| A | B |
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| Douglas McGregor’s Theory X | focuses on 3 main assumptions regarding employee motivation and behavior |
| Theory X’s 3 Assumptions | Assumes that Employees don’t like working and that money is the only motivating factor and people do not possess ambition and only worry about themselves |
| McGregor’s Theory X management style | Dictatorial manner using coercion and strict control believing the only way to control employees is through threats assuming employees only care about money and not ambition |
| Douglas McGregor’s Theory Y | Provides a positive view of employees assuming employees can be self-motivated and enjoy work |
| McGregor’s Theory Y management style | Managers do not need to be strict and controlling but will organize and arrange , allowing for decision making employees assuming that employees can control themselves and will accept and search for responsibility and have a desire for success at work |
| Total quality management | A management method that strive for better internal processes and increased customer satisfaction |
| Principles of total quality management | Managers believe quality is a long-term investment and quality levels should be managed and if problems arise , they are rooted in the process and not in the employees |
| Peter Drucker | “The Practice of Management” written in 1954 |
| MBO | Management by objectives , a management module focusing on creation of objectives or goals |
| Key component of MBO | Both managers and employees create the objectives and the employees are more motivated to achieve them because they took part in the process |
| Advantage of MBO | Produces better relationships between management and employees and improves employee commitment |
| Disadvantage of MBO | Focuses on end results more than on forming comprehensive plans making it more difficult for employees to reach results |
| Activity-based management | Managers examine activities to evaluate costs and value added and set goals to eliminate or improve activities that are not as valuable to the company |
| Functions of management | POLC, Planning , Organizing , Leading , Controlling |
| Henri Fayol | Created list of five basic management functions , four that are identified today |
| Planning | Creating a plan of action to accomplish a goal for the organization that involves a strategic plan, tactical plan and operational plan |
| Organizing | A critical step which includes resource distribution as well as organizing and delegating employees in the best way to carry out the plan |
| Leading | Managers connects with the employees personally |
| Controlling | Occurs after the plan has been implemented |
| Strategic plan | Deals with the company as a whole and is long term and might be related to the objectives and vision for the business |
| Tactical plan | Outlines the tactics the company will utilize to fulfill the strategic plan |
| Operational plan | Deals with the daily running of the company and short-term objectives are highlighted |
| Organizational structure | “Dictates the roles, power, responsibility and information distribution” |
| Controlling | Process by which a manager evaluates the results of a plan to ascertain whether it has met his goals |
| Levels of management | Top-level management middle-level management and low-level management |
| Top level managers | Managers in charge of running the organization as a whole and making the major decisions for the company overseeing everything about the company and controlling it , having the most experience with skills in leadership , delegation and making major decisions |
| Examples of Top Level managers | CEO and president |
| Middle-level managers | Managers that bring organizational plans to fruition and are delegated some authority and act as liaison between top-level and low-level management often having problem solving and team building skills |
| Examples of middle-level managers | Department manager or general manager of a department store |
| Low-level management | Managers spend their time leading , directing , and supervising employees More experience than average employees and good at dealing with people Employees go to low-level managers with problems |
| Examples of Low-level managers | Foremen and supervisors |
| Leadership Styles | Authoritarian, democratic, paternalistic, laissez-faire |
| Authoritarian leadership style | Aka autocratic , the rules and regulations are strict and the manager keeps firm control Relationships are purely professional and there is a lot of supervision |
| Democratic Leadership Style | Aka participative , popular leadership style Manager doesn’t make all the decisions, but shares with the group and there is discussion and debate Employees are encouraged to provide ideas Manager still makes the ultimate decisions Employees happy |
| Paternalistic leadership style | Manager acts almost as a parent and the employees as children who trust and are loyal to the leader , following the managers lead |
| Laissez-faire Leadership style | AKA delegative , management style where workers make all the decisions without any managerial control which can be problematic if the workers cease to be productive due to lack of accountability |
| SWOT analysis | “Refers to strengths , weaknesses , opportunities and threats A powerful tool that allows managers to evaluate both internal factors and the outside environment with the goal of making the best business decisions and a chart for analysis is required” |
| Financing businesses utilize | “Commercial paper , a money market security long-term loan to finance their business and stocks” |
| FV | Future value |
| PV | Present Value |
| PV = FV/(1+r) | “Formula for Present Value, can also be used to calculate missing values” |
| r | Interest rate |
| Sales budget | “A budget that shows the expected sales for a period of time, shown in units and dollars and is often categorized by product categories or geographic location” |
| Production budget | Typically seen in ‘push’ manufacturing system and shows the amount of products that should be made |
| Sales forecast and finished goods inventory | Used to calculate a production budget |
| Cash budget | Covers the inflows and outflows of cash that are expected |
| 4 sections of a cash budget | “Receipts , financing , disbursements , and cash surplus or deficit” |
| Capital expenditure budget | “Covers investments in long-term projects and capital assets , generally for a time span of 3-10 years and may cover investments in buildings, land, plants and equipment” |
| Master budget | “Encompasses all of the budgets of a company to give an entire view of the business as a whole, allowing for comprehensive financial planning, with two major components, the operating budget and the financial budget” |
| Operating budget | “Includes the sales budget, overhead budget, selling and administrative expenses budget and cost of goods manufactured budget Created first because the financial budget will depend on its numbers” |
| Financial budget | “Contains a schedule of expected cash receipts from customers, a schedule of expected cash payments of suppliers, the cash budget, a budgeted income statement and a budgeted balance sheet” |
| Zero-base budget | “Managers first decide on the outcome they want, then create the expenditures to make that happen” |
| Flexible budgeting | Varying sales levels are put into the model and the planned expense levels change accordingly |
| Static budget | The expenditures do not change in response to sales levels |
| Top-down budgeting | Top management makes the budget for the firm as a whole and decides on all the allocations |
| Bottom-up budgeting | The lower level managers have a chance to participate and help set their own budget needs |
| Company Budget | “Includes zero-base budget, flexible budgeting, static budget, top-down budgeting, bottom-up budgeting to make up the company budget” |
| Cost-benefit analysis | An important process to complete when making decisions in business, company will decide on different options available and run a cost-benefit analysis on each |
| Time value of money | Should be applied so value are accurate |
| Net benefit | Also known as the cost |
| Production Methods | Continuous processes and batch operations |
| Continuous processes | Production system is a method of production in which products are continually produced Less flexibility with this type of production and can cost a lot of money to set up but the cost per item can be lower as there is less need for labor but generally a lot of quality control measures |
| Example of Continuous process production system | Car or paper product production |
| Batch operations | “A production method, similar items are made together in batches proceeding together through each stage of production and then all move to the next stage” |
| Example of Batch operations production method | Bakery production of cookies or pastries |
| Inventory Systems | “Traditional, JIT” |
| Traditional inventory system | Involves ordering materials and storing them until they are needed |
| JIT Inventory system | An inventory system in which materials come in just as they are needed for production in order to keep inventory as low as possible |
| Functional Structures | “Organizes the employees, tasks and supervision in the company by function Examples, company with marketing department, production dept, etc” |
| Team structure | Where people with different abilities are put together to build teams that can achieve more than the individuals alone |
| Adaptive structure | Multifunctional teams instead of a rigid hierarchy |
| Network structure | Business functions that can be accomplished with less cost and/or better quality by others are outsourced |
| Matrix structure | “Employees are grouped by function and product for maximum efficiency Team structure, example, vehicle company breaking sales team into car and boat sales” |
| Product-based structure | “Company is organized by product Example, grocery store will have produce, meat and dairy section” |
| Centralized structures | One individual makes decisions for the company allowing for quicker decisions and efficiency |
| Decentralized structures | A team and the decisions are made at different levels which can be slower by also provide more insight and ideas to the organization |
| Formal structure | The exact chain of leadership and the formal hierarchy starting with the owner or CEO and working down to the chain of command with clear indications of who is in charge |
| Informal structure | Often centered on project groups or even on friendship and more knowledgeable people are more natural leaders |
| Staffing Process | Involves the planning stage and the staffing procedures |
| Human resources audits | “The process in which all the functions, policies and characteristics of a company’s human resources department are examined to look for problems, find best practices and increase efficacy and efficiency” |
| Job description | Specifications on what needs to be done and who could do it |
| Succession planning | The process of looking at existing employees and planning and preparing them to move up in the company to leadership positions |
| Staffing procedures | “Recruit potential employees, send out job advertisements or contact a recruiting agency” |
| Procedures | Policies put in place so this is as smooth as possible for both the employee and company |
| Diversity | People from different backgrounds having different ideas and contributing in many positive ways |
| Cross-training | When employees are trained to perform functions outside of the typical functions of their job |
| Abraham Maslow | Created Maslow’s hierarchy of needs |
| Maslow’s Hierarchy of needs | “A five-tiered approach to needs and motivation, pyramid shaped placing needs at the bottom and followed by security, social needs, esteem and self-actualization” |
| Maslow’s basic needs | “Must be attained before higher levels are reached, the desire for physiological needs to be met Example, food, water, air and sleep” |
| Maslow’s security | Important needs such as the desire for a safe home and medical care or a secure job |
| Maslow’s social needs | “Love, affection and belonging” |
| Maslow’s esteem needs | Making a person feel worth and a sense of accomplishment and recognition from others |
| Maslow’s self-actualization | “Top tier of the hierarchy, where people have personal growth and are reaching their fullest potential not worrying too much about others’ opinions” |
| Collective bargaining | “Occurs when a company’s management engages in talks with representatives of a workforce to discuss aspects of the business and its labor including working conditions, pay, hours, benefits and more Example, trade union” |
| Conflict resolution strategies | Utilized when conflict arises in the workplace and the efficiency and efficacy have been impacted |
| Groupthink | A negative behavior that occurs when the people in a group want harmony so much that they minimize opposing viewpoints |
| Group dynamics | How groups act is an area of study |
| Group cohesion | A positive group setting where people feel good about each other |
| Corporate culture | “Encompasses many facets, including values, traditions and customs” |
| Very polite culture | People try to be very kind to each other |
| Formal culture | Where people dress formally and address each other in a formal manner |
| Subcultures | Formed by shared values and interests |
| Team-building exercising | Measure employers take to promote teamwork and might involve games or fun activities |
| Influences on employee morale | “Fairly compensated employees, not overworked, flexibility that promotes motivation, mutual respect, and positive working conditions” |
| Pension | Provides a fixed sum on a regular basis to an employee after retirement |
| ESOP | “Employee stock ownership plan, type of retirement plan that the company puts stock or money for stock into an account on behalf of the employees” |
| 401(k) plans | “Tax advantageous plans that allow people to defer their income taxes, both in earnings and contributions” |
| Individual retirement | Account that provides tax advantages |
| PTO | “Paid time off provided by employers in the form of vacation, sick time and holidays” |
| Worker’s compensation | Insurance that companies pay for to protect themselves and their employees covering medical expenses and partial salary losses to employees who are hurt while on the job |
| Unemployment insurance | Provides benefits to workers who lose their jobs without fault of their own and usually programs are run by the state |
| ADA | “Americans with Disabilities Act, protects those with physical and mental disabilities from discrimination as well as provides many other protections” |
| EEOC | “Equal Employment Opportunity Commission , forbids discrimination against an employee or job applicant due to color, race, gender, religion, age, disability, national origin, or genetic information” |
| ADEA | “Age Discrimination in Employment Act, similar to EEOC but forbids discrimination based on a person’s age and strict penalties can be enforced for any parties violating the above laws and acts” |
| FMLA | Family and Medical Leave Act allows employees who are eligible to take up to 12 weeks per year |
| FICA | Federal Insurance Contributions Act is a law in the US that requires money be deducted from income to fund Medicare and social security Social security portion has a maximum while the Medicare part does not |
| FICA Deductions | 124% deducted from income for Social Security, 29% deducted from FICA for Medicare Employers pay for ½ of FICA amount on employees Add 9% Medicare tax for employees making over $200K |
| COBRA | “Consolidated Omnibus Budget Reconciliation Act, allows employees and their families to continue with group health coverage when it would otherwise be terminated Companies with 20 or more employees must follow COBRA laws and can be extended for 18-36 months” |
| HIPAA | Health Insurance Portability and Accountability Act provides broad protection for American workers concerning the privacy of health insurance giving patients and other individuals’ broad protections for their identifiable health information and limits on who can see medical information |
| OSHA | “Occupational Safety and Health Act of 1970, implemented to prevent accidents to work by requiring safe working conditions OSHA (administration not act) was formed by the act and gives enforcement capabilities to regulate and maintain workplace safety” |
| Criminal law | Involves someone accused of a crime |
| Civil case | A dispute between two parties |
| Case law | Refers to the verdicts of courts that can now be used in new court cases to help plead cases and define law |
| Statutory law | Refers to codes and statutes the legislative bodies have enacted |
| Administrative law | Refers to the procedures that administrative agencies create |
| Tort law | Refers to civil claims that one party brings against another |
| Lawsuit | “Occurs when one party brings a case against another party, no prison” |
| Compensatory damages | Compensate the plaintiff for the money he may have lost as well as pain and suffering |
| Punitive damages | “Like a punishment for being malicious, reckless or grossly negligent” |
| Class action lawsuit | Parties come together to make a lawsuit as a group |
| Court systems | “Federal, state, county, circuit, municipal, supreme, US Supreme Court” |
| State court systems | Consist of many different tiers |
| State trial courts | “Consist of county, circuit, city or municipal courts” |
| Trial courts | “May have limited jurisdiction, hearing lower criminal charges” |
| Specialized courts | “Family courts, juvenile courts, state supreme courts” |
| US Supreme Court | Highest court which shapes many laws and hears a small number of very important cases |
| Due process | Refers to a person’s right to have the state respect his legal rights |
| Liability | “Refers to a party’s legal responsibility for behaviors, actions or inactions” |
| Damages | Refer to the money that may be given to the plaintiff from the defendant during a lawsuit |
| Plaintiff | “A civil lawsuit has the responsibility of providing burden of proof, which means he must bring a ‘preponderance of evidence’ or ‘weight of evidence’” |
| Burden of proof | Refers to a prosecutor needing to show that the defendant is guilty “beyond a reasonable doubt” |
| Negligence | When a party does not show a reasonable amount of care |
| Corporate law | “Refers to the laws surrounding how corporations are formed, dissolved and run” |
| Labor laws | “Deal with many aspects of the relationship between employer and employee such as working conditions, wages, and discrimination” |
| Tax law | Deals with the taxes that businesses owe |
| Contract laws | Govern the contracts that many business enter into on a regular basis |
| Property law | “Governs how property is owned, commonly seen in business” |
| Antitrust law | Strives to keep a competitive marketplace by not allowing mergers that would form monopolies and other antitrust activities |
| UCC | “Uniform Commercial Code , helps make transactions easier between states by helping make uniformity in commercial laws” |
| FTC | “Federal Trade Commission, formed in 1914, protects consumers by stopping businesses from performing deceptive, unfair, and anticompetitive practices” |
| SEC | “US Securities and Exchange Commission, plays a large role in protecting investors, maintaining the integrity of the market and aiding in the formatting of capital” |
| Sarbanes-Oxley Act | Signed by George W Bush in 2002 and increased corporate responsibility and financial disclosure while fighting accounting and corporate fraud |
| Bankruptcy Reform Act of 2005 | Created to lower Bankruptcy Code filings by requiring parties filing to get financial counseling first and undergo a “means test” |
| PCAOB | “Public Company Accounting Oversight Board, oversees auditing professionals and was created in an effort to prevent corporate scandals at a time when such scandals were becoming common” |
| FDA | Food and Drug Administration |
| USDA | Department of Agriculture |
| FSIS | Food Safety and Inspection Service |
| Federal Warranty Law | Covers written and implied warranties |
| FTC | Federal Trade Commission |
| TILA | Truth in Lending Act |
| FCRA | Fair Credit Reporting Act |
| FDCPA | Fair Debt Collection Practices Act |
| Federal Trade Commission | A national agency that protects consumers by taking complaints about unfair practices and stopping forbidden acts such as anticompetitive mergers |
| BBB | Better Business Bureau |
| Consumer Product Safety Act and Consumer Product Safety Improvement act | “(1972) address safety in toys, chemicals in products and more” |
| US Food and Drug Administrations | (FDA) requires testing on drugs to ensure their safety and efficacy |
| Environmental Protection Agency | Strives to safeguard the environment and formed in 1970 |
| Conflicts of interest | “Occurs when a person has two adversary interests, one of which might not be best for his business” |
| Illegal insider trading | Occurs when someone makes a trade while having “insider” information that makes it unfair to other investors |
| Social responsibility | “Businesses have an obligation to customers, employees, investors and society in general” |
