powerpoint presentation by charlie cook the university of west alabama longenecker moore petty...

© 2008 Cengage Learning. All rights reserved.© 2008 Cengage Learning. All rights reserved.

PowerPoint Presentation by Charlie CookThe University of West Alabama

PowerPoint Presentation by Charlie CookThe University of West Alabama

Longenecker • Moore • Petty • Palich

CHAPTER 18

Professional Management in the Entrepreneurial Firm

CHAPTER 18

Professional Management in the Entrepreneurial Firm

Managing Growth in the Small BusinessPart 5

© 2008 Cengage Learning. All rights reserved. 18–2

Looking AHEAD

1. Discuss the entrepreneur’s leadership role.

2. Explain the distinctive features of small firm management.

3. Identify the managerial tasks of entrepreneurs.

4. Describe the problem of time pressure and suggest solutions.

5. Explain the various types of outside management assistance.

After you have read this chapter, you should be able to:


Entrepreneurial Leadership• What is Leadership?

Involves pointing the way: creating and communicating the entrepreneur’s vision of the firm

Varies in a business as it grows larger and more mature.

• Leadership Qualities of Founders A tolerance for ambiguity A capacity for adaptation


Entrepreneurial Leadership (cont’d)• What Makes an Effective Leader?

One who is focused intently on attaining the firm’s business goals.

One who creates a significant personal relationship with employees based on loyalty and respect.

One who directly influences employees’ understanding of how the firm operates (e.g., its ethics).

One who makes the firm attractive to new employees.


Entrepreneurial Leadership (cont’d)• Leadership Styles

1. Coercive leaders demand immediate compliance.

2. Authoritative leaders mobilize people toward a vision.

3. Affiliative leaders create emotional bonds.

4. Democratic leaders build consensus.

5. Pacesetting leaders set high standards and expect excellence.

6. Coaching leaders develop people.


Entrepreneurial Leadership (cont’d)• Leadership That Builds Enthusiasm

EmpowermentGiving employees authority to make decisions or

take actions on their own Work teams

Groups of self-managed employees with the freedom to function without close supervision

BenefitsWorkers are more satisfied with their working

environment.Productivity and profitability are enhanced.


Steps to a Positive Attitude18-1

1.Recognize accomplishments at the end of each day.

2.At the close of business, take time to set goals for the next day.

3.Take care of yourself.

4.Spend time with friends who are upbeat.

5.Imagine your way to success.

6.Use thoughts of failure as a signal to turn your attention back to achievement.

Source: Adapted from Romanus Wolter, “A Brand New Day,” Entrepreneur, Vol. 33, No. 3 (March 2005), pp. 134–135.


Distinctive Characteristics of Small Firm Management

Professional-Level

Management

Professional-Level

Management

Managerial Weakness

Managerial WeaknessManagement

of Small Firms

Management of

Small Firms

Resource Constraints

Resource Constraints

Firm Growth and Managerial

Practices

Firm Growth and Managerial

Practices

Founders asManagers

Founders asManagers


Organizational Stages of Small Business Growth18-2


Stages in Firm Growth and Management

Growth Stage Entrepreneur’s Workload

Stage 1. One-Person Operation

Doing all of the work. Making contact with customers.

Stage 2. Player-Coach Continuing to do some of the basic work, although learning to hire and supervise.

Stage 3. Intermediate Supervision

Rising above hands-on management; working through intermediate managers.

Stage 4. Formal Organization

Using plans and budgets; following policies and procedures.


Managing Versus Doing

STAGE 1 STAGE 2 STAGE 3 STAGE 4One-PersonOperation

Player-Coach IntermediateSupervision

FormalOrganization

Time spent managing Time spent doing


Managerial Tasks of Entrepreneurs

Creating an Organizational

Structure

Creating an Organizational

Structure

ControllingOperationsControllingOperations

Planning ActivitiesPlanning Activities

Leading and Delegating

Leading and Delegating

Entrepreneurial Management

Entrepreneurial Management


Planning Activities• The Benefits of Formal Planning

Improved productivity Better focus on goal attainment Increased credibility with stakeholders

• Planning Time “Tyranny of the urgent” Planning requires discipline Planning should not be postponed

• Employee Participation Employees are an excellent planning resource


Planning Activities: Types of Plans

Type of Plan Purpose

Long-range plan(strategic plan)

A firm’s overall plan for the future

Short-range plan A plan that governs a firm’s operations for one year or less

Budget A document that expresses future plans in monetary terms

Business policies Basic statements that provide guidance for managerial decision making

Procedures Specific work methods to be followed in business activities

Standard operating procedures

An established method of conducting a business activity


Creating an Organizational Structure• The Unplanned Structure

Structure evolves as the firm evolves.Growth creates the need for structural change.

• Chain of CommandThe official, vertical channel of communication in an

organizationA channel for two-way communication

• Span of ControlThe number of subordinates supervised by one

manager


Creating Organizational Structure (cont’d)• Line Organization

A simple organization in which each person reports to one supervisor

• Line and Staff OrganizationAn organizational structure that includes staff

specialists who assist managementLine activities

Activities contributing directly to the primary objectives of the firm

Staff activitiesActivities that support line activities


Line-and-Staff Organization18-3


Factors Determining Optimum Span of Control

Many SubordinatesSimple workVery experienced workersSuperior with much ability

Few SubordinatesComplex workInexperienced workersSuperior with limited ability

More SubordinatesModerately difficult workModerately experienced workersSuperior with moderate ability


Creating Organizational Structure (cont’d)• Understanding Informal Groups

Have something in common.

Have an informal leadership hierarchy.

Are beneficial if group goals are aligned with organizational goals.


Delegating Authority• Delegation of Authority

Granting to a subordinate the right to act or make decisions

• Benefits of delegationFrees up superior to perform more important tasksDevelops subordinate’s skillsImproves two-way communications


Measuring Performance

Measuring Performance

Controlling Operations

Establishing standards

Establishing standards

Planning and Goal Setting

Planning and Goal Setting

Taking Corrective

Action

Taking Corrective

Action


Stages of the Control Process18-4


Communicating• Stimulating Two-Way Communication

Conduct periodic performance review sessions to get employee feedback.

Use bulletin boards to keep employees informed.

Use suggestion boxes to solicit employees’ ideas.

Hold staff meetings to discuss issues and problems.

Hold informal meetings with employees to socialize and talk.


Negotiating• Negotiation

Two-way communication used to resolve differences in needs, goals, or ideas.

Win-lose negotiationsOne party must win and the other party must lose.

Win-win negotiationsBoth parties find a solution that satisfies both

parties’ basic interests.End result of negotiations promotes

long-term continuing relationships.


Presentation Tips18-5

1. Do your homework.

2. Know your material “spot on.”

3. Be interactive.

4. Make vivid mental connections in the minds of listeners.

5. Emphasize relevance.

6. Be dynamic, but be yourself.

7. Use PowerPoint with care.

8. Dress appropriately.

9. Avoid food and drink that make speaking difficult for you.

10. Practice, practice, practice.Sources: Adapted from Naomi Rockler-Gladen, “Fear of Public Speaking,” January 12, 2007, http://collegeuniversity.suite101.com/article.cfm/fear_of_public_speaking, accessed March 15, 2007; “Presentation Tips for Public Speaking,” A Research Guide for Students,http://www.aresearchguide.com/3tips.html, accessed March 15, 2007; and Kimberly L. McCall, “All That Jazz,” Entrepreneur, Vol. 34, No. 1 (March 2006), p. 36.


Personal Time Management• The Problem of Time Pressure

Many owner-managers work 60-80 hours per week. Effect of overwork is inefficient work performance.

• Time Savers for Busy Managers Effective use of time (time management)

Analyze how time is normally spentEliminate practices that waste timeCarefully plan available timeUse a daily planner to prioritize activitiesDon’t avoid unpleasant or difficult tasksLimit conference and meeting times


Outside Management Assistance• The Need for Outside Assistance

To supplement entrepreneur’s personal knowledge and experience.

To provide opportunities to share ideas with peers.

To reduce feelings of loneliness and working in isolation.

To have access to outsiders’ detached, objective viewpoints, insights and ideas.

To gain fresh knowledge of methods, approaches, and solutions beyond the experience of the entrepreneur.


Outside Management Assistance

Business Incubators

Business Incubators

Student Consulting

Teams

Student Consulting

Teams

Service Corps of Retired Executives (SCORE)

Service Corps of Retired Executives (SCORE)

Small Business

Development Centers (SBDCs)

Small Business

Development Centers (SBDCs)

Management Consultants

Management Consultants

Entrepreneurial Networks

Entrepreneurial Networks

Other Business and Professional

Services

Other Business and Professional

Services

Source of Outside

Management Assistance

Source of Outside

Management Assistance


Services Provided by Business Incubators to New Firms18-6


Key TERMS

• empowerment• work teams• professional manager• long-range plan

(strategic plan)• short-range plan• budget• chain of command• line organization• line-and-staff organization

• span of control• delegation of authority• negotiation• Service Corps of Retired

Executives (SCORE)• small business

development centers (SBDCs)

• networking

powerpoint presentation by charlie cook the university of west alabama longenecker moore petty...

Documents

cengage learning

business activity slide

adaptation slide

entrepreneurial firm

professional management

handson management

close of business

operations planning