13 ENTREPRENEURSHIP: Starting and Operating a Small Business,
3/e Steve Mariotti and Caroline Glackin MANAGEMENT, LEADERSHIP,
& ETHICAL PRACTICES UNIT 4 OPERATING A SMALL BUSINESS
EFFECTIVELY Class Name Instructor Name Date, Semester
Slide 2
1. Identify leadership styles. 2. Describe the 10 basic tasks
handled by managers. 3. Develop your organizational culture. 4.
Determine your organizational structure. 5. Understand the
functions of human resources management. 6. Pursue ethical
leadership to build an ethical organization. 7. Incorporate social
responsibility into your company. Learning Objectives After this
lecture, you should be able to complete the following Learning
Outcomes
Slide 3
13 The Entrepreneur as Leader Leader a person who gets things
done through influence, by guiding or inspiring others to
voluntarily participate in a cause or project. Leadership comes
from self-esteem applied to knowledge, skills, and abilities.
Slide 4
13 Leadership Styles That Work Coercivepressure/commanding Pro:
effective in disasters or with employees who need forceful
management Con: hurts employee morale, creativity
Authoritativeleader sets goal, leads team come with me Pro: works
well if leader is expert Con: not good if leader is not an expert
& is trying to lead people who are Affiliativeputs people first
Pro: gets employees on board Con: can fail to give adequate
direction
Slide 5
13 Leadership Styles (cont.) Democraticgives employees strong
voice in company Pro: builds morale Con: can result in endless
meetings & stagnation Pacesettingsets high standards,
challenges employees to meet them Pro: great when employees are
self motivated Con: can overwhelm less committed employees
Coachingfocuses on helping employees learn & grow Pro: good
with new employees Con: can create resistance among long-term
employees
Slide 6
13 How Entrepreneurs Pay Themselves Commission (a percentage of
every sale). Treated as a variable cost (varies with sales). Salary
(fixed amount of money paid once a week or once a month/year).
Treated as a fixed operating cost (does not vary with sales). Wage
(fixed amount per hour). Treated as a cost of goods sold (COGS).
Dividendshare of company profits. Deducted from net profit (after
taxes). This will affect company financial performance. Options
include:
Slide 7
13 Manage Your Time Wisely Prioritize. Set realistic goals.
Dont spend too much time on e-mail. Avoid letting your attention
get caught up in portable electronic devices, such as blackberries
and iPhones. Schedule sit-down meetings only when they will be more
efficient than others, less time-consuming, methods of
communication. Only accept meeting invitations where your presence
is required in order for progress to occur. Delegate responsibility
and authority, and trust your team to do the right things and do
them correctly. Remember to allow yourself downtime, play-time, and
creative thinking time.
13 Business Management: Building a Team What Do Manages Do?
1.Planning (Strategic plans, Tactical Plans, Operational Plans)
2.Organizing 3.Leading 4.Directing 5.Staffing 6.Controlling
7.Coordinating 8.Representing 9.Innovating 10.Motivating
Slide 10
13 Adding Employees to Your Business Recruitment the process of
finding and hiring employees. Possible ways to bring good employees
into the business: Bring them in as partners. Hire experts to
accomplish specific tasks on a contractual or hourly basis. Hire
someone as a part-time or full-time regular employee.
Slide 11
13 Recruiting Process Defining the job Posting &
advertising the job Screening resumes and/or applications Assessing
skills Interview candidates Check references Negotiating
compensation Hiring Orientation
Slide 12
13 Recruitment Process (cont.) Job Profile the identification
of the knowledge, skills, and abilities required to perform the
specific tasks of an employment position. Position Description the
knowledge, skills, and abilities from the job profile, as well as
the required reporting and working relationships, and what the
positions goals and objectives will be. Interview Guide a document
to assist in question development regarding an individuals
knowledge, skills, abilities, and interests. Behavioral Interview a
dialogue designed to determine the fit of a prospective employee
with the requirements of a position, using prior-experience
examples. Job Offer Letter a formal, written invitation extended by
an employer to a candidate selected for hiring that states the
basic employment terms; starting date, position, and salary.
Slide 13
13 Growing Your Team Campus Recruiting Executive or Retained
Searches
Slide 14
13 Creating and Managing Organizational Culture The culture of
an organization is the shared beliefs, values, and attitudes among
employees also referred to as how things are done around here. The
culture that you create for your business should be a strategically
developed translation of your vision and mission into norms,
values, and of work environment you want the company to have.
Slide 15
13 Determining Organizational Structure Line Organization a
structure where each person reports to a single supervisor. Line
and Staff Organization a structure that includes the line
organization, plus staff specialists (such as lawyers) who assist
management. Span of Control the number of direct reports to a
manager or supervisor. Chain of Command hierarchy of communication
and authority.
Slide 16
13 Getting the Best Out of Your Employees Guidelines to be a
good employer: -Get the right people. -Provide a competitive
salary. -Share your vision for the company and create an
environment that encourages buy-in. -Give employees incentives to
work effectively. -Empower employees by giving them control over
their work. -Provide career opportunities and training and
development. -Communicate expectations and goals clearly and
provide ongoing feedback and recognition.
Slide 17
13 Human Resources Fundamentals Human Resources the segment of
a business that hires, trains, and develops a companys employees.
HR Department Areas: -Compensation and payroll. -Benefits.
-Organizational development. -Education and development.
Slide 18
13 Human Resources Fundamentals (Cont.) Labor Law and HR
Compliance: -Payroll Tax - a given percentage of money that
employers deduct from their employees pay and forward to the
designated governmental entity. -Equal Pa Act of 1963 (employers
pay men & women the same amount for substantially equal work).
-Fair Labor Standards Act- In 1938 requires that employees receive
at least the federally mandated minimum wage. -Title VII of the
Civil Rights Act of 1964 prohibits discrimination against
applicants and employees on the basis of race or color, religion,
sex, pregnancy, or national origin.
Slide 19
13 Human Resources Fundamentals (cont.) -Age Discrimination in
Employment Act (ADEA) prohibits discrimination against and
harassment of employees aged 40 or older. -Americans with
Disabilities Act (ADA) prohibits employers from discrimination
against a person who has a disability, or who is perceived to have
a disability, in any aspect of employment. -Immigration Reform and
Control Act (IRCA) of 1986 prohibits employers from discriminating
against applicants or employees on the basis of their citizenship
or national origin.
Slide 20
13 Performance Management Performance Appraisal the formal
process used to evaluate and support employee performance.
-Performance appraisal is an opportunity to communicate goals,
establish training and development needs, and provide feedback to
increase productivity and employee retention.
Slide 21
13 Firing and Laying Off Employees Sometimes you hire someone
and it just does not work out, even after repeated attempts to fix
the problem. -Protect your company from wrongful-termination claims
by conducting regular employee- performance reviews. -If an
employee is violating rules, give notification in writing (and keep
a copy for your records) and work on corrections as the problem
arises, rather than waiting for performance review.
Slide 22
13 Firing and Laying Off Employees (cont.) Sometimes you may
have to lay off employees. -To minimize complications, if you can
do so, offer employee severance. Severance pay that is continued
for a limited time upon separation from a company.
Slide 23
13 Ethical Leadership and Ethical Organizations Ethics a system
of moral conduct and judgment that helps determine right and wrong.
An Ethical Perspective: -For a business, ethics are individual and
organizational moral principles to actions and issues within the
business context. -There is sometimes a gray area between right and
wrong that cannot be clarified by relying on individuals to simply
know whats right.
Slide 24
13 Establishing Ethical Standards Code of Ethics a statement of
the values of a company. Code of Conduct a set of official
standards of employee behavior for a company. Code of Ethics and
Business Conduct a combination of a written statement of values
with official standards of employee behavior. Ethical Relativism-
the belief that ethical standards are open to interpretation.
Ethical dilemma a circumstance in which there is a conflict of
ethical values, which thus muddies decision making.
Slide 25
13 Corporate Ethical Scandals In 2002 these companies were
found to have published false financial statements, inflating their
earnings & misleading investors. Enron WorldCom-MCI Tyco Global
Crossing Stock investors and employees who had put retirement funds
in company stock lost millions. These scandals were failures of
corporate governance: the companies did not have rules &
safeguards in place to prevent executives from lying, cheating,
& stealing.
Slide 26
13 Corporate Governance Corporate Governance rules and
safeguards to ensure that executives behave legally and ethically.
Do not treat company profits as personal funds. Keep accurate
records. Use financial controls. Create an advisory board. - Tax
Evasion the deliberate avoidance of an obligation to pay taxes; may
lead to penalties or imprisonment. - Advisory Board or Advisory
Council- a group that provides advice and counsel, but does not
have the responsibilities of a board of directors.
Slide 27
13 Doing the Right Thing in Addition to Doing Things Right.
Balancing the Needs of Owners, Customers, and Employees.
Slide 28
13 Social Responsibility & Ethics Corporate Social
Responsibility the ethical obligation of a company to its
community. Social Entrepreneurship the sale of products or services
on a for-profit basis to benefit a social purpose. In-kind Donation
contribution of products or services that may include time, rather
than cash.
Slide 29
13 Social Responsibility & Ethics (cont.) Leading with
Integrity and By Example Encourage Your Employees to Be Socially
Responsible -Recycling paper, glass, and plastic. -Donating a
portion of your profits to a charity. -Refusing to use animal
testing on products. -Offering employees incentives to volunteer in
the community. -Establishing a safe and healthy workplace.
Sustainable scenario in which current needs are met while
preserving future resources.
Slide 30
KEY TERMS advisory board or council behavioral interview chain
of command code of conduct code of ethics code of ethics and
business conduct corporate governance corporate social
responsibility ethical dilemma ethical relativism ethics human
resources in-kind donation interview guide job offer letter job
profile leader line organization line and staff organization
payroll tax performance appraisal position description recruitment
severance social entrepreneurship span of control sustainable tax
evasion