Types and Structures of Companies

A business structure where one person owns and operates the business, with full liability for all debts and obligations.

A business structure with two or more partners sharing profits, losses, and liability for business debts.

A type of business structure where the owners are legally separated from the business, creating a distinct legal entity. This limits the owner's personal liability for business debts.

A type of business structure with shares traded publicly on a stock exchange, offering wider ownership opportunities. Owners are also legally separated from the business.

A company that owns shares in other businesses, often to control their operations.

A business structure where a franchisor grants a franchisee the right to operate under their brand in a specific location.

The risk or exposure of an individual's personal assets to business debts and obligations.

A legal principle that limits the owner's liability for business debts to the amount of their investment in the company.

A framework that explains how managers can align their actions with the interests of company owners. It addresses the potential conflict when managers prioritize personal goals over company objectives.

A theory that explores the costs involved in economic transactions. It explains why firms choose to produce goods internally or outsource. Considerations such as transaction frequency, uncertainty, and asset specificity drive these decisions.

A theory that focuses on how unique internal resources, such as skills, brand reputation, and innovation, create a sustainable competitive advantage for a company. These resources must be valuable, rare, inimitable, and non-substitutable to ensure success.

These are physical assets that a company owns, such as buildings, equipment, vehicles, and technology.

This refers to the financial resources a company has access to, including cash, investments, and credit lines.

This category encompasses the skills, knowledge, and experience of a company's employees.

These are natural resources a company utilizes in its operations, such as land, water, and minerals.

A question used to assess the importance of a resource. It asks if the resource is valuable to the company's goals.

A question used to assess the importance of a resource. It asks if the resource is unique or scarce compared to competitors.

A question used to assess the importance of a resource. It asks if the resource is difficult or costly for competitors to imitate.

A question used to assess the importance of a resource. It asks if there are readily available substitutes for the resource.

This level consists of CEOs, presidents, and board members. They set the company's mission, vision, and long-term goals. They also make strategic decisions, allocate resources, and represent the company externally.

This level includes department and division managers. They implement the strategies set by top management, coordinate between teams, monitor performance, and provide feedback.

This level includes supervisors and team leaders. They oversee daily operations, ensure tasks are completed, manage employees, and address operational issues.

This financial statement provides a snapshot of a company's financial position at a specific point in time. It details assets (what the company owns), liabilities (what it owes), and equity (owners' interest).

This financial statement shows the cash inflows and outflows of a company over a period. It's divided into operating, investing, and financing activities. It helps assess the company's ability to generate cash.

This financial statement summarizes a company's revenues, expenses, and profits or losses over a period. It shows if the company is making money or losing money.

The expected value (EV) of an alternative is the average outcome if that alternative is chosen many times. It is calculated by multiplying each possible outcome by its probability and summing the results.

A visual representation of decision-making under uncertainty, showing alternative choices, possible outcomes, probabilities, and payoffs. It helps analyze and compare different choices.

Goods are physical, tangible products that can be stored and inventoried. Services are intangible, cannot be stored, and are consumed simultaneously with their production.

A series of activities a company undertakes to create and deliver a product or service to the market. It includes every step from obtaining raw materials to marketing and customer support.

Job production involves making custom, one-off items individually. Batch production involves producing goods in groups or batches. Flow production is continuous, high-volume production often using automated processes.

A production system that aims to reduce inventory and waste by producing or delivering goods only when needed. It relies on precise planning and efficient supplier relationships.

A philosophy of continuous improvement, focusing on making small, incremental changes to improve efficiency, quality, and productivity. It aims to achieve a gradual, ongoing improvement process.

Also known as 'automation with a human touch,' it refers to automating processes with built-in quality control. Machines or workers can stop production if a problem occurs to prevent defects.

The human resource department is responsible for attracting, hiring, training, managing, and supporting employees. It ensures the organization's human capital is well-managed and aligned with its goals.

Maslow's hierarchy of needs describes five levels of human needs that motivate behavior. Starting from basic physiological needs, they ascend to safety, love, esteem, and finally self-actualization.

Hygiene factors are basic elements that prevent dissatisfaction but don't motivate employees. Motivators are factors that lead to job satisfaction and motivation.

Adding more tasks or responsibilities to a job to increase variety and reduce monotony. It aims to make work more engaging without changing the job's complexity or level.

Altering the structure or content of a job to improve motivation, job satisfaction, and performance. This could involve changing tasks, roles, or how work is organized.

Giving employees more control over their work and decision-making. It involves delegating authority, encouraging autonomy, and involving employees in decisions.

Different leadership styles have varying advantages and disadvantages. Effective leaders adapt their style to the situation and team needs.