Management 201 Exam 2 Study GuideCHAPTER 6: MANAGING SMALL-BUSINESS START-UPS- Small Business vs. Entrepreneurial Ventureo Small businesses could entail franchising or embarking on an already growing industry.o Entrepreneurial ventures are more unique ideas that have not yet been introduced into the market place.- Impact of entrepreneurial companieso Job Creationo Innovation- Characteristics & personality traits of entrepreneurso Internal Locus of Controlo High Energy Levelo Need to Achieveo Self-Confidenceo Awareness of Passing Timeo Tolerance for Ambiguity- How to launch an entrepreneurial start-upo Start with an ideao Write a business plano Choose a legal structureo Arrange financing- Entrepreneurial Motivation and new business ideas (6.6)- Five types of small business owners (6.1)- Successful business models in ecommerce (5 models)o Transaction fee model o Subscription modelo Advertising support modelo Intermediary modelo Affiliate model- Tactics for becoming a business ownero Start a new businesso Buy an existing businesso Buy a franchiseo Participate in a business incubator- Three forms of legal structureo Sole proprietorship: unincorporated business owned by an individual for profit o Partnership: an unincorporated business owned by two or more peopleo Corporation: an artificial entity created by the state and existing apart from its owners- Debt vs. Equity financing & sources of start-up capital (6.7)- Stages of growth- Seven deadly sinsCHAPTER 7: MANAGERIAL PLANNING AND GOAL SETTING - Goal: a desired future state that the organization attempts to realize. Goals define and state and organizationspurpose.- Plan: a blueprint for goal achievement and specifies the necessary resource allocations, schedules, tasks, andother actions. Plans specify today’s means.- Mission: top of the goal hierarchy. The organizations reason for existence. Describes the values, aspirations, and reason for being. A well-defined mission is the basis for development of all subsequent goals and plans.- Mission Statement: broadly stated definition of purpose that distinguishes the organization from others of a similar type. Can enhance employee motivations and organizational performance. Contest focuses on customers.- Vision: An attractive, ideal future that is credible yet not readily attainable.- Strategic vs. Tactical vs. Operational Planning & Goalso Strategic Goals: “official goals.” Broad statements describing where the organization wants to be in the future. These goals pertain to the organization as a whole rather than to specific divisions or departments.o Strategic Plans: define the action steps by which the company intends to attain strategic goals. It is the blueprint that defines the organizational activities and resource allocations – in the form of cash, personnel, space, and facilities – required for meeting these targets. Tends to be long-term and may define steps for 2 to 5 years in the future. Turn goals into realities within that time period. o Tactical Goals: After strategic goals are formed comes this. The results that major divisions and departments within the organization intend to achieve. These goals apply to middle management and describe what major subunits must do for the organization to achieve its overall goals.o Tactical Plans: designed to help execute the major strategic plans and to accomplish a specific part of a company’s strategy. Typically have a shorter time horizon than strategic plans – over the next year or so.Normally it is the middle managers job to take the broad strategic plan and identify specific tactical plans.o Operational Goals: The results expected from departments, work groups, and individuals. They are precise and measurable. “Achieve 90 percent of deliveries on time.” o Operational Plans: developed at the lower level of the organization to specify action steps toward achieving operational goals and to support tactical plans. Tool for daily and weekly operations. Schedules are an important component. Must be coordinated with the budget. Specifies plans for department managers, supervisors, and individual employees.- Steps in the planning process- Strategy Map: A visual representation of the key drivers of an organization’s success, showing the cause-and-effect relationship among goals and plans. It is a good way to communicate goals, because everyone in the organization can see what part they play in helping the organization accomplish its mission.- Criteria for effective goalso Specific and measurableo Defined time periodo Cover key result areaso Challenging but realistico Linked to rewards- Management by Objectives (MBO): system whereby managers and employees define goals for every department, project, and person and use them to monitor subsequent performance.- Set Goals: What are we trying to accomplish? Managers assign responsibility for goal achievement. - Develop Action Plans: action plan defines the course of action needed to achieve the stated goals. Made for both individuals and departments.- Review Progress: Important to ensure plans are working. Allows a manager to see whether they are on targetor whether corrective action is needed. The action plan can be changed whenever goals are not being met.- Appraise Overall Performance: carefully evaluate whether annual goals have been achieved for both individuals and departments. Success or failure to achieve goals can become part of the performance appraisal system and the designation of salary increases and other rewards. The appraisal of departmental and overall corporate performance shapes goals for the next year. The MBO cycle repeats itself annually.- Single use, standing & contingency planso Single-Use Plans: plans that are developed to achieve a set of goals that are unlikely to be repeated in the future. o Standing Plans: ongoing plans that are used to provide guidance for tasks that occur repeatedly in the organization. (social media policy)Single-Use Plans Standing PlansProgram• Plans for attaining a one-time organizational goal• Major undertaking that may take several years to complete• Large in scope; may be associated with several projectsExamples: Building a new headquartersConverting all paper files to digitalProject• Also a set of plans for attaining a one-time goal• Smaller in scope and complexity than a program; shorter in horizon• Often one part of a larger programExamples: Renovating