Business Structures, Management, and Operations
Key Business Structures and Concepts
Syndicates: Temporary associations of individuals or firms organized to perform a specific task that requires a large amount of capital.
Mergers: The purchase of one corporation by another.
Types of Industry: Distribution, service, production.
Business Planning and Franchising
Business plan: A carefully constructed document for the person starting a business, covering communication, management, and planning.
Franchise: A license to operate an individually owned business as though it were part of a chain of outlets or stores.
- Franchisor: An individual or organization granting a franchise.
- Franchisee: A person or organization purchasing a franchise.
Management Functions and Planning
Management functions (POLMC):
- Planning: Establishing organizational goals and deciding how to accomplish them.
- Organizing: Grouping resources and activities to accomplish some end result efficiently and effectively.
- Leading: Influencing people to work toward a common goal.
- Motivating: Influencing people to work in the best interests of an organization.
- Controlling: Evaluating and regulating ongoing activities to ensure goals are achieved.
Planning Levels
- Strategic: An organization’s broadest plan, developed as a guide for major policy setting and decision-making.
- Tactical: A smaller-scale plan developed to implement a strategy.
- Operational: A plan designed to implement tactical plans.
- Contingency: Outlines alternative courses of action if an organization’s other plans are disrupted or become ineffective.
Analysis and Improvement
- SWOT: Identification and evaluation of a firm’s strengths, weaknesses, opportunities, and threats.
- Benchmarking: Evaluating the products, processes, or management practices of another organization that is superior in some way to improve quality.
Key Skills for Successful Managers
- Conceptual: Ability to think in abstract terms.
- Analytic: Identify problems correctly, generate reasonable alternatives, and select the best alternatives to solve problems.
- Interpersonal: Deal effectively with other people.
- Technical: Specific skills needed to accomplish a specialized activity.
- Communication: Ability to speak, listen, and write effectively.
Leadership and Organizational Structure
Leadership defined: The ability to influence others (autocratic, participative, and entrepreneurial).
Organization chart: A diagram that represents the positions and relationships within an organization.
Chain of command: The line of authority that extends from the highest to the lowest levels of an organization.
Span of management: The number of workers who report directly to one manager.
Delegation: Assigning part of a manager’s work and power to other workers.
Job Design
- Job rotation: The systematic shifting of employees from one job to another.
- Job enlargement: Expanding a worker’s assignments to include additional but similar tasks.
Committees and Task Forces
- Ad hoc committee: Created for a specific short-term purpose.
- Standing committee: A relatively permanent committee charged with performing some recurring task.
- Task force: A committee established to investigate a major problem or pending decision.
Operations Management
Utility: The ability of a good or service to satisfy a human need.
Design Planning: The development of a plan for converting an idea into an actual product or service.
Product line: A group of similar products that differ only in relatively minor characteristics.
Capacity: The amount of products or services that an organization can produce in a given time.
Plant Layout
- Process Layout: Used when different operations are required for creating small batches of different products or working on different parts of a product.
- Product Layout (Assembly Line): Used when all products undergo the same operations in the same sequence.
- Fixed-Position Layout: Used when a very large product is produced.
Inventory and Quality
Inventory Control: The process of managing inventories to minimize inventory costs, including both holding costs and potential stock-out costs.
Quality Control: The process of ensuring that goods and services are produced in accordance with design specifications.