GB 370 Final Exam

Goals and objectives of P-O-L-C

Goals and objectives are an essential part of planning. They also have cascading implications for all the aspects of organizing, leading, and controlling. Broadly speaking, goals, and objectives serve to: -gauge and report performance -improve performance -align effort -manage accountabilities

False consensus error

How we as human beings overestimate how similar we are to other people.

Setting up an LLC (limited liability company)

If limited liability is not a concern for your business, you could begin as a sole proprietorship or a partnership so "passed through" losses in the early years of the company can be used to offset your other income To set this up, you must file articles of organization with the secretary of state in the state where you intend to do business Like partnerships, LLCs do not have perpetual life; some states statues stipulate that the company must dissolve after 30 years - technically the company dissolves when a member dies, quits, or retires Another recent development is the limited liability partnership (LLP) - the general partners have limited liability

Ins and Outs of payroll taxes

If you do any hiring, your employees must complete Form I-9 (employment eligibility verification) and From W-4 (employee's withholding allowance certificate) You must also withhold social security and medicare taxes - these are known as FICA (federal insurance contributions act) taxes -the FICA tax consists of two taxes: 1. a 6.2% social security tax 2. 1.45% medicare tax

Partnership

If your business will be owned and operated by several individuals you'll want to look at structuring your business as a partnership Partnerships come in two varieties: 1. General partnerships: the partners manage the company and assume responsibility for the partnership's debt and other obligations -own and operate business and assume liability for the partnership 2. Limited partnerships: has both general and limited partners -serve as investors only; they have no control over the company and are not subject to the same liabilities as the general partners

Reinforcement schedules

In addition to types of reinforcements, the timing or schedule on which reinforcement is delivered has a bearing on behavior -continuous schedule -fixed ratio schedule -fixed interval schedules -variable ratio

ERG Theory

Is a modification of Maslow's hierarchy of needs; proposes that basic human needs may be grouped under three categories: 1. existence 2. relatedness 3. growth

Management by objectives (MBO)

Is a systematic and organized approach that allows management to focus on achievable goals and to attain the best possible results from available resources -aims to increase organizational performance by aligning the subordinate objectives throughout the organization with the overall goals that management has set

S corporation

Is more attractive to small business owners than a regular (or C) corporation because it has some appealing tax benefits and still provides business owners with the liability protection of a corporation -income and losses are passed through shareholders and included on their individual tax returns - as a result there is only one level of federal tax to pay

Health insurance

Is one of the most desirable benefits you can offer employees. There are several basic options for setting up a plan: -a traditional indemnity plan or fee for service -managed care: the two most common forms are the Health Maintenance Organization (HMO) and the Preferred Provider Organization (PPO) -self insurance -health savings accounts (HSA)

Job characteristics model

Is one of the most influential attempts to design jobs to increase their motivational properties The model describes five core job dimensions, leading to three critical psychological states, which lead to work-related outcomes 1. core job characteristics -skill variety -task identity -task significance -autonomy -feedback 2. psychological states -meaningfulness -responsibility -knowledge of results 3. outcomes -motivation -performance -satisfaction -absenteeism -turnover

Outcome controls

Processes that are generally preferable when just one or two performance measures are good gauges of a business's health -these controls are effective when there's little external interference between managerial decision making on the one hand and business performance on the other

Fixed assets

Long-term assets that are relatively permanent such as land, buildings, or equipment.

Management

"the art of getting things done through the efforts of other people"

Computing markup

(selling price - cost to produce) / cost to produce = markup percentage here is the computation to find a price quote using markup: (desired markup x total variable costs) + total variable costs = price quote

Acquired needs theory

-need for achievement -high need for affiliation -need for power

Types of decisions

-programmed (decision rule) -nonprogrammed

Levels of organizational culture

1. Artifacts: visible, tangible aspects of organizational culture 2. Values: shared principles, standards, and goals 3. Assumptions: reflect beliefs about human nature and reality

What is branding?

1. Branding is your company's foundation 2. Branding creates value 3. Branding clarifies your message 4. Branding is a promise

Vroom and Yetton's Normative Decision Model

1. Decision significance 2. Importance of commitment 3. Leader expertise 4. Likelihood of commitment 5. Goal alignment 6. Group expertise 7. Team competence

The balanced scorecard relies on four processes to bind short term activities to long term objectives

1. Translating the vision 2. Communicating and linking 3. Business planning 4. Feedback and learning

Porter's five-forces analysis of market structure

1. barriers to entry and new entry threats 2. buyer power 3. supplier power 4. threat from substitutes 5. rivalry

Top 5 solution trends

1. becoming more connected 2. becoming more global 3. becoming more mobile 4. rise of the creative class 5. increasing collaboration

A general accounting practice covers four basic areas of expertise

1. business advisory services 2. accounting and record keeping 3. tax advice 4. auditing

Five guidelines for seeking feedback

1. consider seeking regular feedback from your boss 2. be genuine in your desire to learn 3. develop a good relationship with your manager as well as the employees you manage 4. consider finding trustworthy peers who can share information with you regarding your performance 5. be gracious when you receive unfavorable feedback

The five core principles of lean

1. define value from the customer's perspective 2. describe the value stream for each product or service 3. create flow in each value stream 4. produce at the pace (pull) of actual customer demand 5. strive to continuously improve all business operations

Why do people resist change?

1. disrupted habits 2. personality 3. feelings of uncertainty 4. fear of failure 5. personal impact of change 6. prevalence of change 7. perceived loss of power

Five steps of OB Mod

1. identify behavior to be modified 2. measure the baseline level 3. analyze its antecedents and outcomes 4. intervene 5. evaluate and maintain

P-O-L-C: Leading

1. leadership 2. decision making 3. communications 4. groups/teams 5. motivation

Eight characteristics of appropriate goals and objectives

1. less is more 2. tie measures to drivers 3. don't just measure the past 4. take stakeholders into account 5. cascade goals into objectives 6. simply 7. adapt 8. base objectives on facts

P-O-L-C: Organizing

1. organization design 2. culture 3. social networks

Fayol's 14 principles of management

1. specialization/division of labor 2. authority/responsibility 3. discipline 4. unity of command 5. unity of direction 6. subordination of individual interest 7. remuneration 8. centralization 9. line of authority 10. order 11. equity 12. stability of tenure 13. initiative 14. esprit de corps

P-O-L-C: Controlling

1. systems/processes 2. strategic human resources

Step-by-step process of developing a mission and vision statement

1. the process 2. the content of the mission and vision statements 3. communicating mission and vision to all relevant stakeholders 4. monitoring

Eight principles of visionary leadership

1. the visionary leader must do on-site observation leading to personal perception of changes in societal values from an outsider's point of view 2. even though there is resistance, never give up 3. revolution is begun with symbolic disruption of the old or traditional system through top-down efforts to create chaos within the organization 4. the direction of the revolution is illustrated by a symbolically visible image and the visionary leader's symbolic behavior 5. quickly establishing new physical, organizational, and behavioral systems is essential for successful revolution 6. real change leaders are necessary to enable revolution 7. create an innovative system to provide feedback from results 8. create a daily operation system, including a new work structure, new approach to human capabilities and improvement activities

P-O-L-C: Planning

1. vision and mission 2. strategizing 3. goals and objectives

Values statement

A brief articulation of the principles that guide a company's decisions and behaviors -either reaffirms or states outright the organization's values that might not be evident in the mission or vision statements

Analysis paralysis

A decision making process in which more and more time is spent on gathering information and thinking about it, but no decisions actually get made.

Delphi technique

A decision-making technique in which group members do not meet face-to-face but respond in writing to questions posed by the group leader -is unique bc it is a group process using written responses to a series of questionnaires instead of physically bringing individuals together to make a decision

Balance sheet

A financial statement that reports assets, liabilities, and owner's equity on a specific date Key components of the balance sheet: -current assets -fixed assets -intangible assets -other assets -current liabilities -long term liabilities -owner's equity

Sarbanes-Oxley Act

A law passed by Congress that requires the CEO and CFO to certify that their firm's financial statements are accurate.

The authentic leadership approach

A leadership approach that embraces this value: its key advice is "be yourself"

General ledger

A ledger that contains all asset, liability, stockholders' equity, revenue, and expense accounts

Payroll

A list of the employees and the payments due to each employee for a specific pay period.

Bounded rationality model

A model that recognizes the limitations of our decision-making processes -according to this model, individuals knowingly limit their options to manageable set and choose the best alternative without conducting an exhaustive search for alternatives

Job enrichment

A motivational strategy that emphasizes motivating the worker through the job itself.

Cash flow statement

A statement designed to convert the accrual basis of accounting used to prepare the income statement and balance sheet back to a cash basis -the accrual basis of accounting generally is preferred for the income statement and balance sheet because it more accurately matches revenue sources to the expenses incurred generating those specific revenue sources This statement is divided into four categories: 1.) net cash flow from operating activities 2.) net cash flow from investing activities 3.) net cash flow from financing activities 4.) net change in cash and marketable securities

Differentiation strategy

A strategy an organization uses to build competitive advantage by being unique in its industry or market segment along one or more dimensions.

Corporate strategy

A strategy that determines the means for utilizing resources in the various functional areas to reach the organization's goals -answers strategy questions related to "what business or businesses should we be in?"

Organizational Behavior Modification (OB Mod)

A systematic application of reinforcement theory to modify employees behaviors This model consists of five stages: 1. identify the behavior that will be modified 2. need to measure a baseline level of absenteeism 3. the behavior's antecedents and consequences are determined 4. an intervention is implemented 5. the behavior is measured periodically and maintained

Reinforcement theory

A theory based on the work of Ivan Pavlov in behavioral conditioning and the later work of B. F. Skinner did on operant conditioning According to this theory, behavior is a function of its consequences -positive reinforcement -negative reinforcement -extinction -punishment

Path-Goal Theory of Leadership

A theory that states that the most important aspect in leadership is the follower's expectation that a task can be accomplished and that it will lead to rewards. identifies four styles of leaders: -directive leaders -supportive leaders -participative leaders -achievement-oriented leaders

Expectancy theory

According to this theory individual motivation to put forth more or less effort is determined by a rational calculation -individuals ask themselves three questions 1. will my effort lead to high performance 2. will performance lead to outcomes 3. do I find the outcomes desirable -expectancy -instrumentality -valence

Fiedler's Contingency Theory

According to this theory, a leader's style is measured by a scale called Least Preferred Coworker (LPC) scale There are three conditions creating situational favorableness: 1. leader-subordinate relations 2. position power 3. task structure

Sequential learners

Acquired one language after another when you break things down into small components you are often able to dive right into problem solving

Accounts payable

Amounts to be paid in the future for goods or services already acquired

Accounts receivable

Amounts to be received in the future due to the sale of goods or services

Learning organization

An organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights. The five building blocks: 1. systematic problem solving 2. experimentation 3. learning from past experience 4. learning from others 5. transferring knowledge

Organizational compliance (or obedience)

An orientation toward organizational structure, job descriptions, and personnel policies that recognizes and accepts the necessity and desirability of a rational structure of rules and regulations -obedience may be demonstrated by a respect for rules and instructions, punctuality in attendance and task completion, and stewardship of organizational resources

Dow Jone's sustainability index

Looks at competence in five areas: 1. strategy: integrating long term economic, environmental, and social aspects in their business strategies while maintaining global competitiveness 2. Financial: meeting shareholders' demands for sound financial returns, long term economic growth, open communication, and transparent financial accounting 3. customer and product: fostering loyalty by investing in customer relationship management, and product and service innovation that focuses on technologies and systems 4. governance and stakeholder: setting the highest standards of corporate governance and stakeholder engagement, including corporate codes of conduct and public reporting 5. human: managing human resources to maintain workforce capabilities and employee satisfaction through best in class organizational learning and knowledge management practices and remuneration and benefit programs

The nature of managerial work

Managers are responsible for the processes of getting activities completed efficiently with and through other people setting and achieving the firm's goals through the execution of four basic management functions: 1. planning 2. organizing 3. leading 4. controlling Mintzberg identified 10 roles common to the work of all managers. The 10 roles are divided into three groups: 1. interpersonal: figurehead, leader, liaison (provide information) 2. informational: monitor, disseminator, spokesperson (process information) 3. decisional: entrepreneur, disturbance handler, resource allocator, negotiator (use information)

Life insurance

Many banks require a life insurance policy on the business owner before lending any money -such policies typically take the form of term life insurance, purchased yearly, which covers the cost of the loan in the event of the borrower's death; the bank is the beneficiary

Maslow's hierarchy of needs

Maslow's theory is based on a simple premise: Human beings have needs that are hierarchically ranked 1. Physiological needs: refer to the need for air, food, and water 2. Safety 3. Social needs: refer to the need to bond with other human beings, to be loved, and to form lasting attachments 4. Self-actualization: refers to "becoming all you are capable of becoming" 5. Esteem

Big five personality traits

OCEAN 1. openness 2. conscientiousness 3. extraversion 4. agreeableness 5. neuroticism

Income statement

Measures all your revenue sources vs. business expenses for a given period -sales -cost of goods sold -gross profit -operating expenses -depreciation -operating profit -other income and expenses -net profit before taxes -income taxes -net profit after taxes

Roles played by mission and vision

Mission and vision statements play three critical roles: 1. communicate the purpose of the organization to stakeholders 2. inform strategy development 3. develop the measurable goals and objectives by which to gauge the success of the organization's strategy

Basic accounting principles

Most businesses typically use on of two basic accounting methods in their bookkeeping systems: cash basis or accrual basis -while most businesses use the accrual basis, the most appropriate method for your company depends on your sales volume, whether or not you sell on credit, and you business structure -the cash method is the most simple in that the books are kept based on the actual flow of cash in and out of the business and is used by many sole proprietors and solopreneurs and gig entrepreneurs, and businesses with not inventory With the accrual method, income and expenses are recorded as they occur, regardless of whether or not cash has actually changed hands

Elimination of waste is the soul of lean

Muda is a japanese term for activity that is wasteful and doesn't add value. Here are the seven deadly wastes: 1. defects 2. overproduction 3. transportation 4. waiting 5. inventory 6. motion 7. overprocessing

The bookkeeping advantage

Aside from every business owner's inherent desire to stay in business, there are two other key reasons to set up a good bookkeeping system: 1. it is legally required 2. bookkeeping records are an excellent business management tool A good accounting system meets three criteria: 1. accurate 2. relevant 3. user friendly

Intellectual stimulation

Behavior a leader engages in to make followers be aware of problems and view these problems in new ways, consistent with the leader's vision

BHAG

Big Hairy Audacious Goal Five guiding criteria for good BHAGS: 1. are set with understanding, not bravado 2. fit squarely in the three circles of (a) what you are deeply passionate about (including core values and purpose) (b) what drives your economic logic (c) what differentiates you (what you can be the best in the world at) 3. have a long time frame - 10 to 30 years 4. are clear, compelling, and easy to grasp 5. directly reflect your core values and core purpose

Sales letters

Can be one of your most effective marketing tools, allowing you to speak one on one to prospects and customers. There are three key rules for making a goods sales letter: 1. start with a hook; begin with a provocative thought or idea that hooks readers and makes them want to keep reading 2. give them the facts fast; quickly list the top two or three benefits of doing business with your company 3. end persuasively; close the letter with a strong argument that compels the readers to respond

The costs and benefits of organizational controls

Costs: Controls can cost the organization in several areas, including 1. financial 2. damage to culture and reputation 3. decreased responsiveness 4. botched implementation Benefits: Although organizational controls come at some cost, most controls are valid and valuable management tools. When they are well designed and implemented, they provide at least five possible areas of benefits, including: 1. improved cost 2. improved quality control 3. opportunity recognition 4. better ability to manage uncertainty and complexity 5. better ability to decentralize decision making

Practicing nichecraft

Creating a good niche, advises Falkenstein, involves the following seven step process: 1. Make a wish list: with whom do you want to do business ? 2. Focus: clarify what you want to sell, remembering: (a) you can't be all things to all people and (b) "smaller is bigger" 3. Describe the customer's worldview 4. Synthesize: a good niche has five qualities -it takes you where you want to go - in other words, it conforms to your long term vision -somebody else want it - namely customers -its carefully planned -it one of a kind -it evolves allowing you to develop different profit centers and still retain the core business and thus ensuring long term success 5. Evaluate 6. Test 7. Go for it!

Establishing a credit policy

Credit can make or break a small business. Many small businesses are reluctant to establish a firm credit policy for fear of losing their customers. What they do not realize is that a consistent credit policy not only strengthens your company, but also creates a more professional image in your customers' eyes A well thought out credit policy accomplishes four things 1. avoids both bad debts and hard feelings 2. standardizes credit procedures, providing employees with clear and consistent directions 3. demonstrates to employees and customers that the company is serious about managing credit 4. helps the business owner define how credit fits into the overall sales and marketing plan

Organizational culture profile (OCP)

Culture is represented by seven distinct values 1. innovative cultures 2. aggressive cultures 3. outcome-oriented cultures 4. stable cultures 5. people-oriented cultures 6. team-oriented culture 7. detail-oriented cultures

EFTPS

Electronic Federal Tax Payment System Allows employers to make federal tax deposits electronically through the ACH network.

Visual learners

People who learn best by relying on their sense of sight.

Accounting system components

Every accounting system has key components. While some may vary depending on the type of business, these components typically consist of the chart of accounts, general ledger, accounts receivable, inventory, fixed assets, accounts payable, and payroll

Overtime requirements

Excluding certain industry-specific expectations, federal and state law requires that nonexempt employees be paid overtime -under the FLSA, nonexempt employees must be paid one and a half times their normal rate of pay for hours worked in excess of 40 hours during a workweek

FUTA tax

Federal unemployment tax act are used to compensate workers who lose their jobs -the FUTA tax is figured on the first $7,000 in wages paid to each employee annually -the gross FUTA tax rate is 6%, however you are given a credit of up to 5.4% for the state unemployment tax you pay, effectively reducing the tax rate in addition you must file an annual return for your FUTA taxes using Form 940 (employer's annual federal unemployment tax return) which must be filed by jan. 31 of the following year

Creating a market plan

Focuses on winning and keeping customers -is strategic and includes numbers, facts, and objectives Step 1: begin with a snapshot of your company's current situation, called a "situation analysis" -the first section of the marketing plan defines your company and its products or services and then shows how the benefits you provide set you apart from your competition Step 2: describe your target audience -develop a simple, one paragraph profile of your perspective customer is the second step in creating an effective marketing plan Step 3: list your marketing goals -write down a short list of goals - and make them measurable so that you'll know when you've achieved them Step 4: develop the marketing communications strategies and the tactics you'll use -this section is the heart and soul of your marketing plan Step 5: set your marketing budget -you'll need to devote a percentage of projected gross sales to your annual marketing budget

Catalogs

For mail order entrepreneurs, a catalog is the backbone of their businesses Here are five steps to ensure yours catalog is brief and successful: 1. keep it simple 2. borrow from the best 3. choose a production route 4. find the perfect printer 5. put it all together

Plan-do-act-dare cycle (PDAD cycle)

Plan: formulate or update your scorecard, which focuses on your work as well as on your spare time Do: start with a simple objective from your scorecard with corresponding improvement activity, keeping in mind the priorities that have been identified Act: check whether the improvement activity is working and take action when it is not Dare: accept larger challenges by daring to take on a more difficult objective and corresponding improvement action from your scorecard and get on with it

Making sales presentations

Four elements determine whether a sale will be made or not 1. Rapport: putting yourself on the same side of the fence as the prospect 2. Need: determining what factors will motivate the prospect to listen with the intent to purchase 3. Importance: the weight the prospect assigns to a product, feature, benefit, price, or time frame 4. Confidence: your ability to project credibility, to remove doubt, and to gain the prospects belief that the risk of purchase will be less than the reward of ownership

Two-factor theory

Frederick Herzberg approached the question of motivation in a different way; by asking individuals what satisfies them on the job and what dissatisfies them, Herzberg came to the conclusion that aspects of the work environment that satisfy employees are very different from aspects that dissatisfy them -hygiene factors -motivators

Savings Incentive Match Plan for Employees (SIMPLE)

SIMPLE plans are one of the most attractive options available for small business owners -with these plans you can choose to use a 401(k) or an IRA as your retirement plan You can set up a SIMPLE IRA only if you have 100 or fewer employees who have received $5,000 or more in compensation from you in the preceding year

Your personal balanced scorecard

Social psychologist Hubert Rampersad has sought to translate the business Balanced Scorecard into a personal balanced score by providing you with the following four suggestions: 1. learning and growth: your skills and learning ability 2. internal: your physical health and mental state 3. customer (external): relations with your spouse, children, friends, employer, colleagues, and others 4. financial: financial stability

Accepting checks

Some steps to establishing a check-acceptance policy that works: 1. start with the basics 2. be observant 3. be especially cautious with new checks 4. establish a waiting period for refunds 5. consider getting electronic help

SMART goals

Specific, measurable, aggressive, realistic, and time bound 1. Measurable: when goals are specific, performance tends to be higher 2. Aggressive: effective goals are difficult, not easy 3. Realistic: while goals should be difficult, they should be based in reality 4. Timely: the goal should contain a statement regarding when the proposed performance level will be reached

Tip credits

States sometimes set minimum wage laws above or below the federal minimum wage standard -if your business is subject to both state and federal wage laws, you'll have to pay the higher of the two Under federal law (the Small business job protection act of 1996) you may apply tips received by an employee against the employee's minimum hourly wage provided that: 1. the employee makes at least $30 per month in tips 2. the employer pays at least 50% of the federal minimum wage 3. the employee has been informed of the applicable law governing minimum wage and tip credits 4. the employee retains all the tips received (unless there's tip pooling with other employees

Steps in identifying stakeholders

Step 1: determining influences on mission, vision, and strategy formulation Step 2: determining the effects of key decisions on the stakeholder Step 3: determining stakeholders' power and influence over decisions

The five step plan for a personal mission and vision statements

Step 1: identify past successes Step 2: identify core values Step 3: identify contributions -ex. world in general, family, employer or future employers, friends, and community Step 4: identify goals Step 5: write mission and vision statements

Courtesy

Subsumes all of those foresightful gestures that help someone else prevent a problem -touching base with people before committing to actions that will affect them, providing advance notice to someone who needs to know to schedule work

Ideas for enhancing organizational creativity

Team composition (organizing/leading): 1. diversify your team to give them more inputs to build on and more opportunities to create functional conflict while avoiding personal conflict 2. change group membership to stimulate new ideas and new interaction patterns 3. leaderless teams can allow teams freedom to create without trying to please anyone up front Team process (leading): 1. engage in brainstorming to generate ideas 2. use the nominal group technique in person or electronically to avoid some common group process pitfalls 3. use analogies to envision problems and solutions Leadership (leading): 1. challenge teams so that they are engaged but not overwhelmed 2. let people decide how to achieve goals, rather than telling them what goals to achieve 3. support and celebrate creativity even when it leads to a mistake 4. model creative behavior Culture (organizing): 1. institute organizational memory so that individuals do not spend time on routine tasks 2. build a physical space conducive to creativity that is playful and humorous 3. incorporate creative behavior into the performance appraisal process

Basic insurance needs

The basic business insurance package consists of four fundamental coverages 1. workers' compensation 2. general liability 3. auto 4. property/casualty plus an added layer of protection over those, often called an umbrella policy

Feedforward control

The control process used before operations begin, including policies, procedures, and rules designed to ensure that planned activities are carried out properly.

Corporation

The corporate structure is more complex and expensive than most other business structures. A corporation is an independent legal entity, separate from its owners, and as such, it requires complying with more regulations and tax requirements

Compliance with OSHA

The first step in complying with OSHA is to learn the published safety standards Under OSHA you also have a general duty to maintain a safe workplace which covers all situations for which there are published standards

Making creative decisions

The five steps to the creative decision making are similar to the decision-making models in some key ways -problem identification -immersion -incubation -illumination -verification and application

Organizational control

The fourth facet of P-O-L-C, and refers to the process by which an organization influences its subunits and members to behave in ways that lead to the attainment of organizational goals and objectives -when properly designed, such controls should lead to better performance because an organization is able to execute its strategy better Typically involves four steps: 1. establish standards 2. measure performance 3. compare performance to standards 4. take corrective action as needed Controls are relevant to a broad spectrum of organizations, including governments, schools, and charities

The general environment: PESTEL

The general environment is composed of dimensions in the broader society that influence an industry and the firms within it Grouped into six segments: 1. political 2. economic 3. social 4. technical or technological 5. environmental 6. legal "PESTEL"

Benefit basics

The law requires employers to provide employees with certain benefits. You must: -give employees time off to vote, serve on a jury, and perform military service -comply with all workers' compensation requirements -withhold FICA taxes from employees' paychecks and pay your portion of FICA taxes, providing employees with retirement and disability benefits -pay state and federal unemployment taxes, thus providing benefits for unemployed workers -contribute to state short term disability programs in states where such programs exist -comply with the federal family and medical leave act You are NOT required to provide: -retirement plans -health plans (except in some states) -dental or vision plans -life insurance plans -paid vacations, holidays, or sick leaves (except in some localities)

Concurrent controls

The process of monitoring and adjusting ongoing activities and processes -often described as 'real time control' because it deals with the present -these controls are not necessarily proactive, but they can prevent problems from becoming worse

Give em' credit

The simplest customer credit policy has two basic points: 1. limiting credit risk 2. diligently investigating each company's creditworthiness No matter how creditworthy a customer is, never extend credit beyond your profit margin. This policy ensures that if you aren't paid, at least your expenses will be paid To gauge a company's creditworthiness, draft a comprehensive credit application that contains the following: -name of business, address, phone, and fax number -names, addresses, and social security numbers of principals -type of business (corporation, partnership, sole proprietorship) -industry -number of employees -bank references -trade payment references -business/personal bankruptcy -any other names under which the company does business with -a personal guarantee that the business owners promise to pay you if their corporation is unable

Cheerleading

The words and gestures of encouragement and reinforcement of coworkers -accomplishments and professional development

The financials

There are three basic financial reports that all managers need to understand and interpret to manage their business successfully: 1. the balance sheet 2. the income/profit and loss 3. the cash flow statement

Measurement failure: Nonfinancial control

There are three common failings 1. failure to tie nonfinancial controls to the strategy 2. failure to validate the relationships between nonfinanical and financial controls 3. failure to set the appropriate nonfinancial control targets

A good business plan

There are three primary parts of a business plan: 1. the business concept, where you discuss the industry, your business structure, your product or service, and how you plan to make your business a success 2. the marketplace section, in which you describe and analyze potential customers 3. the financial section contains your income and cash flow statements, balance sheet, and other financial ratios, such as break even analyses Breaking these three major sections down further, a business plan consists of seven major components 1. executive summary 2. business description 3. market strategies 4. competitive analysis 5. design and development plan 6. operations and management plan 7. financial factors

Strategic control

This control is concerned with tracking the strategy as it is being implemented, detecting any problem areas or potential problem areas suggesting that the strategy is incorrect, and making any necessary adjustments

Building a branding strategy

This is your written plan for how you'll apply your brand strategically throughout the company over time At its core, a good branding strategy lists the one or two most important elements of your product or service, describes your company's ultimate purpose in the world, and defines your target customer Step 1: Set yourself apart Step 2: know your target customer Step 3: develop a personality Putting it all together 1. keep ads brand focused 2. be ruthlessly consistent in all you do 3. shed the deadweight

Operational control

This type of control is imposed, they function within the framework established by the strategy

Retirement plans

To encourage more businesses to launch retirement plans the Credit for the Small Employer Pension Plan Startup Costs provides a tax credit for expenses associated with starting a retirement plan. The tax credit may be claimed for a maximum period of three years There are four rules you must follow to be eligible for the credit, according to Investopia: 1. the plan must be a qualified retirement plan, such as pension, profit sharking, stock bonus, or qualified annuity plan -ex. 401(k), Simplified Employee Pension (SEP) plan, or SIMPLE 2. Employers with 100 or fewer employees who received at least $5,000 in compensation for the preceding year are eligible -part time employees must be considered into this group 3. the plan cannot be just for an owner/employee; it must also cover at least one non-highly compensated employee, who makes $110,000 or less a year and is not an owner of the company 4. the employer is not allowed to have a sponsored pension plan during the three years preceding the new plan's start date

Getting publicity

To get your company noticed, follow these seven steps 1. Write a positioning statement: sums up in a few sentences what makes your business different from the competition 2. List your objectives: what do you hope to achieve for your company through the publicity plan you put into action? - list your top five goals in order of priority 3. Identify your target customers 4. Identify your target media: list the newspapers and TV and radio programs in your area that would be appropriate outlets 5. Develop story angles: keeping in mind the media you are approaching, make a list of story ideas you can pitch to them 6. Make a pitch: put your thoughts on paper, and send them to the reporter in a "pitch letter" 7. Follow up: following up is the key to securing coverage -wait four to six days after you've sent the information, then follow up with a phone call

Creating financial statements

To manage proactively, you should plan to generate financial monthly statements. Your financial statements should include -an income statement -a balance sheet -a cash flow statement

Lagging indicator

Type of metric that describes an activity that has already occurred.

Nonexempt and Exempt employees

Under the FLSA or fair labor standards act, all employees are classified as either exempt or nonexempt Nonexempt employee: is entitled to a minimum wage and overtime pay as well as other protections set forth in the FLSA Exempt employees are not protected under these rules; however if you wish to classify an employee as exempt, you must pay them a salary **anyone paid on an hourly basis is automatically considered nonexempt, however there can be nonexempt employees who are paid a salary**

Altruism

Voluntary actions that help another person with a work problem -instructing a new hire on how to use equipment, helping a coworker catch up with a backlog of work, fetching materials that a colleague needs and cannot procure on their own

Inspirational motivation

When the leader behaves in ways that foster an enthusiasm for and commitment to a shared vision of the future

OSHA regulations

Workers are considered employees under OSHA if you: -control the actions of the employee -have the power to control the employee's actions -are able to fire the employee or modify employment conditions Small employers (ten or fewer employees) don't have to report injuries and illnesses, however that does not mean they are exempt from OSHA regulations

Sportsmanship

a citizen like posture of tolerating the inevitable inconveniences and impositions of work without whining and grievances

Group

a collection of individuals who influence one another, have a common purpose, take on roles, are interdependent, and interact together

Counterculture

a culture defined as shared values and beliefs that are in direct opposition to the values of the broader organizational culture -often shaped around a charismatic leader

Organizational design

a formal guided process for integrating the people, information, and technology of an organization -it is used to match the form of the organization as closely as possible to the purpose(s) the organization seeks to achieve -through this design process, organizations act to improve the probability that the collective efforts of members will be successful

Individual initiative (or conscientiousness)

a pattern of going well beyond minimally required levels of attendance, punctuality, housekeeping, conserving resources, and related matters of internal maintenance

Expectancy

a person's belief that high levels of effort will lead to desired outcomes

Equity sensitivity

a personality trait that explains different reactions to inequity

Generally accepted accounting principles (GAAP)

a set of accounting standards that is used in the preparation of financial statements

The balance sheet

a snapshot of the business's financial position at a certain point in time the financial statement is a listing of total assets (what the business owns - items of value) and total liabilities (what the business owes)

Sensitivity analysis

a special case of what-if analysis, is the study of the impact on other variables when one variable is changed repeatedly most common items for which sensitivity analysis is done are: -sales -cost of goods solds and gross profit -operating expenses -interest rates -accounts receivable -inventory days -accounts payable days on hand -major fixed asset purchases or reductions -acquisitions or closings

Mission statement

a statement that communicates the organization's reason for being, and how it aims to serve its key stakeholders -lays out the organization's "purpose for being"

The cash flow statement

a statement that gives detail of cash received and cash expended for each month of the year

Unique selling proposition (USP)

a strategy of differentiating a product by communicating its unique attributes; often becomes the common theme or slogan in the entire advertising campaign Here is how to uncover your USP and use it to power up your sales: -put yourself in your customer's shoes -know what motivates your customers' behavior and buying decisions -cosmetics and liquor companies are great examples of industries that know the value of psychologically oriented promotion -uncover the real reason customers buy your product instead of a competitors -since your business is just starting out you won't have a lot of customers to ask yet so "shop" your competition instead

Nominal group technique (NGT)

a structured approach to group decision making that focuses on generating alternatives and choosing one it follows four steps 1. each member of the group engages in a period of independently and silently writing down ideas 2. the group goes in order around the room to gather all the ideas that were generated 3. a discussion takes place around each idea and members ask for and give clarification and make evaluative statements 4. individuals vote for their favorite ideas by using either ranking or rating techniques

Lateral thinking

a term coined by Edward DeBono, and is about changing patterns and perceptions; it is about ideas that may not be obtainable by using only traditional step-by-step, programmed, logic -draws on the right side of our brains

Leader-member exchange (LMX)

a theory that proposes that the type of relationship leaders have with their followers is the key to understanding how leaders influence employees

Goal setting theory

a theory that says that specific and difficult goals, with feedback, lead to higher performance Is one of the most influential and practical theories of motivation

Equity theory

a theory that states that people will be motivated when they perceive that they are being treated fairly

Wildstorming

a variation of brainstorming where the group focuses on ideas that are impossible and then imagines what would need to happen to make them possible

Tradition

acceptance of social customs and traditional ideas in a society

Innovative cultures

according to the OCP, companies that have this type of culture are flexible, adaptable, and experiment with new ideas -these companies are characterized by a flat hierarchy and titles and other status distinctions tend to be downplayed

Peacemaking

actions that help prevent, resolve, or mitigate unconstructive interpersonal conflict

Leading indicator

actually serves to predict where the firm is going, in terms of performance

Umbrella coverage

additional layer of protection -protects you for payments in excess of your existing coverage or for liabilities not covered by any of your other insurance policies

Job rotation

an alternative to job specialization that involves moving employees from job to job at regular intervals, thereby relieving the monotony and boredom typical in repetitive jobs

Servant leadership

an approach that defines the leader's role as serving the needs of others -according to this approach, the primary mission of the leader is to develop employees and help them reach their goals

Modular organization

an organization in which all nonessential functions are outsourced

Virtual organization

an organization in which employees work remotely - sometimes within the same city, but more often across a country and across national borders -the company relies on computer and telecommunications technologies instead of physical presence for communication between employees

Learning organization

an organization whose design actively seeks to acquire knowledge and change behavior as a result of the newly acquired knowledge

Classified ads

are a smart way to reach prospects who are looking for - and are prepared to by what you sell

Enthusiastic support

are defenders of the new way and actually encourage others around them to give support to the change effort as well

Decision trees

are diagrams in which answers to yes or no questions lead decision makers to address additional questions until they reach the end of the tree -are helpful in avoiding errors such as framing bias

Motivators

are factors that are intrinsic to the job, such as achievement, recognition, interesting work, increased responsibilities, advancement, and growth opportunities -achievement -recognition -interesting work -increased responsibility -advancement and growth

Organic structures

are flexible and decentralized, with low levels of formalization -in organizations with these structures, communication lines are more fluid and flexible -employee descriptions are broader and employees are asked to perform duties based on the specific needs of the organization at the time as well as their own expertise levels -tend to be related to higher levels to job satisfaction on the part of employees

Stereotypes

are generalizations based on a group characteristic

Stakeholders

are individuals or groups who have an interest in an organization's ability to deliver intended results and maintain the viability of its products and services

Group decision support systems (GDSS)

are interactive computer-based systems that are able to combine communication and decision technologies to help groups make better decisions

Goals

are outcome statements that define what an organization is trying to accomplish, both programmatically and organizationally

Core competencies

are resources and capabilities that serve as a source of a firm's competitive advantage over rivals

Supervisory or team managers

are responsible for coordinating a subgroup of a particular function or a team composed of members from different parts of the organization -sometimes you will hear distinctions between line and staff managers

Top managers

are responsible for developing the organization's strategy and being a steward for its vision and mission

Functional managers

are responsible for the efficiency and effectiveness of an area, such as accounting or marketing

Measures

are the actual metrics used to gauge performance on objectives

Values

are the beliefs of an individual or group, and in this case the organization, in which they are emotionally invested

Capabilities

are the firm's capacity to deploy resources that have been purposely integrated to achieve a desired end state

Principles of management

are the means by which you actually manage, that is, get things done through others - individually, in groups, or in organizations Formally defined, these are the activities that "plan, organize, and control operations of the basic elements of [people], materials, machines, methods, money, and markets, providing direction and coordination, and giving leadership to human efforts, so as to achieve the sought objectives of the enterprise

Current assets

are those assets that are cash or can be readily converted to cash in the short term, such as accounts receivable or inventory

Fixed assets

are those assets that are not easily converted to cash in the short term; that is, they are assets that only change over the long term -ex. land, buildings, furniture, vehicles, and fixtures

Mechanistic structures

are those that resemble a bureaucracy -these structures are highly formalized and centralized -communication tends to follow formal channels and employees are given specific job descriptions delineating their roles and responsibilities -often rigid and resist change, making them unsuitable for innovativeness and taking quick action

Objectives

are very precise, time-based, measurable actions that support the completion of a goal typically must be: 1. related directly to the goal 2. clear, concise, and understandable 3. stated in terms of results 4. begin with an action verb 5. specify a date for accomplishment 6. measurable

Organizational citizenship behaviors (OCB)

are voluntary behaviors employees perform to help others and benefit the organization

Situational leadership theory (SLT)

argues that leaders must use different leadership styles depending on their followers' development level according to this model, employee readiness (defined as a combination of their competence and commitment levels) is the key factor determining proper leadership style

Conformity

being motivated by being self disciplined and obedient -conforming to others

Proactivity

can be defined as the monitoring of problems in a way that provides their timely prevention, rather than after the fact reaction. In management, this is known as feedforward control; it addresses what can we do ahead of time to help our plan succeed -the essence of feedforward control is to see the problems coming in time to do something about them

Organizational citizenship behaviors (OCBs)

can be understood as individual behaviors that are beneficial to the organization and are discretionary, not directly or explicitly recognized by the formal reward system

Filing your tax return: partnerships and limited liability companies (LLCs)

companies set up with these structures must file Form 1065 (u.s. return of partnership income) that reports incomes and loss to the IRS -must furnish copies of schedule K-1

Focus strategy

concentrates on meeting the specialized needs of its customers -products and services can be designed to meet the needs of buyers

Flat structures

consist of only a few layers -a larger number of employees report to each manager; managers will be relatively unable to provide close supervision, leading to greater levels of freedom of action for each employee

Industry microenvironment

consists of stakeholder groups that a firm has regular dealings with

Strategic alliances

constitute another form of boundaryless design -two or more companies find an area of collaboration and combine their efforts to create a partnership that is beneficial for both parties

Workers' compensation

covers medical and rehabilitation costs and lost wages for employees injured on the job, and is required by law in all 50 states consists of two components with a third optional element 1. the first part covers medical bills and lost wages for the injured employee 2. the second encompasses the employer's liability, which covers the business owner if the spouse or children of a worker who's permanently disabled or killed decides to sue 3. the third and optional element of workers' compensation insurance is employment practices liability, which ensures against lawsuits arising from claims of sexual harassment, discrimination, and the like

Detail-oriented cultures

cultures that are characterized in the OCP framework as emphasizing precision and paying attention to details

Team-oriented cultures

cultures that are collaborative and emphasize cooperation among employees

Stable cultures

cultures that are predictable, rule-oriented, and bureaucratic

Subcultures

cultures that emerge within different departments, branches, or geographic locations -may arise from personal characteristics of employees and managers, as well as the different conditions under which work is performed

Aggressive cultures

cultures that value competitiveness and outperforming competitors; by emphasizing this, they often fall short in corporate social responsibility

People-oriented cultures

cultures that value fairness, supportiveness, and respecting individual rights

Nonprogrammed decisions

decisions that are unique and important require conscious thinking, information gathering, and careful consideration of alternatives

Programmed decisions

decisions that occur frequently enough that we develop an automated response to them -the automated response we use to make these decisions is called the decision rule

Leadership

defined as the social and informal sources of influence that you use to inspire action taken by others

Divisional structures

departments represent the unique products, services, customers, or geographic locations the company is serving

Rational decision-making model

describes a series of steps that decision makers should consider if their goal is to maximize the quality of their outcomes

Deliberate

done consciously and intentionally

Democratic decision making

employees participate in the making of the decision

Personality

encompasses a person's relatively stable feelings, thoughts, and behavioral patterns

Direct mail

encompasses a wide variety of marketing materials, including brochures, catalogs, postcards, newsletters, and sales letters major corporations know that this type of advertising is one of the most effective and profitable ways to reach out to new and existing clients

Transactional leaders

ensure that employees demonstrate the right behaviors because the leader provides resources in exchange

Job specialization

entails breaking down tasks to their simplest components and assigning them to employees so that each person would perform few tasks in a repetitive manner

Performance management systems

establishes performance standards used to evaluate employee performance -includes both MBO and the balanced scorecard

Filing your tax return: Sole proprietorship

every year you must file schedule C (profit or loss from business) with you Form 1040 (u.s. individual income tax return) to report your business' net profit and loss

Synergy

exists when the interaction of two or more activities create a combined effect greater than the sum of their individual effects -the idea is that the combination of certain businesses is stronger than they would be individually because they either do things more cheaply or of higher quality as a result of their coordination under a common owner

Hygiene factors

factors that eliminate job dissatisfaction but don't motivate -company policy -supervision and relationship -working conditions -salary -security

Interpersonal helping

focuses on helping coworkers in their jobs when such help was needed

Business strategy

focuses on how a given business needs to compete to be effective

Operational planning

generally assumes the existence of organization-wide or subunit goals and objectives and specific ways to achieve them -is short range (less than a year) planning that is designed to develop specific action steps that support the strategic and tactical plans

Budgeting

generally refers to a simple listing of all planned expenses and revenues

Functional structures

groups jobs based on similarity in functions -in these structures, each person serves a specialized role and handles large volumes of transactions

Self-fulfilling prophecy

happens when an established stereotype causes one to behave in a certain way, which leads the other party to behave in a way that confirms the stereotype

Tangible asset

has a value and physically exists

Project manager

has the responsibility for the planning, execution, and closing of any project -often fund in construction, architecture, consulting, computer networking, telecommunications, or software development

Matrix organizations

have a design that combines a traditional functional structure with a product structure

Need for achievement

have a strong need to be successful

Tall structures

have several layers of management between frontline employees and the top level -the number of employees reporting to each manager tends to be smaller, resulting in greater opportunities for managers to supervise and monitor employee activities

Ability

having the skills and knowledge required to perform the job - is also important and is sometimes the key determinant of effectiveness

Organizational loyalty

identification with and allegiance to organizational leaders and the organization as a whole, transcending with parochial interests of individuals, work groups, and departments -representative behaviors include defending the organization against threats, contributing to its good reputation, and cooperating with others to serve the interests of the whole

Continuous schedule

if reinforcers follow all instances of positive behavior -ex. giving an employee a sales commision every time he makes a sale

Filing your tax return: corporations

if your business is structured as a regular corporation, you must file Form 1120 (u.s. corporation income tax return)

Auto insurance

if your business provides employees with company cars, or if you have a delivery van, you need to think about auto insurance -the good news here is that it offers more of an opportunity to save money than most other types of business insurance -the primary strategy is to increase your deductible; then your premiums will decrease accordingly

People-oriented leader behaviors

include showing concern for employee feelings and treating employees with respect -these leaders genuinely care about the well being of their employees and they demonstrate their concern in their actions and decisions

Self development

includes all the steps that workers take to voluntarily improve their knowledge, skills, and abilities so as to be better able to contribute to their organizations. -seeking out and taking advantage of advanced training courses, keeping abreast of the latest developments in one's field and area, or even learning a new set of skills so as to expand the range of one's contributions to an organization

Importance

indicates the degree to which the organization cannot be considered successful if a stakeholder's needs, expectations, and issues are not addressed

In-role performance

individual level performance draws upon those things you have to do in your job

Entitleds

individuals who expect to receive a lot without giving much in return

Benevolents

individuals who give without waiting to receive much in return

High need for affiliation

individuals who have the desire to be liked and accepted by others

Formal orientation program

indoctrinates new employees to the company culture, as well as introducing them to their new jobs and colleagues

General liability

insures a business against accidents and injury that might happen on its premises as well as exposures related to its products the catch is that the damage cannot be due to poor workmanship

Feedback controls

involve gathering information about a completed activity, evaluating that information, and taking steps to improve the similar activities in the future -this is the least proactive of controls and is generally a basis for reactions -this type of control permits managers on past performance to bring future performance in line with planned objectives

Task-oriented leader behaviors

involve structuring the roles of subordinates, providing them with instructions, and behaving in ways that will increase the performance of the group

Behavioral controls

involve the direct evaluation of managerial and employee decision making, not of the results of managerial decisions -these controls and commensurate rewards are typically more appropriate when there are many external and internal factors that can affect the relationship between a manager's decisions and organizational performance

Variable ratio

involves a random pattern, such as giving a sales bonus every time the manager is in a good mood

Strategic planning

involves analyzing competitive opportunities and threats, as well as the strengths and weaknesses of the organization, and then determining how to position the organization to compete effectively in their environment -has a long time frame, often three years or more -generally includes the entire organization and includes formulation of objectives -often based on the organization's mission which is fundamental reason for existence -top managers often conduct this type of planning

Passive resistance

involves being disturbed by changes without necessarily voicing these opinions -may dislike the change quietly, feel stressed and unhappy, and even look for new job without necessarily bringing their concerns to the attention to decision makers

Refreezing

involves ensuring that change becomes permanent and the new habits, rules, or procedures become the norm

Controlling

involves ensuring that performance does not deviate from standards Consists of three steps, which include: 1. establishing performance standards 2. comparing actual performance against standards 3 taking corrective action when necessary

Controlling

involves ensuring that performance does not deviate from standards consists of three steps: 1. establishing performance standards 2. comparing actual performance against standards 3. taking corrective action when necessary

Compliance

involves going along with the proposed changes with little enthusiasm

Leading

involves influencing others toward the attainment of organizational objectives

Sole proprietorship

involves just one individual who owns and operates the enterprise -the tax aspects of this are appealing because the expenses and your income from the business are included on your personal income tax return, Form 1040 -beginning in 2018, sole proprietors are entitled to take a deduction of 20% of their qualified business income earned from the business as a sole proprietor, you must also file a schedule SE with Form 1040 -you use schedule SE to calculate how much self employment tax you owe

Active management by exception

involves leaving employees to do their jobs without interference, but at the same time proactively predicting potential problems and preventing them from occurring

Fixed interval schedules

involves providing a reward after a specified period of time, such as giving a sales bonus once a month regardless of how many sales have been made

Fixed ratio schedule

involves providing rewards every nth time the right behavior is demonstrated -ex. giving the employee a bonus for every 10th sale he makes

Financial control

involves the management of a firm's costs and expenses to control them in relation to budgeted amounts

Leading

involves the social and informal sources of influence that you use to inspire action taken by others

Self-efficacy

is a belief that one can perform a specific task successfully

SCAMPER

is a checklist tool that helps you to think of changes you can make to an existing marketplace to create a new one - a new product, a new service, or both 1. substitute 2. combine 3. adapt 4. modify 5. put to other use 6. eliminate 7. rearrange

Team

is a cohesive coalition of people working together to achieve the team agenda

Strategic focus

is a common characteristic across successful organizations -is seen when an organization is very clear about its mission and vision and has a coherent, well-articulated strategy for achieving those

Employee engagement

is a concept that is generally viewed as managing discretionary effort; that is, when employees have choices, they will act in a way that furthers their organization's interests

Corporate social responsibility (CSR)

is a concept whereby organizations consider the interests of the society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities, and the environment in all aspects of their operations

Performance evaluation

is a constructive process to acknowledge an employee's performance

Balanced scorecard

is a control system that translates an organization's vision, mission, and strategy into specific, quantifiable goals and to monitor the organization's performance in terms of achieving these goals

Co-Op advertising

is a cooperative advertising effort between suppliers and retailers - such as between a soda company and a convenience store that advertises the company's products both retailers and suppliers benefit: retailers bc co-op advertising increases the amount of money they can spend on ads, and suppliers through increased local exposure and better sales

Economic performance

is a function of its success in producing benefits for its owners in particular, through product innovation and the efficient use of resources

Vision statement

is a future-oriented declaration of the organization's purpose and aspirations -says "based on the purpose, this is what we want to become"

Industry

is a group of firms producing products that are close substitutes

Brainstorming

is a group process of generated ideas that follows a set of guidelines that include no criticism of ideas during the brainstorming process, the idea that no suggestion is too crazy, and building on other ideas (piggybacking)

Job enrichment

is a job redesign technique that allows workers more control over how they perform their own tasks, giving them more responsibility

Nominal group technique (NGT)

is a method of facilitating a group of people to produce a large number of ideas in a relatively short time in addition to using NGT to develop a mission and vision statement, it can be useful: -to generate numerous creative ideas -to ensure everyone is heard -when there is concern that some people may not be vocal -to build consensus -when there is controversy or conflict

Positive reinforcement

is a method of increasing the desired behavior -involves making sure that behavior is met with positive consequences

Employee Identification Number (EIN)

is a nine digit number the IRS issues and it is used to identify the tax accounts of corporations, partnerships, and other entities

Intangible asset

is a nonphysical resource that provides gainful advantages in the marketplace

Entrepreneur

is a person who engages in the process of entrepreneurship

Mission statement

is a statement of purpose, describing who the company is and what it does -it serves an important function for organizations as part of the first facet of the planning P-O-L-C function

Lean control

is a system of nonfinancial of nonfinancial controls used to improve product and service quality and decrease waste -is a highly refined example of nonfinancial controls in action

Individual retirement account (IRA)

is a tax qualified retirement savings plan available to anyone who works and/or the person's spouse, whether the individual is an employee or a self employed person -one of the biggest advantages of these plans is that the earning on your IRA grow on a tax deferred basis until you starting withdrawing the funds -roth 401(k): allows employees to designate all or part of their elective deferrals as qualified Roth 401(k) contributions you can qualify for a deductible IRA as long as you do not participate in an employer sponsored retirement plan, such as a 401(k) -if you are in an employer plan, you can qualify for a deductible IRA if you meet the income requirements

Mentors

is a trusted person who provides an employee with advice and support regarding career-related matters -can be crucial to helping new employees adjust by teaching them the ropes of their jobs and how the company really operates

Creativity: Improvement

is a type of creativity that involves making an existing idea better

Value chain

is a useful tool for taking stock of organizational capabilities -a chain of activities

Break-even analysis

is a useful tool in tracking your business' cash flow; the variables needed to compute a break-even sales analysis includes: -gross profit margin -operating expenses (less depreciation) -total monthly debt payments for the year (annual debt service) The break-even calculation for sales is: (operating expenses + annual debt service) / gross profit margin = break-even sales

Creativity: Incubation

is a very deliberate approach that concerns a vision of sustainability - that is, leaving a legacy

Wiki

is a way for many people to collaborate and contribute to an online document or discussion

Corporate social responsibility (CSR)

is about how companies manage their business processes to produce an overall positive effect on society -"a business approach that creates long term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments"

Negative reinforcement

is also used to increase the desired behavior -involves removal of unpleasant outcomes once desired behavior is demonstrated

Consensus

is another decision making rule that groups may use when the goal is to gain support for an idea or plan of action

Punishment

is another method of reducing the frequency of undesirable behaviors -involves presenting negative consequences following unwanted behaviors

Process loss

is any aspect of group interaction that inhibits good problem solving

Creativity: Investment

is associated with speed - being first and being fast -it is also a form of creativity fostered from the desire to be highly competitive

Motivation

is defined as "the intention of achieving a goal, leading to goal-directed behavior"

Future orientation

is defined as one's expectations and the degree to which one is thoughtful about the future

Entrepreneurship

is defined as the recognition of opportunities (needs, wants, problems, and challenges) and the use or creation of resources to implement innovative ideas for new, thoughtfully planned ventures

Health Maintenance Organization (HMO)

is essentially a prepaid health care arrangement where employees must use doctors employed by or under contract to the HMO and hospitals approved by the HMO

Gross profit margin

is expressed as a percentage gross profit / sales = gross profit margin Two ways to improve gross profit margin 1. increase prices 2. decrease costs to produce goods

Tactical planning

is intermediate-range (one to three years) planning that is designed to develop relatively concrete and specific means to implement the strategic plans -middle managers often engage in this type of planning

Chart of accounts

is kept by every business to record and follow specific entries -is the fuel for your accounting system

Strong culture

is one that is shared by organizational members - that is, a culture in which most employees in the organization show consensus regarding the values of the company -the stronger the company's culture, the more likely it is to affect the way employees think and behave

Passive management by exception

is similar in that it involves leaving employees alone, but in this method, the manager waits until something goes wrong before coming to the rescue

General manager

is someone who is responsible for managing a clearly identifiable revenue-producing unit, such as a store, business unit, or product line

Intended strategy

is strategy as conceived by the top management team

Working capital analysis

is the amount by which current assets exceed current liabilities Five most common sources of short term working capital financing 1. equity 2. trade creditors 3. factoring 4. line of credit 5. short term loan

Strategy

is the central, integrated, externally oriented concept of how an organization will achieve its objectives

Self-esteem

is the degree to which a person has overall positive feelings about himself or herself -those with a high self esteem view themselves in a positive light, are confident, and respect themselves

Agreeableness

is the degree to which a person is affable, tolerant, sensitive, trusting, kind, and warm -likeable people that get along with others

Openness

is the degree to which a person is curious, original, intellectual, creative, and open to new ideas -people who are open seem to thrive in situations that require flexibility and learning new things

Person-job fit

is the degree to which a person's knowledge, skills, abilities, and other characteristics match the job demands

Centralization

is the degree to which decision making authority is concentrated at higher levels in an organization

Autonomy

is the degree to which the person has the freedom to decide how to perform tasks

Economic profit

is the difference between revenue and the opportunity cost of all resources used to produce the items sold

Organizational commitment

is the emotional attachment people have toward the company they work for

Formalization

is the extent to which an organization's policies, procedures, job descriptions, and rules are written and explicitly articulated

Organizing

is the function of management that involves developing an organizational structure and allocating human resources to ensure the accomplishment of objectives

Planning

is the function of management that involves setting objectives and determining a course of action for achieving those objectives -environmental scanning -strategic planning -tactical planning -operational planning

Active resistance

is the most negative reaction to a proposed change attempt -those who engage in this form of resistance may sabotage the change effort and be outspoken objectors to the new procedures

Organizational change

is the movement of an organization from one state of affairs to another

Creativity

is the power or ability to invent there are four types of creativity: 1. investment (external orientation with high control) 2. imagination (external orientation with flexibility emphasis) 3. improvement (internal orientation with high control) 4. incubation (internal orientation with flexibility emphasis)

Strategic management process

is the process by which a firm manages the formulation and implementation of its strategy -is the coordinated means by which an organization achieves its goals and objectives

Cost accounting

is the process of allocating all costs associated with generating a sale, both direct or indirect Direct costs include: materials direct labor (total wages paid to the workers who made product), foreman/plant manager salaries, and freight Indirect costs include all other costs associated with keeping your doors open

Empowerment

is the process of enabling or authorizing an individual to think, behave, take action, and control work and decision making in autonomous ways

Simplified Employee Pension (SEP) plan

is the simplest type of retirement plan available; essentially, a SEP is a glorified IRA that allows you to contribute a set percentage up to a maximum amount each year employees do not make any contributions to SEPs; employers must pay the full cost of the plan, and whatever percentage you contribute to yourself must be applied to all eligible employees

Creative decisions: Immersion

is the step in which the decision maker thinks about the problem consciously and gathers information

Creative decisions: Problem identification

is the step in which the need for problem solving becomes apparent

Psychological contract

is the unspoken, informal understanding that an employee will contribute certain things to the organization

Organizational culture

is the workplace environment formulated from the interaction of the employees in the workplace -is defined by all of the life experiences, strengths, weaknesses, education, upbringing, and other attributes of the employees

Diversification

is where an organization participates in multiple businesses that are in some way distinct from one another

Transformational leaders

lead employees by aligning employee goals with the leader's goals these leaders have four tools in their possession, which they use to influence employees and create commitment to the company goals 1. charisma 2. inspirational motivation 3. intellectual stimulation 4. individualized consideration

Authoritarian decision making

leaders make decisions alone without necessarily involving employees in the decision making process

Participative leaders

leaders that make sure that employees are involved in making important decisions

Formal leaders

leaders who hold a position of authority and may use the power that comes from their position, as well as their personal power, to influence others

Supportive leaders

leaders who provide emotional support to employees

Directive leaders

leaders who provide specific directions to their employees

Achievement-oriented leaders

leaders who set goals for employees and encourage them to reach their goals

Line manager

leads a function that contributes directly to the products or services the organization creates -also referred to as a product or service manager

Staff manager

leads a function that creates indirect inputs

Global learners

learn by absorbing information in a random format, and then synthesizing the larger picture

Intuitive learners

learn by focusing on internal inputs like thoughts and memories

Verbal learners

learn by having things explained to them with words

Laissez-faire decision making

leave employees alone to make the decision; leaders provide minimum guidance and involvement in the decision

Current liabilities

liabilities that are coming due in the short term, usually the coming year -these are accounts payable; employment, income and sales taxes; salaries payable; federal and state unemployment insurance; and the current year's portion of multiyear debt

Unfreezing

making sure that organizational members are ready for and receptive to change

Lifestyles of health and sustainability (LOHAS)

marketplace comes with the price of increased transparency - this customer group demands the necessary data to make informed decisions

Perception

may be defined as the process by which individuals detect and interpret environmental stimuli

Intangible assets (net)

may include goodwill, trademarks, patents, licenses, copyrights, formulas, and franchises -in this instance, net means the value of intangible assets minus amortization

Property/casualty coverage

most property insurance is written on an all risks basis, as opposed to a named peril basis - the latter offers coverage for specific perils spelled out in the policy; if your loss comes from a peril not named, it is not covered

Referent

motivates one person to communicate with another

NAPEO

national association of professional employer organizations

Reflective learners

need time to process information and tend to work with greater care and precision when learning new information

Extinction

occur when behavior ceases as a result of receiving no reinforcement

Escalation of commitment

occurs when individuals continue on a failing course of action after information reveals this may be a poor path to follow

Overconfidence bias

occurs when individuals overestimate their ability to predict future events

Programmed thinking

often called left-brained thinking, relies on logical or structured ways of creating a new product or service

Social networks

often referred to as the "invisible organization;" they consist of individuals or organizations connected by one or more specific types of interdependency

General mental ability

or cognitive ability or intelligence, and often abbreviated as 'g' -can be divided into several components - reasoning abilities, verbal and numerical skills, and analytical skills

Long-term debt

or liabilities, may be bank notes or loans made to purchase the business's fixed asset structure -are due in a period of more than a year -the portion of a bank note that is not payable in the coming year is long-term debt/liability

Creative decisions: Illumination

or the insight moment, when the solution to the problem becomes apparent to the person, usually when it is least expected

Onboarding

or the organizational socialization process, refers to the process through which new employees learn the attitudes, knowledge, skills, and behaviors required to function effectively within an organization

Social loafing

or the tendency of some members to put forth less effort while working within a group

Filing your tax return: S corporations

owners of these companies must file Form 1120S -must also receive a copy of schedule K-1

P-O-L-C framework

planning, organizing, leading, controlling

Accounting profit

profits are achieved when revenues exceed the accounting cost the firm "pays" for those inputs

Rituals

refer to repetitive activities within an organization that have symbolic meaning

Majority rule

refers to a decision making rule where each member of the group is given a single vote, and the option that receives the greatest number of votes is selected

Proactive personality

refers to a person's inclination to fix what is wrong, change things, and use initiative to solve problems -instead of waiting to be told what to do, these proactive people take action to initiate meaningful change and remove the obstacles they face along the way

Social movement

refers to a type of group action that is focused on specific political or social issues; examples include the civil rights movement, the feminist movement, and the gay rights movement

Satisfice

refers to accepting the first alternative that meets your minimum criteria

Turnover

refers to an employee's leaving an organization -has potentially harmful consequences, such as poor customer service and poor company wide performance

Originality

refers to an idea's uniqueness

Passion

refers to an intense, driving, or overmastering feeling or conviction

Boundaryless organization

refers to an organization that eliminates traditional barriers between department as well as barriers between the organization and the external environment -modular organization -strategic alliances

The intuitive decision-making model

refers to arriving at decisions without conscious reasoning

Charisma

refers to behaviors leaders demonstrate that inspire confidence, commitment, and admiration toward the leader

Job enlargement

refers to expanding the tasks performed by employees to add more variety -can reduce boredom and monotony as well as use human resources more effectively

Flexibility

refers to how different the ideas are from one another

Organizational structure

refers to how individual and team work within an organization are coordinated

Decision making

refers to making choices among alternative courses of action - which may also include inaction

Attitude

refers to our opinions, beliefs, and feelings about aspects of our environment

Social networking

refers to systems that allow members of a specific site to learn about other members' skills, talents, knowledge, or preferences

Owner's equity

refers to the amount of money the owner has invested in the firm -the amount is determined by subtracting current liabilities and long term debt from total assets -the remaining capital/owner's equity is what the owner would have left in the event of liquidation or the dollar amount of the total assets that the owner can claim after all creditors are paid

Neuroticism

refers to the degree to which a person is anxious, irritable, temperamental, and moody

Conscientiousness

refers to the degree to which a person is organized, systematic, punctual, achievement oriented, and dependable -is the only personality trait that uniformly predicts how high a person's performance will be across a variety of occupations and jobs

Person-organization fit

refers to the degree to which a person's personality, values, goals, and other characteristics match those of the organization

Procedural justice

refers to the degree to which fair decision-making procedures are used

Interactional justice

refers to the degree to which people are treated with respect, kindness, and dignity in interpersonal interactions

Distributive justice

refers to the degree to which the outputs received from the organization are fair

Task identity

refers to the degree to which the person completes a piece of work from start to finish

Feedback

refers to the degree to which the person learns how effective he or she is at work

Self-monitoring

refers to the extent to which a person is capable of monitoring his or her actions and appearance in social situations

Institutional collectivism

refers to the extent to which people act predominantly as a member of a lifelong group or organization

Skill variety

refers to the extent who which the job requires the person to use multiple high-level skills

Job satisfaction

refers to the feelings people have toward their job

Job performance

refers to the level to which an employee successfully fulfills the factors included in the job description

Triple bottom line

refers to the measurement of business performance along social, environmental, and economic dimensions

Fluency

refers to the number of ideas a person is able to generate

Stakeholder analysis

refers to the range of techniques or tools used to identify and understand the needs and expectations of major interests inside and outside the organization environment -managers perform this analysis to gain a better understanding of the range and variety, of groups and individuals who not only have a vested interest in the organization, and ultimately the formulation and implementation of a firm's strategy, but who also have some influence on firm performance

Overall lower cost or cost leadership

refers to the strategy where a firm's competitive advantage is based on the bet that it can develop, manufacture, and distribute products more efficiently than competitors

Differentiation

refers to the strategy where competitive advantage is based on superior products or service

Anchoring

refers to the tendency for individuals to rely too heavily on a single piece of information

Framing bias

refers to the tendency of decision makers to be influenced by the way that a situation or problem is presented

Absenteeism

refers to unscheduled absences from work -such absences are costly to companies because of their unpredictable nature, affecting a manager's ability to control the firms or departments budget

Task significance

refers to whether the person's job substantially affects other people's work, health, or well being

Influence

reflects a stakeholder's relative power over and within an organization

Strategic human resources management (SHRM)

reflects the aim of integrating the organization's human capital - its people- into the mission and vision -means to integrate decisions about people with decisions about the results an organization is trying to obtain

Uncertainty avoidance

reflects the extent to which members of a society attempt to cope with anxiety by minimizing uncertainty

Power distance

reflects the extent to which the less powerful members of institutions and organizations expect and accept that power is distributed unequally

Strategic management

reflects what a firm is doing to achieve its mission and vision, as seen by its achievement of specific goals and objectives

Sensory learners

remember and understand information best if they can see how it connects to the real world -like facts

Civic virtue

responsible, constructive involvement in the political process of the organization, including not just expressing opinions but reading one's mail, attending meetings, and keeping abreast of larger issues involving the organization

Contingent rewards

rewarding employees for their accomplishments

The gross profit on a product sold

sales - cost of goods sold = gross profit

Environmental scanning

simply means that planners must be aware of the critical contingencies facing their organization in terms of economic conditions, their competitors, and their customers

Selective perception

simply means that we pay selective attention to parts of the environment while ignoring other parts, which is particularly important during the planning process

Knowledge management systems

software that stores and organizes expertise possessed by individual employees so that the knowledge can be shared and used by others

Disability insurance

sometimes called "income insurance" can guarantee a fixed amount of income - usually 60% of your average earned income while receiving treatment or are recuperating and unable to work Two basic types: 1. Short term (anywhere from 12 weeks to a year) 2. Long term (more than a year)

Strategy formulation

sometimes called business planning or strategic planning, helps determine what the firm should do

VRIO framework

stands for valuable, rare, inimitable, and organization - basically suggests that a capability or a resource such as a patent or great location, is likely to yield a competitive advantage to an organization

SWOT analysis

strengths, weaknesses, opportunities, and threats

Active learners

students who are involved with their learning and contribute to the learning process

Helping behavior

taking on the forms of altruism, interpersonal helping, courtesy, peacemaking, and cheerleading

Strategy implementation

tells managers how they should go about putting the desired strategy into action

Pacing indicator

tells you in real time that the organization is on track

Outcome-oriented cultures

the OCP framework describes these cultures as those that emphasize achievement, results, and action as important values

Networking

the ability to network is one of the most crucial skills any startup entrepreneur can have

Realized strategy

the actual strategy that is implemented - is only partly related to that which was intended

Trust

the belief that the leader will show integrity, fairness, and predictability in his or her dealings with others

Emergent strategy

the decisions that emerge from the complex processes in which individual managers interpret the intended strategy and adapt changing external circumstances

Instrumentality

the degree to which the person believes that performance is related to secondary outcomes such as rewards

Stimulation

the desire for a stimulating and exciting life

Power

the desire for control over others, attaining power and prestige

Achievement

the desire for personal success

Hedonism

the desire for pleasure in life

Self-direction

the desire to be free and independent

Universalism

the desire to protect the well being of all people -caring about social justice

Benevolence

the desire to protect the well being of people who are close to the person

Creative decisions: Incubation

the individual sets the problem aside and does not think about it for a while -at this time the brain is actually working on the problem unconsciously

Preferred Provider Organization (PPO)

the insurance company negotiates discounts with the physicians and the hospitals -employees choose doctors from an approved list, than usually pay a set amount per office visit (typically $10 to $35), the insurance company pays the rest

Low-quality LMX relationships

the leader and the member have lower levels of trust, liking, and respect toward each other -these relationships do not have to involve actively disliking each other, but the leader and member do not go beyond their formal job descriptions in their exchanges

High-quality LMX relationships

the leader forms a trust based relationship with the member -the leader and member like each other, help each other when needed, and respect one another -in this relationship the leader and the member are both ready to go above and beyond their job descriptions to promote the other's ability to succeed

Hindsight bias

the opposite of overconfidence bias, as it occurs when looking backward in time where mistakes made seem obvious after they have already occurred

Sustainable competitive advantage

the organization's strengths cannot be easily duplicated or imitated by other firms, nor made reluctant or less valuable by changes in the external environment

Print advertising

the print ad is the basic unit of advertising, the fountainhead from which all other forms of advertising spring whether you are developing an ad yourself or having someone else craft it for you, make sure it follows the five fundamentals of successful ads: 1. it should attract attention 2. it should appeal to the reader's self interest or announce news 3. it should communicate your company's unique advantage 4. it should prove your advantage 5. it should motivate readers to take action

Inventory

the quantity of goods that a firm has on hand

Groupthink

the tendency to avoid critical evaluation of ideas the group favors is characterized by eight symptoms: 1. illusion of invulnerability 2. collective rationalizations 3. an unquestioned belief in the group's inherent morality 4. stereotyped views of out-groups 5. direct pressure 6. self-censorship 7. illusions of unanimity 8. the emergence of self appointed mindguards

Self-enhancement bias

the tendency to overestimate our performance and capabilities and see ourselves in a more positive light than others see us

Self-effacement bias (modesty bias)

the tendency to underestimate our performance and capabilities and to see events in a way that puts ourselves in a more negative light

Valence

the value an outcome holds for the person contemplating it

Independent sales organization (ISO)

these are field representatives from out of town banks who, for a commission, help businesses find banks willing to grant them merchant status -an ISO can match your needs with the banks they represent without requiring you to go through the application process with all of them

Individualized consideration

they show personal care and concern for the well being of their followers

Net income of P&L

this portion of income/P&L statement is the bottom line -this is the measure of a firm's ability to operate at a profit many factors affect the outcome of the bottom line -level of sales -pricing strategy -inventory control -accounts receivable control -ordering procedures -marketing of the business and product -expense control -customer service -productivity of employees

Sales or revenue of P&L

this portion of the income statement is where the retail price of the product is expressed in terms of dollars times the number of units sold

Cost of goods sold/cost of sales of P&L

this portion of the income statement shows the cost of products purchased for resale, or the direct labor cost (service person wages) for service businesses

Gross profit of P&L

this portion of the income/P&L statement tells the difference between what you sold the product or service for and what the product or service cost you

Operating expenses of P&L

this section of the income/P&L statement is a measurement of all the operating expenses of the business there are two types of expenses, fixed and variable 1. fixed expenses: are those that do not vary with the level of sales 2. variable: are those expenses that vary with the level of sales

Creative decisions: Verification and application

this stage happens when the decision maker consciously verifies the feasibility of the solution and implements the decision

Income profit and loss statement (P&L)

this statement shows the relation of income and expenses for a specific time interval -is expressed in a one month format or a quarterly year to date format this statement is divided into five major categories: 1. sales and revenue 2. cost of goods sold/costs of sales 3. gross profit 4. operating expenses 5. net income

Creativity: Imagination

this type of creativity is characterized by new ideas and breakthroughs

Need for power

those who want to influence others and control their environment

Informal leaders

those without a formal position of authority within the organization but demonstrate leadership by influencing others through personal forms of power

Nonfinancial controls

track aspects of the organization that aren't immediately financial in nature but are expected to lead to positive performance outcomes -the theory behind this type of control is that they should provide managers with a glimpse of the organization's progress well before financial outcomes can be measured

Security

valuing safety and stability

Job design

was based on principles of division of labor and specialization, which assumed that the more narrow the job content, the more proficient the individual performing the job could become

Strategy diamond

was developed as a framework for checking and communicating a strategy

Muda

wasteful activity, in all business operations -is a key concept in lean control

Idea quotas

where the group must reach a set number of ideas before they are done, is recommended to avoid process loss and to maximize the effectiveness of brainstorming