PART 3: Organization models, Decision making process, management Flashcards
In a corporation, the boad of directors is selected by…
the stockholder
The function of hiring and competition of senior executives, defining the dividends and option policies and helping to set broad goals are made by…
broad of directors
The senior executive is tasked with overseeing the day to day administrative and operational functions of a business is called…
CEO
When facebook and instagram merged it was…
horizontal merger
When you read in the Nike’s website: “to bring inspiration to every athlete in the world”, this is their…
mission
Assume for a moment your company sells insurance products in a large metropolitan area. The marketing team of your insurance company outline, step by step, each marketing component needed to meet the goals. This is…
tactical plan
The purpose of Hay System is to provide a consistent procedure to evaluate position classification by…
- Measuring the content of each job compared to other jobs based on classification factors know how
- Determining its relative worth
- Establishing equitable pay relationships among all jobs
*** All of them are correct **
Situational leadership
it is up the leader to change his style, not the follower to adapt to the leader’s style
According to the “situational leadership model”, an employee with moderate to high competence and variable commitment needs to the following leadership style
supporting
Which is the DISC profile of an employee whom general characteristics are good listener, team player and predictable
steadiness
Which is the first step of a decision-making process
recognizing and defining the decision situation
Customer acquisition is…
Costly and retaining customers must be a priority
Retaining customers…
Increase the customer share (percentage of a customer’s total spending within a particular category that goes to a specific business or brand)
Customer relationship focus on…
“Good customers”
What are butterflies customers
Problematic customers
The objective of customer experience is
Increase loyalty
Touch points are
any interaction
Organizaion models
Sole proprietorship
business owned and operated by one individual
for example restaurants, hair salon, flower shop, etc. Many of them focus on services rather than manufacture of goods
Advantages of a sole propiertorship
easy and cost of formation, secrecy, the owner decides how to use/distribute the profit, flexibility and control the business, taxation and closing the business
each country has different tax advantages for motivating the entrepreneurship
Disadvantages of a sole propiertorship
unlimited liability, limited sources of funds (higher interest rates), limited skills, lack of continuity (life expectancy linked to that of the owner), difficulty of the tax management
he would have to do the management, marketing, finance, accounting, bookkeeping, personnel management
Partnership
association of two or more people who carry on as of a business for-profit
Advantages of a partnership
easy of organization, availability of capital and credit, combined knowledge and skills, decision making
Disadvantages of a partnership
unlimited liability, life of the partnership and distribution of profits
Corporation
legal entity, created by the state, whose assets and liabilities are separate from its owners
typically owned by many individuals and organizations who own shares of a business called stocks
Corporate owners are often called…
shareholders/stockholders
Cooperatives
Organization composed by of individuals or small businesses that have banded together to reap the benefits of belonging to a larger organization
Types of corporation
Private corporation
owned by just one or few people who are closely involved in managing the business
example: mercadona
Public corporation
corporation whose stock anyone may buy, sell or trade
Quasy public corporation
owned and operated by states or local government
Non-profit corporation
corporations that focus on providing a service rather than earning a profit but are not owned by a government entity
example: Red Cross
Inside directors are…
employees of the company
Outside directors are…
unaffiliated with the company (lawyers, bankers, politicians…)
What is a Joint Venture
A partnership established for a specific project or for limited time
What is a limited liability company
provides limited liability, as in a corporation, profits are not taxed thus the owners only pay tax on the revenue once and protects your assets
What is a cooperative
an organization composed of individuals or small businesses that have banded together to reap the benefits of belonging to a larger organization
Mergers
when two companies (usually corporations) combine to form a new company
Acquisition
occurs when one company purchases another, generally by buying most of its stocks
Acquisitions
Tender offer
an offer to purchase some or all of shareholders shares in a corporation
are typically made publicly and invite shareholders to sell their shares for specified price and within a particular window of time. The price offered is usually at a permium to the market place
Friendly offer
both groups are agreeing the purpose deal
Hostile offer
the second company does not want to be taken over
The acquired company may become a…
subsidiary of the buyer or its operations and assets may be merged with those of the buyer
What does the government does to protect customers from monopolistic practices
scrutinizes mergers and acquisitions
Horizontal merger
when firms make and sell similar
example Facebook and Instagram; Bankia and Caixabank
Vertical merger
companies operating at different but related levels of an industry
example Google and Chrome
Conglomerate merger
two firms of unrelated industries merge
example Samsung (electronics, military, hardware, apartments, ships…)
Entrepeneuship
process of creating and managing a business to achieve desired objectives
Common elements of entrepeneurship
- self-motivation
- understand what you offer (how your product/service fits to the market)
- take risk
- know how to network (able to connect with others and recognize partnership opportunities)
- basic money management and skills and knowledge and passion
Small business
Any independently owned and operated business that is not dominant in its cooperative are and does not employee more than 500 people
What is PYME
small and medium companies
What is the role of small business
Efficiency:
* produce 16 time more patents per employee than larger patenting firms
* employ nearly half of all private sectors employees
* pay 42% of the US private payroll
small businesses per industries
Retailers
acquire goods from producers and wholesalers and sell them to customers
Retailers attract new entrepeneurs because…
a new retail store does not have to invest large sums of money
small business per industries
Wholesalers
supply products to industrial, retail, and institutional users for resale or for use in making other products
small business per industries
Services
businesses that do not actually produce tangible goods
example real state, insurance and personal agencies, barbershops, etc
Entrepeneurs in services also include individuals such as…
beauticians, psychologists, doctors, lawyers or veterinarians
small business per industries
Manufacturing
not usual for small business, although they have an advantage over large firms because they can customize products to meet specifics customers needs and wants
custom artwork, jewlery, clothing or furniture
small business per industries
High technology
businesses that depend heavily on advanced scientific and engineering knowledge
fields like computers, biotechnology, genetic engineering, robotics
Advantages of small businesses
- you are your own boss
- choose whom you work with
- cost: small business hire other firms (to supply services: accounting, advertising, legal counseling)
- flexibility to adapt to changing market demands
- fast decisions (the owner-only one layer of management)
- focus your efforts on a specific group of customers
- reputation for quality and service
Disadvantages of small business
- high stress level
- overcome challenges in starting the business
What are the 3 major reasons of small business failure
- undercapitalization
- managerial inexperience or incompetence
- inability to cope with growth
starting s small business
Equity financing
the owner is the source of money
Venture capitalism
people/organizanizations that agree to provide some funds for a new business in exchange for an ownership interest or stock. They try to purchase cheap stock and then sell the stock for a profit after the business has grown successfully
External financing
banks, family, friends…
Line of credit
(like a credit card) an arrangement by which a bank agrees to lend a specified amount of money to an organization upon request
Trade credit from suppliers
the supplier delivers the goods. The company has a collection period to sell the product, and once it does so, it pays the supplier
approaches to starting a small business
Buying existing business
network of customers, suppliers and distributors problems
Franchising
a license to sell other products or to use another’s name in a business. The franchisee acquires the rights
Management
is the process designed to achieve an organisaiton’s objectives by using its resources effectively and efficiently in a changing environment
Effectively means…
having the intended results
Efficiently means…
accomplishing the objectives with a minimum resources
Managers
make decisions about the use of organization’s resources in order to obtain the results
Why resources are important?
to effectively pursue its objectives and coordinate their use to turn out a final good or service
Planning
the process of determining the organization’s objectives and deciding how to accomplish them
Parts of planning
- mission
- goals
- objectives
- strategic plans
- tactical plans
- operational plans
- contingency planning
mission
a declaration of an organization’s fundamentals purpose and basic philosophy
Goals
the result that a firm wishes to achieve
What is the difference between goals and objectvies
objectives are measurable (profit, efficiency, growth: ability to adapt and get new products to the marketplace)
Strategic plans
establish the long-range objectives and overall strategy or course of action by which a firm fulfills its mission
more than one year
examples: purchase companies, move into international markets, add products
Tactical plans
short range plans designed to implement the activities and objectives in the strategic plan
less than one yeat
tactical plans allow the company to react to changes in the environment while contiuing to focus on the company’s overall strategy
Operational plans
very short plans to specify what actions individuals, work groups or departments need to accomplish in order to achieve tactical plan and strategic plan
Contingency planning
planning that deals with potential disasters such as oil spills, earthquakes, product intoxication, pandemic, etc.
types of management
CEO’s primary responsibilities
making major corporate decisions, managing the overall operations and resources of a company, acting as the main point of communication between the broad of directors and corporate operations and being the public face of the company
CEO reports to the board of directors
COO
senior executive tasked with overseeing the day-to-day administrative and operational functions of a business
COO reports to the CEO
CFO
senior executive responsible for managing the financial actions of a company
CFO reports to the COO
CFO’s duties include tracking cash flow and financial planning as well as analyzing the company’s financial strenght’s and weaknesses and proposing corrective actions
CMO
executive who is in charge of developing and overseeing marketing and advertising plans
CMO reports to the CEO (is part of the C-level executive team)
the CMO has to collaborate and keep pace with other c-executives. This is vital if the company is to adapt in today’s rapidly shifting market
Why CMO’s position is more important than it used to be
due to advances in technology and communications
CDO
senior executive responsible for the utilization and governance of data across the organization
CDO’s responsibilities
governance: advising on, monitoring and governing enterprise data
* operations: enabling data usability, availability and efficiency
* innovation: driving enterprise digital transformation innovation, cost reduction and revenue generation
* analytics: supporting analytics and reporting on products, customers, operations and markets
CIO
person responsible for the management of technology and the usability of information within the company
in most companies, CIO reports to CEO
makes sure the technology is beneficial and promotes progress in the company
Middle information management
members of an organization responsible for the tactical planning that implements the general guidelines established by top management. Are involved in specific operations of the organization and they spend more time in organizing
First line management
members of an organization who supervise both workers and the daily operations of an organization
responsible for implementing the plans established by middle managers and directing and controlling worker’s performance on the job
What does HR ensures
smooth functioning of an organization
The role of HR depends on the company’s behaviour (growth, stability or decrease)
HR: 1. job desing and job analysis
Job design involves…
describing duties, responsibilities and operations of the job. It will help you determine the kind of candidate you want for the job
Job analysis involves…
describing the job requirements such as skills, qualification and work experience
Hay’s guide chart profile method purpose
to provide a consistent procedure to evaluate position classifications by:
* measruring the content of each job compared to other jobs based on classification factors (know how; problem solving and accountability/impact on the results)
* determining its relative worth
* establishing equitable pay relationships among all jobs
HR: 2. Employee hiring and selection
An —- helps to source and identify the ideal candidates for interview and selection
Human Resources System
The candidates are then subjected to a —- process to filter out the most suitable candidates from the pool of applicants
comprehensive screening
The screen candidates are then taken through different interview rounds to…
test and analyze their skills, knowledge and work experience required for the job position
HR. 3. employee training and development
The role of HR should be to ensure that…
new employees acquire the specific knowledge and skills to perform their task efficiently
very crucial role in preparing employees for bigger tasks and responsibilities –> leads to the development of employees at work
HR: 4. Compensation and benefits
The role of HRM is to…
formulate attractive yet efficient benefits and compensation packages to attract more employees into the workplace without disturbing the finances of the company
compensation is related with the job design (Hay Chart)
HR: 5. employee performance management
Performance management ensures that…
the output of employees meets the goals and objective of the organization
- enabling real-time feedback and coaching employees to boost efficiency among them
- conducting performance reviews monthly or quarterly to discuss the positives and the improvement areas of employees
skills nedded by managers
Specialized knowledge and training needed to perform jobs that are related to particular areas of management…
Technical skills
most needed by first-line managers and least critical to top-level manag
The ability to think in abstract terms to see how parts fit together to form the whole; think creatively
Conceptual skills
most needed by all managers (particularly by top-level managers)
The ability to identify relevant and critical factors, understand the relationship between the issues and perceive the underlying causes of a situation
Analytical skills
needed by top-level managers
The ability to deal with people, both inside and outside the organization
Human relations skills
important in organizations that provide services
Ability to influence employees to work towards organizational goals
leadership
Leadership: communicate effectively –> nonverbal communication
It repeats and often strenghts the message you’re making verbally
repetition
Leadership: communicate effectively –> nonverbal communication
It can contradict the message you’re trying yo convey, thus indicting to your listener that you may not be telling the truth
contradiction
It can subsitute for a verbal message
facial expresion often conveys a more vivid message than words ever can
subsitution
It may add to or complement your verbal message
as a boss, if you pat an employee on the back in addition to giving praise, it can increase the impact of your message
complementing
It may accent or underline a verbal message
for example pounding the table can underline the importance of your message
accenting
How to develop employees
- create individual development plans
- provide performance metrics
- provide opportunities outside of job function
- give constructive feedback
leadership styles
He/she makes all the decisions and then tell employees what must be done and how to do it
autrocratic leadership
leadership styles
Involve their employees in decisions. Present a situation and encourage their subordinates to express opinions and contribute ideas
democratic leadership
leadership styles
Are passionate about goals and mission of the company, display corporate values in the workplace and form long-term relationships with stakeholders
free rains leadership (Laissez-Faire)
Passionate about goals and mission of the company, display corporate values in the workplace and form long-term relationships with stakeholders
autentic leader
Situational leadership style has been developed and studied by…
Kenneth Blanchard and Paul Hersey
Situational leadership refers to…
when the leader of an organization must adjust his style to fit the development level of the followers he’s trying to influence
is up to the leader to change his style, not the follower to the leader’s style
Dr. William Moulton Marston at Harvard university
method of identifying predictable actions and personality traits within human behaviour
at home or in the workplace, behavior and personality are often misunderstood and become areas of stress affecting your work productivity and happiness
DISC
dominance, influence, steadiness and conscientiousness
a powerful and profoundly simple tool to understanding people
When employees are provided with the ability to take on responsibilities and make decisions about their jobs
Participative corporate cultures (mature organizations)
The employee empowerment philosophy, managers are important for
- guiding employees
- encourage the participation in decision making
- training in
- setting goals
- making major decisions
6 steps that leads to more effective decision making
- recognizing and defining the decision situation
- developing options to resolve the situation
- analyzing the options
- selecting the best option
- implementing the decision
- monitoring the consequences of the decision
