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Managing A Start Up And Ethics M5

Managing A Start Up And Ethics M5






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    Managing A Start Up And Ethics M5 Managing A Start Up And Ethics M5 Presentation Transcript

    • Module 5 Graham Royce 2009
    • Manage These
      • Money
      • Time
      • Rules & Regulations
      • People + Families
      • Training
      • Clients
      • Ethics
    • Managing the Start-up this is not about accounting however
      • Build your toolkit
        • Consider software packages such as Industry recognized accounting packages
      • Structure your accounts
        • Start with a minimum of accounts and add as needed
      • Establish an accounting routine – and stick to it
        • Reconcile accounts monthly
        • Update financial statements quarterly
      Establish Good Accounting Habits 1. Record transactions regularly 2. Accuracy and consistency are essential 3. Fix mistakes as they happen 4. Manage and reconcile bank account regularly
    • The Many Roles of the Entrepreneur Manager Leadership Visionary Opportunity Seeker Communicator Technical Leader Customer Advocate Organizer/ Planner Decision-Maker Risk Manager Paperwork Completer Designer Owner Business Manager Process Leader Coordinator Team Builder And many more…
    • 4. Compliance. Report your company’s incomes, expenses, and payroll accurately to the IRS. 5. Insight and Decision Making . Make informed decisions – and price your product or service for profitability – with financial reports 6. Funding. To be considered for a loan or investment, you’ll need complete financial statements. 1. Cash Flow. Track the money going in and out of your business. 2. Manage Customers and Sales. Know and understand your customers through consolidated records. 3. Production. Obtain goods and services. Apply for and establish credit with your vendors. YOUR BUSINESS
    • Accountant Next Week
      • Hire a Financial Controller, And an Auditor once a year
      • 2. Buy an Accountancy Package, Hire your Auditor
      • 3. Simply keep records, Retain an accountant to do books once a month, Retain an Auditor
      You will be able to discuss in detail with him Three way’s of recording information
    • What do you want to know about your business?
        • How much money am I bringing in?
        • How much am I spending?
        • Is my business making any money?
        • What’s the value of what my business owns?
        • How much does my business owe to others?
        • What is my business worth?
      Sales Expenses Sales – Expenses Assets Liabilities Equity
    • Cash Flow: Money In and Money Out YOUR BUSINESS Money In Money Out CUSTOMERS Sales Services / Products Out VENDORS Expenses Services / Products In
      • Assets
        • Current (cash, inventory, accounts receivable, etc.)
        • Fixed (property, vehicles, machinery, etc.)
      • Liabilities
        • Current (within one year)
        • Long Term
      • Equity
        • Contributed capital: owner’s investment
        • Retained earnings (profits)
      Assets = Liabilities + Equity Everything your business possesses Everything your business has borrowed Everything your business owns Area’s to manage
    • People
      • Staff the team; pick the right people
      • Empower the team and delegate effectively
      • Develop the team
      • Manage by influence
      • Structure the program effectively
      • Remove the obstacles
      • Develop business relationships with teaming partners
      • Develop teaming agreements that help the program succeed
      Manage the Team
    • Training
      • It is your responsibility to train
      • Health and safety stops with you
      • Market Trends
      • New Technology
      • New Entrants
      • Porters Model
      • Customers
      Business trends to watch for
      • Business Ethics
    • Consider these headlines Standing up to industry: As corporations increasingly hold their purse strings, many researchers feel pressed to deliver favorable results -- Baltimore Sun June 26, 2001
      • The Scientist, May 28, 2001
        • When Corporations Pay for Research:
        • UCSF researcher disputes trial results from drug company
      Risk Was Known as FDA OKd Fatal Drug Study New documents show Warner-Lambert trivialized liver toxicity of diabetes pill Rezulin while seeking federal approval. Inside help from senior regulators is trumpeted in company memos. Los Angeles Times March 11, 2001 Drug testing under ethics microscope USA Today August 7, 2000 Standing up to industry: As corporations increasingly hold their purse strings, many researchers feel pressed to deliver favorable results -- Baltimore Sun June 26, 2001
    • Ethics
      • A personal value system used in determining what is right or good.
      • Typically associated with a system of beliefs that supports a particular moral code or view, e.g. faith
      • A value system widely adopted by members of an organisation.
      Organisational Ethics
    • What ethics means to most people
        • Ethics are principles or standards governing the conduct of communities, groups, organisations individuals & businesses.
        • Ethics is more than morality which is primarily concerned with general outcomes of good and bad, or right and wrong.
        • It is also about self-restraint
        • Not doing what you have the power to do An act isn’t proper simply because it is permissible or you can get away with it.
        • Not doing what you have the right to do There is a big difference between what you have the right to do and what is right to do.
        • Not doing what you want to do An ethical person often chooses to do more than the law requires and less than the law allows.
      What actually is business ethics
    • “ Almost all the respondents said they are willing to pay more for shares of companies with ‘good’ governance, and in the case of Indonesia, they said, a 27% premium on the average is appropriate for such a company” World Banking Group Robert Felton –McKinsey & Co “ There is significant evidence from a large and growing body of academic research that there is at minimum a neutral, and quite likely a positive relationship between responsible corporate practices and financial performance” Sandra Waddock – Does ethics correlate positively with company’s profitability?
    • Unethical behavior may include the following
      • Breach of international or local laws
      • Breach of organisation’s values or standards of conduct
      • Deceptive behaviour
      • Intentional breaches of promises or agreements
      • Breaches of minimum standards relating the treatment of employees
      • Breaches of environmental laws or standards
      • Non disclosure of material information during proposals or negotiations
        • Damage the reputation of the organisation
        • Expose the organisation to litigation from affected parties
        • Expose the organisation to civil and criminal sanctions from the regulators
        • Expose the BOD to risks of criminal prosecution
        • Create a culture within the organisation that does not value ethical behaviour
        • Lead to further unethical decisions to continue or cover up the initial unethical choice
      The risk of being unethical
        • • Reduce costs
        • • Increase long term profits
        • • Increase confidence in business dealings
        • • Make choices that are not compromised by past
        • • Encourage others
        • • Improve relationships with colleagues and business partners
      Promotion of good business ethics can : Our ethics code is . . .
        • Define values to which the company will adhere
        • Obtain political support from internal stakeholders
        • Start with the tone at the top
        • Develop a robust internal control system
        • Apply a zero tolerance policy, however manage the change process carefully
        • Provide rewards as necessary
      Developing ethical culture within the company
      • These are apparent when personal values of employees conflict with the requirements of organisational tasks.
      Individual Versus Organisational Conflicts EXAMPLE A salesperson may consider the company policy of giving large discounts or personal gifts to selected customers to attract their business unfair and unethical.
      • Locating hazardous facilities in communities and manufacturing defective products or products with harmful side effects.
      • Toxic waste disposal that may not yet be regulated by law may be harmful to the natural environment, e.g.
        • countries such as Benin, can more than double their annual GNP by accepting nuclear waste from industrialised countries
        • Republic of Benin , is a country in Western Africa
        • UK scrap merchant accepting decommissioned US warships containing hazardous materials
      Conflicts Between Interest: Example
      • Conflicts between businesses and society arise when businesses acting in self-interest are judged to harm collective interests.
      • For example, an internationalising firm may experience conflicts between the ethical standards of its home country and the ethical standards in a new market.
      Conflicts Between Businesses and Society
    • Businesses Ethical Responsibility To Its Stakeholder Owners/shareholders – Rightfully expect some form of return on their investment Employees - Rightfully expect respect for their worth and devoting their energies to firm Customers - Rightfully expect a seller to provide them with a reliable, safe product or service Suppliers - Rightfully expect to have an equitable relationship with firms they supply Community - Rightfully expect businesses to be good citizens in their community
      • Honesty & observing the law
      • Conflicts of interest
      • Fairness in marketing practices
      • Using insider information
      • Supplier relations
      • Corrupt practices
      • Acquiring information
      • Political activities
      • Use of company assets
      • Proprietary information
      • Pricing, contracting & billing
    • Thinking Through Ethical Problems A model of ethical decision making
      • Although many ethical principles are universal, e.g., do not kill, do not steal, some are culturally bound.
      • When this is the case SME may be confronted with difficult ethical dilemmas.
      Culture & Business Ethics
      • EXAMPLE
      • A SME gives a ‘gift’ to a government official, in an attempt to build a relationship with the official that might be useful in the future.
      • The may be accused of bribery and corruption.
      • What then is the ethical thing to do?
      • Levi’s discovered a supplier employing child labour.
      • On investigation it found that:
        • many female employees brought their children to work
        • there was no local school
        • the small amount the children earned kept the family income above subsistence level.
      • So Levi’s:
        • built a school for the children under 14
        • paid the mothers the additional income the children would have earned.
        • Example Good Ethics: LEVI’S
      This was a small price for Levi’s but made a big difference to the lives of the children.
    • To Succeed Fifteen Things You Absolutely Must Do If Your Business Is To Succeed! (Part One) Brian O’Kane Small business development expert Brian O’Kane looks at what makes businesses successful. Visit our Information Centre http://www.eac.ie/info_centre/documents/BOKSuccessFactors1_000.doc
      • Although many ethical principles are universal, some are culturally bounded.
      • What is not ethical in one country might be common in another.
      • Despite this, there are ethical problems with adopting the ‘when in Rome’ approach to business.
      • Society believes that SME’s should adhere to a consistent set of ethics derived from a high moral code.
      • The definition of a moral code may be subjective.
    • Home Work
      • Napkin
      • Readiness
      • Real Problem
      • Pain Statement
      • Wendy Kennedy Book will help.
    • Thank you any questions ?