

answer

Divisional Organizational Structure

question

In business a Dog is a business unit whose product has little or no potential for growth and your firm maintains a low percentage of the market.

answer

Dog

question

Exporting products at a price below cost to establish a market in another country. Dumping is considered illegal in many countries.

answer

Dumping

question

Net Income divided by Shares Outstanding

answer

Earnings Per Share (EPS)

question

A problem regarding how well your message resulted in the desired behavior.

answer

Effectiveness Communication Problem

question

An inappropriate way of dealing with job loss or disappointments where the focus is largely on damaging emotional reactions such as excessive drinking, abusing drugs, or other escape mechanisms.

answer

Emotion-focused behavior

question

In 2000, the seventh largest corporation in the U.S. with "reported" earnings of $101 Billion and 21,000 employees that was bankrupt by the end of 2001.

answer

Enron

question

A person who pursues lucrative new business opportunities.

answer

Entrepreneur

question

A new business having rapid growth and high profitability as its primary objective.

answer

Entrepreneurial Venture

question

People expect their rewards for their input and abilities will be equal to the rewards of others with similar input and abilities.

answer

Equity Theory

question

Limiting your behavior to what is ethical as opposed to doing anything as long as there is no low specifically prohibiting it.

answer

Ethical Boundary

question

Someone who is ethical, teaches followers what is right and wrong is this setting, and rewards ethical behavior and punishes unethical action.

answer

Ethical Leader

question

A category of wisdom focused on the study of what a society considers right or wrong.

answer

Ethics

question

An approach to ethical decision-making that takes into consideration the rights of others as human beings.

answer

Ethics of Conscience

question

Leaders are to make choices in light of their duty to protect and benefit others.

answer

Ethics of Duty

question

An approach to ethical decision-making based upon the concept of fairness, the facts, and equal treatment for all.

answer

Ethics of Justice

question

An approach to ethical decision-making that acknowledge that all human beings, regardless of their station in life, deserve respect as we respect ourselves.

answer

Ethics of Respect

question

the idea that all human beings are born with certain rights and managers should not violate those rights

answer

Ethics of Rights

question

An approach to ethical decision-making based on what a good person would do.

answer

Ethics of Virtue

question

People who are convinced their native culture is superior to all others.

answer

Ethnocentric

question

An economic and political union of over two dozen European nations with the goal of preventing future wars among European nations.

answer

European Union (EU)

question

The employees' perception of the likelihood that their efforts will result in their goal attainment.

answer

Expectancy

question

Focuses on the expectations of employees.

answer

Expectancy Theory

question

Selling goods made in the home country in another country.

answer

Exporting

question

A belief that things external to the individual such as chance, fate, God, or other outside forces determine life's events.

answer

External Loves of Control

question

Rewards given by someone else such as a raise or a promotion.

answer

Extrinsic Rewards

question

Something that costs the same regardless of how many you make or sell.

answer

Fixed Cost

question

Costs that remain the same regardless of how many units are produced this month.

answer

Fixed Costs

question

Makes it illegal for any U.S. citizen anywhere in the world to bribe a foreign official.

answer

Foreign Corrupt Practices Act of 1977

question

Deciding who is on the team.

answer

Forming

question

A legal contract between a successful business and an individual business manager seeking to start the same business in a new location.

answer

Franchise

question

One company makes a legal agreement with another organization to make and sell the first organizations product or service exactly as the first company demands.

answer

Franchise

question

Professor and author of a Theory of Leadership describing the Contingency Theory of Leadership.

answer

Fred Fiedler

question

An organizational structure organized around the basic business functions such as manufacturing, marketing, finance, information technology, and human resources.

answer

Functional Organizational Structure

question

A multilateral agreement signed by nearly 150 countries following WWII aimed at reducing conflicts that start as business disagreement but could lead to armed conflicts between nations.

answer

General Agreement on Tariffs and Trade (GATT)

question

Metaphor for an invisible barrier that makes it difficult for women and minorities to rise above a certain level in many organizations.

answer

Glass Ceiling

question

A business that views the whole world as one market and itself as a global citizen.

answer

Global Business

question

A company that starts out as a global company.

answer

Global New Venture

question

A common business strategy focused on growth through overseas expansion. Avon is a good example.

answer

Globalization

question

People have conscious goals that energize them and direct their behavior toward a particular end.

answer

Goal Setting Theory

question

The theory that leaders are born leaders or sent by God to lead.

answer

Great Man Theory of Leadership

question

(Revenue - Cost of Goods Sold)/Revenue is the formula for the Gross Margin, sometimes just called Margin.

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Gross Margin

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A concept stemming from Elton Mayo's experiments at the Hawthorne Electric Company showing worker productivity went up when management showed more interest in the worker's and their working conditions.

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Hawthorne Effect

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A workplace where an employee is made to feel threatened or is offended.

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Hostile Environment

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A concept advocated by Mary Parker Follett (1868-1933) stressing the importance of management working with workers in a cooperative mode rather than ruling over them in a command mode.

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Human Relations Approach to Management

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Report that measures a company's revenues and expenses over a specific accounting period such as a quarter (three months) or a year.

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Income Statement

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The everyday unwritten relationships among the employees working together within the organization.

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Informal Organizational Structure

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In The Shannon & Weaver Communication Model what produces the message.

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Information Source

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to breathe life into.

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Inspire

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The perceived likelihood that performance will be followed by a particular outcome.

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Instrumentality

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Putting the differentiated units together so that work is coordinated into an overall product.

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Integration

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A belief that the individual is in charge of the things that occur in life, or at least our reaction to them.

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Internal Loves of Control

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A business that is primarily located in its home country, such as the United States, but has branch offices, and perhaps factories, in several overseas locations.

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International Business

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An organization of 187 nations working to foster global monetary cooperation and stabilization around the world.

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International Monetary Fund (IMF)

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A person who works to create new business ventures while working inside an existing large company.

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Intrepreneur

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Rewards derived from the satisfaction of performing the job well.

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Intrinsic Rewards

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Former CEO of Enron who is currently serving a prison term for fraud.

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Jeff Skilling

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Giving employees extra tasks to do to relieve boredom and encourage employee growth and opportunities for advancement.

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Job Enlargement

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Changing a job to make it more challenging and therefore more rewarding, satisfying, and motivating.

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Job Enrichment

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Allowing employees to move through a series of jobs so they do not get bored and so they are qualified for more than one job.

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Job Rotation

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Two or more companies sign a legal agreement to form a third company to work together to make and sell a product or products.

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Joint Venture

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Former CEO of Enron who died of an apparent heart attack before going to prison for fraud.

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Ken Lay

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A classification of levels of moral reasoning defined by Lawrence Kohlberg (1927-1987) beginning with obedience to avoid punishment, through fitting into the norms of society and ending with the voluntary following of principles.

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Kohlberg's Levels of Moral Reasoning

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Leaders lead by drawing key followers into their inner circle.

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Leader-Member Exchange Theory of Leadership

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In Fiedler's Contingency Theory of Leadership the degree of confidence, trust, and respect employees have in their leader.

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Leader-Member Relations

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The art and science of ethically and effectively guiding others toward a positive goal.

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Leadership

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The theory that potential leaders can be identified early by certain traits.

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Leadership Trait Theory

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Focus on manufacturing that eliminates waste by making labor-related activities more efficient, repeatable, and impactful.

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Lean Manufacturing

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In Fiedler's Contingency Theory of Leadership an indirect way of determining whether a leader is people-oriented by asking him or her to describe the employee they would least prefer to work with.

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Least Preferred Co-worker

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One company signs a legal agreement with another country to manufacture and sell the first company's product with the first company getting a small fee or royalty per item sold.

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License

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The natural progression of power from its birth or beginning through growth, maturation, and eventually decline and the death or end of a leader's power.

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Life Cycle of Power

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Work by Lillian Gilbreth (1876-1972) extended the scientific method advocated earlier by Frederick W. Taylor. She became famous for raising 12 children while continuing her engineering work, which resulted in a 1950 movie entitled Cheaper by the Dozen.

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Lillian Gilbreth

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Position where the manager has the direct responsibility for a principal activity of the firm.

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Line

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Looking far beyond the quarterly (every 3 months) effects when making decisions.

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Long-Term Focus

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A common business strategy focused on reducing costs so the price charged to customers will be lower than competitors' prices. Walmart is an example.

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Low-Cost Provider

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The factors in the economy, government, and general business climate that could greatly affect the organizations competitive status.

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Macro Environment

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Control based on pricing mechanism; if something gets too costly, then the market will show purchases that the same product or service is available elsewhere at a lower cost.

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Market Control

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Lower-level needs such as the need for food and water must first be satisfied before higher level needs such as esteem and self-actualization become motivators.

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Maslow's Hierarchy of Needs Theory

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Budget of budgets where all the other budgets are combined.

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Master Budget

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An organizational structure that is a combination of functional and divisional where some employees report to two managers, a functional manager plus a divisional manager.

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Matrix Organizational Structure

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An organizational structure that is rigid and inflexible.

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Mechanistic Organizational Structure

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Major factors within the organizations industry that could greatly affect its competitive status.

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Micro Environment

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An organization that employs few, if any, women, minorities, or other groups that differ from the majority and thus has a highly homogeneous employee population.

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Monolithic Organization

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The performance of good ethics.

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Morality

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An organization that highly values cultural diversity and actively seeks to utilize and encourage diversity.

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Multicultural Organization

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People have varying levels of need for achievement (advancing in your career), affiliation (having strong friendships), and power (influence).

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Need for Achievement, Affiliation, and Power

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A collection of organizations that work together to produce a good or service and looks more like a web than a pyramid.

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Network Organizational Structure

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In The Shannon & Weaver Communication Model any interference resulting in the signal being received incorrectly.

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Noise

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An agreed-upon behavior within a group.

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Norm

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Agreeing on shared team goals and processes.

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Norming

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An agreement between the U.S., Canada, and Mexico aimed at eliminating all trade barriers.

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North American Free Trade Agreement (NAFTA)

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Research conducted over 50 years ago at Ohio State with mixed results regarding whether concern for people was better than concern for the task.

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Ohio State Leadership Studies

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The budget that lists the revenues and expenses related to the regular and ongoing operations of the organization.

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Operating Budget

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Something the organization could build or buy that would give it a future competitive advantage.

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Opportunity

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A flexible organizational structure that uses teamwork and managers are more like coaches than bosses.

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Organic Organizational Structure

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Leaders lead best by helping their followers align their personal goals with the goals of the organization.

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Path-Goal Theory of Leadership

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Getting the job done as a team.

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Performing

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Drucher (1909-2005) wrote the famous textbook The Practice of Management (1954) used by many colleges of business for decades, thereby influencing management thought for thousands of future managers. He especially emphasized the importance of customer satisfaction.

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Peter Drucher

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The love of wisdom.

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Philosophy

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Determining where an organization is now, where it could be with a few years, and what it would take to get there.

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Planning

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An organization that has a relatively diverse employee population as the result of a proactive effort to involve employees from different gender, racial, and cultural backgrounds.

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Pluralistic Organization

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In Fiedler's Contingency Theory of Leadership the amount of power the leader has over variables such as hiring, firing, discipline, promotions, and salary increases.

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Position Power

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The study of what makes for a healthy psychological approach to life.

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Positive Psychology

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The ability to implement change despite resistance.

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Power

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Judging someone in advance, before an objective, fact-based review.

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Prejudice

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Price per share divided by earnings per share.

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Price-Earnings Ratio (P-ER Ratio)

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An appropriate way of dealing with job loss focused on defining the problem, generating alternative solutions, and acting to solve the problem in a non-emotional manner.

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Problem-focused behavior

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Forecasts units to be produced each month per product.

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Production Budget

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Another name for the Income Statement that lists the revenues and expenses for a specific time period, also called P&L Statement.

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Profit and Loss Statement

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The basis for an understanding between workers and management.

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Psychological Contract

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Concept advocated by Ford W. Harris and others suggesting how mathematics can improved business decision-making.

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Quantitative Management

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In business a Question Mark is a business unit where your company has a low percentage of the market but the potential for growth is high.

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Question Mark

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(current assets - inventory) divided by current liabilities

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Quick Ratio

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A situation where one person, typically a manager, offers something to another, typically an employee, in exchange for a sexual favor.

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Quid Pro Quo

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In The Shannon & Weaver Communication Model what decodes the message from the channel.

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Receiver

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A person assigned a task is supposed to carry it out.

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Responsibility

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(Net Income - Preferred Dividends) divided by Common Shareholders' Equity.

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Return on Equity (ROE)

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Professor, author and advocate of the Path-Goal Theory of Leadership.

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Robert House

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Former AT&T executive and college lecturer who authored the book Servant Leadership and founder of the Servant Leadership movement.

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Robert K. Greenleaf

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Contains forecasts of sales by month, sales area, and product.

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Sales Budget

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Concept advocated by Frederick W. Taylor (1856-1915) involving breaking complex tasks down into a series of small movements and then analyzing each movement for efficiency and speed to save time and money.

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Scientific Management

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Belief that you are in control of your life and that your decisions and actions shape that life.

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Self-efficacy

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A problem regarding how accurately the meaning of your message was conveyed.

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Semantic Communication Problem

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Each worker in a factory stays at his or her work station doing a specialized task while the product being made moves along a belt.

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Separation of Labor

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The leader considers himself or herself to be a servant to all and leads out of a desire to serve rather than out of a need for money, power, and prestige.

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Servant Leadership Theory

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An organization of retired executives who volunteer to help others start or grow their small businesses.

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Service Corps of Retired Executives (SCORE)

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Any unwanted and offensive action of a sexual nature.

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Sexual Harassment

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Authors of famous model of communication.

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Shannon & Weaver

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Few layers of managers between the workers and the CEO so each manager has a broader span of control with more workers reporting to him or her.

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Short, Fat Organizational Chart

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In management a silo is when workers in one department work in isolation on their part of the project-contrast with teamwork.

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Silo

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A concept borrowed from statistics referring to less than 3.4 defective parts per million.

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Six Sigma

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A control standard of less than 3.4 defects per million.

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Six Sigma

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Making small infractions to ethics that gradually lead to making larger ones.

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Slippery Slope

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One with less than 100 employees and independently owned and operated.

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Small Business

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Division of the U.S. government dedicated to helping anyone start or grow a small business.

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Small Business Administration (SBA)

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Goals or targets that are specific, measurable, attainable, relevant, and timely.

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SMART Goals

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Team member who fails to do his or her fair share of the work but expects to reap the team's reward.

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Social Loafer

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Greek philosopher who lived around 470 B.C. and defined ethics as how we ought to live.

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Socrates

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The number of subordinates who report directly to a manager or supervisor.

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Span of Control

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The process in which different individuals and units perform different tasks and develop high skills.

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Specialization

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Position where the person provides specialized or professional skill and advice in support of the line departments.

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Staff

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Forming, Storming, Norming, Performing, and Adjourning.

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Stages in Team Building

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An expected performance level.

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Standard

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In business a Star is a business unit whose product has a high potential for market growth and your company maintains a large share of the market.

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Stars

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A frame of mind where the person is concentrating so completely on what they are doing that other thoughts are temporarily set aside.

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State of Flow

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Ironing out differences about team goals and individual roles.

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Storming

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Two companies sign a legal agreement to work together, often in a joint venture, to make and sell a product or products.

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Strategic Alliance

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Something the organization does exceptionally well.

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Strength

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Money a business has already spent and can't get back.

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Sunk Cost

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A tool of analysis where the organizations strengths, weaknesses, opportunities, and threats are identified.

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SWOT

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Many layers of managers between the workers and the Chief Executive Officer.

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Tall Organizational Chart

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A tax on fees a country charges to a business importing products into that country.

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Tariff

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In Fiedler's Contingency Theory of Leadership the degree to which the job assignments of workers are structured (well-defined) or unstructured.

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Task Structure

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A process of cooperative work that most organizations use to increase productivity, reduce costs, improve quality, enhance speed, and capture the creativity and innovation of their employees.

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Teamwork

question

A problem regarding how accurately your message was conveyed.

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Technical Communication Problem

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Book written by Sun Tzu over 2,500 years ago containing words of wisdom about leadership.

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The Art of War

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Book written by Niccolo Machiavelli 500 years ago describing the leaders responsibility to defend his followers.

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The Prince

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Book written by Adam Smith in 1759 admonishing business leaders to operate with high morals and not greed.

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The Theory of Moral Sentiments

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Book written by Adam Smith in 1776 describing how supply and demand work to establish a fair price.

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The Wealth of Nations

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Managers perceive employees as lazy and unmotivated to do good work.

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Theory X

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Managers see employees as naturally motivated to do a good job.

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Theory Y

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Concept advocated by William Ouchi suggesting American business leaders should learn from the success of Japanese businesses and build long-lasting relationships with their workers.

answer

Theory Z

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A behavior that is followed by positive consequences (a reward) will likely be repeated.

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Thorndike's Law of Effect

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Something that could substantially reduce the organizations revenues or increase its expenses.

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Threat

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Optimistic, Pessimistic, and Most Likely are the three planning scenarios most successful planners consider.

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Three Planning Scenarios

question

Leaders use pay and other rewards to trade off with followers to get them to do what the leader wants done.

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Transactional Theory of Leadership

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A psychological tendency to transfer our feelings for one person onto another.

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Transference

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Leaders inspire their followers to implement major organization shifts or sea changes.

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Transformational Theory of Leadership

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In The Shannon & Weaver Communication Model what encodes the message into signals.

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Transmitter

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Some factors such as company policies, working conditions, pay, etc. are likely to cause employee dissatisfaction while other factors such as the nature of the work itself and feelings of achievement are likely to cause satisfaction on the job.

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Two-Factor Theory

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A concept of ethics based primarily upon the notion that choices should be made that result in the greatest good for the greatest number of people.

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Utilitarianism

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The value or importance a particular outcome holds for an employee.

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Valence

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Any action or process that a customer would be willing to pay for.

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Value

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An expense that increases with volume, for example, raw material that goes into each item produced.

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Variable Cost

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Costs, such as raw materials used, that go up as the level of production goes up.

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Variable Costs

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Money provided by a group of wealthy investors, investment banks, or other financial institutions representing groups of individual investors who pool their funds and seek to invest those funds into small businesses with perceived long-term growth potential.

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Venture Capital

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Person or group that invests money in startup companies in return for a share of the ownership and high returns.

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Venture Capitalist

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American statistician (1906-1993) who helped Japan's industrial efforts to recover from World War II by advocating statistical quality control, a concept later accepted in America.

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W. Edwards Deming

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Something the organization lacks or does poorly.

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Weakness

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A contractual agreement between two companies where one company called the parent, wholly owns the other company, for example Honda Motors of America is owned by Honda Motors of Japan.

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Wholly Owned Affiliate

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Another name for the Current Ratio.

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Working Capital Ratio

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A collection of people carefully chosen for their complementary skills who trust one another and are committed to a common goal, a common approach, and have agreed to hold each other mutually accountable.

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Working Group

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An organization first formed near the end of WWII to rebuild France and other nations devastated by WWII but more recently to provide loans to poor and developing nations.

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World Bank

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A global international organization formed in 1995 involving over 150 nations to administer trade agreements.

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World Trade Organization (WTO)

STUDY

Employee Of The Month Employee Stock Ownership Plan Methods Pay For Performance Profit Sharing Plan Profit Sharing Plans

Dessler Human Resource Management Chapter 12 Pay for Performance and Financial Incentives Lindenwood University – Flashcards 24 terms

Daphne Armenta

24 terms

Preview

Dessler Human Resource Management Chapter 12 Pay for Performance and Financial Incentives Lindenwood University – Flashcards

question

Financial Incentives

answer

Financial rewards paid to workers whose production exceeds some predetermined standard

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Productivity

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The ratio of outputs(goods and services) divided by the inputs (resources such as labor and capital)

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Fair day's work

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Output standards devised based on careful, scientific analysis

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Scientific management

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Management approach based on improving work methods through observation and analysis

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Intrinsic Motivation

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Motivation that derives from the pleasure someone gets from doing the job or task

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Expectancy

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A person's expectation that his or her effort will lead to performance

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Instrumentality

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The perceived relationship between successful performance and obtaining the reward

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Valence

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The perceived value a person attaches to the reward

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Behavior Modification

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Using contingent rewards or punishment to change behavior

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Variable Pay

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Any plan that ties pay to productivity or profitability, usually as one-time lump payments

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Piecework

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A system of pay based on the number of items processed by each individual worker in a unit of time, such as items per hour or items per day

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Straight Piecework

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An incentive plan in which a person is paid a sum for each item he or she makes or sells, with a strict proportionality between results and rewards

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Standard Hour Plan

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A plan by which a worker is paid a basic hourly rate but is paid an extra percentage of his or her rate for production exceeding the standard per hour or per day. Similar to piecework payment but based on a percent premium

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Merit pay (merit raise)

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Any salary increase awarded to an employee based on his or her individual performance

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Annual Bonus

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Plans that are designed to motivate short-term performance of managers and which are tied to company profitability

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Stock Option

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The right to purchase a stated number of shares of a company stock at today's price at some time in the future

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Golden Parachute

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A payment companies make in connection with a change in ownership or control of a company

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Team (or group) incentive plan

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A plan in which a production standard is set for a specific work group, and its members are paid incentives if the group exceeds the production standard

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Organization-wide incentive plan

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Incentive plan in which all or most employees can participate

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Profit-sharing plan

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A plan whereby employees share in the company's profits

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Scanlon plan

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An incentive plan developed in 1937 by Joseph Scanlon and designed to encourage cooperation, involvement, and sharing of benefits

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Gainsharing Plan

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An incentive plan that engages employees in a common effort to achieve productivity objectives and share the gains

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Earnings-at-risk pay plan

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Plan that puts some portion of employees' normal pay at risk if they don't meet their goals, in return for possibly obtaining a much larger bonus if they exceed their goals

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Employee stock ownership plan (ESOP)

answer

A corporation contributes shares of its own stock to a trust in which additional contributions are made annually. The trust distributes the stock to employees on retirement or separation from service.

STUDY

Employee Stock Ownership Plan New York Stock Exchange Profit Sharing Plan Pros And Cons Wages And Salaries

Ch-12 HR – Flashcard 65 terms

Patricia Smith

65 terms

Preview

Ch-12 HR – Flashcard

question

Pay specifically designed to energize, direct, or control employees' behavior is known as:

answer

incentive pay.

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An effective incentive pay plan should:

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have performance measures linked to the organization's goals.

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Which of the following is a disadvantage of using incentive plans?

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The goals of an incentive plan may interfere with other management goals.

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When designing incentives, managers should make sure that:

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employees think that the pay plan is fair.

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Which of the following types of incentive pay plans are used to reward individual performance?

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Merit pay

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A company provides wages to its employees based on the amount workers produce. The more employees produce, the more they earn. This type of plan is called

answer

piecework rate plan.

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A piecework rate plan is best suited for:

answer

production workers.

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As an incentive to work efficiently, some organizations pay production workers a ____, a wage based on the amount they produce.

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piecework rate

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An employee who produces 10 components in an hour earns $9 ($.90 X 10) per hour, while an employee who produces 15 components earns $13.50 ($.90 x 15). This is an example of a:

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straight piecework plan.

question

_____ refers to an incentive pay in which the wage paid is higher when a greater amount is produced.

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Differential piece rate

question

Which of the following is true about a piece rate plan?

answer

It has a direct link between the work and how much the employee earns.

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Differential piece rates system refers to:

answer

an incentive pay in which the piece rate is higher when a greater amount is produced.

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Piecework rate plans are most suited for _____.

answer

routine, standardized jobs

question

Standard hour plans are likely to succeed if:

answer

employees want the extra money more than they want to work at a pace that feels comfortable.

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Martin owns and manages a small auto-parts shop. He determines the time required to complete each task in his shop. When an employee completes the repair in less time, he/she receives an amount of pay equal to the rate determined by Martin for . Martin is using a:

answer

standard hour plan.

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Which of the following is true about standard hour plans?

answer

They encourage employees to work as fast as they can.

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An incentive system in which an organization links pay increases to ratings on performance appraisals is referred to as:

answer

merit pay.

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In merit pay programs, an individual's compa-ratio represents his/her:

answer

pay relative to average pay.

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The decisions about merit pay are based on two factors: the individual's performance rating and the individual's

answer

compa-ratio.

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What is the function of a merit increase grid?

answer

To make the merit increases consistent

question

In order to control compensation costs, administrators of merit pay programs must closely monitor the compa-ratio and the:

answer

an individual's performance ratings.

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An advantage of merit pay is that:

answer

it makes the reward more valuable by relating it to economic conditions.

question

Which of the following is a disadvantage of a merit pay system?

answer

It can quickly become expensive for the company.

question

_____ provides a method for rewarding performance in all of the dimensions measured in the organization's performance management system.

answer

Merit pay

question

Which of the following is true of a performance bonus?

answer

It should be re-earned by employees during each performance period.

question

Retention bonuses refer to:

answer

one-time incentives paid in exchange for remaining with the company.

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When an employee's pay is calculated as a percentage of sales, it is referred to as:

answer

commission

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Paying most or all of a salesperson's compensation in the form of commissions encourages the salesperson to focus on:

answer

closing the sale.

question

Straight commission plans:

answer

are common among insurance and real estate agents.

question

Which of the following types of incentive plans are specifically designed to promote group performance?

answer

Gainsharing

question

Which of the following incentive programs measures improvements in productivity and effectiveness and distributes a portion of each profit to employees?

answer

Gainsharing

question

Organizations that want employees to focus on efficiency and on group incentives are most likely to implement a _____ program.

answer

gainsharing

question

An organization uses a gainsharing program in which employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard. This incentive plan is referred to as:

answer

Scanlon plan.

question

The Scanlon plan is a variation of:

answer

gainsharing plans.

question

What should employees do to earn bonuses under the Scanlon plan?

answer

They should keep labor costs to a minimum and produce as much as possible with that amount of labor.

question

An organization uses Scanlon plan to provide incentives to employees. The workers produce parts worth $5 million. The target ratio set by the organization is 30%. The employees will be given a bonus if the actual labor costs are less than:

answer

$1.5 million.

question

What is the difference between bonuses and team awards?

answer

Bonuses reward attainment of goals measured in terms of physical output whereas team awards reward performance in terms of cost savings.

question

Team awards differ from group bonuses in that they:

answer

are more likely to use a broad range of performance measures.

question

Which of the following is an advantage of group incentives?

answer

Groups try to outdo one another in satisfying customers and therefore create healthy competition.

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Which of the following is a disadvantage of using group bonuses?

answer

It could result in competition among groups.

question

Which of the following is an incentive plan that is intended to improve the overall performance of an organization?

answer

Profit sharing

question

What is profit sharing?

answer

An incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary.

question

Why do organizations use profit sharing?

answer

It costs less when the organization is experiencing financial difficulties.

question

Which of the following incentive plans would enable its employees to think like owners, taking a broad view of what they need to do in order to make the organization more effective?

answer

Profit sharing

question

Identify the disadvantage of using profit sharing plans.

answer

Profit sharing is not directly linked to individual behavior.

question

What is the drawback of stock ownership as a form of incentive pay?

answer

Financial benefits mostly come when the employee leaves the organization.

question

The link between employees' performance and pay is harder to establish in:

answer

stock ownership plans.

question

Stock options have their greatest motivational potential during periods of:

answer

high economic growth.

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In 2003, a company employee received an option to purchase the company's stock at $45 per share. If the stock is trading at $40 a share in 2005, the employee will most likely:

answer

would not bother to exercise the options.

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Which of the following is an arrangement in which the organization distributes shares of stock to all its employees by placing it in a trust?

answer

Employee stock ownership plan

question

What is meant by backdating a stock option?

answer

Changing the price in the original option agreement so that the option holder can buy stock at a bargain price

question

What is the difference between stock options and employee stock ownership plan (ESOP)?

answer

Stock options are usually used with top management whereas ESOPs are provided to all employees.

question

Which of the following is a reason for ESOPs' popularity?

answer

ESOPs provide very high risk-free retirement income.

question

By law, what is the minimum percentage of assets that an ESOP must invest in its company's stock?

answer

question

A major problem with ESOPs is that:

answer

they carry a significant risk for employees.

question

Which of the following is a method where a combination of performance measures directed toward the company's long- and short-term goals are used as the basis for awarding incentive pay?

answer

Balanced scorecard

question

What is a balanced scorecard?

answer

A combination of performance measures directed toward the company's long- and short-term goals and used as the basis for awarding incentive pay

question

Which of the following is an advantage of using balanced scorecard?

answer

It helps employees understand the organization's goals.

question

An organization wants to provide its employees information about what its goals are and what it expects employees to accomplish. It is planning to implement an incentive plan that helps employees understand the organization's goals. Which of the following should be used by this organization?

answer

Balanced scorecard

question

Employee participation in pay-related decisions can be part of a general move toward:

answer

employee empowerment.

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If employee participation in making pay-related decisions is encouraged in an organization, then:

answer

the incentive plan has more chances of being successful.

question

Which of the following is a short-term incentive?

answer

Return on investment

question

Which of the following is a long-term incentive?

answer

Stock option

question

How does the balanced scorecard help organizations deal with unethical behaviors of executives?

answer

Rewarding the achievement of a variety of goals reduces temptation on the executive's part to gain bonuses by manipulating data.

question

The _____ has required companies to more clearly report executive compensation levels and the company's performance relative to that of competitors.

answer

The Securities and Exchange Commission

STUDY

Business Management Employee Stock Ownership Plan Goal Setting Theory Human Resource Management Job Characteristics Model Personal Characteristics Of A Leader

Chapter 12 Motivating Employees – Flashcards 42 terms

Mary Moore

42 terms

Preview

Chapter 12 Motivating Employees – Flashcards

question

Alderfer referred to the needs for physical well being as ____ needs. a. physiological b. existence c. belongingness d. relatedness e. growth

answer

b. existence

question

The core dimension of Hackman and Oldham's model of job characteristics that is based on the number of diverse activities that make up a job is known as a. autonomy. b. job enlargement. c. skill variety. d. task identity. e. feedback.

answer

c. skill variety.

question

The delegation of power and authority to subordinates is referred to as a. need for power. b. need for achievement. c. empowerment. d. passing the buck. e. need of affiliation.

answer

c. empowerment.

question

A high need for ____ is associated with successful attainment of top levels in the organizational hierarchy, according to McClelland. a. power b. achievement c. affiliation d. success e. expertise

answer

a. power

question

The degree to which the job is perceived as important and having impact on the company or customers is referred to as a. task complexity. b. task identity. c. task significance. d. task structure. e. task simplification.

answer

c. task significance.

question

Which of the following theories places an emphasis on behavior and its consequences? a. Two-factor theory b. Need hierarchy theory c. Reinforcement theory d. ERG theory e. Equity theory

answer

c. Reinforcement theory

question

In goal-setting theory, ____ refers to the degree to which goals are concrete and unambiguous. a. goal specificity b. goal difficulty c. goal acceptance d. feedback e. goal motivation

answer

a. goal specificity

question

Which of the following is the administration of a pleasant and rewarding consequence following a desired behavior? a. Avoidance learning b. Punishment c. Positive reinforcement d. Extinction e. Suspension

answer

c. Positive reinforcement

question

Which motivation theory proposes that needs must be satisfied in sequence? a. Reinforcement theory b. ERG theory c. Hierarchy of needs theory d. Experiential learning theory e. Social learning theory

answer

c. Hierarchy of needs theory

question

According to Herzberg, ____ is an example of a hygiene factor. a. achievement b. recognition c. pay d. responsibility e. opportunity for growth

answer

c. pay

question

Empowering employees means giving employees a. information. b. knowledge. c. power. d. rewards. e. all of these.

answer

e. all of these.

question

Katie dislikes almost everything about her job. The only reason she continues to work at Mace Autobody is the excellent benefits package she receives. Katie is motivated by a. extrinsic rewards. b. intrinsic rewards. c. variable rewards. d. all of these. e. none of these.

answer

a. extrinsic rewards.

question

Which of the following techniques reduces the likelihood that behavior will be repeated? a. Positive reinforcement b. Negative reinforcement c. Extinction d. Reward enhancement e. All of these

answer

c. Extinction

question

In goal-setting theory, ____ refers to the idea that employees have to "buy into" the goals. a. goal specificity b. goal difficulty c. goal acceptance d. feedback e. goal motivation

answer

c. goal acceptance

question

Highroller Casinos provides good salaries and benefits, including bonuses of up to 25 percent of annual salaries. However, the company has been criticized for not establishing an achievement or recognition program for its employees. Which of the following best describes the company in terms of the two-factor theory? a. Good motivators, inadequate hygiene factors b. Good hygiene factors, inadequate motivators c. Good hygiene factors and motivators d. Inadequate hygiene factors and motivators e. None of the above

answer

b. Good hygiene factors, inadequate motivators

question

The removal of an unpleasant consequence following a desired behavior is referred to as a. avoidance learning. b. punishment. c. positive reinforcement. d. extinction. e. inefficient management.

answer

a. avoidance learning.

question

A recent study from the U.S. Department of Labor shows that the top reason that people leave their jobs is because they: a. Don't make enough money b. Don't feel appreciated c. Don't believe in what the organization stands for d. Don't like their colleagues e. Don't like their boss

answer

b. Don't feel appreciated

question

Karen is a first line supervisor at Wolfs, Inc. She wishes to increase her employee's opportunities for growth and learning. Which of the following techniques should she use? a. Job enlargement b. Job enrichment c. Job rotation d. Positive reinforcement e. Continuous

answer

b. Job enrichment

question

Bruce publicly praises his employees when they have achieved their goals. Bruce hopes this will increase the likelihood of goal achievement in the future. This is an example of a. extinction. b. negative reinforcement. c. avoidance learning. d. positive reinforcement. e. none of these.

answer

d. positive reinforcement.

question

Sally enjoys her job as a teacher, not because of the pay or benefits, but because she feels good about shaping the minds of tomorrow's leaders. Sally is motivated by: a. Power factors b. Leadership factors c. Hygiene factors d. Extrinsic rewards e. Intrinsic rewards

answer

e. Intrinsic rewards

question

Which of the following is NOT a need proposed by Maslow in his hierarchy of needs theory? a. Safety needs b. Compensation needs c. Physiological needs d. Esteem needs e. Self-actualization needs

answer

b. Compensation needs

question

Nelson is motivated by a strong need for recognition and is continually seeking credit for his contributions to the organization. According to Maslow, Neil is motivated by which category of needs? a. Physiological b. Safety c. Belongingness d. Esteem e. Self-actualization

answer

d. Esteem

question

Which term, in goal-setting theory, refers to the need to make goals highly ambitious but achievable? a. Goal specificity b. Goal difficulty c. Goal acceptance d. Feedback e. Goal motivation

answer

b. Goal difficulty

question

Which of the following is an example of a process theory of motivation? a. Need hierarchy theory b. Equity theory c. Two-factor theory d. ERG theory e. Acquired needs theory

answer

b. Equity theory

question

____ theory deals with employee's perception of fairness. a. Expectancy b. Reinforcement c. Need hierarchy d. Equity e. ERG

answer

d. Equity

question

Which of the following is based on the relationships between effort, performance, and outcomes? a. Equity theory b. Expectancy theory c. Reinforcement theory d. Two-factor theory e. ERG theory

answer

b. Expectancy theory

question

The ____ involves whether putting effort into a task will lead to high performance. a. P -> O expectancy b. E -> P expectancy c. O -> V expectancy d. A -> Z expectancy e. V -> P expectancy

answer

b. E -> P expectancy

question

Tim is a manager at Chuck's Construction. He sees little opportunity for advancement at Chuck's Construction, regardless of how well he performs. Which of the following expectancies is low for Tim? a. E -> P expectancy b. O -> V expectancy c. P -> O expectancy d. E -> V expectancy e. None of these

answer

c. P -> O expectancy

question

Abbi works at Railroad Ties. Her bosses continually indicate that her motivational level is low. Abbi agrees, but is unwilling to work harder until the company changes the types of reward it offers its employees. Which of the following is low for Abbi? a. E -> P expectancy b. O -> P expectancy c. Valence d. Motivators e. O -> E indicators

answer

c. Valence

question

Which of these is sometimes called negative reinforcement? a. Avoidance learning b. Punishment c. Positive reinforcement d. Extinction e. Neutral learning

answer

a. Avoidance learning

question

One of your fellow students is continually late to class. The professor has tried numerous verbal warnings and recently took points away from the student's grade. Based on the above, the professor's actions are consistent with which of the following reinforcement techniques? a. Negative reinforcement b. Punishment c. Positive reinforcement d. Avoidance learning e. Rewards enhancement

answer

b. Punishment

question

One of your fellow team members at work is continually disrupting the team's work with jokes and general horseplay. You hope that by ignoring him he will stop this senseless behavior. You are attempting to use which reinforcement tool? a. Extinction b. Positive reinforcement c. Negative reinforcement d. Avoidance learning e. Desired behavior is reinforced annually

answer

a. Extinction

question

Which theory proposes that an individual's motivation can result not just from direct experience of rewards and punishments but also from the person's thoughts and beliefs and his or her observations of other people's behavior? a. Reinforcement theory b. Hierarchy of needs theory c. ERG theory d. Experiential learning theory e. Social learning theory

answer

e. Social learning theory

question

Larry is looking for ways to increase the number of different tasks that an employee performs without increasing task complexity. He should try a. job simplification. b. job enlargement. c. job rotation. d. job enrichment. e. job lay-off.

answer

c. job rotation.

question

____ is an important part of the job characteristics model. a. Critical psychological states b. A hierarchy of needs c. Schedules of reinforcement d. All of these e. None of these

answer

a. Critical psychological states

question

Daisy tried to apply the job characteristics model to her workforce, but it only worked for some of her employees. Which of the following may be a reason why it did not work for everyone? a. Some of her employees are lazy. b. Some of her employees are low in growth-need strength. c. Some of her employees have a low need for power. d. All of her employees have high growth-needs. e. Some of her employees have low affiliation needs.

answer

b. Some of her employees are low in growth-need strength.

question

____ is a situation in which employees enjoy their work, contribute enthusiastically to meeting goals, and feel a sense of belonging and commitment to the organization. a. Commitment b. Engagement c. Employee loyalty d. Employee assurance e. Employee guarantee

answer

b. Engagement

question

On the continuum of empowerment, employees who are self-managed a. give input. b. participate in decisions. c. are responsible for decision process and strategy. d. have no decision discretion. e. make decisions.

answer

c. are responsible for decision process and strategy.

question

Yolanda recently learned that Sue, who works in the same position as she and has been with the company for the same amount of time, earns about ten percent more than she does. As a result, Yolanda feels that she should not work as hard, so she starts coming in late and taking more days off. This is an example of which method for reducing perceived equity? a. Working harder, not smarter b. Changing outcomes c. Changing work effort d. Changing perceptions e. Leaving the job

answer

c. Changing work effort

question

Samuel, a sales associate at an electronics store, learns that his base pay is higher than any other sales associate in the store. He justifies his higher salary to the idea that he must be a top sales associate, generating more revenue than anyone else. This example demonstrates which method for reducing perceived inequity? a. Working harder, not smarter b. Changing outcomes c. Changing work effort d. Changing perceptions e. Leaving the j

answer

d. Changing perceptions

question

____ refers to a reward given by another person. a. An intrinsic reward b. An internal reward c. An extrinsic reward d. A valued reward e. A charity

answer

c. An extrinsic reward

question

____ is an example of an intrinsic reward. a. An employee's feelings of self-worth b. A pat on the back from your boss c. A pay raise d. A promotion e. A bonus

answer

a. An employee's feelings of self-worth

STUDY

Backward Vertical Integration Business Management Employee Stock Ownership Plan Human Resource Management Management Strategic Management Process

Chapter 5 – (O) – Flashcards 162 terms

Adam Howard

162 terms

Preview

Chapter 5 – (O) – Flashcards

question

LO 1. Discuss the nature and purposes of planning. LO 2. Explain what managers do in the strategic planning process. LO 3. Compare and contrast approaches to goal setting and planning. LO 4. Discuss contemporary issues in planning.

answer

question

*I. WHAT IS PLANNING AND WHY DO MANAGERS HAVE TO PLAN?*

answer

*A. Intro*

question

Planning is often called ___.

answer

Planning is often called *the primary management function*

question

Planning is often called the primary management function because it establishes the ___

answer

Planning is often called *the primary management function because it establishes the *basis for all other things managers do as they organize, lead, and control.*

question

planning involves... (3)

answer

1) defining the organization's goal 2) establishing an overall strategy for achieving those goals and 3) developing a comprehensive hierarchy of plans to integrate and coordinate activities

question

Planning is concerned with ___ as well as with ___

answer

Planning is concerned with *ends* (*what* is to be done) as well as with *means* (*how* it's to be done)

question

Planning can be further defined in terms of whether it's ___ or ___

answer

Planning can be further defined in term of whether it's *formal* or *informal*

question

In informal planning.. (4)

answer

1) In informal planning, *very little, if anything, is written down* 2) organizations goals rarely verbalized and in few people's heads 3) generally the type of planning conducted in small businesses 4) it is general and lacks continuity

question

Formal planning means (3)

answer

1) defining specific goals covering a specific time period 2) *writing down these goals and making them available to organization members* 3) using these goals to develop specific plans that clearly define the path the organization will take to get from where it is to where it wants to be

question

*I. WHAT IS PLANNING AND WHY DO MANAGERS HAVE TO PLAN?*

answer

B. Why should managers formally plan?

question

Managers should engage in planning for what (4) reasons?

answer

question

Exhibit 5-1

answer

question

Fill in *Exhibit 5-1*

answer

question

coordinated effort

answer

*1. Planning establishes coordinated effort.* It gives direction to both managers and nonmanagerial employees so each knows what he or she must contribute— individually and as a group—to reach the organization's goals. Planning stimulates intra- and inter-department coordination of activities, which fosters teamwork and cooperation. *2. Planning reduces uncertainty*. It forces managers to look ahead, anticipate change, consider the impact of change, and develop appropriate responses. It also clarifies the consequences of the actions managers might take in response to change. *3. Planning reduces overlapping and wasteful activities*. Coordination before the fact is likely to uncover waste and redundancy. *4. planning establishes the goals or standards that facilitate managerial control* to ensure that the plans are carried out and the goals are met.

question

A lack of planning can cause..

answer

A lack of planning can cause *various organizational members or their units to work against one another*

question

Planning clarifies the ...

answer

Planning clarifies the *consequences of actions.*

question

Planning is precisely what is needed when managing in ___

answer

Planning is precisely what is needed when managing in *a chaotic environment.*

question

*I. WHAT IS PLANNING AND WHY DO MANAGERS HAVE TO PLAN?*

answer

question

What are (4) criticisms of formal planning?

answer

1. planning may create rigidity 2. formal plans can't replace intuition and creativity 3. planning focuses managers' attention on today's competition, not on tomorrow's survival 4. formal planning reinforces success, which may lead to failure.

question

*Criticism #1:* Planning may create rigidity (3)

answer

*1) Formal planning efforts lock an organization into specific goals and specific timetables.* *2) The assumption may be that the environment won't change during the time period the objectives cover.* (a) If that assumption is faulty, managers who follow a plan may have trouble. (b) Forcing a course of action when the environment is fluid can be a recipe for disaster. *3) Managers need to remain flexible and not be tied to a course of action simply because it is the plan.*

question

*Criticism #2:* formal plans can't replace intuition and creativity

answer

a) Visions have a tendency to become formalized as they evolve. b) Formal planning efforts typically follow a methodology that reduces the vision to a programmed routine. c) *Planning should enhance and support intuition and creativity, not replace it.*

question

*Criticism #3:* Planning focuses managers' attention on today's competition, not on tomorrow's survival.

answer

a) Formal planning tends to focus on how to best capitalize on existing business opportunities within the industry, instead of ways to reinvent the industry. b) It often does not allow for managers to consider creating or reinventing the industry. c) Some companies have found much of their success to be the result of forging into uncharted waters, designing and developing new industries as they go.

question

Instead of focusing on ___, managers should plan with an eye to ___

answer

Instead of focusing on *today*, managers should plan with an eye to *untapped opportunities.*

question

*Criticism #4:* Formal planning reinforces success, which may lead to failure.

answer

a) Success may, in fact, breed failure in an uncertain environment. b) It is hard to change or discard successful plans. c) Successful plans may provide a false sense of security. d) Managers may need to face that unknown and be open to doing things in new ways to be even more successful.

question

*I. WHAT IS PLANNING AND WHY DO MANAGERS HAVE TO PLAN?*

answer

D. Does Formal Planning Improve Organizational Performance?

question

Contrary to critics, the evidence generally supports having formal plans. However, organizations that formally plan ___

answer

Contrary to critics, the evidence generally supports having formal plans. However, organizations that formally plan *do not always outperform those that don't*

question

(4) conclusions from studies on the relationship between planning and performance are:

answer

*1.* generally higher profits, higher return on assets . *2.* The quality of the process and appropriate implementation of the plans probably contribute more towards high performance than does the extent of planning. *3.* Finally, in those organizations in which formal planning did not lead to higher performance, the environment was typically the culprit. *(a)* Government regulations and similar environmental constraints leave managers with fewer viable alternatives.

question

*II. WHAT DO MANAGERS NEED TO KNOW ABOUT STRATEGIC MANAGEMENT*

answer

A. What is strategic management?

question

Strategic management is...

answer

Strategic management is what managers do to develop an organization's strategies.

question

What are an organization's strategies?

answer

1. How the organization will do what it's in business to do 2. How it will compete successfully 3. and how it will attract and satisfy its customers in order to achieve its goals

question

*II. WHAT DO MANAGERS NEED TO KNOW ABOUT STRATEGIC MANAGEMENT*

answer

B. Why is Strategic Management Important?

question

Strategic management is important to avoid

answer

Strategic management is important to avoid *weakening one's position due to poor economic conditions and myriad external and interval variables.*

question

___ types of organizations can benefit from strategic plans?

answer

*All* types of organizations can benefit from strategic plans.

question

Why is strategic management important? (3)

answer

*1)* it can make a difference in how well an organization performs. *2)* It prepares managers to cope with changing situations. *3)* It guides managers to examine relevant factors in planning future action.

question

The strategic management process helps managers in organizations of all types and sizes face ___

answer

The strategic management process helps managers in organizations of all types and sizes face *continually changing situations.*

question

*II. WHAT DO MANAGERS NEED TO KNOW ABOUT STRATEGIC MANAGEMENT*

answer

C. What are the Steps of the Strategic Management Process?

question

The strategic management process is a six step process that involves strategic ___, ___, and ___.

answer

The strategic management process is a six step process that involves strategic *planning, implementation,* and *evaluation*

question

What are the (6) steps in the strategic management process?

answer

*Step 1:* Identify the organization's current mission, objectives, and strategies *Step 2:* Analyze the external environment *Step 3:* Evaluate the organization's internal resources *Step 4:* Formulating strategies *Step 5:* Implementing strategies *Step 6:* Evaluate results

question

What is the Strategic management process? *Exhibit 5-2*

answer

question

Fill in for the Strategic management process for *Exhibit 5-2*

answer

question

Defining the mission forces managers to identify ___

answer

Defining the mission forces managers to identify *what the organization is in business to do. *

question

*Step 1* Determining the ___ is as important for not-for-profits as it is for business firms.

answer

Determining the *nature of one's business* is as important for not-for-profits as it is for business firms.

question

1) *managers conduct an external analysis so they can:

answer

*a)* Know what the *competition* is doing, how pending legislation might affect the organization, and how stable the local labor supply is in locations where it operates. *b)* Examine all *components of the environment*—that is, economic, demographic, political/legal, sociocultural, technological, and global—to see the trends and changes. *c) Pinpoint opportunities* that the organization can exploit *and threats* that it must counteract.

question

*Step 2:* Organizations need an accurate grasp of the ___ and important ___ that might affect the organization's operations.

answer

Organizations need an accurate grasp of the *environment* and important *trends* that might affect the organization's operations.

question

*Step 2:* The same environment can present opportunities to one organization and pose threats to another.

answer

The same environment can present *opportunities* to one organization and pose *threats* to another.

question

*Step 3:* Evaluating the organization's internal resources involves ___ and ___ and provides critical information about an organization's ___ and ___.

answer

Evaluating the organization's internal resources involves *asking specific questions* and *analyzing the available information* and provides critical information about an organization's *specific resources* and *capabilities*

question

What are (5) questions that should be asked when evaluating the organization's internal resources?

answer

(1) This involves asking specific questions and analyzing the available information. (2) What skills and abilities do the organization's employees have; human resources? (3) What is the organization's cash flow; financial resources? (4) Has it been successful at developing new and innovative products? (5) How do customers perceive the image of the organization and the quality of its products or services?

question

managers conduct an internal analysis to provide critical information about

answer

1. resource 2. capabilities 3. core competencies 4. organizational strengths and weaknesses

question

*Step 3:* The analysis should lead to a clear assessment of the organization's ___, such as (3)

answer

The analysis should lead to a clear assessment of the *organization's internal resources*, such as *capital*, *worker skills*, *patents*, and the like.

question

*Step 3:* capabilities should include

answer

*organizational departmental abilities*, such as a) training and development, b) marketing, c) accounting, d) human resources, research and development, e)management information systems.

question

___ ( ___ ) are internal resources or things that the organization does well (Step 3).

answer

*Strengths (strategic)* are internal resources or things that the organization does well (Step 3).

question

*Step 3:* When an organization lacks certain ___ or identifies ___, these are called weaknesses.

answer

When an organization lacks certain *resources* or identifies *activities the firm does not do well*, these are called weaknesses.

question

A merging of the externalities (Step 2) with the internalities (Step 3) results in ___. This merging is called a ___

answer

A merging of the externalities (Step 2) with the internalities (Step 3) results in *an assessment of the organization's opportunities*. This merging is called a *SWOT analysis*

question

This merging is called SWOT analysis because it brings together the organization's Strengths, Weaknesses, Opportunities, and Threats in order to: (3)

answer

*a)* Exploit an organization's strengths and external opportunities, *b)* Buffer or protect the organization from external threats, *c)* Correct critical weaknesses.

question

After completing the SWOT analysis, managers are ready to formulate appropriate strategies that: (2)

answer

(1) Exploit an organization's strengths and external opportunities, and (2) Buffer or protect the organization from external threats.

question

*Step 4:* is formulating strategies with what (3) main types?

answer

1. corporate 2. competitive 3. functional.

question

As managers formulate strategies, they should consider the realities of the ___ and their available ___ and ___ to design strategies that will help their organization achieve its goals

answer

As managers formulate strategies, they should consider the realities of the *external environment* and their available *resources* and *capabilities* to design strategies that will help their organization achieve its goals

question

Step 5 is evaluating results to determine

answer

Step 5 is evaluating results to determine *the effectiveness* or *whether changes need to be made.*

question

*II. WHAT DO MANAGERS NEED TO KNOW ABOUT STRATEGIC MANAGEMENT*

answer

D. What Strategic Weapons do Managers Have?

question

What are the (3) strategic "weapons" that managers have?

answer

1. customer service 2. employee skills and loyalty 3. innovation *4. quality 5. social media 6. big data*

question

To the degree that an organization can satisfy a ___ for ___, it can differentiate itself from the competition and attract and hold a loyal customer base.

answer

To the degree that an organization can satisfy a *customer's need* for *quality*, it can differentiate itself from the competition and attract and hold a loyal customer base.

question

Constant improvement in the ___ and ___ of an organization's products or services can result in a competitive advantage others cannot steal.

answer

Constant improvement in the *quality* and *reliability* of an organization's products or services can result in a competitive advantage others cannot steal.

question

Product innovations are not sustainable because..

answer

Product innovations are not sustainable because *they can be quickly copied by rivals.*

question

Incremental improvement is something that becomes an integrated part of an organization's operations and can develop into a considerable ___

answer

Incremental improvement is something that becomes an integrated part of an organization's operations and can develop into a considerable *cumulative advantage.*

question

Benchmarking can help promote ___ because it involves the search for ___

answer

Benchmarking can help promote *quality* because it involves the search for *the best practices among competitors and non-competitors that lead to superior performance.*

question

Benchamarking (2)

answer

*1)* Management can improve quality by analyzing and then copying the methods of the leaders. *2)* It is a very specific form of environmental scanning.

question

___ has become a tool organizations can use to as a strategic weapon.

answer

*Social media* has become a tool organizations can use to as a strategic weapon.

question

Successful social media strategies should: (2)

answer

(1) Help people inside and outside the organization connect. (2) Reduce costs or increase revenue possibilities or both.

question

___ can also be used as a strategic weapon.

answer

*Data* can also be used as a strategic weapon.

question

Collecting data about ___ (x5) can be used to respond to the needs of these same stakeholders.

answer

Collecting data about *customers, partners, employees, markets and other quantifiable areas* can be used to respond to the needs of these same stakeholders.

question

*II. WHAT DO MANAGERS NEED TO KNOW ABOUT STRATEGIC MANAGEMENT*

answer

E. What Strategies do Managers use?

question

Strategies need to be set for ___

answer

Strategies need to be set for *all levels* in the organization.

question

What are the (3) strategies managers use?

answer

1. corporate strategies 2. competitive strategy 3. functional strategy

question

What are the (3) main corporate strategies?

answer

1. growth strategy 2. stability strategy 3. renewal strategy

question

Ways to grow/types of growth strategies are: (4)

answer

1. *Concentration* 2. *Vertical Integration* 3. *Horizontal Integration* 4. *Diversification*

question

What are (2) types of vertical integration and (2) types of diversification?

answer

1. *Backward vertical integration* 2. *Forward vertical integration* 3. *Related diversification* 4. *Unrelated diversification*

question

With the stability strategy, the organization..

answer

with the stability strategy, the organization *doesn't grow* but *doesn't fall behind*, either

question

The stability strategy is characterized by ___

answer

The stability strategy is characterized by *an absence of significant changes*

question

The stability strategy is most appropriate when what (4) conditions exist?

answer

1. a stable and unchanging environment 2. satisfactory organizational performance 3. an absence of valuable strengths and critical weaknesses 4. only insignificant opportunities and threats.

question

What are the (2) renewal strategies, and in both strategies managers can ___ and ___ but actions are more extensive in the ___ strategy

answer

1. Retrenchment strategy 2. Turnaround strategy In both strategies, managers can *cut costs* and *restructure organizational operations,* but actions are more extensive in *turnaround strategy*

question

the retrenchment strategy is for ___

answer

the retrenchment strategy is for *minor performance problems*

question

the turn around strategy is used when companies ___

answer

the turn around strategy is used when companies *face serious financial challenges*

question

*Corporate strategies: Competitive strategies* In a small organization in only one line of business OR a large organization that has not diversified, their competitive strategy describes ___

answer

In a small organization in only one line of business OR a large organization that has not diversified, their competitive strategy *describes how it will compete in its primary or main market*

question

What are competitive strategies like in organizations in multiple businesses?

answer

Organizations in multiple businesses *each have their own competitive strategies* using SBUs

question

Companies will seek a position, so that they can ___ This positioning requires ___

answer

Companies will seek a position, so that they can *gain a distinct edge over the company's rivals* This positioning requires *a careful evaluation of the competitive forces*

question

the competitive advantage comes from the organization's ___, by doing ___

answer

the competitive advantage comes from the organization's *core competencies*, by doing *something that others cannot do or doing it better than others can do it*

question

What is a leading researcher in choosing competitive strategies?

answer

Michael Porter

question

What is Michael Porter's competitive strategies framework?

answer

question

His competitive strategies framework has (3) generic competitive strategies, which are?

answer

1. cost-leadership 2. differentiation 3. focus

question

According to him, no firm can successfully perform at an above-average profitability level by ___

answer

According to him, no firm can successfully perform at an above-average profitability level by *trying to be all things to all people*

question

According to him, management must select a competitive strategy that will give it a distinct advantage by ___

answer

According to him, management must select a competitive strategy that will give it a distinct advantage by *capitalizing on the strength of the organization and the industry it is in*

question

Success requires that the organization be the ___; the product or service being offered must be perceived as comparable to rivals, or at least acceptable to buyers

answer

Success requires that the organization be the *cost leader*; the product or service being offered must be perceived as comparable to rivals, or at least acceptable to buyers

question

A firm typically gains a cost advantage by ___ (x5)

answer

1. efficiency of operations 2. economies of scale 3. technological innovation 4. low-cost labor 5. preferential access to raw materials.

question

A differentiation strategy is followed when ___

answer

A differentiation strategy is followed when *a firm seeks to be unique in its industry in ways that are widely valued by buyers*

question

A differentiation strategy might emphasize

answer

1. high quality 2. extraordinary service 3. innovative design 4. technological capability 5. an unusually positive brand image.

question

They key to the differentiation strategy is

answer

The key is that the attribute chosen must be *different* from those offered by rivals and *significant enough to justify a price premium* that exceeds the cost of differentiating.

question

The focus strategy aims at a ___ or ___ in a narrow segment.

answer

The focus strategy aims at a *cost advantage (cost focus)* or *differentiation advantage (differentiation focus)* in a narrow segment.

question

In a focus strategy, goal is to

answer

The goal is to *exploit a narrow segment of a market*

question

In a focus strategy, you select a segment or group of segments (such as ___ (x4) and then ___

answer

Select a segment or group of segments in an industry (such as *product variety, type of end buyer, distribution channel*, or *geographical location of buyers*) and *tailor the strategy to serve them* to the exclusion of others.

question

Feasibility of a focus strategy depends on the ___ and whether it can ___

answer

Feasibility of a focus strategy depends on the *size of the segment* and whether it can *support additional cost of focusing*

question

What if an organization cannot use one of Porter's (3) strategies to develop a competitive advantage?

answer

1. Porter uses the term *"stuck in the middle"* to describe that situation

question

Organizations that are stuck in the middle find it difficult to ___

answer

Organizations that are stuck in the middle find it difficult to *achieve long-term success.*

question

The final strategies for managers are the strategies used by an organization's various functional departments to ___

answer

The final strategies for managers are the strategies used by an organization's various functional departments to *support the competitive strategy.*

question

*III. HOW DO MANAGERS SET GOALS AND DEVELOP PLANS?*

answer

A. What Types of Goals Do Organizations Have and How Do They Set Those Goals

question

What are types of goals? (2)

answer

1. stated goals 2. real goals

question

*Setting goals:* goals provide the direction for ___ and form the criterion against which ___

answer

goals provide the direction for *all management decisions and actions* and form the criterion against which *actual accomplishments are measured*.

question

*Exhibit 5-5: Traditional goal setting* goals set by top managers that flow down through the organization and become sub-goals for each organizational area

answer

question

Top-down goals may not translate easily into ___, ___ or ___ goals. ___ goals have to be made more specific

answer

Top-down goals may not translate easily into *departmental, team* or *individual* goals. *Ambiguous goals* have to be made more specific

question

___ is when higher-level goals (or ends) are linked to lower-level goals, or goals achieved at lower levels become the ___ to ___ at the next level

answer

*Means-ends chain* is when higher-level goals (or ends) are linked to lower-level goals, or goals achieved at lower levels become the means to reach the goals (ends) at the next level

question

Many organizations use ___, instead of traditional ways, which is a process of setting mutually agreed-upon goals and using those goals to evaluate employee performance

answer

Many organizations use *management by objectives (MBO)*, instead of traditional ways, which is a process of setting mutually agreed-upon goals and using those goals to evaluate employee performance

question

What are the (4) ingredients common to MBO programs?

answer

1. Goal specificity 2. Participative decision making 3. an explicit time period 4. performance feedback

question

*Ingredients to MBO Programs:* goal specificity

answer

The objectives in MBO should be concise statements of expected accomplishments

question

*Ingredients to MBO Programs:* participative decision makin

answer

The manager and employee jointly choose the goals and how they will be achieved

question

*Ingredients to MBO Programs:* an explicit time period

answer

Each objective has a concise time period in which it is to be completed (e.g., three months, six months, or a year)

question

*Ingredients to MBO Programs:* performance feedback

answer

MBO seeks to give continuous feedback on progress toward goals both through ongoing feedback to individuals and periodic formal appraisal meetings

question

Studies of actual MBO programs confirm that MBO effectively increases ___ and ___

answer

Studies of actual MBO programs confirm that MBO effectively increases *employee performance* and *organizational productivity*

question

What are (6) characteristics of Well-written goals?

answer

1. written in terms of outcomes rather than actions 2. measurable and quantifiable 3. clear as to a time frame 4. challenging yet attainable 5. written down 6. communicated to all necessary organizational members

question

What are the (6) steps in goal setting?

answer

1) Review the organization's mission and employee's key job tasks. 2) Evaluate available resources. 3) Determine the goals individually or with input from others 4) Make sure goals are well-written and then communicate them to all who need to know. 5) Build in feedback mechanisms to assess goal progress. 6) Link rewards to goal attainment

question

*III. HOW DO MANAGERS SET GOALS AND DEVELOP PLANS?*

answer

B. What Types of Plans Do Managers Use and How Do They Develop Those Plans?

question

The most popular ways to describe plans are in terms of their (4)

answer

1. breadth 2. time frame 3. specificity 4. frequency of use

question

*Exhibit 5-7 *illustrates the relationship of types of plans

answer

question

*Breadth: strategic v tactical* Strategic plans apply to the ___, establish the organization's ___, and seek to ___.

answer

Strategic plans apply to the *entire organization*, establish the organization's *overall objectives*, and seek to *position the organization in terms of its environment*.

question

*Breadth: strategic v tactical* Strategic plans drive the organization's efforts to ___. They serve as a basis for ___.

answer

Strategic plans drive the organization's efforts to *achieve its goals*. They serve as a basis for *forming the tactical plans*.

question

*Breadth: strategic v tactical* Tactical plans (___) specify the details of ___.

answer

Tactical plans *(operational plans)* specify the details of *how to achieve the overall objectives*

question

*Timeframe: long term v short term* Short term covers ___

answer

Short term covers *less than one year*

question

*Timeframe: long term v short term* Long term is classified as ___

answer

Long term is classified as any time frame *beyond three years*

question

*Specificity: directional v specific* It appears intuitively correct that specific plans are always preferable to ___, or ___, plans

answer

It appears intuitively correct that specific plans are always preferable to *directional*, or *loosely guided*, plans.

question

*Specificity: directional v specific* Specific plans have ___. Specific plans require ___ and a ___ that often does not exist

answer

Specific plans have *clearly defined objectives*. Specific plans require *clarity* and a *predictability* that often does not exist

question

*Specificity: directional v specific* When uncertainty is high, and management must maintain flexibility in order to respond to unexpected changes, ___ plans may be preferable.

answer

d) When uncertainty is high, and management must maintain flexibility in order to respond to unexpected changes, *directional plans* may be preferable.

question

*Specificity: directional v specific* Directional plans, on the other hand, identify ___.

answer

Directional plans, on the other hand, identify *general guidelines*.

question

*Specificity: directional v specific* They provide ___ but do not lock managers into specific ___ or specific ___.

answer

They provide *focus* but do not lock managers into specific *objectives* or specific *courses of action*.

question

*Frequency: single-use v standing plans:* A single-use plan is used to meet the need of ___.

answer

A single-use plan is used to meet the need of a *particular or unique situation*.

question

Standing plans are ___, providing guidance for ___.

answer

Standing plans are *ongoing*, providing guidance for *repeatedly performed actions*.

question

*Developing plans:* What (3) contingency factors affect the choice of plans?

answer

1. organizational level 2. degree of environmental uncertainty 3. length of future commitments

question

*Exhibit 5-8* shows the relationship between a manager's level in the organization and the type of planning being done.

answer

question

What are the (2) approaches to planning?

answer

1. a formal planning department 2. planning by organizational members

question

Under a formal planning department, plans developed by In a survey of managers about this approach, over 75% said that ___.

answer

Under a formal planning department, plans developed by *top-level managers* flow down through other organizational levels. over 75% said that *their company's planning approach was unsatisfactory.*

question

When planning by organization members, plans aren't handed down from one level to the next, but instead are developed by ___ and in ___ to meet specific need

answer

In this approach, plans aren't handed down from one level to the next, but instead are developed by *organizational members at the various levels* and in the *various work units* to meet their specific needs.

question

When organizational members are more actively involved in planning, they see that the plans are used in ___ and ___ work.

answer

When organizational members are more actively involved in planning, they see that the plans are used in *directing* and *coordinating work*.

question

*IV. WHAT CONTEMPORARY PLANNING ISSUES DO MANAGERS FACE?*

answer

A. How Can Managers Plan Effectively in Dynamic Environments?

question

Managers should develop plans that are ___, but ___.

answer

Managers should develop plans that are *specific*, but *flexible*.

question

Managers need to stay alert to ___ changes that may impact implementation and response.

answer

Managers need to stay alert to *environmental changes* that may impact implementation and respond.

question

A ___ organizational hierarchy helps to effectively plan in dynamic environments.

answer

A *flatter* organizational hierarchy helps to effectively plan in dynamic environments.

question

*IV. WHAT CONTEMPORARY PLANNING ISSUES DO MANAGERS FACE?*

answer

B. How Can Managers Use Environmental Scanning?

question

*How is competitive intelligence useful?*

answer

*1.* It seeks basic information about competitors: Who are they? What are they doing? How will what they are doing affect us? *2.* Most of the competitor-related information an organization needs to make crucial strategic decisions is available and accessible to the public.

question

Competitive intelligence isn't ___

answer

Competitive intelligence isn't organizational espionage.

question

Competitive intelligence becomes illegal ___ when it involves ___

answer

Competitive intelligence becomes illegal *corporate spying* when it involves the *theft of proprietary materials or trade secrets by any means.*

question

*Competitive intelligence* The ___ makes it a crime in the United States to engage in economic espionage or to steal a trade secret.

answer

The *Economic Espionage Act* makes it a crime in the United States to engage in economic espionage or to steal a trade secret.

question

*Exhibit 5-7* illustrates the relationship of types of plans

answer

question

CHAPTER SUMMARY

answer

question

1 Discuss the nature and purposes of planning.

answer

As the primary management function, planning establishes the basis for all the other things that managers do. The planning we're concerned with is formal planning; that is, specific goals covering a specific time period are defined and written down and specific plans are developed to make sure those goals are met. There are four reasons why managers should plan: *(1)* it establishes coordinated efforts, *(2)* it reduces uncertainty, *(3)* it reduces overlapping and wasteful activities, and *(4)* it establishes the goals or standards that are used in controlling work. Although criticisms have been directed at planning, the evidence generally supports the position that organizations benefit from formal planning.

question

2 Explain what managers do in the strategic management process.

answer

Managers develop the organization's strategies in the strategic management process, which is a six-step process encompassing strategy planning, implementation, and evaluation. The six steps are as follows: *(1)* Identify the organization's current mission, goals, and strategies; *(2)* Do an external analysis; *(3)* Do an internal analysis—steps 2 and 3 together are called SWOT analysis; *(4)* Formulate strategies; *(5)* Implement strategies; and *(6)* Evaluate results. The end result of this process is a set of corporate, competitive, and functional strategies that allow the organization to do what it's in business to do and to achieve its goals.

question

3 Compare and contrast approaches to goal setting and planning.

answer

Most company's goals are classified as either strategic or financial. We can also look at goals as either stated or real. In traditional goal setting, goals set by top managers flow down through the organization and become subgoals for each organizational area. Organizations could also use management by objectives, which is a process of setting mutually agreed-upon goals and using those goals to evaluate employee performance. Plans can be described in terms of their breadth, time frame, specificity, and frequency of use. Plans can be developed by a formal planning department or by involving more organizational members in the process

question

4 Discuss contemporary issues in planning.

answer

One contemporary planning issue is planning in dynamic environments, which usually means developing plans that are specific but flexible. Also, it's important to continue planning even when the environment is highly uncertain. Finally, because there's little time in a dynamic environment for goals and plans to flow down from the top, lower organizational levels should be allowed to set goals and develop plans. Another contemporary planning issue is using environmental scanning to help do a better analysis of the external environment. One form of environmental scanning, competitive intelligence, can be especially helpful in finding out what competitors are doing.

question

DISCUSSION QUESTIONS

answer

question

5-1 Contrast formal with informal planning.

answer

In informal planning, very little, if anything, is written down. In formal planning, there are written plans at various levels, people are assigned responsibilities, there is a great deal of detail, etc. Formal planning involves specific goals to be achieved within specific timetables.

question

5-2 Discuss why planning is beneficial.

answer

Planning is beneficial because it sets the foundation for all of the other management functions. Planning encompasses defining the organization's objectives or goals, establishing an overall strategy for achieving those goals, and developing a comprehensive hierarchy of plans to integrate and coordinate activities. It's concerned with ends (what is to be done) as well as with means (how it's to be done).

question

5-3 Describe in detail the six-step strategic management process.

answer

The strategic management process is made up of six steps: *(1)* identify the organization's current mission, objectives, and strategies, *(2)* analyze the external environment by identifying the opportunities and threats in the environment, *(3)* analyze the organization's internal resources by identifying the organization's strengths and weaknesses, *(4)* formulate strategies, (5) implement strategies, and (6) evaluate results.

question

5-4 What is a SWOT analysis and why is it important to managers?

answer

SWOT analysis refers to analyzing the organization's internal strengths and weaknesses as well as external opportunities and threats in order to identify a niche that the organization can exploit. Having completed the SWOT analysis, the organization reassesses its mission and objectives. This process provides the foundation for planning and an accurate assessment of the organization in order to operate and succeed.

question

5-5 Under what circumstances do you believe MBO would be most useful? Discuss.

answer

question

5-6 "The primary means of sustaining a competitive advantage is to adjust faster to the environment than your competitors do." Do you agree or disagree with this statement? Explain your position.

answer

Key to this answer is the following facts. Long-term success requires that the advantage be sustainable. It must withstand both the actions of competitors and the evolutionary changes. Managers need to create barriers that make imitation by competitors difficult or reduce the competitive opportunities.

question

"The concept of competitive advantage is as important for not-for-profit organizations as it is for for-profit organizations." Do you agree or disagree with this statement? Explain, using examples to make your case.

answer

The process of planning is similar, but the content of the plans will differ. The types of objectives that are established and the plans that are formulated will be influenced by the fact that a not-for-profit organization does not have profit as its major objective. However, a not-for-profit organization must devote efforts and resources to planning how to raise funds and to recruit volunteers to achieve its mission.

STUDY

Business Management Employee Stock Ownership Plan Equal Pay For Equal Work Executive Vice President Human Resource Management Physical Fitness

HRM Ch 10 – Flashcards 10 terms

Malcolm Bright

10 terms

Preview

HRM Ch 10 – Flashcards

question

An effective performance management system must have all the following characteristics EXCEPT a. it must link organizational strategy to ultimate results. b. it must allow individual employees flexibility in how they will achieve ultimate results. c. it must translate organizational strategies into unit-level actions. d. it must assign unit-level actions to individual employees.

answer

b. it must allow individual employees flexibility in how they will achieve ultimate results.

question

Which of the following statements is TRUE? a. If ethical behavior were evaluated in a performance appraisal system and rewarded, employees would sometimes be rewarded for causing immediate or long-term financial losses to the organization. b. Performance appraisal systems are most effective when the behaviors evaluated are objectively measurable or observable. This is the main reason why most performance appraisal systems do not incorporate specific evaluations of the ethical aspect of employee performance. c. An organization's ethical culture is independent of its performance management system. d. A performance-driven organization culture, especially one using management-by-objective performance appraisal, is incompatible with strict ethical standards for employee behavior.

answer

a. If ethical behavior were evaluated in a performance appraisal system and rewarded, employees would sometimes be rewarded for causing immediate or long-term financial losses to the organization.

question

____ is the process of determining how well employees do their jobs relative to a standard and communicating that information to the employee. a. Employee development b. Performance management c. Process improvement d. Performance appraisal

answer

d. Performance appraisal

question

Ultimately, performance management links organizational strategy to organizational a. culture. b. goal setting. c. rewards. d. results.

answer

d. results.

question

In order to translate organizational strategies in to employee behaviors that support these strategies, performance management systems use a variety of techniques at the individual employee level. These techniques include all of the following EXCEPT a. informing the employee of the expected performance levels. b. rewarding the individual employee based on his/her performance. c. ensuring that the individual employee is satisfied with his/her performance appraisal. d. providing feedback on individual employee performance.

answer

c. ensuring that the individual employee is satisfied with his/her performance appraisal.

question

In comparison to some Asian countries such as China and Japan, U.S. a. managers are brutally honest in communicating negative information to employees in performance appraisals. b. performance appraisal systems over-emphasize traits rather than behaviors. c. performance appraisal systems are based on fewer sources of information. d. managers tend to be so tactful in communicating performance decrements to employees that employees often do not know where they stand.

answer

a. managers are brutally honest in communicating negative information to employees in performance appraisals.

question

Which of the following statements is TRUE regarding performance management in a global setting? a. Because human psychology is the same worldwide, a well-designed performance management system will work in any cultural setting. b. Business organizations in every culture include some type of formal performance feedback for employees. c. U.S.-style performance management systems are becoming more widely used overseas because of their effectiveness in increasing employee performance. d. U.S. companies may need to eliminate their performance management processes in certain countries.

answer

d. U.S. companies may need to eliminate their performance management processes in certain countries.

question

Research has shown that performance-driven organizational cultures a. are based on eliminating differentiations among employees and commitment to equality of rewards for employees. b. is typically welcomed by employees when it is instituted in a formerly entitlement-based organizational culture. c. require behavior-based performance measures. d. tend to have significantly higher financial results compared with other types of organizational cultures.

answer

d. tend to have significantly higher financial results compared with other types of organizational cultures.

question

Which of the following statements is TRUE? a. Pay-for-performance systems do not work well for CEOs because most CEO performance is not objectively measurable. b. Performance-based pay systems for CEOs typically build in penalties for unethical behavior. c. Performance-based pay systems for CEOs are a key factor in an organization's development of a performance-driven culture. d. Pay-for-performance systems do not work well for CEOs because organizational performance is strongly affected by economic factors beyond the CEO's control

answer

c. Performance-based pay systems for CEOs are a key factor in an organization's development of a performance-driven culture.

question

At SafeGreen, Inc., there is little variation in pay among employees within the existing job categories. Raises are essentially the same for average and excellent performers. Although performance appraisals are performed regularly, everyone views the process as paper-shuffling. The from the point of view of its performance appraisal system, the culture of SafeGreen, Inc., can best be described as a. entitlement-based. b. bureaucratic. c. performance-driven. d. equity-driven.

answer

a. entitlement-based.

STUDY

Alternative Dispute Resolution Employee Assistance Program Employee Stock Ownership Plan Full Time Employees Management Production And Distribution Costs

HRM Messiah Final – Flashcards 173 terms

Jaxon Wilson

173 terms

Preview

HRM Messiah Final – Flashcards

question

Terminating an employee for the use of illegal drugs is an example of

answer

Involuntary turnover

question

The employment at will doctrine

answer

Has eroded significantly in recent years

question

Blank involves the ends of a discipline process, while blank and blank focus on the means to those ends

answer

Outcome fairness, procedural justice, interactional justice

question

although the rate of inflation is only 2 percent, Jessi receives a 6 percent increase in salary. She is nonetheless dissatisfied with her salary increase due to Norvin's 9 percent increase. Jessie is likely to contend that there is a lack of:

answer

outcome fairness

question

The process through which organizations make decisions about who will or will not be allowed to join the organization is referred to as

answer

personnel selection

question

For most companies, the first step in the personnel selection process is

answer

screening the applications to see who meet the basic requirements for the job

question

At which stage in the selection process are supervisors and team members often involved?

answer

interviewing candidates

question

Which act prohibits preferential treatment in favor of minority groups?

answer

The Civil Rights Act of 1991

question

Under the Americans with Disabilities Act (ADA) of 1991:

answer

employers are required to make "reasonable accommodation" to disabled individuals.

question

Which of the following is an impermissible question for job applications and interviews?

answer

What is your height?

question

Which of the following is a disadvantage of using résumés as a source of information about job applicants?

answer

The information contained in it may not be accurate.

question

Generally, the organization checks references:

answer

after it has determined that the applicant is a finalist for the job.

question

If a person who is included as a reference by a job candidate gives negative information, there is a chance the candidate will claim ___, meaning the person damaged the applicant's reputation by making statements that cannot be proved truthful.

answer

defamation

question

cognitive ability tests

answer

are especially valid for complex jobs and those requiring adaptability.

question

a structured interview

answer

establishes a set of questions for the interviewer to ask.

question

A well planned interview should

answer

focus on the job and the organization

question

The process of arriving at a selection decision in which a very high score on one type of assessment can make up for a low score on another is termed the _____ model.

answer

compensatory

question

An organization's planned effort to help employees learn job-related knowledge, skills, abilities and behaviors is known as:

answer

training

question

What kind of a training plan are managers most likely to support?

answer

Training that will result in a significant improvement compared to its cost.

question

_____ is a combination of employee characteristics and positive work environment that permit training.

answer

readiness for training

question

Which of the following is NOT a characteristic of an effective training objective?

answer

Abstract performance standards

question

Which of the following training methods is best suited for conveying facts or comparing alternative processes?

answer

Presentation methods

question

The major disadvantage of distance learning as a training method is:

answer

the limited interaction between the instructor and students

question

Which of the following is a work-study training method that teaches job skills, usually a trade, through a combination of on-the-job training and classroom training?

answer

Apprenticeship

question

Which of the following statements about business games and case studies is true?

answer

Cases are designed to develop higher-order thinking skills.

question

Giving teams or work groups an actual problem, having them work on solving it and commit to an action plan, and holding them accountable for carrying out the plan describes:

answer

action learning

question

Employees are most likely to learn when the training:

answer

is linked to trainees' current job experiences and tasks.

question

Measures of training success generally include all of the following EXCEPT:

answer

increased training requirements in the organization.

question

The most accurate way to evaluate the training program is to:

answer

conduct pretests; train only part of the employees; and then, compare posttest results of both groups.

question

Training conducted during employees' first days on the job and designed to prepare employees to perform their jobs effectively, learn about the organization, and establish work relationships is known as:

answer

orientation

question

The content of a typical orientation program is NOT likely to include:

answer

salary data relating to organizational positions within the company.

question

Which of the following is a form of diversity training provided by some organizations that involves sending employees directly into communities where they have to interact with persons from different cultures, races, and nationalities?

answer

cultural immersion

question

Which of the following characteristics makes diversity training more effective?

answer

Training should be tied to business objectives.

question

Which of the following is true of the comparison between training and development?

answer

The goal of training is preparation for the current job, while the goal of development is preparation for changes in the current job.

question

Which of the following is a trend in executive education?

answer

Formal educational programs are being supplemented with other developmental activities.

question

According to the Myers-Briggs Type Indicator, extroverts gain energy through:

answer

interpersonal relationships

question

The Myers-Briggs Type Indicator could be helpful to a manager in all but one of the following situations. Name the exception.

answer

measuring the job performance of employees

question

What is an assessment center?

answer

A process in which multiple raters evaluate employees' performance on a number of exercises, usually as they work in a group at an off-site location.

question

When a team of five to seven employees is assigned a problem and must work together to solve it within a certain time period, which of the following techniques is being used?

answer

Leaderless group discussion

question

When using performance appraisals for development, all of the following are important EXCEPT:

answer

employees should be evaluated on personality rather than on behavioral considerations.

question

answer

question

Which of the following is a potential problem of job rotation?

answer

Employees typically develop a short-term perspective on problems and solutions.

question

A mentor is generally an:

answer

experienced, productive senior employee who provides feedback and coaching.

question

the 360 degree feedback process

answer

involves rating the individual in terms of work-related behaviors.

question

The process through which managers ensure that employees' activities and outputs contribute to the organization's goals is known as:

answer

performance management

question

The administrative purpose of a performance management system refers to:

answer

the ways in which organizations use the system to provide information for day-to-day decisions about salary, benefits, and recognition programs.

question

Performance management has a(n) _____ purpose, meaning that it serves as a basis for improving employees' knowledge and skills.

answer

developmental

question

The extent to which a performance measure gives guidance to employees about what is expected of them is called:

answer

specific feedback

question

Which of the following performance measurement methods requires managers to rank employees in their group from the highest performer to the poorest performer?

answer

Simple ranking

question

The performance measurement method that assigns a certain percentage of employees to each category in a set of categories is called:

answer

forced distribution

question

The _____ method of performance measurement compares each employee with each other employee to establish rankings.

answer

Paired comparison

question

If a manager considers one employee at a time and circles a number/word to signify the degree to which that employee demonstrates a particular trait, he/she is using a:

answer

graphic rating scale

question

In which performance technique are managers given three performance rating scales per dimension and asked to indicate whether the employee's performance is above (+), at (0), or below (-) the statements?

answer

Mixed standard scale

question

The performance management method that requires managers to rate the frequency with which the employee has exhibited a behavior during a rating period is the:

answer

behavioral observation scale

question

Which of the following is true of behavioral approaches to performance measurement?

answer

They link the company's goals to the specific behavior required to achieve those goals.

question

In which type of system are goals established and passed down through the organization, so employees at all levels are contributing to the organization's overall goals?

answer

management by objectives

question

The type of performance management system where a company assembles performance data on an individual from most or all of his/her contacts within and outside the company is known as:

answer

a 360 degree performance appraisal

question

Subordinates, as a source of performance information, are generally most appropriate when the performance results are to be used for:

answer

developmental purposes

question

Which of the following occurs when a rater compares an individual, not against an objective standard, but against other employees?

answer

contrast errors

question

This distributional error occurs when the reviewer rates everyone near the top of a rating scale.

answer

leniency

question

A(n) _____ is a gathering at which managers discuss employee performance ratings and provide evidence supporting their ratings with the goal of eliminating the influence of rating errors.

answer

calibration meeting

question

How does an organization promote fairness and reduce political behavior in the appraisal system?

answer

Train managers to use the appraisal process

question

Which of the following is effective feedback?

answer

"You did not meet the deadline."

question

To improve the performance of underutilizers, managers should:

answer

link rewards to performance outcomes

question

Lawsuits related to performance management usually involve charges of discrimination or:

answer

unjust dismissal

question

If an employee is dismissed on the grounds of poor performance immediately after he/she complained to higher authorities about the bad work ethics of his/her manager, the employee could file a(n):

answer

unjust dismissal lawsuit

question

Which of the following does an employer violate when he/she terminates an employee for refusing to do something illegal, unethical, or unsafe?

answer

Public Policy

question

When conducting a workplace search, employers can act fairly and minimize the likelihood of a lawsuit by:

answer

justifying that the organization has work rules that provide for searches

question

If employers covered by this federal law do not give notice to the employees (and their union, if applicable) of layoffs, they may have to provide back pay and fringe benefits and pay penalties as well. Identify this law.

answer

The Worker Adjustment Retraining and Notification Act

question

The principles of justice suggest that organizations prepare for problems by establishing a formal discipline process in which the consequences become more serious if the employee repeats the offense. Identify this process.

answer

progressive discipline system

question

A progressive discipline system:

answer

communicates unacceptable behavior and responds to a series of offenses with increasing forcefulness.

question

Conducting personal business online during work hours is called:

answer

cyberslacking

question

This stage of the alternative dispute resolution process works only to the degree that managers who hear complaints listen and are able to act. Identify this stage of the alternative dispute resolution process.

answer

open door policy

question

Based on the expectation that two people in conflict should first try to arrive at a settlement together, the organization has a policy of making managers available to hear complaints. Typically, the first "open door" is that of the employee's:

answer

immediate supervisor

question

Which stage of an alternative dispute resolution system is generally binding upon both parties?

answer

Arbitration

question

____ is a referral service that employees can use to seek professional treatment for emotional problems or substance abuse.

answer

Employee assistance program

question

Which of the following is true of employee assistance programs?

answer

They should be incorporated into an organization's discipline and dismissal program.

question

_____ tries to help people realize that losing a job is not the end of the world and that other opportunities exist.

answer

Outplacement counseling

question

Identify the correct statement about tasks and roles.

answer

Employees may feel conflict between work roles and family roles.

question

_____ is uncertainty about what the organization and others expect from the employee in terms of what to do or how to do it.

answer

Role ambiguity

question

Foreign assignments can be highly disruptive to family members, and the resulting role _____ is the top reason that people quit overseas assignments.

answer

conflict

question

This results when too many expectations or demands are placed on a person. After an organization downsizes, it may expect the remaining employees to experience this role. Identify it.

answer

role overload

question

The form of withdrawal which is likely to occur first is:

answer

behavior change

question

In terms of job dissatisfaction, an employee who calls in sick or arrives to work late is engaging in:

answer

physical withdrawal

question

Helen is very dissatisfied with her job situation, but she does not perceive any other employment opportunities, so she stays and spends most of the workday dreaming about nonwork matters. Which of the following behaviors is she experiencing?

answer

psychological withdrawal

question

Organizations can improve job satisfaction by:

answer

clarifying employees' roles by clearly spelling out work methods, schedules, and performance measures.

question

Which of the following is NOT a likely outcome or benefit of conducting annual employee satisfaction surveys?

answer

They provide evidence of the knowledge, skills, and abilities necessary to perform specific jobs.

question

This Act permits a lower "training wage," which employers may pay to workers under the age of 20 for a period of up to 90 days. Identify this act.

answer

FLSA

question

A _____ wage is essentially a minimum wage based on the cost of living in a particular region.

answer

living

question

An employee who earns $10 an hour and receives a weekly attendance award of $20 works 50 hours this week (Overtime pay is required, whether or not the employer specifically asked or expected the employee to work more than 40 hours). His/her total compensation for the week will be:

answer

570

question

Which of the following statements is true about the FLSA requirements of employee overtime payment?

answer

Overtime must be paid whether or not the employer specifically asked or expected the employee to work the extra hours.

question

Decisions about how to respond to the economic forces of product markets and labor markets limit an organization's choices about:

answer

pay structure

question

The federal government tracks trends in the nation's cost of living with a measure known as the:

answer

Consumer Price Index

question

The procedure through which an organization compares its own practices to those of successful competitors is known as:

answer

benchmarking

question

compensable factors

answer

are the characteristics of jobs that a firm values and chooses to pay for.

question

_____ are sets of jobs having similar worth or content, grouped together to establish rates of pay.

answer

pay grades

question

The compa-ratio

answer

measures the degree to which actual pay is consistent with the pay policy.

question

Pay specifically designed to energize, direct, or control employees' behavior is known as:

answer

incentive pay

question

Which of the following types of incentive pay plans are designed to provide pay for individuals' performance?

answer

merit pay

question

Retention bonuses refer to:

answer

one-time incentives paid in exchange for remaining with the company.

question

When an employee's pay is calculated as a percentage of sales, the employee is being paid under a:

answer

commission plan

question

Which of the following incentive programs measures improvements in productivity and effectiveness and distributes a portion of each gain to employees?

answer

gainsharing

question

What is profit sharing?

answer

An incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary.

question

Identify the disadvantage of using profit sharing plans.

answer

Profit sharing is not directly linked to individual behavior.

question

What is a balances scorecard?

answer

A combination of performance measures directed toward the company's long- and short-term goals and used as the basis for awarding incentive pay.

question

Which of the following incentives has a long term focus?

answer

Stock Options

question

How does linking executive pay to stock price reward unethical behavior?

answer

Executives can use the advantage of knowing the company's inside information to buy or sell stock and create huge personal gains.

question

Which one of the following employer-provided benefits is required by law in the U.S.?

answer

Unpaid family and medical leave

question

Which legal benefit requires employers to pay payroll tax?

answer

Unemployment insurance

question

In which of the following areas are unemployment insurance benefits and workers' compensation benefits similar?

answer

Both these costs depend on the organization's experience ratings.

question

To take unpaid family leave under the provisions of the Family and Medical Leave Act, employees must meet which of the following criteria?

answer

Have worked for an employer with 50 or more employees within a 75-mile radius

question

Due to increasing diversity within the workplace, many employers are extending benefits such as health insurance to:

answer

domestic partners

question

Which one of the following is true of the Consolidated Omnibus Budget Reconciliation Act of 1985?

answer

Qualifying events include, among others, termination (except for gross misconduct), a reduction in hours that leads to the loss of health insurance, and death.

question

Identify the prime difference between PPOs and HMOs.

answer

PPOs provide benefits on a reduced-fee, per-call basis rather than on a prepaid basis.

question

From which of the following sources do most retirees (65 and older) receive most of their income?

answer

Social security

question

Which type of retirement plan guarantees a specified level of retirement income?z

answer

Defined benefit plan

question

Benefit plans that permit employees to choose the types and amounts of benefits they want from a set of alternatives are called:

answer

cafeteria style plans

question

The labor relations decision regarding _____ in a union setting involves decisions about pay structure, job security, work rules, workplace safety, and many other issues. These decisions affect workers' and the employer's situation for the term of the contract.

answer

negotiating contracts

question

Most national unions are affiliated with the ____, an association that seeks to advance the shared interests of its member unions at the national level.

answer

AFL-CIO

question

John works at a factory of a large manufacturing company and is a member of the local chapter of a national industrial union. He believes his supervisor is not living up to the terms of the recently negotiated contract. In order to seek resolution to his grievance, John should first contact:

answer

his union steward

question

Which of the following is true of union membership in the United States since the 1980s?

answer

Union membership among government workers has held steady, while declines have occurred in the private sector.

question

Which of the following statements is true about unionization of government workers?

answer

Strikes are illegal for federal workers and for state workers in most states.

question

Which of the following is true of the effects of unions on company performance?

answer

On average, union members receive higher wages and more generous benefits than nonunion workers.

question

Which of the following is a union security arrangement that requires employees to join the union within a certain amount of time (30 days) after beginning employment?

answer

Union shop

question

Which type of union security provision is illegal under provisions of the NLRA?

answer

Closed shops

question

Protected activities under the NLRA include all of the following EXCEPT:

answer

activities by those employed as contract workers.

question

Right to work laws are

answer

federal legislations sanctioning the use of union shops and agency shops.

question

Which of the following employee groups may be excluded by the NLRB from participating in organizing activities and being a member of the bargaining unit?

answer

Employees with managerial duties

question

What is the minimum percent of employees in a bargaining unit who must sign authorization cards for the NLRB to hold a union representation election?

answer

30 percent

question

Which of the following should a supervisor do to discourage unions?

answer

Report any direct or indirect signs of union activity to a core management group.

question

Contract administration includes carrying out the terms of the agreement and resolving conflicts over interpretation or violation of the agreement. Under a labor contract, the process for resolving these conflicts is called a(n):

answer

grievance procedure

question

Under the National Labor Relations Act, the union has a duty of fair representation, which means the union must:

answer

give equal representation to all members of the bargaining unit, whether or not they actually belong to the union.

question

An IBM employee who was born in the U.S. and works at IBM offices in New York is a(n):

answer

parent country national

question

John, an American who works for a U.S.-based company, is on assignment for his company in Japan. He is known as a(n):

answer

expatriate

question

A company is headquartered in Germany, has offices in the U.S., and has a Vietnamese manager working in a facility in the U.S. In this case, Germany is the _____ country, the U.S. is the _____ country, and Vietnam is the _____ country.

answer

parent, host, third

question

Which one of the following is true of global organizations?

answer

Managers at such companies must be able to get results across national boundaries.

question

Which one of the following is true of global organizations?

answer

They tend to have centralized, parent-country decision-making structures.

question

Assume that you are visiting Mexico for a business meeting and you call your host, the Chairman of the company, by his first name rather than his title. He seems offended. A difference in which of the following cultural dimensions between the two countries is likely to have caused the misunderstanding?

answer

Power distance

question

Which of the following countries has led the world in eliminating discrimination in the workplace?

answer

The United States

question

Which of the following is true about selecting employees in a global labor market?

answer

A host-country national can more easily understand the local values and customs.

question

According to research, the factor that most strongly influences whether an employee completed a foreign assignment is:

answer

the comfort of the employee's spouse and family.

question

answer

question

answer

question

According to the text, among the following countries, which country has the highest average work hours per year?

answer

South Korea

question

Which of the following is true of global incentive pay and employee benefits?

answer

Paid vacation tends to be more generous in Western Europe than in the United States.

question

In practice, the total cost of an international assignment is roughly _____ the employee's salary in the host country.

answer

four times

question

The process of preparing expatriates to return home from a foreign assignment is called:

answer

repatriation

question

one dean, two administrative assistants, 20 faculty members. How many positions?

answer

Three

question

Which one of the following laws requires all organizations holding federal contracts to engage in affirmative action to hire women and minorities?

answer

Executive order 11246

question

The HRM function during downsizing is to terminating the workers who

answer

are less valuable in their performance

question

offshoring is defined as:

answer

moving operations from the country where a company is headquartered to a country where pay rates are lower but the necessary skills are available

question

Which of the following arrangements would qualify as job rotation?

answer

Team members work on the assembly line one day and pack products into cases the next

question

differing treatment of individuals, where the differences are based on the individuals' race, color, religion, sex, national origin, age, or disability status is termed as

answer

disparate treatment

question

Which of the following is a challenge for HRM during mergers?

answer

developing conflict resolution skills among employees

question

When an organization structure is strongly based on function

answer

workers tend to have low authority and work alone at highly specialized jobs

question

What effect does the use of employee empowerment have on recruiting?

answer

It has shifted the focus away from technical skills to general cognitive and interpersonal skills

question

A worker leaves an organization for three years to fulfill military duties. Which of the following observations is true of the employers obligation to reemploy the worker

answer

Employer must reemploy the worker with the same seniority

question

Which of the following actions of employers can result in reverse discrimination?

answer

affirmative action

question

which of the following is a major problem associated with aging?

answer

Older workers present challenges related to costs of health care

question

in contrast to tasks, duties, and responsibilities, KSAOs are:

answer

not directly observable

question

A system in which employees have online access to information about HR issues and go online to enroll themselves in programs and provide feedback through surveys is termed

answer

self-service

question

A bona fide occupational qualification must be

answer

a necessary qualification for the job

question

when an individual is promised a positive outcome for submission to sex, or threatened with a negative outcome for failure to submit to sex, this is referred to as:

answer

quid pro quo harassment

question

which of the following adjustments can be exempted from reasonable accommodation?

answer

A small firm required to change the design and structure of the building to allow wheelchairs

question

Age Discrimination in Employment Act (ADEA) protects only those workers who are over the age of

answer

Forty

question

independent contractors are:

answer

self-employed individuals with multiple clients

question

which of the following terms refers to an organizations active effort to find opportunities to hire or promote people in a particular group

answer

affirmative action

question

Which of the following is a strategy to defeat labor shortage where the results can be obtained fast

answer

outsourcing

question

the primary reason organizations engage in downsizing is to

answer

promote future competitiveness

question

Which of the following refers to a list of the tasks, duties, and responsibilities that a job entails?

answer

job description

question

in the context of HR planning, implementation that ties planning and recruiting to the organization's strategy and to its efforts to develop employees becomes a complete program of

answer

talent management

question

army of one

answer

image adver.

question

cost of using a particular recruitment source for a particular type of vacancy. then divide by the number of people hired to fill that type of vacancy

answer

cost per hire

STUDY

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Human Resource Management – Final Exam – Flashcards 88 terms

Ben Powell

88 terms

Preview

Human Resource Management – Final Exam – Flashcards

question

Pay level

answer

the compensation decision concerning how much to pay employees relative to what they could earn doing the same job elsewhere; external equity, internal equity

question

External equity

answer

employee perceptions of fairness based on how much they are paid relative to people working in other organizations; determined using pay surveys

question

Pay survey

answer

gathering information to learn how much employees are being paid by other organizations

question

Internal equity

answer

employee perceptions of fairness based on how much they are paid relative to others working in the same organization; determined using point systems

question

Point system

answer

a process of assigning numerical values to each job in order to compare the value of contributions within and across organizations

question

Meet-the-market strategy

answer

a compensation decision to pay employees an amount similar to what they can make working for other organizations

question

Lead-the-market strategy

answer

a compensation decision to pay employees an amount above what they might earn working for another organization

question

Lag-the-market strategy

answer

a compensation decision to pay employees an amount below what they might earn working for another organization

question

Transactional commitment

answer

a sense of obligation to an organization that is created primarily by financial incentives; Bargain Laborer, Free Agent

question

Relational commitment

answer

a sense of loyalty to an organization that is based not only on financial incentives but also on social ties; Loyal Soldier, Committed Expert

question

Uniform rewards

answer

a reward system that minimizes differences among workers and offers similar compensation to all employees; Bargain Laborer, Loyal Soldier

question

Variable rewards

answer

a reward system that pays some employees substantially more than others in order to emphasize differences between high and low performers; Free Agent, Committed Expert

question

Reinforcement theory

answer

a psychological theory suggesting that people are motivated by antecedents (environmental cues) and consequents (rewards and punishment); pay-for-performance

question

Pay-for-performance

answer

compensation practices that use differences in employee performance to determine differences in pay

question

Goal-setting theory

answer

a psychological theory suggesting that an individual's conscious choices explain motivation

question

Justice theory

answer

a psychological theory suggesting that motivation is driven by beliefs about fairness

question

Equity theory

answer

a justice perspective suggesting that people determine the fairness of their pay by comparing what they give to and receive from the organization with what others give and receive; distributive justice, procedural justice

question

Distributive justice

answer

perceptions of fairness based on the outcomes (such as pay) received from an organization

question

Procedural justice

answer

perceptions of fairness based on the processes used to allocate outcomes such as pay

question

Expectancy theory

answer

a psychological theory suggesting that people are motivated by a combination of three beliefs: valence, instrumentality, and expectancy

question

Valence

answer

the value that an individual places on a reward being offered

question

Instrumentality

answer

the belief in the likelihood that the reward will actually be given contingent on high performance

question

Expectancy

answer

an individual's belief that he or she can do what is necessary to achieve high performance

question

Agency theory

answer

an economic theory that uses differences in the interests of principals (owners) and agents (employees) to describe reactions to compensation

question

Fair Labor Standards Act (FLSA)

answer

federal legislation that governs compensation practices and helps ensure fair treatment of employees; exempt employees, nonexempt employees

question

Exempt employees

answer

workers, such as executives, administrators, professionals, and sales representatives, who are not covered by the FLSA

question

Nonexempt employees

answer

all employees who are not explicitly exempt from the FLSA, sometimes referred to as hourly workers

question

Equal Pay Act

answer

amendment to the FLSA that requires employers to pay men and women the same when performing the same job

question

Compensation package

answer

the mix of salary, benefits, and other incentives that employees receive from the organization

question

Base pay

answer

compensation that is consistent across time periods and not directly dependent on performance level; hourly wage or annual salary

question

At-risk pay

answer

compensation where the amount varies across pay periods depending on performance; individual incentives, group incentives, organization-level rewards

question

1. piece-rate 2. commission 3. merit pay increase 4. merit bonus

answer

Individual incentives (4)

question

Piece-rate incentive

answer

an individual incentive program in which each employee is paid a certain amount for each piece of output

question

Commission

answer

an individual incentive program in which each employee is paid a percentage of the sales revenue that he or she generates

question

Merit pay increase

answer

an individual incentive program in which an employee's salary increase is based on performance

question

Merit bonus

answer

a one-time payment made to an individual for high performance

question

1. group-based team reward 2. gainsharing

answer

Group incentives (2)

question

Group-based team reward

answer

a group-level incentive provided to members of a team when the team meets or exceeds a specific goal

question

Gainsharing

answer

a group-level incentive program that rewards groups of employees for working together to reduce costs and improve productivity

question

1. profit sharing 2. stock options 3. employee stock ownership plans (ESOPs)

answer

Organization-level rewards (3)

question

Profit sharing

answer

an organization-wide incentive program under which a portion of organizational profits are shared with employees

question

Stock options

answer

rights to purchase stock at a specified price in the future

question

Employee stock ownership plan (ESOP)

answer

a plan under which an organization sets up a trust fund to hold and manage company stock given to employees

question

1. social security 2. unemployment insurance 3. workers' compensation 4. unpaid leave 5. healthcare plan

answer

Legally-required benefits (5)

question

Social security system

answer

a federal program that requires workers to pay into a retirement fund, from which they will draw when they have reached a certain age

question

Unemployment insurance

answer

a network of state-mandated insurance plans that provide monetary assistance to workers who lose their jobs through no fault of their own

question

Workers' compensation

answer

state programs that provide workers and families with compensation for work-related accidents and injuries

question

Healthcare plan

answer

an insurance plan that provides workers with medical services

question

1. life insurance 2. disability insurance 3. flexible schedule 4. retirement; defined benefit, defined contribution 5. paid leave; pay without work, sick leave

answer

Discretionary benefits (5)

question

Life insurance

answer

a form of insurance that pays benefits to family members or other beneficiaries when an insured person dies

question

Disability insurance

answer

a form of insurance that provides benefits to individuals who develop mental or physical conditions that prevent them from working

question

Defined benefit plan

answer

a retirement plan under which an organization provides retired individuals with a fixed amount of money each month; the amount is usually based on number of years employed and pay level at retirement

question

Defined contribution plan

answer

a retirement plan under which the employer and/or the employee contribute to a fund for which only the contributions are defined and benefits vary according to the amount accumulated in the fund at retirement

question

Pay without work

answer

compensation paid for time off, such as holidays

question

Sick leave

answer

compensation paid to employees who are unable to work because they are ill

question

1. traditional 2. managed care; HMO, PPO 3. health savings account

answer

Types of healthcare plans (3)

question

Health maintenance organization (HMO)

answer

a healthcare plan under which the provider receives a fixed amount for providing necessary services to individuals who are enrolled in the plan

question

Health savings account (HSA)

answer

a personal savings account that an employee can use to pay healthcare costs

question

Line of sight

answer

the extent to which employees can see that their actions influence the outcomes used to determine whether they receive a particular reward

question

Flexible benefits program/cafeteria benefits

answer

a benefit program that allows employees to choose the benefits they want from a list of available benefits

question

Wagner Act

answer

a federal law passed in 1935 that created the National Labor Relations Board and provided employees with the express right to organize unions; formally known as the National Labor Relations Act

question

National Labor Relations Board (NLRB)

answer

a board of five members appointed by the POTUS to enforce the Wagner Act

question

Taft-Hartley Act

answer

a federal law passed in 1947 that regulates union activities and requires unions to bargain in good faith; formally known as the Labor-Management Relations Act

question

1. collective action 2. union organizing 3. joining a union 4. going on strike 5. collective bargaining

answer

Wagner Act protected activities (5)

question

Collective bargaining

answer

the process in which labor unions and employers negotiate contracts defining the terms and conditions under which union members will work

question

1. exclusive representative of bargaining unit 2. wages, hours, terms and conditions of employment 3. grievance procedures 4. union security provisions

answer

Components of collective bargaining (4)

question

Right-to-work laws

answer

state laws that require open-shop labor agreements

question

Labor union

answer

an organization representing the collective interests of workers

question

Featherbedding

answer

a practice in which a union requires a company to pay employees wages for work that is not performed; defined as an unfair labor practice

question

Closed shop

answer

an organization that hires only workers who belong to a certain union

question

Union shop

answer

an organization that requires workers to join a union as soon as they are hired

question

Boycott

answer

an organized action in which consumers refuse to purchase goods or services from a company; unions engaged in labor disputes may support these of the companies involved in the disputes

question

Mandatory bargaining topics

answer

issues, such as wages, hours, and working conditions, that must be discussed as part of collective bargaining

question

Strike

answer

an action in which union members refuse to perform their job duties as a result of a labor dispute

question

Lockout

answer

an action in which an employer closes a workplace or otherwise prevents union members from working as a result of a labor dispute

question

Union steward

answer

a representative of the union who acts as an advocate for employees

question

1. higher pay 2. better benefits 3. more job security 4. better working conditions

answer

Impact of unions on unionized employees (4)

question

1. higher productivity 2. lower profits 3. less flexibility

answer

Impact of unions on union shops (3)

question

Authorization card campaign

answer

a campaign in which employees or labor union representatives seek signatures from employees requesting a vote on union representation

question

Decertification election

answer

an election to remove a union's authorization to represent employees

question

Alignment

answer

the state in which organizational practices are in their proper place relative to other practices

question

Vertical alignment

answer

the state in which an organization's human resource strategy supports its competitive business strategy

question

Horizontal alignment

answer

the state in which individual human resource practices fit together and support each other

question

Turnaround strategy

answer

a competitive business strategy that focuses on radical change to return a company to profitability

question

Global expansion strategy

answer

a competitive business strategy that focuses on increasing an organization's presence in foreign countries

question

Growth strategy

answer

a competitive business strategy that focuses on expanding products and services into new markets

question

Rational strategic approach

answer

an approach in which organizational leaders carefully plan a strategy before carrying it out

question

Evolutionary strategic approach

answer

an approach in which an organization's strategy unfolds over time in response to common issues

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ISOM TEST 2 – Flashcards 50 terms

Isabella Parker

50 terms

Preview

ISOM TEST 2 – Flashcards

question

If the negotiations between union and management representatives come to a standstill and a third party is brought in to make suggestions or propose solutions to help resolve the impasse, then the third party would likely be a(n)

answer

mediator

question

When Betsy pointed out to her supervisor that the furniture assemblers at their manufacturing plant were using 20 percent more nails than in the preceding month, she was involved in

answer

controlling directing

question

The degree to which a good or service meets the demands and requirements of customers is called

answer

quality

question

Operations management includes responsibility for

answer

inputs and outputs

question

Determining an organization's objective and deciding how to accomplish them are part of the management function known as

answer

planning

question

The major reason for forming a labor union is that

answer

a group has more clout with management than an individual

question

Why is monitoring the consequences of decisions important?

answer

The consequences of decisions may not be apparent quickly enough without monitoring

question

To avoid legal problems, before firing an employee, companies should ensure that

answer

they have documented all problems and warning in the employee's work records

question

Why do the products of service providers tend to be more customized than those of manufacturers?

answer

Differing customers have differing needs

question

The qualifications necessary for a specific job are spelled out in the job

answer

specification

question

Which of the following is not a benefit?

answer

Salary

question

When assessing the appropriateness of decision option, managers should

answer

consider its impact on the organizations as a whole

question

Top managers spend most of their time performing which of the following management functions?

answer

Planning

question

The document that contains an overview of a job's title, tasks, relationships with other jobs, physical and mental skills required, duties, and responsibilities is referred to as a job

answer

description

question

Having conceptual skills often means being able to

answer

think creatively and in abstract terms

question

Professionals who specialize in luring qualified people away from other companies are known as

answer

headhunters

question

Having good human relations skills means that a manager is able to

answer

work with others

question

______ are responsible for tactical planning that will implement the general guidelines established by top management

answer

Middle managers

question

The process of determining how many supplies and goods are needed, keeping track of quantities on hand, each item's location, and who is responsible for it is called

answer

inventory control

question

When analyzing option in the decision-making process, managers must consider the appropriateness and ______ of each option

answer

practicality

question

A person in charge of designing production facilities, purchasing supplies, and ensuring that products meet quality standards is probably a

answer

productions and operations manager

question

The first step in the control process is to

answer

measure the actual performance

question

_____ make decisions about the use of an organization's resources and are concerned with planning, organizing, leading, and controlling the organization's activities

answer

Managers

question

When managing quality in manufacturing, when is sampling likely to be used?

answer

When inspection tests are destructive

question

Decisions regarding adding new products, acquiring companies, and moving into foreign markets would most typically be made by

answer

top management

question

To ensure quality and efficiency, operations managers take _______ at a various points in the transformation process and compare them to established standards.

answer

Feedback

question

Which of the following is best used when employees know the organization's standards and are highly motivated to attain them?

answer

Free-rein leadership

question

Facility location decisions are complex because

answer

they involve the evaluation of a number of important factors and the costs are high

question

Which of the following activities is not included in supply chain management?

answer

Researching and developing new products

question

Crisis management plans generally cover maintaining business operations during a crisis and

answer

communicating with others about the situation and the company's response to it

question

Positions such as foremen, supervisors, and officer managers are examples of

answer

first-line management

question

______ is a philosophy that uniform commitment to quality in all areas of an organization will promote a culture that meets customers' perceptions of quality

answer

Total Quality Management

question

Manufacturers' products are typically

answer

more standardized than service providers'

question

Management is a process

answer

of coordinating resources to achieve objectives

question

Managers involved in checking an applicant's references should be aware that an applicant's former employers will likely confirm only that the individual did indeed work there, but not provide any information about the applicant's

answer

quality of work

question

To achieve its objectives, management may use ______, which are similar to union strikes.

answer

lockouts

question

An interview is

answer

a chance to exchange information with the candidate

question

The nature of the service provider's product requires

answer

a higher degree of customer contact

question

Bob has been put in charge of a group of new employees. He has told them they must perform their duties in the exact manner and other that he has commanded, with no exceptions. Bob is using

answer

autocratic leadership

question

All activities involved in obtaining and managing raw materials and component parts, managing finished products, packaging them, and getting them to customers are a part of

answer

supply chain management

question

Materials that have been purchased to be used in making other products are included in the

answer

raw materials inventory

question

Transformation processes occur

answer

in all organizations

question

Compared to service providers, manufacturers generally

answer

are more capital intensive

question

To motivate employees such as car salespersons to sell as much as they can, they are paid

answer

commissions

question

Joe Johnson was recently moved to a new position in his company that involved learning new skills and work assignments even though Joe received no pay increase. This would best be called a

answer

transfer

question

The processes of an organization uses to maintain its established quality standards are called

answer

quality control

question

Determining how many items are to be inspected is called

answer

sampling

question

Minimizing inventory by providing an almost continuous flow of items from suppliers to the production facility is referred to as

answer

just-in-time management

question

Determining, through observation and study, the specific tasks that comprise a job and knowledge, skills, and abilities necessary to perform it is called

answer

job analysis

question

The system in which management collects and analyzes information about the production process to pinpoint quality problems in the production system is called

answer

statistical process control

STUDY

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Management quizes test 2 – Flashcards 150 terms

Kayden Hussain

150 terms

Preview

Management quizes test 2 – Flashcards

question

individual plan.

answer

The most common type of incentive plan, which compares a worker's performance against an objective standard with pay determined by his or her own performance is known as a(n):

question

workers' compensation

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In the context of employee benefits, _____ provides financial support to employees suffering a work-related injury or illness.

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employment-at-will.

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The legal concept that an employee may be terminated for any reason is known as:

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assessment center

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A managerial performance test in which candidates participate in a variety of exercises and situations is known as a(n)_____.

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difficult to imitate.

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One of the criteria for creating a competitive advantage through human resources is that they should be:

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needs assessment.

answer

An analysis identifying the jobs, people, and departments for which training is necessary is known as a(n):

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union shop

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In a _____, the contract requires workers to join the labor organization after a set period of time.

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job rotation

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In the context of training methods, _____ refers to assigning employees to different roles in the organization to broaden their experience and improve their skills.

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Integrity

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_____ tests are administered by employers to assess the honesty of a job candidate.

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helping dismissed workers find employment elsewhere.

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Outplacement refers to:

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It provides the information required by virtually every human resources activity.

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Which of the following is a function of job analysis?

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comparable worth

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The _____ doctrine implies that women who perform different jobs of equal value as those performed by men should be paid the same wage.

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Trait

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_____ appraisals involve judgments about employee performance.

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Behavioral description interview

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Which of the following types of interview explores what candidates have actually done in the past?

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gainsharing plans

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In the context of incentive systems, _____ reward employees for increasing productivity or saving money in areas under their direct control.

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economic

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A(n) _____ strike refers to a situation wherein workers go on strike to compel employers to agree to their terms.

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ensuring the availability of the right number and types of people.

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In the context of human resources management, the planning stage involves:

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It allows differences in pay in the case of a seniority system or merit system.

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Which of the following is true of the provisions of the Equal Pay Act (EPA) of 1963?

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Managing layoffs

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On a day-to-day basis, which of the following is a concern of human resources managers?

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Provide written explanations of severance benefits.

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Which of the following should be done when conducting a termination interview?

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individual rights

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In a collective bargaining agreement, the _____ clause includes the use of seniority to determine pay increases, job bidding, and the order of layoffs.

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evaluating the activities conducted to ensure that they are producing the desired results.

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The final stage in the human resources planning process involves:

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They are usually implemented in the division or the organization as a whole.

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In the context of incentive systems, which of the following is true of profit-sharing plans?

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Using attrition if they have planned far enough in advance

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Which of the following is a step taken by companies when there is a labor surplus?

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labor supply forecast.

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The estimate an organization makes regarding the number and quality of its current employees and the available external source of workers is known as a(n):

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It is more likely to be free of bias and stereotypes.

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Which of the following is an advantage of a structured interview?

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It permitted workers to decertify (reject) a union as their representative.

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Which of the following is true of the provisions of the Labor-Management Relations Act?

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Employers must maintain records of injuries and deaths caused by workplace accidents and submit to on-site inspections.

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Which of the following is true of the provisions of the Occupational Safety and Health Act (OSHA) of 1970?

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They are hard to defend in court.

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In the context of selection methods, which of the following is true of personality tests?

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It was designed to curb abuses by labor union leaders.

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Which of the following is true of the Landrum-Griffin Act (1959)?

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Gaining the support of top management regarding diversity

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Which of the following is the first step to be taken in the process of cultivating a diverse workforce?

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managing diversity.

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The entire process of understanding and appreciating employee differences to build a more effective and profitable organization is known as:

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diversity.

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The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class, and lifestyle in addition to gender, race, ethnicity and nationality is:

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systems accommodation.

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Recognizing religious holidays, differing modes of dress, and dietary restrictions, as well as allowing flexible scheduling are all ways to improve employee retention that may appeal to employees of diversity. These types of efforts are referred to as:

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mentors.

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Higher-level managers who help ensure that high-potential people are introduced to top management and socialized into the norms and values of the organization are typically called:

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New Zealand.

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In Hofstede's chart showing individualism/collectivism and power distance, the United States is similar to:

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ecruiting individuals with different backgrounds.

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Managing diversity typically involves such basic activities as:

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awareness building and skill building.

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Typically, diversity training has two components:

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expatriates.

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Parent-company nationals who are sent to work in another country are typically referred to as:

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disability.

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According to the ADA, a physical or mental impairment that substantially limits one or more major life activities is referred to as a:

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affirmative action

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To correct the past exclusion of women and minorities, companies introduced _____ —special efforts to recruit and hire qualified members of groups that have been discriminated against in the past.

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culture shock.

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The disorientation and stress associated with being in a foreign environment is termed as:

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communication problem.

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The most common negative effect of diversity, contributing to inaccuracy and inefficiency, is:

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Ability to leverage creativity and innovation in problem solving

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Which of the following is an advantage of managing a diverse workforce?

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affirmative action.

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In Portland, Oregon, about one-fifth of the city's population consisted of various ethnic minorities, but only 12 percent of new construction employees were minorities. The city government responded to this issue by increasing minority group members' participation in public contracts. This special program taken up by the government authorities is an example of:

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They are marked by an absence of prejudice and discrimination.

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Which of the following is a defining characteristic of multicultural organizations?

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Lower birth rates

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Which of the following is the main reason behind the projected slowdown in the pace of growth of the labor force in the U.S. and other developed countries?

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Identifying and reducing hidden biases toward minority groups

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Which of the following is one of the goals of diversity training?

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hold different perspectives on issues.

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Work team diversity promotes creativity and innovation because people with different backgrounds:

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Phased retirement programs

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Which of the following is most likely to help employers in preventing an exodus of talent, and retaining skilled and knowledgeable older workers?

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make managers aware of the importance of valuing diversity.

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Awareness building is designed to:

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It will see a slowdown in growth.

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In the context of the U.S labor force, which of the following is true?

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Career development program

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_____ gives exposure and experience in line jobs to a wide range of employees in order to make senior management positions more available to them.

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phased retirement.

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Allowing older employees to work fewer hours per week as a strategy to attract and retain these experienced people is known as:

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Increased communication problems

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Which of the following is one of the disadvantages commonly associated with a diversified workforce?

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minority group members are forced to adopt the norms of the majority to survive.

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In monolithic organizations, conflicts among groups is seen to be low. Which of the following is most likely to be the reason behind this low rate of conflict?

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Relatively diverse employee population

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Which of the following is a defining characteristic of pluralistic organizations?

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quid pro quo harassment.

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Submission to or rejection of sexual conduct that is used as a basis for employment decisions is referred to as:

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in which diversity not only exists but is valued.

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A multicultural organization is best defined as an organization:

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These organizations use an affirmative action approach.

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Which of the following is true of pluralistic organizations?

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achievement-oriented

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In the context of the path-goal theory, _____ leadership refers to behaviors geared toward motivating people, such as setting challenging goals and rewarding good performance.

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ability

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In the context of the path-goal theory, _____ is people's beliefs about their own capabilities to do their assigned jobs.

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task performance behaviors.

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Actions taken to ensure that the work group or organization reaches its goals are known as:

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self-confident

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According to the trait approach to leadership, a(n) _____ leader overcomes obstacles, makes decisions despite uncertainty, and instills confidence in others.

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leader-member exchange theory

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According to the _____, maintenance behaviors such as trust, open communication, mutual respect, mutual obligation, and mutual loyalty form the cornerstone of relationships that are satisfying and perhaps more productive.

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job maturity

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According to Hersey and Blanchard's situational theory, _____ is the level of the followers' skills and technical knowledge relative to the task being performed.

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group maintenance behaviors.

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Actions taken to ensure the satisfaction of team members, develop and maintain harmonious work relationships, and preserve the social stability of the group are referred to as:

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bridge leaders.

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Leaders who reconcile conflicting value systems or different cultures are known as:

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power

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n organizations, _____ often means the ability to get things done or accomplish one's goals despite resistance from others.

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transactional leader

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A leader who manages through activities, using his legitimate, reward and coercive powers to give commands and exchange rewards for services rendered is referred to as a:

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Strategic

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_____ leadership gives purpose and meaning to organizations by anticipating and envisioning a viable future for the organization and working with others to initiate changes that create such a future.

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Democratic

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_____ leadership seeks information, opinions, and preferences, sometimes to the point of meeting with the group, leading discussions, and using consensus or majority vote to make the final choice.

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situational approach.

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The leadership perspective that proposes that universally important traits and behaviors do not exist and that effective leadership behavior varies from circumstance to circumstance is known as the:

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Vision

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Which of the following is best described as a mental image of a possible and desirable future state of the organization?

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Vroom

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The _____ model of leadership uses the basic situational approach of assessing the situation before determining the best leadership style.

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expectancy.

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In the context of the trait approach to leadership, the correspondence between actions and words is known as:

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Leader-Member Exchange (LMX) theory

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Which of the following highlights the importance of leader behaviors, not just toward the group as a whole, but toward individuals on a personal basis?

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locus of control

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In the context of the path-goal theory, _____ is the extent to which individuals see events as being under their influence.

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reward

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A leader who has _____ power influences others because he or she controls valued benefits; people comply with the leader's wishes to receive those benefits.

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least preferred coworker

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In the context of Fiedler's contingency model of leadership effectiveness, leadership styles were measured with an instrument assessing the leader's _____.

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referent

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A leader with _____ power has personal characteristics that appeal to others.

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expert

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A leader who has _____ power has certain knowledge; people comply because they believe in, can learn from, or can otherwise gain from that knowledge.

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They have a high need for power.

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According to the trait approach to leadership, which of the following is a characteristic of effective leaders?

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task-oriented

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In the context of a research program conducted at the University of Michigan, planning, scheduling, coordinating, providing resources, and setting performance goals is known as _____ behavior.

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It expresses the leader's ambitions for the organization

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n the context of leadership, which of the following is true of vision?

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relationship-motivated

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In the context of Fiedler's contingency model, ____ leadership is more likely from high-LPC leaders.

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Group maintenance

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_____ behavior includes a focus on people's feelings and comfort, appreciation of them, and stress reduction.

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task-motivated

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In the context of Fiedler's contingency model, _____ leadership is more likely exhibited by leaders with low LPC scores.

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relationship-oriented

answer

In the context of the research program conducted at the University of Michigan on the impact of leaders' behavior on job performance, demonstrating trust and confidence, being friendly and considerate, showing appreciation, and keeping people informed is known as _____ behavior.

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transformational

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A _____ leader has a special ability to generate excitement and revitalize organizations.

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just-in-time.

answer

A system that calls for subassemblies and components to be manufactured in very small lots and delivered to the next stage of the production process as they are needed is referred to as

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span of control.

answer

In the context of the vertical structure of a firm, the number of subordinates who report directly to an executive or supervisor is known as the:

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coordination by plan

answer

In the context of organizational integration, _____ refers to a situation when interdependent units are required to meet deadlines and objectives that contribute to a common goal.

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mass customization.

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The production of both high-volume and high-variety products at the same time is referred to as:

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delegation.

answer

The assignment of new or additional responsibilities to a subordinate is referred to as:

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he legitimate right to make decisions and to tell other people what to do.

answer

In the context of the vertical structure of a firm, authority refers to

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formalization.

answer

In the context of organizational integration, the presence of rules and regulations governing how people in the organization interact is known as:

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lean manufacturing.

answer

An operation that strives to achieve the highest possible productivity and total quality, cost-effectively, by eliminating unnecessary steps in the production process and continually striving for improvement is known as:

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centralization

answer

In an organization, _____ may be valuable when departments have different priorities or conflicting goals, which need to be mediated by top management.

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decentralized

answer

In _____ organizations, more decisions are made at lower levels.

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Organization chart

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In the context of the fundamentals of organizing, which of the following depicts the positions in a firm and the way they are arranged?

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standardization.

answer

In the context of organizational integration, establishing common routines and standard operating procedures that apply uniformly to everyone is known as:

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responsibility.

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The assignment of a task that an employee is supposed to carry out is known as:

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divisional organization.

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An organization with departmentalization that groups units around products, customers, or geographic regions is known as a:

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the procedures that link the various parts of the organization to achieve the organization's overall mission.

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In the context of the fundamentals of organizing, coordination refers to:

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he procedures that link the various parts of the organization to achieve the organization's overall mission

answer

In the context of the fundamentals of organizing, coordination refers to:

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six sigma quality.

answer

One of the most important contributions to total quality management has been the introduction of statistical tools to analyze the causes of product defects, in an approach called:

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centralized

answer

In a(n) _____ organization, important decisions usually are made at the top

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departmentalization

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In the context of horizontal structure of a firm, subdividing an organization into smaller units is known as

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The work performed by each unit in the organization.

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Which of the following types of information is conveyed by a traditional organization chart?

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lean manufacturing.

answer

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learning organization

answer

An organization skilled at creating, acquiring, and transferring knowledge as well as at modifying its behavior to reflect new knowledge and insights is known as a

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line departments

answer

In the context of horizontal structure of a firm, _____ deal directly with the organization's primary goods or services; they make things, sell things, or provide customer service

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span of control.

answer

In the context of the vertical structure of a firm, the number of subordinates who report directly to an executive or supervisor is known as the

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Total quality management

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_____ is a way of managing in which everyone is committed to continuous improvement of his or her part of the operation.

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responsibility

answer

The assignment of a task that an employee is supposed to carry out is known as:

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functional

answer

In a _____ organization, jobs (and departments) are specialized and grouped according to business functions and the skills they require.

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just-in-time.

answer

A system that calls for subassemblies and components to be manufactured in very small lots and delivered to the next stage of the production process as they are needed is referred to as:

question

centralization

answer

In an organization, _____ may be valuable when departments have different priorities or conflicting goals, which need to be mediated by top management.

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the legitimate right to make decisions and to tell other people what to do.

answer

In the context of the vertical structure of a firm, authority refers to:

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Tolerance of risk, ambiguity, and uncertainty

answer

Which of the following characteristics helps an entrepreneur succeed?

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Business incubators

answer

_____ are protected environments for new, small businesses offering low rents and shared costs.

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small business.

answer

A business having fewer than 100 employees, independently owned and operated, not dominant in its field, and not characterized by many innovative practices is a(n):

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social capital.

answer

A competitive advantage from relationships with other people and the image other people have of the entrepreneur is known as

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subscription

answer

In the context of successful business models for e-commerce, the _____ model involves charging monthly or annual fees for Internet website visits or access to website content.

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opportunity analysis.

answer

A description of the good or service, an assessment of the opportunity, an assessment of the entrepreneur, specification of activities and resources needed to translate the idea into a viable business, and the source(s) of capital together make up a(n):

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bootlegging

answer

Informal efforts, as opposed to official job assignments, in which employees work to create new products and processes of their own choosing and initiative are known as:

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affiliate

answer

In the context of successful business models for e-commerce, the _____ model involves charging fees to direct Internet website visitors to other companies' websites.

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Making cheerleaders

answer

"Loading the gun", or lining up ammunition in support of one's idea, is a phrase used by managers at General Electric that parallels which stage of building support for an idea?

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he appearance of unexpected opportunities as one follows a plan.

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The side street effect refers to:

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intermediary model.

answer

eBay brings buyers and sellers together and charges a commission for each sale. This type of business model is known as a(n):

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Initial public stock offerings

answer

_____ offer a way for a business to raise capital through federally registered and underwritten sales of shares in the company.

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formal control systems

answer

Entrepreneurs, in part because they are very busy, often fail to use _____, resulting in inadequate margins to support growth.

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Opportunity

answer

Which of the following key planning elements involves a competitive advantage that can be defended and should be focused on customer?

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rewarding risk taking.

answer

Successfully fostering and managing intrapreneurship involves:

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Access to shared services

answer

Which of the following is a benefit of business incubators?

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Successful companies do not always require a cutting-edge technology or an exciting new product

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Which of the following is true of entrepreneurial ventures?

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high innovation/high risk.

answer

In the context of the entrepreneurial strategy matrix, a novel product idea that involves a large financial investment would be described as:

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To ensure the success of the business

answer

Which of the following is a function of business plan?

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lower right

answer

Most small business ventures are located in (the) _____ quadrant(s) of the entrepreneurial strategy matrix.

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entrepreneurial venture

answer

A(n) _____ is a new business having growth and high profitability as primary objectives.

question

Someone outside the family and the business should help plan succession.

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According to Peter Drucker, which of the following is true with respect to managing a family business?

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New pharmaceutical drug

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In the context of the entrepreneurial strategy matrix, which of the following products is most likely to have the highest risks and returns?

question

To specify resources needed to translate the idea into a viable business

answer

Which of the following is the purpose of an opportunity analysis?

question

Revenues of $2-3 million

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Which of the following improves the odds of survival of a venture?

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clearing the investment.

answer

The first step toward building organizational support for an idea that involves explaining the idea and seeking approval to look for wider support is known as:

question

Business plan

answer

Which of the following devotes too much attention to financial projections while neglecting other important information that is important to investors?

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fill at least one key position with a nonfamily member

answer

In order for family-managed businesses to survive and prosper, management guru Peter Drucker advised them to:

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Getting the blessing

answer

Guaranteeing the project's technical and political feasibility, often with a formal presentation to higher management, refers to which of the following stages for building support for an idea?

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Succession planning

answer

The success of entrepreneurial venture is often jeopardized by the death of the founder. Which of the following is an important measure to minimize this problem?

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Business Buying And Selling Employee Stock Ownership Plan Initial Public Offering Sarbanes Oxley Act

Small Business Management: Launching and Growing Entrepreneurial Ventures CHAPTER 13 – Flashcards 25 terms

Alicia Bennett

25 terms

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Small Business Management: Launching and Growing Entrepreneurial Ventures CHAPTER 13 – Flashcards

question

harvesting (exiting)

answer

the process used by entrepreneurs and investors to reap the value of a business when they leave it

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business broker

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a professional who assists in the buying and selling of a business

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leveraged buyout (LBO)

answer

a purchase heavily financed with debt, where the future cash flows of the target company are expected to be sufficient to meet debt repayments

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bust-up LBO

answer

a leveraged buyout involving the purchase of a company with the intent of selling off its assets

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build-up LBO

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a leveraged buyout involving the purchase of a group of similar companies with the intent of making the firms into one larger company for eventual sale

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management buyout (MBO)

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a leveraged buyout in which the firm's top managers become significant shareholders in the acquired firm

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employee stock ownership plan (ESOP)

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a method by which a firm is sold either in part of in total to its employees

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seller financing

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financing in which the seller accepts a note from a buyer in lieu of cash in partial payment for a business

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double taxation

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taxation of income that occurs twice--first as corporate earning and then as stockholder dividends

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initial public offering (IPO)

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the first sale of shares of a company's stock to the public

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private equity recapitalization

answer

private investors provide financing to a business that allows an entrepreneur to cash out a portion while possibly continuing to operate the business

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lower employee morale

answer

uncertainties accompanying an impending sale of a business often lead to

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opportunity cost of funds

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the rate of return that could be earned on another investment of similar risk

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What is the value of her firm?

answer

Valerie is beginning to think of harvesting her company. Which question should be asked first?

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culture conflict

answer

Evangeline has sold her small boutique to a large retail chain but has agreed to stay on and manage the store. Evangeline should expect:

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negotiation skills

answer

Which best characterizes business valuation?

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Offer to finance the remaining 20% with payments.

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Steve wants to sell his business but the bank will not lend the buyer enough money. The buyer has 80% of the price. Steve should...

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poor performance

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the effects of the harvesting process include

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cash, stock

answer

Vasily is selling his business. As a harvesting owner, we would expect him to prefer _____ over _____.

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distributing the firm's cash flows

answer

He plans to retire soon, so Matt has decided to retain ownership for now without growing the business. He will invest excess cash that the business is generating for retirement. Which harvesting method is this?

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exiting a business

answer

Harvesting refers to

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Get advice from someone who has sold a business.

answer

Arthur's company is doing well but he has grown a bit tired of the daily grind. The idea of selling is appealing to him. What would you recommend Arthur do next?

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bust-up

answer

In earlier years, leveraged buyouts became synonymous with the ____ LBO.

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liquid currency

answer

Going public can be beneficial to a firm by helping it create a

question

LBO

answer

Marvin is planning to sell his company to his management team. Marvin will be financing part of the purchase. This type of arrangement is a form of:

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