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Legitimacy |
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4 levels- Ownership, Legal Right, Moral Right, Interest (no legitimacy) |
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Power |
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Ability to influence the decision (money, public opinion, political power, etc) |
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Urgency |
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Want to influence the decision. |
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4 business processes |
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Acquiring customers, acquiring financial capital, managing human resources, creating value. |
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Acquiring customers |
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product (customer), price (cost), promotion (communication), Place (convenience) |
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Acquiring financial capital |
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Debt, equity, financial impact (cost and risk) |
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managing human resources |
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hiring/firing, retaining the best employees. |
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Creating value |
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raw material from suppliers, |
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Sarbanes-Oxley Act |
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protect owners/investors |
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Critical Thinking Skills |
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(0)confused fact finder, (1) biased jumper, (2) perpetual analyzer, (3) pragmatic performer, (4) strategic revisioner |
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confused fact finder |
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looks for the only answer, doesn't seem to get it, quotes inappropriately, illogical/contradictory arguments, appears unable to read carefully, insists professors, textbooks, or other experts provide the correct answer even to open ended problems. 50% of first year college students. |
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biased jumper |
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jumps to conclusions, doesn't recognize own biases, accuses others of being bias, stacks up evidence for own position and ignores contradicting evidence, uses unsupported personal opinion as evidence, acknowledges multiple viewpoints but cannot adequately address a problem from viewpoint other than own. |
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perpetual analyzer |
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doesn't reach or adequately defend a solution, exhibits strong analysis skills, but appears to be wishy-washy, writes papers that are long and seem to ramble, doesnt stop analyzing, "wait what about this", "I can also look at it this way and.." |
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pragmatic performer |
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considers alternatives before reaching conclusions, incorporates others in the decision process, views tasks as finished when a solution is reached. |
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Strategic re-visioner |
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seeks continuous improvement, lifelong learning, anticipates change, thinks outside the box, works toward constructing knowledge over time. |
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revenue |
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sales, the top line, what customers pay |
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profit |
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net income, the bottom line, what owners receive after subtracting all business cost. |
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81st question |
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C |
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functions of an HR manager |
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strategic, associate advocate, administrative |
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strategic |
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20%=>60%, at the MGT table--collaborative, planning, measurement |
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associate advocate |
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30%=>30%, hr development, employee and labor relations, compensation and benefits, health safety and security, staffing. |
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administrative |
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50%=>10%, government reporting, payroll, osha reporting, legal complianace |
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employment at will doctrine (common law) |
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you can start and stop working someplace anytime for no reason |
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HR statutory laws |
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civil rights act, age discrimination act, equal employment opportunity act (affirmative action), americans with disabilities act |
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"at will" exceptions |
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public policy-protects employees from being fired for refusal to commit crimescontractual actions- protects employees who they believe have contracts or implied contractsbreach of good faith actions- employers are expected to hold to a standard of fairness and good faith dealings |
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Model Employee Termination Act (META) |
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requires employers to at least show "good cause" for terminating you in states that have adopted it. |
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sources of employee rights |
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statutory rights (government laws), collective bargaining rights (union contracts), enterprise rights (promises from the business) |
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alternative dispute resolution |
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hearing procedure-permits employees to be represented by an attorney or neutral partyombusman-a troubleshooter investigates and helps achieve equitable settlements for employee complaintspeer review panel- fellow workers in the same job family and at a grade level equal to or higher than the employee with a grievance |
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size of the U.S. GDP |
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$14 trillion |
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U.S market |
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300,000,000 (300 million) |
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world market |
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7,000,000,000 (7 billion) |
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how much profit do companies |
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3% |
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sole proprietorship advantages |
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easy to start, simple tax rules (business income=personal income) |
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sole proprietorship disadvantages |
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unlimited liability, limited resources available, limited growth potential. |
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partnerships advantages |
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more resources available, can share the load, longer survival, no special taxes |
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partnerships disadvantages |
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unlimited liability in some forms of partnerships, division of profit, potential for disagreements, exit conditions must be spelled out in partnership agreement. |
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general partnership |
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each general partner manages the firm, each has unlimited liability. |
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limited partnership |
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at least one general partner with unlimited liability, rest are passive investors with limited liability |
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corporation advantages |
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limited liability, greater acces to $, separation of ownership from management, ease of ownership transfer |
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corporation disadvantages |
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more costly to form, must keep accurate records, potential for conflicts with BOD, taxed twice if dividends given, separation of ownership from management |
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Milton Friedman |
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strategic, owner profit |
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Edward Freeman |
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multi fiduciary, look out for all stakeholders |
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Blanchard & Peale's ethical check questions |
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Is it legal? Does it seem fair? How will it make me feel about myself? |
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owners |
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equity finance, stockholders, shareholders, investors |
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employees |
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not appointed by board, receive health benefits |
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customers |
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B2B & B2C, always look from the perspective of company |
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suppliers |
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raw material inputs and debt capital. No health benefits |
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society |
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environmental concerns, potential employees |
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income statement |
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sales-expenses=profit |
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cash statement |
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cash from operations +/- investments +/- financing |
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balance sheet |
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assets=liabilities+equitywhat you own=owed others +owed to yourself |
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contract law requirements |
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voluntary offer and acceptance, legal, competency, consideration |
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fiduciary must follow these obligations |
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loyalty, obedience, notification, accounting, reasonable care |
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principal has obligations |
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indemnification, reimbursement |
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equity |
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issuing shares of ownership |
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debt |
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borrowing money |
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who gets paid back first... and then |
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secured debt, unsecured debt, preferred stock, common stock. |
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positives of debt |
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tax deductibility of interest, debt does not dilute control of the firm, lower cost of funds |
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disadvantages of debt |
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increases probability of financial distress, uses up potential debt capacity |
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problems with agency relationship |
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excessive perks, shirking, agents act in own best interest. |
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creating value decisions |
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how many factories, how much capacity at each, low cost or customizable products, what will we make and what will we buy from others, how will we measure quality, how much inventory, skilled or unskilled |
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