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