Chapter 10 overviewIn chapter 10, we discuss the important step of hiring managers and hiring staff for a start-up business.It may be necessary to hire specialists: people with unique skills and talents.
Chapter 10 overviewThe business owner, the boss, must manage his team closely.Under close supervision, each worker should know what to do, what is expected of him, and how to do a good job.All workers should be productive.
Chapter 10 overviewIn case the number of workers is large, the boss must find some way to supervise them all through department heads or team leaders.
Chapter 10 overviewAt some point, the chairman and president of the company must appoint a chief operating officer (COO) who would direct day-to-day operations.
Chapter 10 overviewThe COO coordinates the marketing, production, finance, and accounting.The chairman and chief executive officer (CEO) should concentrate on big issues.
Chapter 10 overviewThe job of the chairman or CEO, is to make sure that the company continues to have a bright future given the opportunities and threats in the environment.
Chapter 10 overviewThe sum total of skills and talents of a company can be said to be its “human capital.” Human capital is the human component that makes the firm productive. It is the “brain” that organizes the material resources of the firm to make the firm profitable.
Chapter 10 overviewWe tackle the question: Is appropriate to hire friends to work for us, or work with us, in the business?
Coverage of the Chapter• Managers and Staff • Note on human capital• Hire Specialists • Note on hiring close• Job description friends• How to Supervise• Appoint senior managers• Table of organization
Activities How to supervise. Icebreaker Human capital Story: IZOLA White.Glossary. Video. Appoint senior Story: Partners Story: Dawn managers, like the health care. (Do Barnes. COO. Story: learn Exercises inManagers & staff to Delegate workbook) What is a job Organizational Case analysis: description Chart TIVO. Summary.
Learning Objectives• Learn how to hire managers and staff• Learn how to hire specialists• Understand the need for a job description• Know how to supervise employees
Learning Objectives• Understand the role of the COO and the CEO• Build a table of organization• Understand the value of human capital• Be able to decide if close friends can work in the business
Story from Real Life• Entrepreneur: Dawn Barnes, founder of Dawn Barnes Karate Kids Inc. in Santa Monica, California. It is a karate school that focuses on inspiring self-esteem in every child.• Startup Costs: $15,000 in 1995.• Projected 2005 sales: $2.5 million.
Story from Real Life• Entrepreneur’s problem: there was no one she could hire to teach in this special way.• She had to train herself in martial arts before she could start to teach using her special way.
Story from Real Life• In 1984, Dawn Barnes enrolled herself and her two young sons in a karate class.• By signing up, this former ballerina and stuntwoman started down the path to becoming a third-degree black belt and successful entrepreneur.
Story from Real Life• Fascinated by the physical/spiritual balance of martial arts, Barnes trained diligently.• Ten years later, she opened a school.
Story from Real Life• Barnes four schools are beautifully equipped and pleasing to the eye.• The schools true beauty, however, can be found in the “life skills” emphasized during each class.
Story from Real Life• Focusing on respect, patience, kindness, and honesty, all 1,200 students, ages 4 to 14, finish each class with the thought: “Make your mind strong, your body strong, your spirit strong."
Story from Real Life• Barness motivates children with praise rather than fear.• She has written instructors manuals (and produced videos) used by teachers worldwide. She speaks at national conventions.
Story from Real Life• She has written a childrens book soon to be turned into a feature film ”The Black-Belt Club.”• Says Barnes, "If the seed of self-esteem can be planted in a child, that child is going to grow up and make a difference for other people."
Story from Real Life• (Lesson: If you cannot hire good people, who have all the needed skills and values, train yourself.• Acquire the needed skills.)
Central Idea Managers: Chief Operating OfficerSpecialists Hire Senior Managers people Staff
GlossaryHuman Capital: the sum total of skills and talents that make your firm unique and competitive.Market Research: finding information that will tell you if there is a market for your product
GlossaryPromotions: activities that can help increase awareness about your product in the publicMarketing Communications: strategies to “talk to” the public so that they will learn about your product or your company
GlossaryProcurement: buying things the company needsProcessing: changing raw materials to finished products.
GlossaryPackaging: the department that prepares how to wrap the product, for example, in a box or with plastic.Delivery: how to deliver the product to your customers or outlets that carry your product
GlossaryDistribution: the department that takes care of making your product available to the publicTreasury: the department that takes care of the revenues or funds of your company
GlossaryBudget: takes care of allocating your company’s cashAccounting: takes care of making sure that cash is disbursed properly
GlossaryManagement Consulting: giving advice on how to run a companyEconomic forecasting: giving predictions on how the economy will perform
Points to Remember• Your business may • You may need to hire need to hire managers specialists, people with and staff. unique skills and talents.
Points to Remember• The business owner, the boss, must manage his team closely.• With close supervision, each worker will know what to do, what is expected of him, and how to do a good job.• If all workers are productive, the business will prosper.
Points to Remember• The sum total of skills and talents of a company, can be referred to as its human capital.• Human capital makes the firm productive.• It is the “brain,” that organizes the material resources of the firm, to make the firm profitable.
Points to Remember• In case the number of workers is large, then the boss must find some way to delegate supervision to department heads or team leaders.
Points to Remember• At some point, the Chairman and Chief Executive Officer of the company must appoint a Chief Operating Officer, who would direct the various departments.
Points to Remember• The COO could supervise the managers of the marketing department, the finance, and accounting department, and the production department.• He would handle day-to-day management.
Points to Remember• The chairman and CEO should learn to delegate because he should concentrate on “future” issues.• The chairman’s job is to make sure that the company has a bright future, given the opportunities and threats in the environment.
Points to Remember• A table of organization sets out the areas of responsibility and the lines of reporting.
Marketing department Marketing Manager Market Brand PromotionsResearch Managers
Production department Production Manager Processing or Delivery orProcurement Packaging Distribution
Finance department Finance managerTreasury & Internal Accounting Budget Audit
Points to Remember• There are many industries where assets are predominantly material. Examples are manufacturing and mining.
Points to Remember• There are other industries, like the software industry, where the main assets are the intelligence and skills of the employees.• These human assets are sometimes called “human capital.”
Points to Remember• Should you hire a friend or family in your start-up company?
Points to Remember• In Asia, Latin America, and Africa, businessmen believe it is better to hire friends and family because they are more reliable.• This is because the system for written contracts is not well developed in these regions and enforcing a contract may take a costly legal battle.
Points to Remember• In Europe and North America, they are in favor of not hiring friends or family so that the boss can fire anyone who is not performing well. Sorry, business is business. Don’t take it personally.
Ask Yourself• Will I need more than ten or more than one hundred employees in my new firm?• Do I know people who would be excellent choices to work in my new firm?• Should I read a book on how to supervise people effectively?
Ask Yourself• All my life, I have been supervised. Am I ready, to supervise other people?• Am I ready to turn into a responsible person?• What changes do I need to undergo?
Ask Yourself• Am I capable of being productive through other people?• Do I have the ability to lead a team of athletes to victory?
Ask Yourself• Can I lead a team of fellow students to organize a school event successfully? • It could be a theater play, a musical concert, or a symposium on intellectual topics.
Ask YourselfWho do you have in mind to bring on board your new venture as your first employees? • Why them in particular? • Will you hire them for their technical skills only? • Will you hire them for their management capabilities and potential?
Review QuestionsWhy are good people hard to find, for a young company?Why do you even have to “sell” your business idea to your prospective managers and employees?What kinds of workers would the entrepreneur need to hire?
Review QuestionsHow many supervisors should you hire?How many senior managers should there be?What is the work of the chief operating officer?
Review QuestionsWhat is the job of the marketing manager?What is the job of the finance manager?What is the job of the production manager?
Review QuestionsHow should the boss discuss assignments with each worker, everyday?Give examples of industries where the main assets are the intelligence and skills of the employees.
Case Study questionsWhy does the case say about knowing the right people, choosing good partners?Did they have a good management team?Did they approach the right funders?
Chapter 11 overviewThe previous chapters gave guidance on setting up the business. In Chapter 11, we focus on the day-to- day running of the business.
Chapter 11 overviewDaily operations may look boring or routine but if they are left unattended, all sorts of problems crop up.These include: damaged reputation, out-of-stock situations, bad debts, and lost opportunities.
Chapter 11 overviewWe show how to avoid such problems in Chapter 11.More to the point, we show how to maximize profits by effectively managing the resources used in operations.
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