MGT Test Flashcards

Terms Definitions
disadvs of franchising
cumbersome, lost flexibility
localization strategy
increasing profitability by customizing the firm's goods and services so that they provide a good match to tastes and preferences in different national markets (Fosters)
first-mover disadvantages
disadvantages affecting early entrants to a foreign market
political union
coordinate aspects of members' economic and political systems (greatest integration, best example if it existed would be United States)
economic union
remove barriers to trade, labor/capital, set a common trade policy against nonmembers, and coordinate members' economic policies (ex. EU)
transnational strategy
attempting to simultaneously achieve low costs thru location economies, economies of scale, and learning effects while also differentiating product offerings across geographic mkts to account for local differences and fostering multidirectional flows of skills b/w diff subsidiaries in the firm's global network of operations (McDonalds)
value creation
performing activities that increase the value of goods or services to consumers
good qualities for expatriates
self-confidence, open mindedness, cross-cultural sensitivity, cultural toughness (ability to adjust to diff. cultures)
value-chain analysis
divide company activities into primary and support activities and identify those that create value for customers; each activity is a source of either strength or weakness; insights gained are fed into the strategy formulation process
high risk approaches
open account & advance payment
an order written by an exporter instructing an importer, or an importer's agent, to pay a specified amount of money at a specified time
primary activities
involve design, creation, and delivery of the product; its marketing; and its support and after-sale service (R&D, production, marketing and sales, customer service)
sight draft
payable upon presentation to the drawee
foreign language training
basic foreign language training that will be helpful
types of export/import financing
open account, documentary collection, letter of credit, advance payment
integration in Africa
Economic Community of West African States (ECOWAS): common market hopes (1975), little progress thus far
free-trade area
remove all barriers to trade among members, but each country has own policies for nonmembers (NAFTA)
when a firm agrees to purchase a certain amount of materials back from a country to which it made a sale
learning effects
cost savings that come from learning by doing
discuss European integration
European Coal and Steel Community (1951): Removed trade barriers in coal, iron and steel European Economic Community (1957): Outlined and took initial steps toward common market European Community (1967): Expanded to other industries including atomic energy European Union (1994): Final name change and reduced barriers further Additional milestones: Single European Act (1987): Harmonized regulations, strived for lower barriers Maastricht Treaty (1991): Single currency targets, outlined eventual political union
a manager working in a diff. country, high costs ($300,000 annually), high failure rates
disadvs of management contract
personnel at risk, creation of competitor
Global strategies of organized labor
Trying to establish international labor organiztions Lobbying governments to restrict MNEs Lobbying UN to regulate MNEs None has been very successful (e.g., Seattle protest in December 1999)
timing of entry
when a business enters a foreign market; said to be early when it does so before other firms, and late when it does so after other businesses have already established themselves
export management company
export specialists that act as an export marketing or international dept for their client firms
what must mission statements consider?
company activities, biz objectives, stakeholders, stockholders, customers, residents, environment
organizational structure
3 part structure of an org., including its formal division into subunits such as product divisions, its location of decision-making responsibilities with that structure, and the establishment of integrating mechanisms to coordinate the activities of all subunits
expatriate manager
a citizen of one country appointed to a management position in another country
enterprise resource planning systems
a software application that extends the MRP concept to support integrated management beyond the manufacturing function and encompass other functions across the enterprise
components of expatriate pay
base salary + foreign service premium (10-30% base salary as an inducement) + allowances (hardship, housing, cost of living, education) + taxation & benefits
compensation for ethnocentric firms
pay expats according to their home country standards
geocentric staffing policy
a staffing policy under which the firm seeks the best people for key jobs throughout the company, regardless of nationality
Expat training and development
only 30% receive training, always good idea to involve family, 3 types of training (cultural, foreign language, practical)
national differences in compensation issue
Pay managers in different countries according to local norms, or on a global basis?
key factors to assess in national business environments
cultural differences, political processes, legal matters, economic systems, labor issues, consumer forces
turnkey project
a project in which a firm agrees to set up an operating plant for a foreign client and hand over the "key" when the plant is fully operational
wholly owned subsidiary
a subsidiary in which the firm owns 100% of the stock
modularity, application and data integration, and configurability
What are the principal characteristics of enterprise systems?
compensation for geocentric firms
Equalization seems to be the only way out in the long run; but it can be very costly
discuss integration efforts in the Americas
CUSFTA 1989 (always traded but needed to formalize their relationship; US-Canada-Mexico NAFTA 1994 (complicated rules of origin, effx still fiercely debated pop 420 mill, gdp 12 trillion)
legacy systems are functional and fragmented; processes become increasingly cross-functional
What are some problems with the enterprise system?
goal of a firm is to:
maximize the value of the firm for its owners, shareholders
Hudson Roofing's budgeted manufacturing costs for 25,000 squares of shingles are:
Fixed manufacturing costs               $12,000
Variable manufacturing costs         $16.00 per square
Hudsonproduced 20,000 squares of shingles dur
The flexible budget
a.   is prepared before the master budget.
b.   is relevant both within and outside the relevant range.
c.   eliminates the need for a master budget.
d.   is a series of static budgets at different levels of activity.
Intangible benefits in capital budgeting would include all of the following except increased
a.   product quality.
b.   employee loyalty.
c.   salvage value.
d.   product safety.
The standard predetermined overhead rate must be based on direct labor hours as the standard activity index. (T/F)
The responsibility for expressing management's budgeting goals in financial terms is performed by the
a.   accounting department.
b.   top management.
c.   lower level of management.
d.   budget committee.
Effective budgeting requires clearly defined lines of authority and responsibility. (T/F)
Financial planning models and statistical and mathematical techniques may be used in forecasting sales. (T/F)
Colt Widgets prepared its income statement for management using a standard cost accounting system. Which of the following appears at the “standard” amount?
a.   Sales
b.   Selling expenses
c.   Gross profit
d.   Cost of goods sold
Miles Company had average operating assets of $4,000,000 and sales of $2,000,000 in 2011. If the controllable margin was $400,000, the ROI was
a.   50%
b.   40%
c.   20%
d.   10%
A company developed the following per-unit standards for its product: 2 gallons of direct materials at $6 per gallon. Last month, 2,000 gallons of direct materials were purchased for $11,400.  The direct materials price variance for last month was
Top management's reaction to a difference between budgeted and actual sales often depends on
a.   whether the difference is favorable or unfavorable.
b.   whether management anticipated the difference.
c.   the materiality of the difference.
Which of the following is true?
a.   The form, content, and frequency of variance reports vary considerably among companies.
b.   The form, content, and frequency of variance reports do not vary among companies.
c.   The form and content of varia
A static budget report
a.   shows costs at only 2 or 3 different levels of activity.
b.   is appropriate in evaluating a manager's effectiveness in controlling variable costs.
c.   should be used when the actual level of activity is materially di
Of the following choices, which contain both a traceable fixed cost and a common fixed cost?
a.   Profit center manager's salary and timekeeping costs for a responsibility center's employees.
b.   Company president's salary and company personnel dep
The comparison of differences between actual and planned results
a.   is done by the external auditors.
b.   appears on the company's external financial statements.
c.   is usually done orally in departmental meetings.
d.   appears on periodic
The most common budget period is
a.   one month.
b.   three months.
c.   six months.
d.   one year.
When a capital budgeting project generates a positive net present value, this means that the project earns a return higher than the
a.   internal rate of return.
b.   annual rate of return.
c.   required rate of return.
d.   profitability inde
Mussina Company had an investment which cost $260,000 and had a salvage value at the end of its useful life of zero. If Mussina's expected annual net income is $15,000, the annual rate of return is:
a.     5.8%.
b.     9.8%.
c.   11.5%.
Colaw Company is considering buying equipment for $80,000 with a useful life of five years and an estimated salvage value of $4,000. If annual expected income is $7,000, the denominator in computing the annual rate of return is
a.   $80,000.
b.   $4
The capital budgeting decision depends in part on the
a.   availability of funds.
b.   relationships among proposed projects.
c.   risk associated with a particular project.
d.   all of these.
Owens Company's cash budget showed total available cash less cash disbursements. What does this amount equal?
a.   Ending cash balance
b.   Total cash receipts
c.   The excess of available cash over cash disbursements
d.   The amount of financ
Zimmer Company reported the following information for 2011:
                                                      October                 November              December
Which of the following statements about standard costs is false?
a.   Properly set standards should promote efficiency.
b.   Standard costs facilitate management planning.
c.   Standards should not be used in "management by exception."
d.   St
A company has budgeted direct materials purchases of $200,000 in March and $320,000 in April. Past experience indicates that the company pays for 70% of its purchases in the month of purchase and the remaining 30% in the next month. During April, the foll
The projection of financial position at the end of the budget period is found on the
a.   budgeted income statement.
b.   cash budget.
c.   budgeted balance sheet.
d.   sales budget.
Using the annual rate of return method, a project is acceptable if its rate of return is greater than management's minimum rate of return. (T/F)
Companies often assume that the risk element in the discount rate is
a.   zero.
b.   greater that zero.
c.   less than zero.
d.   known with certainty.
A company is considering purchasing a machine that costs $320,000 and is estimated to have no salvage value at the end of its 8-year useful life.  If the machine is purchased, annual revenues are expected to be $100,000 and annual operating expenses excl
If actual costs are greater than standard costs, there is a(n)
a.   normal variance.
b.   unfavorable variance.
c.   favorable variance.
d.   error in the accounting system.
A static budget is usually appropriate in evaluating a manager's effectiveness in controlling
a.   fixed manufacturing costs and fixed selling and administrative expenses.
b.   variable manufacturing costs and variable selling and administrative exp
Which of the following would not appear as a fixed expense on a selling and administrative expense budget?
a.   Freight-out
b.   Office salaries
c.   Property taxes
d.   Depreciation
A debit to the Overhead Volume Variance account indicates that the standard hours allowed for the output produced was greater than the standard hours at normal capacity. (T/F)
A master budget consists of
a.   an interrelated long-term plan and operating budgets.
b.   financial budgets and a long-term plan.
c.   interrelated financial budgets and operating budgets.
d.   all the accounting journals and ledgers used by
Actual costs that vary from standard costs always indicate inefficiencies. (T/F)
A responsibility report for a profit center will
a.   not show controllable fixed costs.
b.   not show indirect fixed costs.
c.   show noncontrollable fixed costs.
d.   not show cumulative year-to-date results.
All of the following statements are correct about controllable costs except
a.   all costs are controllable at some level of responsibility within a company.
b.   all costs are controllable by top management.
c.   fewer costs are controllable as
The accumulation of accounting data on the basis of the individual manager who has the authority to make day-to-day decisions about activities in an area is called
a.   static reporting.
b.   flexible accounting.
c.   responsibility accounting.
In order to develop a budgeted balance sheet, the previous year's balance sheet is needed. (T/F)
Training - Assess Residual
lobbyists __________ companies in coalition building around issues
Some set of government body/conformity
market culture
strong external focus, values stability and control
Organizational Culture Profile
-useful for determining person-organization fit
-survey that forces choices/rankings of one's personal values
-identifies most important values to look for in an organization to find a good fit
the use of one's intellect.Heuristics- simplifying strategies or rules of thumb used to make decisions
variable compensation plans that pay employees on the basis of some performance measure
concurrent engineering
Performing product and service development engineering functions in tandem to reduce time and improve communication.
individuals in an organization who direct the activities of others
Behavioral outcomes of feedback
i. Direction, effort and persistenceii. Resistance – feedback schemes that are perceived as manipulated or failing one of the cognitive evaluation tests cause people to resist it
•Resource dependencies
–The firm’s need for resources that are controlled by others
•The resource dependence of an organization increases as:
–Needed resources become more scarce
–Outsiders have more control over needed resources
There are fewer substitutes for a particular type of resource controlled by a limited number of outsiders
intrinsic reward
personal satisfaction you feel when you perform well and complete goals
merchant wholesalers
independently owned firms that take title to (own) the goods they handle

 Products or services that have an impact on the value of a firm’s products or services
Staff Personnel
have authority functions; they provide advice, recommendation, and research to line managers.
Purposes of LawCh1
To keep order,influence conduct,honor expectations,promote equality,laws as the great compromiser
Kurt Lewin
Individual who identified 3 basic styles of leadership. Behavior Thoery
hygiene factors
factors--such as company policy and administration, supervision, and salary--that, when adequate in a job, placate workers. when these factors are adequate, people will not be dissatisfied.
utilitarial rule
decision that produces the greatest good for the greatest number of people
Dispositional/genetic components
job satisfaction is partly a function of both personal traits and genetic factors1. Implies that stable individual differences are just as important in explaining job satisfaction as are characteristics of the work environment
Competitors who get to market later must settle for lower prices because_____.
A) technology has changed
B)there sre fewer resources available
C)there are more customers
D)prices have fallen
D)prices have fallen
knowledge management
finding the right info, keeping the info in a readily accessible place, and making the info known to everyone in the firm

Groups of employees from different departments who work together on a long-term basis.
a) Cross-Functional Self-Managed Teams
b) Flat Organizational Strctures
c) Line Organization
d) Matrix Organization
e) Tall Orgainzation Structures
Cross-Functional Self-Managed Teams
A measure of how well or how productively resources are used to achieve a goal.
DECA Records
-had the most money and best contracts
-1962 the dominate record company
–they dismissed the Beatles because they didn’t like their sound
social traits
surface level traits that reflect the way a person appears to others when interacting in various social settings
The variability in demand is magnified as we move from the customer to the producer in the supply chain.
Bullwhip Effect
execution challenge
asks whether managers have the access, capabilities and motivation to use the measurement data to communicate strategy and monitor progress
Formal group
Formed by a manager to help the organization accomplish its goals
Angel Investors (Direct Investor)
Invest typically in the beginning stages when company is small, recently they are start to invest in social enterprises
brand name
word, letter, or group of words or letters that differentiates one seller's goods and services from those of competitors

An owner who invests money in the business but enjoys limited liability.
a) General Partner
b) Limited Partner
c) Limited Liability Partner
d) Master Limited Partner

Limited Partner
Natural LawCh2
idea that some standards do not exist because of the law or they may exist despite the law
process map
A diagram of the steps in a process.
Mediation 593
Involves a third party neutral who has no binding authority to decide a dispute but assists the parties' efforts to reach a voluntary agreement.
the number of employees a supervisors can manage effectively.
Span of management
50. Define and explain yield management?
Yield Management Definition: the process of allocating the right typeof capacity to the right type of customer at the right price and timeto maximize revenue or yield (pg. 531)Explanation: Through appropriate forecasting, yield mgmt. is a toolto shape demand patterns so firms can operate more efficiently.E.g. The text used the example of American Airlines being able tochange their ticket prices hourly based on competing flight's prices.(pg's 531 & 533)
skimming price strategy
strategy in which a new product is priced high to make optimum profit while there's little competition
Fiedler's Contingency Theory Def: Position Power
The authority associted with the leader's FORMAL position in the organization
technological or operational capability
a source of uniqueness where a business can have a distinct way of building or delivering its product or service
Determining Independent Contract Status
A person who contracts with another to do something for him who is not controlled by the other nor subject to the others right to control. 
If the principal (hirerer) asserts little control, the person is an independent contractor. 
length of time employed
amount of time agent works for principal
if principal supplies tools and equipment used in work
degree of skill necessary to complete work
if employer has right to control manner of complete job
MX- Discernment (enables a leader
Discernment enables a leader to see the partial picture, fill in the missing pieces intuitively, and find the heart of the matter.
NFL: league has run out of ways to make ____; 3 options, raise ___ prices, ask _____ to subsidize costs, paid more for _________. have to balance priorities of ____ matters most!
money, ticket, taxpayers, broadcasting, who
Laura Nash(Business Ethical Dilemmas)
how would I view the issue if I stood on the other side of the fence
1 I am thinking about starting a new business. Which of the following types of information do I need to know?
Government regulations related to the type of products that I want to produce.b. Marketing information related to the products that I want to produce.c. Information regarding various laws that strongly affect all businesses.
Choosing a Forecasting Method Factors:
1. The time of forecast
Short term < 3months
Intermediate term - 3months-2yrs
Long term- >2yrs
2. The level of detail/ how much aggregation there will be (product, product line, division, whole company)
3. Number of items forecasting for
4. Stability of the situation (same as in past?)

Specific, short-term statements detailing how to achieve the organization’s goals.
a) Objectives
b) Goals
c) Mission Statement
d) Vision
Proactive Personality
Identifies opportunities, shows initiative, takes action, & perseveres until meaningful change occurs.
Create positive change in the environment, regardless or even in spite of constraints or obstacles.
--> managerial jobs
Moral RelativismCh2
(situational ethics)our ethical standards derive from the situation that we are in
matrix structure
organization combines functional and divisional chains of command in a grid so that there are two command structures--vertical and horizontal

Satisfice= evaluate our options until we come to one that is good enough
  --> satisfactory rather than optimal decision
-characterizes decision making
-limited info processing and identity of possible alternatives
-use of judgmental heuristics
-lack of time and other resources 

another means by which the corporate office can add value to a business
            Asset Restructuring
            Capital Restructuring
            Management Restructuring
two or more interacting and interdependent individuals who come together to achieve specific goals, formal and informal
terminal values
reflect a persons preferences concerning the ends to be achieved
strategic plans
plans that are organization-wide, establish overall objectives, and position an organization in terms of its environment
Job rotation
Moving employees from one specialized job to anotherWorkers are trained and given the obbortunity to perform two or more separate jobs on a rotating basisManagers believe they can stimulate interest and motivation while providing employees with a broader perspective of the organizationAdvantages; increased worker flexibility and easier scheduling
program decision making
routine, virtually automatic decision making that follows established guidelines where we made similar choices before
business environment
surrounding factors that either help or hinder the development of business
Unrelated Diversification: 

A firm entering a different business that has little horizontal interaction with other businesses of a firm
Team-based structure
teams or work-groups temporary or permanent are used to improve horizontal relations and solve problems throughout the organization.
Statutory LawCh1
passed by some government body, typically in some written form created by legislative branch
Interpersonal roles
In their __________ roles, managers interact with people inside and outside of their work units.
Decision Making
People respond to oppertunities and threats by 1) choosing goals 2) analyzing options 3) selecting right course of action
transactional leaders
leaders that motivate subordinates by rewarding them for high performance and reprimanding them for low performance
Cross functionalism
Common feature of self managed teams; specialists from different areas are put on the same team
the ability to discover new and novel ideas and and courses of action
function in a firm that searches for quality material resources, finds the best suppliers, and negotiates the best price for goods and services
knockoff brands
illegal copies of national brand name goods

Managers and employees work together to make decisions.
a) Autocratic Leadership
b) Free-Rein Leadership
c) Participative or Democratic Leadership
d) Management Leadership
Participative or Democratic Leadership
Empowerment and Self-Managed Teams
Empowerment- expansion of employees' knowledge, tasks and decision making responsibilities. Can lead to many types of performance gains.
Self managed team- a group of employees who assume responsibility for organizing, controlling, and supervising their own activities and monitoring the quality of the goods and services they provide.
(both are made easier and possible through IT) 
cognitive dissonance
a state of inconsistency between an individuals attitude and behavior.
job satisfaction
A positive feeling about the job resulting from an evaluation of its characteristics
1. acquiring human resource capability
2. develping human resource capability
3. rewarding and compesating human resources
3. managing human resources and enhancing productivity and quality of worklife
4 domains of HRM
Job Design
the process of defining how work will be performed and what task will be required in a given job design
Community Development Financial Institutions
make loans and equity investments available to social enterprises that focus on low income communities (Mostly housing and small business development)
critical path
in a PERT network, the sequence of tasks that takes the longest time to complete

The use of computers in the manufacturing of products.
a) Transparency
b) Computer-Aided Manufacturing (CAM)
c) Virtual Corpoartion
d) Computer-Aided Design (CAD)
Computer-Aided Manufacturing (CAM)
Not Following the Stare DecisisCh3
Courts do change over time!
sources and types of values
parents, friends, teachers, and external reference groups
Sunshine Laws 590
Efforts to open up the bargaining process to citizen observation and participation.
Legal realism
1920's and 1930's. Based on the idea that law is just one of many institutions in society and that it is shaped by social forces and needs
34. Explain the benefits and disadvantages of centralized anddecentralized purchasing. (Ch 9 notes)
With centralized purchasing, all supplier info is managed from onelocation allowing for more leverage on pricing, no duplication ofeffort by multiple purchasing organizations, locus of expertise inone commodity. A disadvantage is lack of uniformity in practicesacross the company and speed may be sacrificed.Decentralized purchasing could instead offer the advantages ofquicker response to local demands, more control over purchasing byindividual departments and customized processes.
Legitimate power
the extent to which a manager can use the "right of command" to control other people.
Figurehead, Leadership role and Liaison role
What are the three interpersonal roles for managers?
Natural law is one
of the oldest and most significant schools of jurisprudence. Dates back to Aristotle.
Moving away from Attributes to Results
Attributes - rather than comparing individuals, another approach is to evaluate each individual’s performance against a set of predetermined standards. The ratings can be based on attributes or behaviors.Results - Systems that measure results may focus on the objective, measurable results of a job or work group such as sales, costs, productivity, etc.
B.F. Skinner (father of operant conditioning) 4 things that motivate
4 things that motivate: Positive Reinforcement- getting something good bc you did a correct behavior
Negative reinforcement- taking away something bad for doing the correct behavior
punishment- adding something negative for undesired behavior
extinction- removing bad behavior by removing what causes it ( bully and attention)
Rational (Classical) Model of Decision Making
-decisions based on rationality or a careful calculated choice to maximize value given in assessment of alternatives & consequences
-describes how a decision Should be made
-ties to classic theories of economic behavior

-4 step: identify problem, generate solutions, select a solution,implement/evaluate the solution
How to apply social contract theory...
Step 1- does it violate a hypernorm? (if yes stop)Step 2- Does it violate a authentic norm? (If yes stop, if no then do it)
What is one of the main reasons hybrids are formed?
allows them to get capital from different sources (Investors for-profit and donations non-profit)
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