ADM 1301 Lecture Notes - Lecture 8: Ethical Movement, Totalitarianism, Consumerism
18 Apr 2016
School
Department
Course
Professor
MANAGEMENT PROCESS:
MISSION STATEMENT
(mandate, philosophy of the organization affected by ethical, tech., competition, social, legal,
political, resources, etc)
VISION
GOALS
(long-term; desired goals must be specific and measurable (control system!) + challenging
+ realistically retainable + time frames
OBJECTIVES
(short-term; plan/steps towards goal)
ORGANIZING
(arranging resources)
MOTIVATE
(directing, leading)
PLAN
(Policy, Procedures, Rules, and
Budgets)
CONTROL
(Establish Demands + Measure
Performance + Compare IF
necessary, Corrective Action)
ART OF COMMUNICATION!
COORDINATE
(POMC connected)
SYNERGY
(Whole > sum of its parts)
FORMS OF OWNERSHIP
TYPE OF PARTNERSHIPS:
1. General partnership: complete sharing of management and liabilities
2. Limited partnership: 1 limited + 1 unlimited
3. Joint Venture: specific projects for a limited time
PARTNERSHIP AGREEMENTS:
Legal documents that state the basic agreements made between partners. It lists the partnership
capital (money invested) and management duties and other issues such as profit/loss split and
one may leave. (Articles of Partnership) not legally required in Canada.
TYPES OF CORPORATIONS:
1. Private: owned by 1 or a few people, all closely involved; don’t have to disclose financial
information publicly
2. Public: anyone may buy/sell/trade its stock; must disclose financial information to the
public under specific laws
3. Crown: operated by the government to provide a service and earn a profit fosters
competition provides services that would not likely be offered by others, etc
4. Mixed: jointly owners by the government and the general public mostly operate in the
exploration and natural resource sectors
Sub Types
a. Subsidiary (parent corporation owns the majority of the stock both separate
structures)
b. Holding (controls one or more corporation though ownership of their common
stock)
c. Non-profit (not owned by government and focuses on service not profit)
CREATING A CORPORATION:
Incorporated under the laws of the provincial or federal government
Incorporators (individuals creating the corporation) + chartering the corporation (specific
government procedure for incorporating a business)
Name must end in “company”, “corporation”, “incorporated”, or “limited
Must file articles of incorporation (legal documents for government office) which include
oName + address + principle place of business
oObjectives of the corporation
oClasses of stock (common, preferred, voting, nonvoting) + number of shares for
each stock to be issued
oWhether it will be a public or private company
oProvisions for transferring share of stock between owners if private
oProvisions for the regulation of internal corporate affairs
oNames + addresses of the initial board of directors + incorporators
If information is okay, the government issues a certificate of incorporation
ELEMENTS OF A CORPORATION:
1. Board of directors: elected by shareholders, oversee general operations, set long-range
objectives, legally liable for mismanagement + misuse of funds
2. Stock ownership: preferred and common shareholders; common have proxy vote and
preemptive rights over preferred
BENEFITS AND PROBLEMS:
Economic/Social Benefits: effective means of managing resources, professional management +
research, higher living standards, more products (bulk = cheaper!)
Economic/Social Problems: bigness (monopolies + morale + price fixing), environment, political
HOW DOES A CORPORATION OBTAIN FUNDS?
1. Equity financing (selling shares + diluting ownership)
- Common = volatile = vote + 2nd dibs on dividends + more risk but better return IF
- Preferred = stable = no vote = 1st dibs on dividends + no risk
2. Debt financing (borrowing of money + interest payments + date of maturity)
Equity Financing
Common (Residual)
Vote
Dividends if declared after preferred owners
Share in assets after preferred owners.
MORE RISK but potentially greater return.
Preferred
Usually, no vote
Dividends if declared at a certain rate.
Share in assets before Common.
The Board of Directors
Represents rights
Formulates/ adopts a set of corporate bylaws
Oversees/evaluates job of senior management.
Absolutely liable for the GST/Income Tax of the organization for which they sit on the
board.
Liable for 6 months of employee wages.
Corporation: An artificial being, invisible, intangible, and existing only in the eyes of the law.
Legal entity
Rights: Buy/sell property, sue and be sued, recognized as the legal owner, to continue
forever….
MERGERS AND ACQUISITIONS
Merger is when 2 companies combine to for a new one
-Horizontal merger (same product + same customers)
-Vertical merger (different product + same industry)
-Conglomerate merger (completely different)
Acquisition is when 2 company purchases another (usually through stock)
- Ways to avoid unwanted acquisition (prevent hostile takeover)
Ask shareholders not to sell stock to the raider
File a lawsuit
Go private
Increase debt to scare off raiders
Poison pill (sell stocks to shareholders at lower price)
Shark repellant (management requires a large majority of shareholders to
approve)
White knight (find a firm that is will to take over the threatened company)
Leveraged buyout = borrow money from banks and acquire a company using the assets of the
purchased company to guarantee repayment of the loan
Merger + Acquisition are favourable: boost stock price + market value = ability to meet foreign
comp.
Merger + Acquisition are harmful: focus on avoiding takeovers instead of managing effectively
Document Summary
Vision (mandate, philosophy of the organization affected by ethical, tech. , competition, social, legal, Mission statement political, resources, etc) (long-term; desired goals must be specific and measurable (control system!) Objectives (short-term; plan/steps towards goal) (policy, procedures, rules, and. Performance + compare if necessary, corrective action) Type of partnerships: general partnership: complete sharing of management and liabilities, limited partnership: 1 limited + 1 unlimited, joint venture: specific projects for a limited time. Legal documents that state the basic agreements made between partners. It lists the partnership capital (money invested) and management duties and other issues such as profit/loss split and one may leave. (articles of partnership) not legally required in canada. Sub types: subsidiary (parent corporation owns the majority of the stock both separate, holding (controls one or more corporation though ownership of their common structures) stock, non-profit (not owned by government and focuses on service not profit) Incorporated under the laws of the provincial or federal government.
