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IUPUI BUS X100 FINAL EXAM 200 QUESTIONS &
DETAILED ANSWERS WITH RATIONALES ALREADY
GRADED A+
Sole Proprietorship - CORRECT ANSWER >>> business owned and operated by one person
(advantage: no double taxation)
partnership - CORRECT ANSWER >>> a voluntary agreement under which two or more
people act as co-owners of a business for profit
corporation - CORRECT ANSWER >>> a legal entity that is separate and distinct from its
owners (shields the owners from personal liability) (advantage: stock)
General Partnership - CORRECT ANSWER >>> partnership in which partners share equally
in both responsibility and liability
limited partnership - CORRECT ANSWER >>> A partnership with one or more general
partners and one or more limited partners (limited partners do less and have less liability).
S corporation - CORRECT ANSWER >>> A unique government creation that looks like a
corporation but is taxed like sole proprietorships and partnerships
C Corporation - CORRECT ANSWER >>> The most common type of corporation, which is a
legal business entity that offers limited liability (separate from the owners) to all of its owners, who are called stockholders
corporation advantages - CORRECT ANSWER >>> limited liability, ease of transfer of
ownership, perpetual life, external sources of funds, expansion potential, easier to separate management from ownership
Corporation Disadvantages - CORRECT ANSWER >>> - double taxation
- cost of setup and report filing (paperwork!)
- difficulties in terminating corporation
- possible conflicts between management and board
- double taxation (c-corp only)
Limited Liability Company (LLC) - CORRECT ANSWER >>> a form of business ownership
that offers both limited liability to its owners and flexible tax treatment
- protects like a corporation
- taxed like a partnership (or a corp)
- no eligibility requirements for investments
- fewer administrative tasks and less record keeping than a corp
LLC corporation characteristics - CORRECT ANSWER >>> - limited personal liablity
- corporation taxation
- few ownership limitations
- stock
LLC partnership characteristics - CORRECT ANSWER >>> - no stock
- no articles of organization
- fewer reporting requirements
corporations advantages - CORRECT ANSWER >>> Limited liability
Ability to raise more money for investment Size Perpetual life Ease of ownership change Ease of attracting talented employees Separation of ownership from management
domestic corporation - CORRECT ANSWER >>> a corporation in the state in which it is
incorporated
foreign corporation - CORRECT ANSWER >>> a corporation in any state in which it does
business except the one in which it is incorporated
Alien Corporation - CORRECT ANSWER >>> a corporation chartered by a foreign government
and conducting business in the United States
stock - CORRECT ANSWER >>> A share of ownership in a corporation.
stockholder (shareholder) - CORRECT ANSWER >>> An owner of one or more shares of a
corporation
private company (closed corporation) - CORRECT ANSWER >>> a corporation that is held by
a limited number of shareholders and is not publicly traded.
public company (open corporation) - CORRECT ANSWER >>> A company that sells its stock
to the general public.
nonprofit corporation - CORRECT ANSWER >>> An organization that does not pay taxes and
does not exist to make a profit.
multinational corporation - CORRECT ANSWER >>> a company that is heavily engaged in
international trade, beyond exporting and importing
preferred stock - CORRECT ANSWER >>> A special type of stock whose owners, though not
generally having a say in running the company, have a claim to profits before other stockholders do.
common stock - CORRECT ANSWER >>> the most basic form of ownership, including voting
rights on major issues, in a company
double taxation - CORRECT ANSWER >>> corporate income is taxed twice. a corporation
pays income taxes on its earnings, and when dividends are distributed to stockholders, the stockholders pay taxes a second time on the corporate dividends they receive
largest percentage of US businesses - CORRECT ANSWER >>> sole proprietorships are the
largest percentage of total receipts by businesses (US) -^ CORRECT ANSWER^ >>> corporations
create the
Franchise - CORRECT ANSWER >>> A business established or operated under an
authorization to sell or distribute a company's goods or services in a particular area
horizontal merger (or acquisition) - CORRECT ANSWER >>> joins firms in the same industry
that wish to diversify, cut costs, or offer expanded product lines (eg if coca-cola and pepsi merged)
vertical merger (or acquisition) - CORRECT ANSWER >>> combines firms at different levels in
the production and marketing process to ensure adequate flow of raw materials and supplies or increase distribution (ie if a textile company merged with a cotton yarn manufactuer)
conglomerate merger (or acquisition) - CORRECT ANSWER >>> combines unrelated firms to
diversify, spur sales growth or spend a cash surplus (ie ebay and paypal, unrelated companies, but allows ebay users to pay in a different way)
line organization - CORRECT ANSWER >>> a chain-of-command system that establishes a
clear line of authority flowing from the top down
line-and-staff organization - CORRECT ANSWER >>> an organization system that has a clear
chain of command but that also includes functional groups of people who provide advice and specialized services (ie marketing researchers, legal advisors, and HR)
line/line and staff inflexibility - CORRECT ANSWER >>> these organizational structures may
suffer from inflexiblity. both allow for established lines of authority and communication and work well in organizations with stable environments and slow product development (ie household appliances), but today's economy is dominated by high-growth industries (ie aerospace).
Matrix Organization - CORRECT ANSWER >>> An organization in which specialists from
different parts of the organization are brought together to work on specific projects but still remain part of a line-and-staff structure.
matrix organization advantages - CORRECT ANSWER >>> 1. Mangers have flexibility in
assigning people to projects
- Encourages inter-organizational cooperation and teamwork
- It can produce creative solutions to product development problems 4. It makes efficient use of organizational resources
matrix organization disadvantages - CORRECT ANSWER >>> 1. Costly and complex
- Confuse employees about where their loyalty belongs-with the project manager or with their functional unit 3.It requires good interpersonal skills as well as cooperative employees and mangers to avoid communication problems
- It may only be a temporary solution to a long-term problem
matrix organization challenges - CORRECT ANSWER >>> violates traditional managerial
principles. Normally a person can't work effectively for two bosses. Project teams are also not permanent, there is little chance for cross-functional learning because teams often work together so briefly.
Functional Departmentalization - CORRECT ANSWER >>> organizing work and workers
into separate units responsible for particular business functions or areas of expertise
Product Departmentalization - CORRECT ANSWER >>> the organization of jobs in relation to
the products of the firm (ie marketing manager, then sub categories of trade books, textbooks, tech books)
Customer Departmentalization - CORRECT ANSWER >>> the arrangement of jobs around
the needs of various types of customers (ie consumers, manufacturers, institutions)
- Delayed decision making
- Less responsiveness to customers
centralized decision making - CORRECT ANSWER >>> occurs when key decisions are made by
top management
decentralized decision making - CORRECT ANSWER >>> An organizational structure in which
decision-making authority is delegated to lower-level managers more familiar with local conditions than headquarters management could be.
with top management - CORRECT ANSWER >>> centralization concentrates decisionmaking
authority where?
Lower-level managers - CORRECT ANSWER >>> decentralization requires for decisionmaking
responsibility and authority to be dispersed to who?
empowerment - CORRECT ANSWER >>> giving frontline workers the responsibility,
authority, freedom, training, and equipment they need to respond quickly to customer requests
delegate - CORRECT ANSWER >>> To divide up, especially responsibilities
Functional Team Structure - CORRECT ANSWER >>> No cross-functional integration;
employees remain within functional departments. (ie marketing stays on the marketing team)
self-managed teams - CORRECT ANSWER >>> groups of employees with the authority and
skills to manage themselves
cross-functional team - CORRECT ANSWER >>> a work team composed of individuals from
various functional specialties (ie marketing, finance, hr)
chain of command - CORRECT ANSWER >>> the line of authority that moves from the top
of a hierarchy to the lowest level
organizational (corporate) culture - CORRECT ANSWER >>> widely shared values within an
organization that provide unity and cooperation to achieve common goals
restructuring - CORRECT ANSWER >>> redesigning an organization so that it can more
effectively and efficiently serve its customers
centralized - CORRECT ANSWER >>> when it is important to have reliability (ie
compliance w/laws) or efficiency (ie replication of a task for different operating depts) then use _______ type of decision making
Decentralized - CORRECT ANSWER >>> when it is important to have responsiveness to the
customer use ______ type of decision making
centralized decision making advantages - CORRECT ANSWER >>> Retailers can reduce
overhead, i.e. fewer managers Coordinating efforts, it can achieve lower prices from suppliers Opportunity to have the best people making decisions
decentralized decision making disadvantages - CORRECT ANSWER >>> - Makes it more
difficult for staff functions to be executed
- if needed, take corrective action
strategic planning - CORRECT ANSWER >>> the process of determining the major goals of
the organization and the policies and strategies for obtaining and using resources to achieve those goals
tactical planning - CORRECT ANSWER >>> the process of developing detailed, short-term
statements about what is to be done, who is to do it, and how it is to be done
operational planning - CORRECT ANSWER >>> the process of setting work standards and
schedules necessary to implement the company's tactical objectives
contingency planning - CORRECT ANSWER >>> the process of preparing alternative courses
of action that may be used if the primary plans don't achieve the organization's objectives
planning process steps - CORRECT ANSWER >>> 1. Define objectives
- Compare current to objectives
- Compare future alternatives
- Analyze alternatives/make plan
- Implement and evaluate
top - CORRECT ANSWER >>> ____ management is focused on developing missing and long
term goals and strategic planning.
middle - CORRECT ANSWER >>> _____management is focused on developing strategic,
tactical, and operationsal plans for business units, conveying the importance of goals to first and front line-monitor and control.
First line - CORRECT ANSWER >>> ____management and non managements implements the
plans to achieve organizational goals.
top management - CORRECT ANSWER >>> Most important skill: conceptual.
middle management - CORRECT ANSWER >>> Technical, HR, and conceptual skills are
EQUALLY important
First line management - CORRECT ANSWER >>> Most important skill: technical.
president, vice president - CORRECT ANSWER >>> Top management positions
environmental scanning - CORRECT ANSWER >>> the process of collecting information
about forces in the marketing environment
PESTLE analysis - CORRECT ANSWER >>> Analysis of the external political, economic, social,
technological, legal and environmental factors affecting a business
Environmental Scanning PESTLE Analysis - CORRECT ANSWER >>> Process of systematically
surveying and gathering data from internal and external sources. Focus on what's currently present or taking place in the world, not what "might" happen
SWOT analysis - CORRECT ANSWER >>> a planning tool used to analyze an organization's
strengths, weaknesses, opportunities, and threats, that will affect the company's ability to achieve its goals.
free-rein leadership - CORRECT ANSWER >>> managers set objectives and employees are
free to do whatever is appropriate to accomplish those objectives
mission - CORRECT ANSWER >>> described in terms of who the organization is now and who
it serves
mission statement - CORRECT ANSWER >>> defines the company's business, its objectives
and its approach to reach thos objectives
vision - CORRECT ANSWER >>> an encompassing explanation of why the organization
exists and where it's trying to head, long term goals
company values - CORRECT ANSWER >>> principles and practices that a business feels are
important
marketing slogan - CORRECT ANSWER >>> short phrases used in advertising campaigns to
generate publicity and unify a company's marketing strategy.
humans - CORRECT ANSWER >>> the most valuable resource in any organization is
Human Resource Management - CORRECT ANSWER >>> the process of determining
human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organizational goals
acquisition (HR) - CORRECT ANSWER >>> planning, job analysis, recruiting, selection,
orientation
development (HR) - CORRECT ANSWER >>> training and development, performance
appraisal
maintenance (HR) - CORRECT ANSWER >>> compensation, benefits, employee relations
HR specialist - CORRECT ANSWER >>> A person who has in-depth knowledge and expertise
in a limited area of HR.
HR Generalist - CORRECT ANSWER >>> An individual who is able to perform multiple
diversified human resources functions.
Civil Rights Act of 1964 - CORRECT ANSWER >>> protection against discrimination based
on race, color, religion, sex, and national origin
Pregnancy Discrimination Act - CORRECT ANSWER >>> U.S. act that prohibits discrimination
on the basis of pregnancy, childbirth, or related medical conditions.
age discrimination act - CORRECT ANSWER >>> prohibits discrimination against applicants
and employees 40 years of age or older in hiring, promotion, termination, and other employment practices.
Equal Pay Act of 1963 - CORRECT ANSWER >>> Requires that men and women be paid the
same amount for doing the same job
Americans with Disabilities Act - CORRECT ANSWER >>> prohibits discrimination against the
disabled
positive reinforcement - CORRECT ANSWER >>> one of the most often used motivation
techniques because the focus is purely positive-REWARD when a DESIRED behavior is exhibited
equity theory - CORRECT ANSWER >>> looks at how employees' perceptions of fairness
affect their willingness to perform. It assumes employees ask, "If i do a good job, will it be worth it?"
Expectancy Theory - CORRECT ANSWER >>> The amount of effort employees exert on a
specific task depends on their expectations of the outcome
production - CORRECT ANSWER >>> the creation of goods and services through
transforming factors of production
production management - CORRECT ANSWER >>> All the activities managers do to help
firms create goods.
Operations Management - CORRECT ANSWER >>> The management of systems or
processes that create goods and/or provide services
product - CORRECT ANSWER >>> the goods and services combination the company offers to
the target market
Form Utility - CORRECT ANSWER >>> the value producers add to materials in the creation of
finished goods and services
process manufacturing - CORRECT ANSWER >>> that part of the production process that
physically or chemically changes materials
assembly process - CORRECT ANSWER >>> that part of the production process that puts
together components
computer-aided design (CAD) - CORRECT ANSWER >>> the use of computers in the design of
products
computer-aided manufacturing (CAM) - CORRECT ANSWER >>> Using computers to operate
and control machines and processes to manufacture a product.
lean manufacturing - CORRECT ANSWER >>> the production of goods using less of
everything compared to mass production
mass customization - CORRECT ANSWER >>> tailoring products to meet the needs of
individual customers
facility location - CORRECT ANSWER >>> the process of selecting a geographic location for a
company's operations
quality - CORRECT ANSWER >>> consistently producing what the customer wants while
reducing errors before and after delivery to the customer
Six Sigma Quality - CORRECT ANSWER >>> a quality measure that allows only 3.4 defects per
million opportunities
ISO 9001 - CORRECT ANSWER >>> the common name given to quality management and
assurance standards
