Behavioral Competencies: Business

Question 1

Return on Investment (ROI)

Answer 1

Net return on investment / cost of investment X 100 percent

Question 2

Return on equity (ROE)

Answer 2

• Amount of money made compared to average investment of each shareholder
• Foundation of strategic plan

Question 3

Balance sheets

Answer 3

Assets - liabilities = equity

Question 4

Asset

Answer 4

Any resource possessed by the company as a result of previous actions and from which future gains are expected

Question 5

Bottom-up budgeting

Answer 5

Department supervisors forecast departmental expenses

Question 6

Top-down budgeting

Answer 6

Estimating expenses for an entire organization and then allocating a set amount to each department

Question 7

Business case

Answer 7

Document produced to explore solutions to a business problem
- Problem statement
- Background
- Objectives
- Current status
- Requirements
- Alternatives
- Additional considerations
- Action plan
- Executive summary

Question 8

OLAP

Answer 8

• Online Analytical Processing
• On demand, facilitates decision-making
• Reporting, what-if planning, trend spotting, etc.

Question 9

Business Intelligence tools and techniques

Answer 9

• Online Analytical Processing (OLAP)
• Advanced Analytics
• Business Intelligence portals (centrally stored collection of firm’s data)

Question 10

Financial analysis methods to assess business health

Answer 10

• Financial ratios
• Marketing and sales metrics (# of customers or orders, average revenue per order, gross profit margin)
• Operations and business development metrics (# of activities, opportunity success rate, innovation rate (revenue from new ideas / total revenue))
• Information Technology (IT) metrics (# of online orders, availability of information resources, # of views per page)
• General business and economic environment metrics (current # of competitors, average $ of new competitors entering/year, current market share, average income of target customer)

Question 11

Financial ratios

Answer 11

• Profitability ratio
• Liquidity ratio: available cash or ability to pay off short-term debt
• Operational efficiency and employee productivity ratios
• Leverage or capital structure ratios: assess how business uses debt to finance operations

Question 12

Gross profit margin

Answer 12

(revenue - cost ) / revenue

Question 13

SWOT analysis

Answer 13

Look at strengths, weaknesses, opportunities, and threats

Question 14

Gene Dalton’s Theory of Lasting Change

Answer 14

Change Management Theories & Models
- Argued change would not occur without a feeling of loss or pain to motivate it
- People will continue old patterns of behavior unless they feel a need for change
- Also need trustworthy facilitators of change

Question 15

Lewin’s Change Management Model

Answer 15

Change Management Theories & Models
- Kurt Lewin
- 3 stages for planning change:
1. Unfreezing
2. Change
3. Refreezing

Question 16

McKinsey 7-S Model

Answer 16

Change Management Theories & Models
- Frequently used
- Founded on principle that each company has 7 elements/key factors:
1. Strategy
2. Structure (reporting hierarchy)
3. Systems (procedures, processes)
4. Shared values
5. Style (leadership approach, operational culture)
6. Staff (employee development and empowerment)
7. Skills

Question 17

John Kotter’s 8-Step Change Model

Answer 17

Change Management Theories & Models
1. Create a sense of urgency
2. Build a guiding coalition
3. Develop a shared vision and strategy
4. Communicate the change vision
5. Empower action
6. Generate short-term wins
7. Capitalize on momentum
8. Make the change stick