Comm Test #1

Channels

- Describes how a company communicates with and raches its customer segments to deliver a value proposition - Sales force, web sales, partner stores, own stores, wholesaler

Consistency

- Has the person behaved similar in the past or over time - high consistency: internal attributions - low consistency: external attributions

Departmentalization (divisional)

- customer oriented - fast response times - large companies - can be divided according to products, customers, processes, or geography - each division functions on its own

Departmentalization (matrix)

- customer oriented - flexible - resource allocation confusion - teams report to multiple leaders

Equity

- funds raised through the sale of stock in the business - those who provide equity funds get a share of the business's profits

What does it take to achieve entrepreneurial success?

- good team - something people want/something that solves a problem - experience - good timing

Departmentalization (functional)

- groups together people who have comparable skills and perform similar tasks - small/medium sized companies - each unit is headed by an expertise - slow response time between units

Marketing Plan

- outlines marketing strategy - selling approach - advertising and budget

Agency Problem

A conflict of interest inherent in a relationship in which one party is supposed to act in the best interest of the other

Valuable

A resource/capability adds value by enabling an organization to exploit opportunities or defend against threats

Rare

A resource/capability that is acquired by one of a very few companies; gains temporary competitive advantage

Vision and Mission Statement

A statement that communicates an organization's overarching aspirations to guide it through changing objectives, goals, and strategies.

Relational-Oriented Behaviors

All of the things someone does to show concern for others and make it enjoyable to be a member of the group

Resources

An asset that an organization can draw on when formulating and implementing a strategy

Business

Any activity that provides goods or services to customers for the purpose of profit

Equity Theory

Based on individual's perceptions about how fairly they are treated compared with their coworkers

Coercive Power

Based on the ability to punish someone if they do not comply

Debt

Borrowed Funds that must be repaid with interest over a stated time period

Partnership

Business owned by 2 or more people

Product and/or Service Plan

Describes the product and/or service and points out any unique features, as well as explains why people will buy the product or service

Segmented

Distinguish between market segments with slightly different needs and problems

Unity of Command

Do you report to more than one person

Reciprocal Interdependence

Everyone's outputs become everyone's inputs, and vice versa; you do things that others pay attention and reach to

Company Overview

Explains the type of company

Operating Plan

Explains type of manufacturing system to be used

Best-Cost Provider Strategy

Giving customers more value for the money by satisfying buyers' expectations on key product attributes while beating their price expectations; low cost but reaches broad spectrum of consumers

Expert Power

Influence that comes for having special knowledge

Seed Capital

Initial funding used to launch a company

Context/Situation

Knowing which behaviors/styles best fit the context or situation

Goals

Leadership moves people toward a desired end and is not a steady state

Mutual Enhancement

Only discussing what we all know because sharing unique information represents a risk

Costly to Imitate

Other organizations can't imitate, buy, or substitute the resource/capability at a reasonable price

Executive Summary

Overview of total business plan

Procedural Justice

Perceived fairness of the process used to determine an outcome

Financial Plan

Projections of revenues, costs, and profits

Intrinsic Motivation

Satisfaction, contentment, sense of accomplishment, confidence, pride

Confirmation Bias

Seeking out or paying attention to information or aligns with our decisions, beliefs, values, and assumptions

Broad Differentiation Strategy

Seeking to differentiate the company's product or service from rivals' in ways that will appeal to a broad spectrum of buyers

Capabilities

Skills necessary to orchestrate a diverse set of resources and deploy them strategically

Multipreneur

Starting a series of companies

Commerce

The activity of buying and selling, especially on a large scale

Legitimate Power

The authority inherent in a person's role

Task-Oriented Behaviors

The extent to which someone clearly defines and organizes the work of each team member and makes clear how different roles within a team are related

Organized to Capture Value

The organization's management systems, processes, policies, organizational structure and culture have to be structured to fully realize the potential of its valuable, rare, and costly to imitate resources and capabilities

Expectancy Theory

The probability of an individual acting in a certain way depends on the strength of that individual's belief that the act will have a certain outcome and on whether the individual values that outcome

IPO

When a private company first sells shares of stock to the public

Strategic Focus

When an organization is very clear about its mission and vision and has a coherent, well-articulated strategy for achieving those

External Attributions

When behavior is the result of external or situational factors

Process Division

When gods move through several steps during production

Internal Attributions

When the behavior is thought to be under control of the person

Value Propositions

- Describes the bundle of products and services that create value for a specific customer - newness, performance, customization, getting the job done, design, brand/status, price, cost reduction, risk-reduction, accessibility, convenience

Process

- a set of behaviors and responses that continues for some period of time - not a one off interaction

Corporation Drawbacks

- agency problem - costly to set up - double taxation

Intrapreneur

- apply their vision within a large corporation - take less personal risk - large companies provide the funds

Extraverted

- being seen as energetic and likable - link to leadership

Sole Proprietorship Benefits

- complete control - receive all income - profits are taxed as personal income - simple and inexpensive to set up

Behaviors/Styles

- concern for others - clarity of roles and expectations - speaking up, innovating, learning, adapting

Attributes/Traits of Leadership

- conscientiousness - extraverted

Decentralization

- decisions are delegated to lower-level employees - divisions might end up competing against each other

Centralization

- decisions being made are concentrated at the top - quick decisions

Customer Segments

- defines the different groups of people or organizations an enterprise aims to reach and serve - grouped into common needs, common behaviors

Cost Structure

- describes all costs incurred to operate a business model - cost drive, value-driven, fixed costs, variable costs

Key Resources

- describes the most important assets required to make a business model work - production, problem solving, platform/network

Key Partnerships

- describes the network of suppliers and partners that make the business model work

Customer Relationships

- describes the types of relationships a company establishes with a specific customer - personal assistance, self-service, automated services, communities, co-creation, dedicated personal assistance

How is the business model canvas used

- design new models - starting point for strategic planning - historical analysis - understand competition

Job Specialization

- dividing tasks into jobs - leads to efficiency - results in jobs that are easier to learn and roles that are clear to employees - leads to boredom

Consensus

- do other people act this way in the same or a similar situation - No, low consensus: internal attributions - Yes, high consensus: external attributions

Distinctiveness

- does this person behave similar in other situations - low distinctiveness: internal attribution - high distinctiveness: external attribution

Conscientiousness

- doing things carefully - attention to detail leads to results - link to leadership

What does situational leadership require

- flexibility - emotional intelligence - technical skills - coaching skills

Misconceptions about Entrepreneurship

- funding = venture capital - focus only on Silicon Valley model - it's all about having great ideas

Venture Capital

- funding obtained from venture capitalists, investment firms that specialize in financing small, high-growth companies - receive an ownership interest and a voice in management

Social Loafing Ingredients

- individualized inputs - only group-level rewards - big enough group or task to let someone hide

Entrepreneur

- innovators who start companies to pursue their ideas - can start as small-business owners - longer term view than small-business owner

Corporation Benefits

- limited liability for shareholders - can sell stocks and get bank loans - specialized management - ease of transferring ownership - separate entity

Public companies

- listed on a public change - shares of ownership can be easily bought and sold public reporting obligations - disclosure burden - short-term focus

Partnership Benefits

- makes financing easier - easy and inexpensive to form - partners can legally agree to allow the partnership to survive if one or more partners die

Small Business Owner

- managers or people with technical expertise who started a business or bought an existing business and make the decision to stay small - generate steady income

What do companies take into account before changing their structure

- many not resolve all issues - costly and time consuming - employee resistance - change fatigue

Leadership effectiveness

- objective performance - improvement in the skills/abilities of followers - creating a positive work environment

Management Plan

- outside resource people - plans for recruiting and training employees

Distributive Justice

- perceived fairness of an outcome - "I deserve the size of raise I got"

Sole Proprietorship Drawbacks

- relying on own resources for financing - supplying the talent - all borrowed money is loaned to you personally - unlimited liability

Revenue Streams

- represents the cash a company generates from each customer segment - one-type customer payments, ongoing payments - asset sale, usage, fee, subscription fee, letting/renting/leasing, licensing, brokerage fees, advertising, fixed menu pricing, dynamic pricing

Appendix of Supporting Documents

- research summaries - company values

Management

- responsible for the work performance of other people - involves planning for, organizing, leading, and controlling a company's resources so that it can achieve its goals

Partnership Drawbacks

- share profits - each partner is personally liable for the actions of all the partners - share decision making

Goal Setting Theory

- specific goals lead to higher levels of performance - more difficult goals lead to better performance - feedback on progress enhances performance

Managing

- supporting and facilitating individuals working to achieve individual and organization goals - executing the strategy - doing things right

Escalation of commitment/sunk-cost fallacy

- tending to stick to a decision even when there are rational reasons to change our minds - happens when there is a fear that changing our plans will result in a sunk cost and embarrassment from admitting a mistake

Acquisition

- the purchase of one company by another - attractive to companies facing competitive pressures

Leading

- uniting individuals around a common goal - developing the strategy - doing the right things

Growth-Oriented Entrepreneur

- want their business to grow into a major corporation - lots of high tech companies

Merger

- when two or more companies join to form a single firm - attractive to companies facing competitive pressures - gain complementary products - attain new markets or distribution channels

4 Leadership Styles

1. Directing 2. Coaching 3. Supporting 4. Delegating

4 Developmental Stages

1. Low competence, high commitment 2. Some competence, low commitment 3. High competence, variable commitment 4. High competence, high commitment

Sequential Interdependence

A unique tasks is completed by each person in a specified order using unique inputs and the sequence of tasks results in a finished product

Niche Market

Cater to specific customer segments

Disclosure Burden

Certain info has to be made available to the public

Focused Differentiation Strategy

Concentrating on a narrow buyer segment and outcompeting rivals by offering niche members customized attributes that meet their tastes and requirements better than rivals' products

Focused Low-Cost Strategy

Concentrating on a narrow buyers segment and outcompeting rivals by having lower costs than rivals and thus being able to serve niche members at a lower price

Competitive Advantage

Condition or circumstance that puts a company in a favorable or superior business position

Double Taxation

Corporations are taxed by the federal and state governments on the earnings and shareholders pay taxes on their dividends

Change-Oriented Behaviors

Developing and communicating a compelling vision, encouraging others to contribute to the vision and engage in innovative thinking

Mass Market

Don't distinguish between different customer segments

Geographical Division

Enables companies that operate in several locations to be responsive to customers at a local level

Customer Division

Enables companies to better serve their various categories of customers

Pooled Interdependence

Everyone deals with a common resource or input and completes the full task on their own and then at the end, the results are added together

Motivation

Forces within a person that affect the direction, intensity, and persistence of voluntary behavior

Disproportionate Influence

Getting people to do things they may not necessarily do on their own and don't really have to do

How do firms achieve competitive advantage

Having intangible resources

Unlimited Liability

If the business incurs a debt or suffers a catastrophe, the owner is personally liable

Angel Investors

Individual investors or groups of experienced investors who provided financing for start-up businesses

Referent Power

Influence because of admiration

Empowerment

Involved delegating decision-making authors to employees at all levels of the organization, trusting employees to make the right decision

Corporation

Legal entity that is owned by shareholders who invest by buying shares of stock

Span of Control

Measures the number of people reporting to a particular manager

What is strategy not

Not being the first, having operational effectiveness, or being the only company

Extrinsic Motivation

Pay raises, promotes, bonuses, prestigious assignments

Organizational Justice

People make fairness judgements on three main dimensions

Interactional Justice

Perceived degree that respect is given

Multi-Sided Platforms/Markets

Serves 2 or more interdependent segments

Diversified

Serves two unrelated customer segments with very different needs and problems

Limited Liability

Shareholders are not responsible for the obligations of the corporation

Chain of Command

Show the authority relationships among people working at different levels of the organization

Business Plan

Strategy that outlines the goals and the company's plans for achieving them

Broad Low-Cost Provider Strategy

Striving to achieve lower overall costs than appealing to a broad spectrum of customers by under-pricing rivals

Product Division

Structure according to its product lines

Self-serving Bias

Tendency to attribute our own success to internal factors and our failures to external factors

Fundamental Attribution Error (FAE)

Tendency to overemphasize internal causes of another person's poor behavior or performance and underemphasize external factors

Reward Power

The ability to bestow positive benefits on employees

Objective Performance

The best leaders exceed performance expectations

Organization

The collection of people working together to achieve a common purpose; goal oriented, structured activities, linked to the environment, identifiable boundaries

Task Interdependence

The degree and form in which group members must rely on one another for inputs to perform their tasks effectively

Self-fulfilling prophecy

The process by which a person's expectations about someone can lead to that someone behaving in ways which confirm the expectations

Social Loafing

The tendency for average levels of effort in a group to mask an individual's lower level of output on a task

Reinforcement Theory

Theory that positive and negative reinforcers motivate a person to behave in certain ways

Availability Bias

We focus on information that is called to mind more easily

Overconfidence Bias

We tend to believe in our ability more than we should