POB Chapter 7

• Business Principles - include vision, structure of the business, chain of command, roles of employees, and accountability
• Mission Statement - a sentence describing the purpose of the company and why it exists
• Goal - something to be achieved in a specific period of time
• short-term goal - one that is accomplished in a short period of time, generally less than a year
• Long-term Goal - one that takes more than a year to reach
• policy - outlines how company decisions are made
• procedure - describes how tasks should be completed
• bribe - an exchange of something of value for special consideration when doing business
• organizational structure - identifies the hierarchy of the employees within the business
• Two common organizational structures are functional and matrix
• Functional Organizational Structure - workers that share the same skill set and expertise are brought together for a specific function
• Matrix Organizational Structure - Workers with various skills and experience are brought together to solve a specific problem or task
• task force or cross-functional team - type of group including many different perspectives
• chain of command (Line of Authority) - the authority structure in a company from highest to the lowest levels
• organization chart is a diagram that shows the structure of an organization
• organizational chart is a diagram showing how each employee position within the company interacts with others in the chain of command.
• Centralized organization. All of the authority within a business rests with top management.
• Decentralized organization. Authority within a business is given to various managers that run their own departments.
• Departmentalization. Responsibilities and authority are divided among certain areas or departments within the business
• Management is the process of controlling and making decisions about a business
• Top management consists of a company’s board of directors, president, and other high-ranking managers.
• Middle management consists of a company’s division managers and department heads
• First-line management coordinates and supervises the activities and duties of employees
• Business management includes all the activities necessary to operate a business
• five functions of management are planning, organizing, staffing, leading, and controlling.
• Planning is the process of setting goals and deciding how to accomplish them.
• The steps involved in reaching goals are then developed into a plan
• A plan is an outline of the actions needed to accomplish a goal
• There are four basic types of management plans: strategic, tactical, operational, and contingency.
• Strategic plans are created for the long- term goals of an organization.
• Tactical plans are developed for the short- term goals of a company.
• Operational plans are designed to reach the day-to-day goals of a business
• Contingency plans are backup plans.
• Organizing is the coordination of activities and resources needed to reach its goals
• Staffing is the process of recruiting, hiring, training, evaluating, and compensating employees
• Human resources are the employees who work for a company.
• The human resource (HR) department helps an organization hire employees and handles other employee-related functions, including compensation, benefit programs, code of conduct, and following employment regulations.
• Leading is the process of influencing others to work toward common goals.
• Controlling is a continuous process of evaluating the progress in reaching goals and making corrections to plans, when necessary
• The chain of command is the authority structure in a company from the highest to the lowest levels. It is also called the line of authority