PBO_QUIZ/MIDTERM Flashcards
is the attempt to create value through recognition of business opportunity, the management of risk taking appropriate to the opportunity and through the communicative and management skills to mobilize human, Financial and material resources necessary to bring a project to fruition.
Entrepreneurship
Essential Characteristics of Successful Entrepreneurs
I-P-P-I-C
I 1. Initiative
P 2. Perceiving opportunities
P 3. Persistence
I 4. Information gathering
C 5. Concern for quality work
6. Commitment to contractual obligations
7. Efficiency orientation
8. Planning
9. Problem solving
10. Self-confidence
11. Experience
12. Self -critical
13. Persuasion
14. Use of influence strategies.
15. Assertiveness
16. Monitoring
17. Credibility
18. Concern for employee welfare
19. Impersonal relationship
20. Expansion of capital base
21. Building product image
is a person who buys factor services at certain prices with a view to selling its product at uncertain prices.
Entrepreneur
Risks of Entrepreneurship
C-T-P-E-F-E-S-H
C 1. Competitive risk – it is a risk of business facing competition from its rivals. They face competition because there are substitutes easily available to the market. In order to minimize this, a proper SWOT analysis must run to counter competition.
T 2. Technological Risk – new technologies are constantly emerging at a rapid pace. To be competitive, a new business may have to invest heavily in new system and processes.
P 3. Political and legal risk – risk is everywhere especially in the case of businesses that run in uncertain environments. This includes the changing political scenario in the changes in laws and regulations.
E 4. Economical Risk – this risk includes the changes in the cycle that includes periods of high prosperity and recession.
F 5. Financial risk – the risk of running out of finances. They need to manage cash f low, predict demand and supply so financial decisions should be taken properly.
E 6. Employee Risk – there is always the risk of a key employee deciding to switch or not reporting to work on an important day. Some of these can be controlled, but most of the time, it cannot be solved easily.
S 7. Strategic risk – is the risk of strategy failing due to one reason or another. An entrepreneur should have business plan properly. Some of them may not have knowledge about every aspect of business so they must seek help to other relevant departments
H 8. Health and Safety Risk – this risk involves how business functions. It is the duty of business owners to provide right environment to its employees.
varies from one country to another and from one time to another in the same country depending upon the pattern and stage of development, government policy and administrative set up of the particular country.
Small Scale Industry
Barriers to Entrepreneurship
LV-LM-LT-LS-LB
L V1. Lack of a viable concept
L M2. Lack of market knowledge
L T3. Lack of technical skills
L S4. Lack of seed capital
L B 5. Lack of business know how
C 6. Complacency—lack of motivation
S 7. Social stigma
T 8. Time presence and distractions
L 9. Legal constraints and regulations
M 10. Monopoly and protectionism
I 11. Inhibitions due to patents
shall be defined as any business activity or enterprise engaged in industry, agribusiness and/or services, whether single proprietorship, cooperative, partnership or corporation whose total assets, inclusive of those arising from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are situated, must have value falling under the following categories
Micro, Small and Medium Enterprises (MSMEs) as Beneficiaries (RA 9501)
Rewards for an Entrepreneur
F-S-P-R-R
F 1. Freedom to work.
S 2. Satisfaction of being own boss.
P 3. Power to do things as he likes.
R 4. Rewards of ownership and retirement assurance.
R 5. Respect of family and friends.
Types of Financing for a Small Business
P-L-V-B-B
P 1. Personal investment (own cash or with collateral on your assets)
L 2. Love money (loaned by a spouse, parents, family or friends)
V 3. Venture capital
B 4. Bank loans
B 5. Business incubators
(kind of support of ten operate within state-of-the-art sectors such as biotechnology, information technology, multimedia, or industrial technology)
G 6. Government grants and subsidies
A 7. Angel Investor
is concerned with two aspects the aggregate demand for the proposed product/service, the market share of the project under consideration. For this market analysis requires variety of information and appropriate forecasting methods.
Market Feasibility
deals with the organization and suggests a clear and precise identification of the key officers and key personnel, basic considerations in forming an organization, form of ownership organizational chart, project scheduling, and job analysis.
Management feasibility
seeks to determine whether prerequisites for successful commissioning of the project have been considered and reasonably good choices have been made with respect to location, size, and so on.
Technical Analysis
is necessary as ascertain whether the propose project is financially viable in the sense of being able to meet the burden of servicing department and whether the propose project will satisfy the return expectations of those who provide the capital.
Financial Analysis
This is concerned with judging a project from the larger social point of view, where in the focus if on social costs and benefits of a project, which may of ten be different from its monitory costs and benefits.
Economic/Social Cost-benefit Analysis
Today, environmental concerns assured a great deal of significance and hence ecological analysis should be done, particulars for project which have significant ecological implications like power plants and irrigation schemes and for environmental polluting industries like chemicals, leather processing etc.
Ecological Analysis
it is a risk of business facing competition from its rivals. They face competition because there are substitutes easily available to the market. In order to minimize this, a proper SWOT analysis must run to counter competition.
Competitive risk
a new business may have to invest heavily in new system and processes.
Technological Risk
risk is everywhere especially in the case of businesses that run in uncertain environments. This includes the changing political scenario in the changes in laws and regulations.
Political and legal risk
this risk includes the changes in the cycle that includes periods of high prosperity and recession.
Economical Risk
the risk of running out of finances. They need to manage cash flow, predict demand and supply so financial decisions should be taken properly.
Financial risk
there is always the risk of a key employee deciding to switch or not reporting to work on an important day. Some of these can be controlled, but most of the time, it cannot be solved easily.
Employee Risk
is the risk of strategy failing due to one reason or another. An entrepreneur should have business plan properly.
Strategic risk
this risk involves how business functions. It is the duty of business owners to provide right environment to its employees.
Health and Safety Risk
is a process consisting of planning, organizing, actuating and controlling performed to determine and accomplish the objectives by the use of people and resources.
Management
is the ability to secure desirable actions from a group or followers voluntarily without the use of coercion.
Leadership
There are four views of management
P- Process
D- Discipline
H- Human activity
C- Career
is a systematized body of knowledge.
Science
Management as science: Science is a systematized body of knowledge. We call a discipline scientific if its:
M (1) Methods of inquiry are systematic and empirical.
I (2) Information can be ordered and analyzed; and
R (3) Results are cumulative and communicable.
Management is the art of getting things done through others in dynamic situations.
Management is an art:
Management Functions or Process of Management
P 1) PLANNING
O 2) ORGANIZING
S 3) STAFFING
D 4) DIRECTING
C 5) CONTROLLING
- is the primary function of management.
-It is looking ahead and preparing for the future.
-It determines in advance what should be done. It is conscious determination of future course of action
-is deciding in advance what to do, how to do it, when to do it and who is to do it.
-It bridges the gap from where we are and to where we want to go. It is in essence the exercise of foresight
1.) Planning
Importance of Planning
P-TM-TF-TF-TI
P 1. Primacy of planning
TM 2. To minimize risk and uncertainty
TF 3. To focus attention on objectives
TF 4. To facilitate control
TI 5. To increase organizational effectiveness
Steps in Planning
EG-EP-D-I-E- D-M
E 1. Establishing goals/objectives
E 2. Establishing planning premises
D 3. Deciding the planning period
I 4. Identification of alternatives
E 5. Evaluation and selection of alternative
D 6. Developing derivative/supportive plan
M 7. Measuring and controlling the process
is the distribution of work in group-wise or section- wise for effective performance. Once the managers have established objectives and developed plans to achieve them, they must design and develop a human organization that will be able to carry out those plans successfully
2) ORGANIZING
Types of Organizational Structure
F,D,F
F 1. Functional Organizational Structure:
D 2. Divisional Organizational Structure
F 3. Flat Organizational Structure
people who do similar tasks are grouped together based on specialty. This structure is based on specialty.
- Functional Organizational Structure:
- This is common among large companies with many business units. This is also called “multidimensional structure”.
- The company that uses this method structures its leadership team based on the products, projects, or subsidiaries that meet the needs of a certain type of customer.
- Company uses this kind of organizational structure when one division is sufficiently independent from one another.
- Divisional Organizational Structure
- This is also called “flatarchy” and commonly used among startups.
- A ____ organization structure will show few or no levels of management between executives and all other employees.
- Flat Organizational Structure
- refers to systematic reservation of authority at central points within the organization.
-means retention or concentration of managerial authority in few key managerial positions at the nerve centre of an organization i.e., at the top level.
-Everything that goes to reduce the subordinate’s role in decision making is _______________.
Centralization
means ‘dispersal’ of decision-making power to lower levels of the organization.
Decentralization
- involves managing various positions of the organizational structure.
- It involves selecting and placing the right person at the right position
- identifying the gap between manpower required and available, identifying the sources from where people will be selected, selecting people, training them, fixing the financial compensation and appraising them periodically.
3) STAFFING
- Planning, organizing and staffing functions are concerned with the preliminary work for the achievement of organizational objectives
-The actual performance of the task starts with the function of direction. - —- This function can be called by various names namely “leading”, “directing”, “motivating”, “activating” and so on.
4) DIRECTING
It is the process of passing information from one person to another.
(a) Communicating
Types of Communication
D 1. Downward communication
U 2. Upward communication:
H 3. Horizontal communication
D,U,H
-Lows from people at higher level to those at the lower levels in the organizational hierarchy.
-The purpose of ___________ is to communicate policies, procedures, programs and objectives and to issue orders and instructions to subordinates.
- Downward communication
-travels from subordinates to superiors
- generally nondirective
- Upward communication:
- It refers to transmission of information among positions of the same level.
- helps to coordinate the activities of different departments.
- Horizontal communication
It is a process by which a manager guides and influences the work of his subordinates.
(b) Leading
Directing involves these sub functions:
C (a) Communicating
L (b) Leading
M (c) Motivating
C, L, M
It is arousing desire in the minds of workers to give their best to the enterprise.
(c) Motivating
- Planning, organizing, staffing and directing are required to realize organizational objectives.
- To ensure that the achieved objectives confirm to the pre- planned objectives control function is necessary.
5) CONTROLLING
Steps in a Control Process
E, M, T
E 1. Establishment of standards
M 2. Measuring and comparing actual performance with standards
T 3. Taking corrective action
-The first step in control process
-acts as a reference line or a basis of actual performance.
- Establishment of standards
- The second step in the control process
-The quantitative measurement should be done in cases where standards have been set in numerical terms. This will make evaluation easy and simple.
- Measuring and comparing actual performance with standards
- The final step in the control process
-This will involve taking certain decisions by the management like re- planning or redrawing of goals or standards, reassignment or classification of duties.
T 3. Taking corrective action
Levels of Management
T, M, F
T- TOP MANAGERS
M- MIDDLE MANAGERS
F- FIRST-LINE MANAGERS
-Set objectives
-Plan and make decisions
-consists of board of directors, chairman and chief executive officer.
-determines goals and objectives. It performs overall planning, organizing, staffing, directing and controlling. It integrates organization with environment, balances the interest groups and is responsible for overall results.
T- TOP MANAGERS
-Allocate resources
-oversee first-line managers
-Report to top management
-Develop and implemented activities
-stands between top management and supervisory management level.
-establishes programs for department and carries out functions for achieving specific goals.
-training and development of employees, integrating various parts of the department.
M- MIDDLE MANAGERS
-Coordinate activities
-Supervise employees
-Report to middle managers
-Involved in day-to-day operations
- is concerned with efficiency in using resources of the organization.
-is an executor of policies and procedures making a series of decisions with well –defined and specified premises.
F- FIRST-LINE MANAGERS or Supervisory management
is generally defined as influence, the art of process of influencing people so that they will strive willingly towards the achievement of group goals.
Leadership
Functions/Characteristics of Effective Leaders
T, G, R, E, AM, P, A
T (1) Taking initiative: A leader has to take all initiative to lead the business activities. He himself should come in the field and take all steps to achieve predetermined targets. Hence a leader is initiator.
G (2) Guide: A leader has the primary duty of guiding others by communicating instructions and orders.
R (3) Representation: A leader is a representative of the organization.
E (4) Encouraging others: A leader is the captain of the team. Encouragement is necessary to build teamwork. The leader must win the confidence of his colleagues.
A M (5) Arbitrator and mediator: A leader has to create a smooth relationship among employees. In addition, he has to settle disputes arising among employees.
P (6) Planner: A leader makes decisions concerning the ways and means by which the organizational goals can be achieved.
A (7) Administrator of rewards and punishments: Leaders encourage, upgrade, promote deserving people and reprove, transfer and fine inefficient workers.
In order to be successful in planning, organizing, leading, and controlling, managers must use a wide variety of skills.
Managerial Skills
is the ability to do something proficiently.
Skill
Managerial Skills
T, H, C
- Technical Skills
- Human Relations Skills
- Conceptual Skills
Specialized areas of knowledge and expertise and the ability to apply that knowledge make up a manager’s __________. Preparing a financial statement, programming a computer, designing an office building, and analyzing market research are all examples of _______________
- Technical Skills
are the interpersonal skills managers use to accomplish goals through the use of human resources. This set of skills includes the ability to understand human behavior, to communicate effectively with others, and to motivate individuals to accomplish their objectives.
- Human Relations Skills
-include the ability to ‘view the organization as a whole’, understand how the various parts are interdependent, and assess how the organization relates to its external environment.
-These skills allow managers to evaluate situations and develop alternative courses of action.
- Conceptual Skills
Leadership Styles
A, D, F
A 1. Autocratic leadership
D 2. Democratic leadership
F 3. Free rein
-is one who dominates and drives his subordinates through coercion, command and the instilling of fear in his followers.
-He demands ‘strict obedience’. Such leaders love power and love to use it for promoting their own ends.
- Autocratic leadership
- This style of leadership is also known as participative leadership.
-the entire group is involved in goal setting and achieving it.
-This type of leadership encourages people to develop and grow, receives information and ideas from his subordinates to make decisions, and boosts the morale of employees.
- Democratic leadership
-In this type of leadership, the leaders exercise absolutely no control.
-He only provides information, materials and facilities to his subordinates. —- This type of leadership is ‘employee centered’, and the subordinates are free to establish their own goals and chart out the course of action.
- Free rein
-comprises organizational principles, values, and norms that may originate from individuals, organizational statements, or from the legal system that primarily guide individual and group behavior in business.
Business Ethics
Benefits of Business Ethics
CE, CI, CC, CP
C E * Contributes to employee commitment
C I * Contributes to investor loyalty
C C * Contributes to customer satisfaction
C P * Contributes to profits
