Chapter 18 Business Basics Chapter Objectives Describe three

Chapter 18 Business Basics

Chapter Objectives • Describe three forms of business ownership. • Explain what a franchise is. • List and describe the five functions of management. continued Copyright Goodheart-Willcox Co. , Inc. May not be posted to a publicly accessible website.

Chapter Objectives • Assess an organizational chart. • Explain the three levels of management. • Differentiate between revenue centers and support centers. Copyright Goodheart-Willcox Co. , Inc. May not be posted to a publicly accessible website.

Business Structure • A single-unit business is called an independent business • Multiple-unit businesses can be either chains or franchises kenary 820/Shutterstock. com Copyright Goodheart-Willcox Co. , Inc. May not be posted to a publicly accessible website.

Ownership • Sole proprietorship—only one person, called the sole proprietor, owns the business • Partnership—two or more people, called partners, own the business • Corporation—the business is owned by a legal entity known as a corporation – Stockholders who own stock actually own the corporation Copyright Goodheart-Willcox Co. , Inc. May not be posted to a publicly accessible website.

Management • Management consists of a team of managers, the people who make decisions for the business • In an owner-managed business, the owner makes all the decisions • In a business with hired management, the owner hires a person or company to manage the business Copyright Goodheart-Willcox Co. , Inc. May not be posted to a publicly accessible website.

Chains and Franchises • Chains and franchises are multiple-unit businesses • A business chain has one name and one owner • Units in a franchise are part of a chain, but each unit may have a different owner continued phipatbig/Shutterstock. com Copyright Goodheart-Willcox Co. , Inc. May not be posted to a publicly accessible website.

Chains and Franchises • In the lodging industry, the relationship among chain, franchise, ownership, and management can be complex – A corporation may own some units and franchise others – It may or may not directly manage the units it owns – It may manage units for businesses it does not own Copyright Goodheart-Willcox Co. , Inc. May not be posted to a publicly accessible website.

Management Functions • The five major functions of management are – planning – organizing – staffing – leading – controlling wavebreakmedia/Shutterstock. com Copyright Goodheart-Willcox Co. , Inc. May not be posted to a publicly accessible website.

Planning • Planning consists of setting goals and developing methods to meet those goals – Has three time frames • Before a business is started (business plan) • Day-to-day operations (operations manual) • For the future (such as five- or ten-year plans) – Has two levels: overall and specific Copyright Goodheart-Willcox Co. , Inc. May not be posted to a publicly accessible website.

Organizing • Organizing consists of designing the internal structure of the business, and often involves – dividing up tasks into divisions and departments and hiring managers to manage and organize – delegating authority • The organizational chart shows how tasks are organized, who performs them, and the levels of responsibility and authority Copyright Goodheart-Willcox Co. , Inc. May not be posted to a publicly accessible website.

Staffing • Staffing consists of all the activities involved in hiring and keeping workers, including – recruiting – hiring – training – scheduling – evaluating – compensating (pay and benefits) Copyright Goodheart-Willcox Co. , Inc. May not be posted to a publicly accessible website.

Leading • Leading consists of influencing people to accomplish the goals of the business, including – motivating people – creating a positive work atmosphere – communicating clearly – giving feedback – listening – solving problems Eugenio Marongiu/Shutterstock. com Copyright Goodheart-Willcox Co. , Inc. May not be posted to a publicly accessible website.

Controlling • Controlling is making sure the business accomplishes its goals, including – setting measurable goals – measuring results – comparing results with goals – finding out why results fall short of goals – taking corrective action Copyright Goodheart-Willcox Co. , Inc. May not be posted to a publicly accessible website.

Management Levels • Upper management is the top level and is responsible for the entire company • Supervisory management is responsible for a specific department or area • Larger companies may have one or more levels of middle management between the top and supervisory levels • Organizational charts may show reporting relationships Copyright Goodheart-Willcox Co. , Inc. May not be posted to a publicly accessible website.

Organization of Hospitality Businesses • Small hospitality businesses have few or no departments • Larger businesses are organized into departments and divisions; divisions are often based on geography • Multiple-unit businesses have corporate headquarters, where tasks relating to the entire company are handled Copyright Goodheart-Willcox Co. , Inc. May not be posted to a publicly accessible website.

Revenue and Support Centers • Revenue is the money a business takes in for the products and services it sells • Profit is money left over after costs are paid • A revenue center is a division or department that sells products that bring in revenue • A support center (cost center) provides services that enable the revenue centers to make money Copyright Goodheart-Willcox Co. , Inc. May not be posted to a publicly accessible website.

Chapter 18 Review • What are three forms of business ownership? – sole proprietorship, partnership, corporation • How does a franchise differ from a chain? – A franchise is part of a chain, but each unit may have a different owner. continued Copyright Goodheart-Willcox Co. , Inc. May not be posted to a publicly accessible website.

Chapter 18 Review • What are the five management functions? – planning, organizing, staffing, leading, controlling • What does an organizational chart show? – how tasks are organized, who performs them, and the levels of responsibility and authority continued Copyright Goodheart-Willcox Co. , Inc. May not be posted to a publicly accessible website.

Chapter 18 Review • What are three management levels? – upper, supervisory, middle • What is the difference between a revenue center and a support center? – A revenue center sells products that bring in revenue. A support center provides services that enable the revenue centers to make money. Copyright Goodheart-Willcox Co. , Inc. May not be posted to a publicly accessible website.