Core courses problems

1. Management and leadership.

The biggest difference between managers and leaders is the way they motivate people who work or follow them.

-Managers have subordinates and they are a person of authority given the power by a company, and their subordinates work for them. They are being paid for what they do and follow the orders from the Management in return they are given a salary.

-Leaders do not have subordinates - at least not when they are leading. Many organizational leaders do have subordinates, but only because they are also managers. But when they want to lead, they have to give up formal authoritarian control, because to lead is to have followers, and following is always a voluntary activity. They must want to follow you enough to stop what they are doing which means the leader needs to find a way to inspire and motivate people and have a strong charisma to attract people.

2. Formalization & types of structures.

Formalization is the extent to which rules and procedures are followed in an organization. For example, in some organizations arrival and departure times to and from work are specified to the minute, with time clocks used to control deviant behavior. In other organizations it is understood that employees will spend sufficient time on the job to get the work done. In some organizations rules and procedures cover most activities, while in others people are allowed to exercise their own judgment.

In assessing the degree of formalization, one needs to use care. In some organizations many rules are codified in huge manuals, but no one pays attention to them. In others little is written down, but rules are informally understood and followed. Thus the most useful definition of formalization is that it represents the use of rules in an organization. The degree to which rules are followed—not the degree to which they are codified—is the key factor. Formalization is influenced by technology, size, and organizational traditions. One can categorize technologies as routine and non routine. Organizations or work units in which work is routine are more likely to be highly formalized than those in which technologies are less routine.

The most common forms of business enterprises in use in the United States are the sole proprietorship, general partnership, limited liability company (LLC), and corporation. Also, some business forms have subclasses, such as the C Corporation, S corporation, and Professional Corporation.

-The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a natural person who owns the business and is personally responsible for its debts. A sole proprietorship can operate under the name of its owner or it can do business under a fictitious name, such as Nancy's Nail Salon. The fictitious name is simply a trade name--it does not create a legal entity separate from the sole proprietor owner.

Advantages of the Sole Proprietorship:

Owners can establish a sole proprietorship instantly, easily, and inexpensively. Sole proprietorships carry little, if any, ongoing formalities.

A sole proprietor need not pay unemployment tax on himself or herself (although he or she must pay unemployment tax on employees). Owners may freely mix business and personal assets.

Disadvantages of the Sole Proprietorship:

Owners are subject to unlimited personal liability for the debts, losses, and liabilities of the business.
Owners cannot raise capital by selling an interest in the business.

Sole proprietorships rarely survive the death or incapacity of their owners and so do not retain value.

-A partnership is a business form created automatically when two or more persons engage in a business enterprise for profit. Consider the following language from the Uniform Partnership Act: "The association of two or more persons to carry on as co-owners of a business for profit forms a partnership, whether or not the persons intend to form a partnership." A partnership--in its various forms--offers its multiple owners flexibility and relative simplicity of organization and operation. In limited partnerships and limited liability partnerships, a partnership can even offer a degree of liability protection.

Advantages of the Partnership:

Owners can start partnerships relatively easily and inexpensively.

Partnerships do not require annual meetings and require few ongoing formalities.
Partnerships offer favorable taxation to most smaller businesses. Partnerships often do not have to pay minimum taxes that are required of LLCs and corporations.

Disadvantages of the Partnership:

All owners are subject to unlimited personal liability for the debts, losses, and liabilities of the business (except in the cases of limited partnerships and limited liability partnerships).
Individual partners bear responsibility for the actions of other partners. Poorly organized partnerships and oral partnerships can lead to disputes among owners.

Date: 2015-02-03; view: 901