Unit5

1. Unit5 Corporate Structures

2. Corporate Structure • Corporation • A business owned by a group of people and authorized by the state in which it is located to act as though it were a single person, separate from its owners • Generally less corporations than proprietorships; however, they are much larger in size • Corporations can make contracts, borrow money, own property, and sue or be sued in its own name • Any act performed for the corporation by an authorized person is done in the name of the business • Financial officer can borrow, receptionist cannot • 3 key types of people in corporations • Stockholders, directors, officers

3. Stockholders • AKA Shareholders • Owners of a corporation • Shares – equal parts of the division of ownership of a corporation • Capital Stock (Stock) – The general term applied to the shares of ownership of a corporation • One person who buys a single share becomes a stockholder • Receives a certificate from the corporation, which shows the number of shares owned

4. Stock Certificate Example

5. Stock Certificate Example

6. Stockholders • Basic rights • Transfer ownership to others • Vote for members of the ruling body and on other special matters • Receive dividends • Profits that are distributed to stockholders on a per-share basis (Determined by the ruling body to share profits) • Buy new shares of stock in proportion to one's present investment should the corporation issue more shares (usually first option before new buyers and opportunity to keep percentage of ownership) • Share in the net proceeds should the corporation go out of business(last to receive $ after all assets are sold and debts are paid)

7. Board of Directors (BOD) • AKA Board or Directors • The ruling body of the corporation • Usually between 10 – 25 directors (depends on size of company) • Few are from within the company (top executives) • Most are executives from other businesses or people from nonprofit organizations (professors) • Usually stockholders, but may not be a rule • Elected by the stockholders • Develop plans and policies to guide the corporation • Appoint officers to carry out the plans • Usually focuses on policies and progress of company; however, if the company is doing poorly, they have the ability to step in and take an active role

8. Officers • The top executives who are hired to manage the business • Appointed by the BOD • Small corporation: president, secretary, and treasurer • Large corporation: Each of above AND vice presidents in charge of major areas (marketing, finance, manufacturing) • CEO – Chief Executive Officer (AKA CE) • CEO – Chief Ethics Officer • CFO – Chief Financial Officer • CIO – Chief Investment Officer • COO – Chief Operating Officer • CMO – Chief Marketing Officer • CSO – Chief Security Officer

9. Exercise • 1,000 people bought stock at $100 each. What is the monetary value of the stock? • The BOD decided to distribute $50,000 as dividends to shareholders who hold 25,000 shares of stock. What is the amount of the dividend to be distributed on each share? • Mark owns 250 shares. What amount will he receive in dividends based on your answer?

10. Organizing Function • The company must be organized to carry out the plan and perform work effectively • Involves arranging resources and relationships between departments and employees and defining the responsibility each has for accomplishing work • Example: manufacturing a new product: determine who is involved in accomplishing each part of the job • Research, manufacturing, human resources, marketing and sales, finance, information technology • Department managers would then determine the responsibilities of the people within their departments

11. Role of Organization Charts • A drawing that shows the structure of an organization, major job classifications, and the reporting relationships among the organization’s personnel.

12. Organizational Charts • Purpose is to: • Show the major work units that make up the business • Allow employees to identify which unit they are affiliated with, how it relates to other units, and to whom they are accountable • Identify lines of authority and formal communication within the organization • Information is usually found in an employee handbook or a company’s web site

13. Division of Work Charts

14. Division of Work Charts

15. Line Organization • All authority and responsibility can be traced in a direct line from the top executive down to the lowest employee level of the organization • Lines joining the individual boxes indicate the lines of authority • Lines describe how formal communications are expected to flow up and down the organizations • The president has direct control over all units of the business, but responsibility, authority, and accountability are passed along from one person to another

16. Line-and-Staff Organization • The addition of staff specialists to a line organization • Found in large and complex businesses – the need for expertise • Managers have direct control over the units and employees they supervise but have access to staff specialists to a line organization • Staff specialists give advice and assistance to line personnel; however, they have no authority over line personnel (cannot require tasks to be completed) • Examples: legal, info management, strategic planning, human resources

17. Matrix Organization • AKA – Project Organization • Organizes employees into temporary work teams to complete specific projects • Employees report to a project manager with authority and responsibility for the project and will work with that manager until completed, then move on to another project • No permanent organization structure

18. Centralized Organization • Few top managers do all major planning and decision making • Large companies often develop very complex centralized structures • May cause communication problems and the need for many policies and rules to control the organization • Individual managers and employees then begin to feel like unimportant parts of the business • Tend to get frustrated when rules keep them from doing things they consider important or takes a long time for a decision

19. Centralized Organization Example

20. Decentralized Organization • A business which is divided into smaller operating units where managers are given almost total responsibility and authority for the operation of those units • In many ways, the units operate as if they were independent companies

21. Flattened Organization • One with fewer levels of management than traditional structure • To achieve a flattened organization, the remaining managers and employees assume many of the responsibilities previously assigned to other levels of management • Improved communication, more coordination and cooperation, can be more competitive due to flexibility and responsiveness

22. Tall Organization

23. Review • If managers in large organizations have difficulty mastering the knowledge and skills they need in all of their areas of responsibility, which type of organizational structure would be most helpful? • Line • Line-and-staff • Matrix • Team • Why does the line organizational structure often create problems in sharing information and communicating among employees and managers from different parts of the organization? • Flattened organizations provide benefits in improved communications, coordination, and cooperation. Why does that occur? What problems do you believe might result from the flattened organization structure?

24. Establishing an E-Commerce Business

25. Considerations • Developing an effective e-business requires careful planning • Not easy to get people to buy from an online business • Why? • What about a new business? • Large companies can spend millions • There are other ways to have an attractive and effective website without spending as much • Needs careful design and planning, and regular updating

26. 3 Tasks for Success • Business Planning • Determine the purpose of your website • Study your customers, their needs, and their internet experience • Plan your online business • Technology Development • Obtain a web server and domain name • Develop order processing and customer service procedures • Design the website • Site Promotion • Advertise your online business • Open for business

27. 3 Tasks for Success • Business Planning – determine the purpose of your website • Can have an entire business or promote your “bricks and mortar” business • Some products are easier to sell over the Internet than others • Study sites of similar businesses • Talk to e-commerce experts • Determine how much to begin with to move toward full integration or determine how much of the business and promotion you want to be on the website

28. 3 Tasks for Success • Business planning - Study your customers • Determine your target market, what they want, and their interest in doing business online • What is their experience with e-commerce and whether they use the internet primarily for information shopping • What products would they buy online vs only in-store • Age matters: younger individuals are more likely to buy online • Utilize Social Networking • Virtual communities for people interested in sharing information about themselves with others • These sites generate revenue upwards of $500 million or more!

29. 3 Tasks for Success • Business planning – Plan your online business • Based on your study, you will determine what products and services to offer through your online business and whether you will have information-only, interactive, or integrated website • If you determine to NOT be solely online, then you need to present your brick-and-mortar location first (depending on the situation) • Who will handle the activities? • Shipping? FedEx, UPS, Postal Service • Financial Institution for processing payments? • Will you need an additional worker(s) to process orders?

30. 3 Tasks for Success • Technology Development – Obtain a Server and Domain Name • New businesses generally lack adequate computer or network technology or necessary skills to build and manage a website • Answer: Obtain a web-hosting service • A private business that maintains the websites of individuals and organizations on its computers for a fee • Provides design services, the hardware and software needed to maintain websites, and the technical personnel to make sure the sites operate effectively • Obtain an internet address– Domain Name • A website owner’s unique name that identifies the site • Business: www.businessname.com (Amazon.com) • Must register with one of the companies that maintain and approve all domain names used throughout the world

31. 3 Tasks for Success • Technology Development– Develop order processing and procedures • If your business will process orders and collect payments online, you will need specialized software • Use of Electronic Shopping Carts • specialized programs that keep track of shoppers’ selections as they shop, provide an order form for them to complete and submit the form to the company through the Internet • Secure server to accept credit card payments while collecting personal data • Consider other methods of payment (electronic check, payment on delivery, delivery after payment received) • Process for quick and accurate filling of orders and delivery • Consideration: returns process online

32. 3 Tasks for Success • Technology Development– Design the website • Need to wait to develop the website until the other tasks have been completed • Until you plan the business completely, you will not know what needs to go on your website • Must be attractive and easy to use: if customers cannot find the information they need, takes too long to load, or if ordering instructions are confusing, prospective customers will leave your site and go to a competitor • Stumptown Coffee Roasters • Basic design and easy-to-understand buttons and links • Shopping and ordering procedures should be very obvious and simple ( Amazon ) • Should be assured of security and customer service

33. 3 Tasks for Success • Site Promotion– Advertise your online business • First, register your business with major search engines (Google and Yahoo!) • Be sure your site is filled with Key Words that will the search engines can categorize the relevancy of your page • Place advertising for your business in other internet locations where prospective customers are likely to search for information related to the products and services you sell • Ask other webmasters to place your link on their page! • Verio

34. 3 Tasks for Success • Site Promotion– Advertise your business offline • Second, advertise and promote your e-commerce business offline • Especially starting out, you want to promote outside of the internet • If you are not ranked within the first 2 pages of a search, your chances of being viewed are minimal at best. • Place your domain name on all company materials • Business cards, brochures, correspondence (letters, memos, e-mails) • Get press involved (newspapers, tv news) • Commercials

35. 3 Tasks for Success • Site Promotion– Open for Business • Maintain your website! • Even if items do not change, start a blog, hold specials, identify “customers of the week” or anything else that may be relevant to your business • Watch your competitors • Study their trends and attempt to stay ahead • Keep up with the latest technology and online procedures

36. Review • Establishing an e-commerce business requires • Business planning • Technology development • Site promotion • All of the above • If a business cannot host its own e-commerce site, it could us a • Domain service • Web-hosting service • Server company • All of the above • Describe the basic elements of successful e-commerce site design • Describe how a search engine can help promote a business

37. Moving into Management

38. Moving into Management • Misconceptions of management • Often employees believe they can do the job better • The decision to promote should not be solely salary based • Know the duties, tasks, and decisions that are to be made • Current success vs success in management role • Can you demote? • Training programs are key to success • Temporary assignments before permanent are also successful

39. Management Activities • Management • The process of accomplishing the goals of an organization through the effective use of people and other resources • Due to the several types of managers, it is difficult to identify exactly what managers do • HR, Line managers, financial managers, marketing managers, and so on usually have similar job functions and tasks • Depending on industry and size of company, some of these can change

40. Primary Work • Grouped into 4 functions • Planninginvolves analyzing information and making decisions about what needs to be done • Organizingconcerned with determining how plans can be accomplished most effectively and arranged resources to complete work • ImplementingWhen carrying out the plans and helping employees to work effectively • Controllingwhen evaluating results to determine if the company’s objectives have been accomplished as planned

41. Levels of Management • Manager • A person who completes all 4 management functions on a regular basis and has authority over other jobs and people • At times non-management employees will have authority, but only for a short period of time • Usually trained, during vacations, in emergency situations, as needed • Companies are attempting to reduce the number of levels of management making each role more important

42. Levels of Management • Supervisors • Typically the first (or beginning) level of management in a company and often have many non-managerial activities to perform as well. • Executive • A top-level manager who spends most all of his/her time on management functions and decisions that affect the entire company • Have other managers reporting to them • Mid-manager • Completes all of the management functions, but spends most of the time on 1 or 2 management functions such as planning or controlling, or is responsible for a specific part of the company’s operations

43. Levels of Management • Supervisors work most directly with employees and are involved primarily in ensuring that the day-to-day work of the business is completed – implementing • Executives work with other managers and are responsible for the long-term direction of the business – planning and organizing

44. Review • Which of the following is not one of the 4 functions of management • planning • budgeting • implementing • controlling • The level of management that devotes the greatest amount of time to planning is • supervisors • mid-managers • executives • all levels spend equal amounts of time on planning • Why would businesses reduce the number and levels of managers?

45. Decision Making Process

46. Decision Making • In the process of planning, organizing, implementing, and controlling, managers encounter problems that require them to make decisions • Top-level managers make some decisions such as new products to be developed or new markets to be entered • Mid-managers make decisions that may result in new ways of organizing work, the use of new technology, or improved procedures • First-level managers (department heads or supervisors) make decisions about the daily operations of their units • On a piece of paper state the steps you would take to solve a problem you face. Be prepared to share!

47. Steps in Problem Solving • Most problems can be analyzed by completing a series of steps. • Identify the problem • List possible solutions • Analyze the solutions • Select the best solution

48. Steps in Problem Solving • Identify the problem • A problem is a difficult situation requiring a solution • Usually do not have single solutions • A symptom is a sign or indication of something that appears to be the problem, not the problem itself • Symptom: falling sales • Problem: ineffective advertising, bad product location, untrained salespeople, quality problems, poor service • Managers need to review plans and performance regularly • Do not wait until problem exists! • Sometimes managers only find out when too late – customer complaint

49. Steps in Problem Solving • List Possible Solutions

50. Steps in Problem Solving • Analyze the solutions