Chapter 17

2. Chapter 17 Managing Operations and Staffing Managing Operations 17.1 Staffing and Company Policies 17.2

3. 17.1 • Explain the significance of operational plans. • Describe the purpose of operating policies, rules, and regulations. Section 17.1 Managing Operations

4. 17.1 Establishing and implementing policies and rules allow your operation to run smoothly. Section 17.1 Managing Operations

5. 17.1 policy rule credit character capacity capital return policy rework policy Section 17.1 Managing Operations

6. Implementing Operational Plans The goal of first-line management is to put operational plans into action. As your business grows, you may have to delegate some responsibilities to employees. Section 17.1 Managing Operations

7. Operating Policies, Rules, and Regulations Having a policy on how to deal with a recurring situation helps simplify day-to-day management. policy a statement of goals, purposes, and principles that serves as a guideline for daily business operations and supports the company’s goals and objectives Section 17.1 Managing Operations

8. Operating Policies, Rules, and Regulations In contrast to a policy, a rule leaves no room for interpretation. rule a standard set forth to guide behavior and actions; a rule tells employees exactly what they should and should not do Section 17.1 Managing Operations

9. Operating Policies, Rules, and Regulations Most policy statements cover these issues: • hours of operation • credit • return and rework • delivery • customer service • employee and customer safety Section 17.1 Managing Operations

10. Credit Policies A business that offers credit may encourage sales, but offering credit also ties up money. credit an arrangement for deferred payment for goods and services; credit allows a business or individual to obtain products in exchange for a promise to pay later Section 17.1 Managing Operations

11. Credit Policies There are four major credit plans: • bank credit cards • charge accounts • installment plans • financing Section 17.1 Managing Operations

12. Three Cs of Credit Businesses that extend consumer credit use the three Cs of credit to determine whether to extend credit to customers. C Character C Capacity C Capital Section 17.1 Managing Operations 12

13. Credit Policies Credit bureaus give higher credit ratings to people who have good character. character a person’s reputation for honest dealings, such as that of a borrower of money Section 17.1 Managing Operations

14. Credit Policies Applicants for credit must document their capacity by stating income and expenses when filling out credit application forms. capacity a borrower’s ability to repay a debt as judged by lenders Section 17.1 Managing Operations

15. Credit Policies A lender is more likely to extend credit to individuals or businesses with substantial capital than to those with modest means. capital the overall assets of an individual or a business Section 17.1 Managing Operations

16. Return and Rework Policies When you choose to have a return policy or a reworkpolicy, your business is guaranteeing the quality of the goods or services you sell or provide. return policy a policy that establishes the conditions under which items that have been ordered, shipped, or delivered may be returned rework policy a policy that establishes conditions under which items will be reworked, that is doing something again because it was not done right the first time Section 17.1 Managing Operations

17. Delivery Policies Delivery policies are part of your place strategy. Section 17.1 Managing Operations

18. Customer Service Policies Common customer service policies include: • complaint handling • product servicing • customer courtesy • shopping climate • restroom access • response time • warranties Section 17.1 Managing Operations

19. Customer Service Policies Businesses can take two basic precautions to reduce liability and ensure the safety of their customers and employees: • Train employees in safety and emergency procedures. • Reinforce training with well-placed signs in the workplace. Section 17.1 Managing Operations

20. 17.1 • Explain the significance of operational plans. Operational plans govern day-to-day business operations. Operational plans allow a business to run smoothly. Section 17.1 Managing Operations

21. 17.1 • Describe the purpose of operating policies, rules, and regulations. Policies are general statements about how you intend to run the business. They eliminate having to make the same decisions repeatedly. Rules and regulations are standards set to guide behavior. They let employees and customers know exactly what they should and should not do. Section 17.1 Managing Operations

22. 17.2 • Explain the staffing process. • Determine the need for additional policies. Section 17.2 Staffing and Company Policies

23. 17.2 Staffing determines who carries out the work of your company and how your company is perceived. Consequently, staffing policies and decisions have a direct bearing on the success of your company. Section 17.2 Staffing and Company Policies

24. 17.2 line organization staff line-and-staff organization project organizations job description job specification résumé recruit wages salary benefits piece rate commission Section 17.2 Staffing and Company Policies

25. Staffing Your Operation You make staffing decisions based on how many and what kinds of employees you need. Section 17.2 Staffing and Company Policies

26. Staffing Your Operation To determine your specific staffing needs, you need to assemble four types of documents: • organization chart • job descriptions • job specifications • résumés Section 17.2 Staffing and Company Policies

27. Types of Organization The easiest way to begin staffing your business is to design an organization chart that includes all the jobs in your business and their relationships. This structure should help delegate responsibility, authority, and workflow. Section 17.2 Staffing and Company Policies

28. Types of Organization In a line organization, top management makes the decisions that affect the entire company; middle management implements the decisions; supervisory, or first-line, management supervises the activities of employees; and employees carry out the plans made by top and middle management line organization a form of business organization where managers are responsible for accomplishing the main objectives of the business and are in the direct chain of command. Section 17.2 Staffing and Company Policies

29. Types of Organization As your business grows, you must hire staff. staff the managers and others who provide support and advice to line managers, such as accounting, legal, and training activities Section 17.2 Staffing and Company Policies

30. Types of Organization A line-and-staff organization is another common form of business organization. line-and-staff organization a form of business organization that incorporates staff into line organization Section 17.2 Staffing and Company Policies

31. Types of Organization Project organizations supplement the line and line-and-staff structures. project organizations temporary organizations brought together from different parts of a business for a special project Section 17.2 Staffing and Company Policies

32. Job Descriptions and Job Specifications For each position in your organization chart, you need to write a job description and an accompanying job specification. job description a statement that describes the objectives of a job and its duties and responsibilities job specification a document that details the abilities, skills, educational level, and experience needed by an employee to perform a job Section 17.2 Staffing and Company Policies

33. Job Descriptions and Job Specifications To identify staffing needs in a start-up business, examine the résumé of each employee to recognize gaps in your company’s staffing. résuméa summary of academic and work history, skills, and experience of a prospective employee Section 17.2 Staffing and Company Policies

34. Personnel Policies Businesses must establish policies to oversee : • employee standards • recruiting and screening • pay and benefits • training and development • personnel record keeping Section 17.2 Staffing and Company Policies

35. Personnel Policies When staffing, you can use school and college placement offices, union hiring halls, and word of mouth to recruit new employees. recruit to bring in prospective employees; businesses use classified ads, employment agencies, and other placement offices to find potential employees Section 17.2 Staffing and Company Policies

36. Personnel Policies To attract and keep good employees you must offer competitive wages or salary. wages an amount of money an employee receives for every hour he or she works salary an amount of pay an employee receives for each week, month, or year the employee works Section 17.2 Staffing and Company Policies

37. Personnel Policies Competitive employee benefits are also necessary to attract and keep good employees you. benefits extra compensation that workers receive on a job, such as paid vacation and sick days, flextime, and child care Section 17.2 Staffing and Company Policies

38. Personnel Policies Another way to pay employees is based on productivity, either by a piece rate or with a commission. piece rate a means of compensation based on an amount per unit produced commission a means of compensation based of percentage of sales Section 17.2 Staffing and Company Policies

39. Personnel Policies To make sure that you do not overlook any important policies and rules for your operation: • Make a list of operational rules and policies that apply to your business. • Find out about competitors’ policies. • Get feedback from potential customers. Section 17.2 Staffing and Company Policies

40. 17.2 • Explain the staffing process. The staffing process involves designing an organizational structure; writing job descriptions and job specifications; developing and implementing policies about employee standards; recruiting, screening, hiring, and training employees; and establishing pay and benefit plans; and maintaining personnel records. Section 17.2 Staffing and Company Policies

41. 17.2 • Determine the need for additional policies. Determining the need for and developing additional policies involves (1) reviewing operational processes, (2) reviewing competitors’ policies, and (3) getting feedback from potential customers Section 17.2 Staffing and Company Policies

42. Web Design Basics If you are starting a business on a limited budget, you may need to design and build your own Web site to do business on the Internet. To build your own site, you will need to learn how to code Web pages in HTML or use WYSIWYG software. Section 17.2 Staffing and Company Policies 42

43. Tech Terms hot spot a clickable hyperlink on a Web page; a division of an image map image map a graphic image on a Web page that is used for navigation Section 17.2 Staffing and Company Policies 43

44. Tech Terms table a data structure that is used to organize Web-page elements spatially, making it possible to easily create complex page layouts WYSIWYG an acronym that stands for “What You See Is What You Get;” the software used by Web authors that enables them to design Web pages visually, without having to learn HTML Section 17.2 Staffing and Company Policies 44

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