Business Administration Overview
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Questions and Answers

What is the primary role of the board of directors in a company?

  • To oversee daily operational tasks
  • To direct and drive company policy (correct)
  • To develop employee training programs
  • To manage customer relations
  • Which of the following characteristics is NOT true about the minimum size of a board of directors?

  • It must consist of three members at a minimum
  • It must have at least one executive director
  • It cannot include external non-executive directors (correct)
  • It must include a president and a secretary
  • What does the term 'sole proprietorship' indicate regarding company management?

  • Management responsibilities are distributed to stakeholders
  • Management is shared between multiple stakeholders
  • A single individual is responsible for managing the company (correct)
  • The board of directors is solely responsible for management
  • Which of the following statements about company listings and management is accurate?

    <p>Listed companies in Spain must comply with specific governance codes</p> Signup and view all the answers

    In what context is a CEO most relevant?

    <p>In each organizational work area of any firm size</p> Signup and view all the answers

    Study Notes

    Business Administration Overview

    • Management is essential in all organizations, regardless of size, location, or work area.
    • Company owners decide who manages the business.
    • Business administration differences depend on:
      • Firm size (micro, small, medium, large)
      • Public or private stock market listing
      • National laws
    • Sole proprietors manage their own company.
    • Larger companies (private limited liability co., Capital Companies Act (Spain)) use an administrative body (single or multiple administrators/board of directors) to manage and represent the company.
    • Decision-making authority must be centralized. The CEO (Chief Executive Officer) holds this in the US.

    Board of Directors Roles

    • Directing Company Policy: Set policy for the company
    • Controlling Management Affairs: Monitor and control management decisions
    • Serving as a Link to Owners: Act as a communication channel between the owners and management.

    Board of Directors Characteristics

    • Minimum three members (president - exec or non-exec, secretary, etc.)
    • Composed of internal (executive) and external (non-executive) directors
      • Internal: CEO
      • External: block holders or independent directors
    • Listed limited liability companies in Spain should follow the Code of Good Governance for Listed Companies.

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    Description

    This quiz explores the fundamentals of business administration, covering key aspects such as management in various organizational sizes, the roles of a board of directors, and the centralized decision-making structure. Understand how different factors influence business management, including ownership and national regulations.

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