Student Business Academy

1. Student Business Academy Managing relations with stakeholders of a business

2. New Venture Team New Venture Team Is the group of founders, key employees, and advisers that move a new venture from an idea to a fully functioning firm. Usually, the team doesn’t come together all at once. Instead, it is built as the new firm can afford to hire additional personnel. The team also involves more than paid employees. Many firms have boards of directors, boards of advisers, and professionals on whom they rely for direction and advice. 9-2

3. Separate Elements of a New Venture Team 9-3

4. The Founder or Founders Founder or Founders The characteristics of the founder or founders of a firm and their early decisions have a significant impact on the manner in which the new venture team takes shape. Size of the Founding Team Studies have shown that 50% to 70% of all new ventures are started by more than one individual. It is believed that new ventures that are started by a team rather than a single individual have an advantage. 9-4

5. The Founder or Founders • Factors That May Contribute to a Founders’ Success • Firm started by a team • Higher education • Prior entrepreneurial experience • Relevant industry experience • The ability to “network” effectively Qualities of Founders 9-5

6. Designing Organizational Structure • Organizational Structure: Formal system of task and job reporting relationships • Organizational Design: Arrangement of tasks and job relationships that comprise the organizational structure

7. The Functional Structure

8. Advantages Coordination Communication Skill Improvement Motivation Controlling Disadvantages Limited growth under existing structure Limits to number of products and services Coordination difficulties at larger size The Functional Structure

9. Divisional Structures • Product • Market • Geographic

10. Divisional Structures

11. Advantages As size and complexity of organization increases, Coordination Communication Motivation Autonomy Disadvantages Increased costs Duplication of functions Miscommunication across divisions Competition for resources Conflict The Divisional Structure

12. Allocating Authority • Span of control • Tall and Flat Hierarchies • Chain of Command • Centralization versus Decentralization

13. Building an Entrepreneurial Team Study: 80% of employees turnover is caused by bad hiring decisions. Leadership IQ study: 46% of newly hired employees will fail in their jobs within 18 months. 19% of newly hired employees will achieve unequivocal success. Study: 34% of hiring managers admit to making bad hiring decisions because they were under pressure to fill a job. 16 - 13

14. Recruiting and Selecting Key Employees Recruiting Key Employees Startups vary in terms of how quickly they need to add personnel. In some instances, the founders will work alone for a period of time. In other instances, employees are hired immediately. A skills profile is a chart that depicts the most important skills that are needed and where skills gaps exist in a new firm. 9-14

15. Skills Profile for New Venture Fitness Drinks 9-15

16. Conducting a Job Analysis Create a job description - a written statement of the duties, responsibilities, reporting relationships, working conditions, and materials and equipment used in a job. Create a job specification - written statement of the qualifications and characteristics needed for a job, stated in terms such as education, skills, and experience. 16 - 16

17. Planning an Effective Interview Involve others in the interview process. Develop a series of core questions and ask them of every job candidate. Ask open-ended questions rather than questions calling for “yes or no” answers. Create hypothetical situations candidates would encounter on the job and ask how they would handle them. Situational interviews 16 - 17

18. Planning an Effective Interview Probe for specific examples in the candidate’s work history that demonstrate the necessary traits and characteristics. Ask candidates to describe a recent success and a recent failure and how they dealt with them. Arrange a “non-interview” setting that allows others to observe the candidate in an informal setting. 16 - 18

19. Conducting an Effective Interview Break the ice. Goal: to diffuse nervous tension. Ask questions. Puzzle interviews. Remember the 25/75 Rule. Be respectful and keep it legal! Sell the candidate on the company. Best candidates will have other job offers. Your job: to convince the best candidates that your company is a great place to work. 16 - 19

20. Checking References Checking an applicant’s references is an important part of protecting a company against making a “bad hire.” Is it really necessary? Yes ! According to a CareerBuilder survey, 49% of all candidates either exaggerate or falsify information about their previous employment on their résumés. 16 - 20

21. Company Culture Distinctive, unwritten, informal code of conduct that governs the behavior, attitudes, relationships, and style of an organization. “The way we do things around here.” In small companies, culture plays as important a part in gaining a competitive edge as strategy does. 16 - 21

22. Characteristics of a Positive Culture Respect for work and life balance Sense of purpose Sense of fun Engagement Diversity Integrity Participative management Learning environment 16 - 22

23. Rewards and Compensation The key to using rewards to motivate workers is tailoring them to the needs and characteristics of individual workers. Money is an effective motivator … up to a point. Pay-for-performance systems Profit-sharing plans Open book management Cafeteria benefit plan 16 - 23

24. Rewards and Compensation Intangible rewards – such as praise, recognition, celebrations, and others – can be powerful, yet inexpensive, motivators. Entrepreneurs tend to rely on non-monetary rewards. 16 - 24

25. Customer Service Is Keeping Customers Happy Know your customers by name. Deliver products/services on time. Help customers carry large or heavy purchases to their cars. Suggest a less expensive product that might meet the customer’s need. Listen politely to complaints and provide full refunds to dissatisfied customers. Provide a toll-free customer-service line.

26. Positively Outrageous Service* Random and unexpected Out of proportion; catches attention Involves the customer personally Creates positive word of mouth * T. Scott Gross

27. Costs of Losing a Customer Loss of dollars that the customer was spending at your business. Loss of jobs. Loss of reputation. Loss of future business.

28. Customer Complaintsare Valuable Always acknowledge and address complaints and criticism. Complaints are a valuable source of market research! Never overreact to negative remarks from customers. Do not take comments personally. Always tell the truth about any negative aspect of your product or service. When you admit a negative, you gain a customer’s trust.

29. 5 Rules of Customer Care Conduct your own survey by talking to customers. Check employees’ telephone manners. Give customers prompt and cheerful help. Make customer service a team effort. Extend your efforts after hours.