John Davis Just Decided to Quit His Job with General

question 15

Essay

John Davis just decided to quit his job with General Motors where he worked in an assembly plant. He is going to open his own shop that will install customized mufflers on cars. Using Woodward's framework, explain the differences in the technologies of these two types of organizations. What resulting differences in organization structure should there be?

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Definitions:

Common Stock Options

Financial derivatives that give the holder the right, but not the obligation, to buy or sell shares of a company's common stock at a set price before the option expires.

Corporate Capital Structure

The mix of debt, equity, and other securities that a company uses to finance its activities.

Diluted Earnings Per Share

A metric that calculates a company's earnings per share (EPS) if all convertible securities were converted into common stock, potentially lowering the EPS.

Convertible Debt

A type of bond or loan that can be converted into a predetermined amount of the company's equity at certain times during its life, usually at the discretion of the bondholder.