Presentation Transcript

1. Legal Implications

2. Control Looking at a business activity, comparing to what is supposed to be happening, and addressing any problems that are found.
3. Control Controls give a manager ways to uncover and correct problems before they damage the business. Controls can also provide the information necessary to improve business functions What activities in your life do you try to control?
4. Why Controls are Needed Prevent Crises Standardize outputs Appraise employee performance Update plans Protect the organizations assets
5. Three Requirements for Control Setting Standards Standard – outlines what is expected of the employee or organizational unit. Monitoring Performance Correcting Deviations
6. Three Requirements for Control Monitoring Performance – gather data and detect problem areas. Should be monitored often enough that a problem will be caught quickly. Fix the problem
7. Three Requirements for Control Performance Deviations Faculty Planning Insufficient Communication Need for Training Lack of Motivation Unforeseen Forces Correcting Deviations – Managers should address the cause of the problem rather than simply try to fix the symptoms
8. Assignment Explain using the three requirements for control to explain how you can control your nine weeks and semester grade in this class Standard Monitor Performance Correct for Deviations
9. Types of Controls Behavior Control – the monitoring of an employees behaviors through direct surveillance EX. Office internet use, monitoring of emails Output Control – Monitoring based on the measurement of something that is produced by the employee or work unit
10. Timing of Control Preliminary Control – designed to prevent problems from occurring Concurrent Control – focused on thing that happen during the work process Post-action control – detect problems after they occur
11. Tools for Control Budgets Financial Controls Direct Observations Written Reports Audits
12. Budgets A numerical plan for allocating resources to specific activities. Budgets can be used for a number of different areas or items. Expense Budget Profit Budget Cash Budget Capital Expenditure Budget Fixed Budget Variable Budget Incremental Budget
13. Types of Budgets Profit Budget – used by separate units of an organization that combines revenue and expense to determine the units profit contribution Cash Budget – forecasts how much cash an organization will have on hand and how much is needed to meet expenses
14. Types of Budgets Expense Budget – lists the primary activities undertaken by a unit and allocates a dollar amount to each Capital Expenditure Budget – forecasts investments in property, buildings, and major equipment
15. Types of Budgets Fixed Budget – Assumes a fixed level of sales or production Variable Budget – Takes into account those costs that vary with volume.
16. Approaches to Budgets Incremental Budget – Allocates funds to departments according to previous period earnings Zero-based Budget – Budget requests start from scratch regardless of previous appropriations
17. Zero-Based Budgeting Some organizations use the same budget from the previous year, without considering changing circumstances. Some circumstances to consider: Situation changes Cost reduction Decrease in demand Past year inefficiencies
18. Zero-Based Budgeting Requires each Budget request be justified in detail. Must show why the expense is necessary Each activity must compete for a share of available resources Activities: Equipment upgrades Training for employees Employee compensation Raw materials
19. Zero-Based Budgeting Advantages: Cost saving Elimination of unnecessary functions Ability to reevaluate projects each year Disadvantages Difficulties in planning for multiyear projects Morale problems with agencies constantly fighting for existence.
20. Budget Misuses Budgets are an essential Business tool, but can be misused. Problems to be discussed Inflexibility Budget being the primary goal Misplaced priorities
21. Inflexibility Progress sometimes requires spending money. On a budget, making $500 may be frowned upon due to the spending of $5 over budget. Where in your life have you not spent money but lost the opportunity to make money?
22. Budget as Primary Goal The budget should not be the primary goal of a business. Each department should be primarily focused on its part in the organizations mission. Service to a group of customers or clients Organizations should not exist only to get their paperwork to balance out at the end of the year.
23. Misplaced Priorities Do not lose site of the main goals and objectives of the company itself. Make the best decision for the success of the company in the long run rather than the numbers on a budget sheet.
24. Tools for Control Budgets Financial Controls Direct Observations Written Reports Audits
25. Financial Controls Managers use Financial Info for control purposes Balance Sheets Income statements Financial ratios Financial info is not meaningful out of context. It must be compared to: Historical performance figures for a company Figures of another company Usually will compare to an industry average
26. Financial Ratios 4 basic types of financial ratios: Profitability Ratios Liquidity Ratios Debt Ratios Activity Ratios
27. Financial Ratios Profitability ratio – indicates how efficiently the organization is being managed Liquidity ratio – measures the ability to meet short term obligations. EX. Payroll, accounts payable
28. Financial Ratios Debt ratio – indicates the ability to meet long term obligations Activity ratio – measures how effectively the organization manages its basic operations
29. Tools for Control Budgets Financial Controls Direct Observations Written Reports Audits
30. Direct Observations The observing of an employee by a manager with their own eyes and own opinions Observation is necessary to get an accurate picture of an organization Can be time consuming Can be misinterpreted due to employees being on their best behavior or the manager bringing a bias to the observation.
31. Direct Observation What can a manager do to ensure that his or her visits are interpreted positively? Make visits a common event Give notice to employees Engage employees in discussion of their work to make it seem like the observation is not an inspection
32. Tools for Control Budgets Financial Controls Direct Observations Written Reports Audits
33. Written Reports Management controls that may be prepared on a periodic or “necessary” basis. Two basic types of written reports Informational Analytical
34. Written Reports Informational Reports – Presents a series of facts Analytical Reports – provides an interpretation of the facts they present.
35. Written Reports Preparing a report is a multistep process: Planning what is to be done Collecting the facts Organizing the facts Interpreting the facts Writing the report Reports should be prepared for the benefit of the reader, not the writer.
36. Tools for Control Budgets Financial Controls Direct Observations Written Reports Audits
37. Audits A detailed look at an organizations financial or other practices They see if accounting methods are: Fair Consistent In accordance with regulations and customary practices
38. Audits Audits can be external or internal External audits are performed by outside accountants who examine a companies financial records Internal audits are performed by members of an organization itself
39. Audits Management audits look at areas other than finance and accounting Personnel procedures to ensure equal opportunity laws Mgt audits may be external or internal Internal is less expensive but have a greater risk of bias
40. Workers and the Law In the early twentieth century, companies had tremendous power over employees Companies could Pay workers as little as they wanted Make them work under dangerous conditions Refuse to hire minorities Pay women less than men at the same job
41. Workers and the Law In 1930’s, Congress and state legislatures wanted to help the average worker. To protect and provide benefits to employees, and provide a better power balance between companies and workers, Employment Laws were formed.
42. Employment Laws Regulates the relationship between companies and their workers. Gives workers significant rights and benefits Including working in a safe environment There are strict penalties for companies who violate these laws Fines Loss of government contracts
43. Employment Laws Companies must comply with 5 major employment laws: Equal Employment Opportunity Laws Occupational safety and health laws Wage-hour laws Benefits laws Labor relations laws
44. Employment Laws In 1938, the Fair Labors Standards Act initially provided for a minimum wage of $0.25 per hour and a maximum work week of 44 hours. What are the total wages a person would earn in one week if they worked maximum hours? Minimum wage now is $7.25 per hour. How much do you make in minimum work week? Maximum? Do workers work harder now or in the past?
45. Equal Employment Opportunity laws Prohibit companies from discriminating against workers. 1960’s was the height of the Civil Rights Movement Civil Rights leaders spoke out about discrimination against African Americans and other minorities
46. Equal Employment Opportunity laws Congress listened to civil rights leaders and passed 3 major EEO laws that protect workers from discrimination by companies: Title VII of the Civil Rights Act of 1964 Age Discrimination in Employment Act Americans with Disabilities Act
47. Equal Employment Opportunity laws Title VII of the Civil Rights Act of 1964 States companies cannot discriminate against an employee because of race, color, religion, sex or national origin. To enforce this act, they formed the Equal Employment Opportunity Commission (EEOC) EEOC can sue a company that discriminates against an employee The employee may also take the company to court
48. Equal Employment Opportunity Laws Title VII of the Civil Rights Act of 1964 In 1999, a California Superior Court awarded a supervisor at a public transit company $5.7 million because the company had discriminated against him on the basis of his national origin. What examples can you think of where this may take place?
49. Equal Employment Opportunity Laws Age Discrimination in Employment Act States companies cannot discriminate against employees because of their age. Cannot discriminate against workers due to age in: Hiring Promotions Retirement Workers may sue employers for discrimination based on age
50. Equal Employment Opportunity Laws In 1998, a 61-year old senior manager at Goodyear Tire and Rubber Company successfully sued the company for $2.1 million for age discrimination when it tried to force him to accept an early retirement. In your opinion, Right or Wrong?
51. Equal Employment Opportunity Laws Age Discrimination in Employment Act Discussion A writer for a popular TV program about young adults lied about her age because the producers did not want to hire any writers over 30 What do you think of this hiring practice? Legal or Illegal?
52. Equal Employment Opportunity Laws Americans with Disabilities Act States companies cannot discriminate against any person with a disability Companies cannot fire or refuse to hire people based on disabilities or illness. Companies must also accommodate a workers disability Disabilities include: Spinal cord injuriesLoss of limbsMultiple SclerosisMuscular DystrophyCerebral PalsyHearing, Speech, Visual, and Learning impairmentsHead injuriesPsychiatric disordersDiabetesAIDS
53. Equal Employment Opportunity Laws Americans with Disabilities Act In 1998, a court ruled that a supermarket could not make a worker with a bad back lift or carry heavy boxes and had to find him less strenuous work. Right or Wrong? What if you worked with this person?
54. Occupational Safety and Health Laws Require employers and employees to comply with safety and health standards established by federal, state, and local governments. Enforced by the U.S. Department of Labor’s: Occupational Safety and Health Administration OSHA
55. Occupational Safety and Health Laws Sets standards for keeping workplaces clean and free of hazards Unsafe machinery Dangerous chemicals Business must keep records of employee illness, injuries, and deaths and submit them to the U.S. Department of Labor
56. Occupational Safety and Health Laws OSHA inspectors visit many workplaces each year to ensure they comply with regulations. Employees may request OSHA visits the workplace if they feel it is not meeting regulations. OSHA may issue Citations Written warnings Shutdown of the working environment until regulations are met.
57. Occupational Safety and Health Laws In 1999, utility workers in Florida bombarded OSHA with complaints following an explosion at Tampa Electric Company. OSHA responded by investigating these complaint. Companies are not allowed to retaliate against workers who request an OSHA visit Helena laboratories in Beaumont, Texas had to pay $137,100 in 1999 due to an employee requested visit that found workers being exposed to blood-related products without adequate protection.
58. Wage-Hour Laws In 1938, Congress passed the Fair Labor Standards Act (FLSA). Also Known as the Wage-Hour Law Established minimum wage, overtime, and child labor standards for employees.
59. Wage-Hour Laws Fair Labor Standards Act (FLSA) protects workers in three ways: Sets the minimum wage companies can pay their workers Sets the number of hours per week workers can work without receiving overtime pay Prohibits companies from employing children under the age of 14 years old.
60. Wage-Hour Laws Minimum Wage currently is $7.25 per hour Overtime Pay is the regular amount someone is paid per hour plus half of that total added together. Time and a half. Workers under the age of 18 must be off work by 10 p.m. to allow for the opportunity for attending school.
61. Benefits Laws Guarantee that workers will receive certain benefits regardless of what happens to them on the job. Benefits include: Vacation Sick leave Pensions Tuition assistance
62. Benefits Laws Companies must comply with five different benefits laws: Social Security Act Employee Retirement Income Security Act (ERISA) Unemployment Insurance Laws Workers Compensation Laws Family and Medical Leave Act (FMLA)
63. Benefits Laws Social Security Act The SS act of 1935 was designed to provide workers and their families with income after retirement Social security funds also support disabled workers and the federal Medicare programs Medicare provides health insurance for senior citizens
64. Benefits Laws Social security (SS) defined: Workers and Employers share the cost of SS taxes while the worker is employed. Every employee and employer must pay SS When they retire, they receive a pension based on their lifetime earnings. The spouse, children, and other dependents of a worker who dies can receive a portion of the benefits
65. Benefits Laws Employee Retirement Income Security Act (ERISA) Protects the money put into an employee’s retirement fund by companies and workers
66. Benefits Laws Unemployment Insurance Laws Both the SS act and the Federal Unemployment Tax Act provide workers with assistance during times of unemployment
67. Benefits Laws Unemployment Insurance Laws To be eligible, workers must meet two requirements: Must have lost their jobs through no fault of their own Must have worked a certain length of time Employers must pay a certain amount into the unemployment fund for each worker The amt a worker receives is based on: Length of Employment Salary
68. Benefits Laws Workers Compensation Laws that insure workers against injury, illness, or death because of job conditions Each state has these laws Some state have employers pay into a special fund Some buy insurance from private companies
69. Benefits Laws Workers Compensation Laws Employers are responsible for an employee’s on-the-job injury, no matter how the injury or illness occurs Workers comp covers accidents even if it is the workers fault Payment will depend on a passed drug test If failed, all workers comp will be lost.
70. Benefits Laws Family and Medical Leave Act (FMLA) Requires companies to allow up to 12 weeks of leave to care for a child, spouse, or parent. The law only affects companies with 50 or more employees Companies don’t have to pay salary during leave, but must give them the job back upon return with no penalties. Employers must also maintain health insurance during leave. Why is there a need for this act?
71. Labor Relations Laws Protects the right of employees to organize into unions to bargain collectively for better wages and working conditions. Most important labor relation law is the: National Labor Relations Act (NLRA)
72. Labor Relations Laws Union – Groups of workers who collectively bargain for rights such as higher wages and better working conditions. Companies must bargain in “Good Faith” Companies must at least listen to what unions have to say. They cannot dismiss the bargaining without at least making a counteroffer.
73. Labor Relations Laws Things unions might bargain for: Wages Hours Conditions of Employment – safety Things managers might bargain with: Sick leave Work rules Drug testing Layoffs Overtime Holiday bonuses Disciplinary procedures
74. Labor Relations Laws Unions can be effective due to the right to STRIKE – stop working to get demands A strike is a last resort when they see no other alternative