Business Management and Strategy

Van T
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PHR Human Resources Flashcards on Business Management and Strategy, created by Van T on 12/25/2017.

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Van T
Created by Van T over 1 year ago
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Question Answer
Five factors of external business environment 1. Technological Developments 2. Industry Changes 3. Economic Environment 4. Labor Pool 5. Legal and Regulatory Activity
Four basic structures of orgnaizaitons 1. Sole Proprietorships 2. Partnerships 3. Corporations 4. Limited Liability Company
Sole Proprietorships - The most basic and easy to organize - The owner is a single (sole) person who is the final authority for all decisions in the business. - Any profits earned by the business belong to the owner, and the owner has unlimited personal liability for all business decisions and activities.
Partnerships - Is owned by two or more people who share final authority for all business decisions and are jointly liable for the actions of the business - Partners are liable not only for their own individual actions but for the actions taken by their other partner(s) as well - The profits of the business are split according to the ownership shares established at the beginning of the partnership (most often equal shares, but ownership can be any arrangement agreed on by the partners).
Three types of partnership arrangements 1. General partnership (GP): partners share responsibility for managing the business based on the partnership agreement 2. Limited partnership (LP) or a limited liability partnership (LLP): most of the partners are involved only as investors and have little input into daily operations of the business; are commonly used for medical clinics, accounting practices, law firms, and other service businesses 3. Joint venture (JV): similar to a GP but is formed to manage a specific project or for a limited time frame.
Four characteristics of Corporations 1. Liability is limited to assets owned by the corporation 2. The life of the corporation can extend beyond the life of its original owner/ founder 3. There is a central management structure 4. Ownership may be transferred freely by selling stock
Limited Liability Company - A cross between a general partnership and a corporation - Provides its owners with the liability protection of a corporation with fewer operating restrictions
Six components of an organizaiton functions 1. Production and operations 2. Sales and marketing 3.Research and development 4. Finance and accounting 5. Information technology 6. People/Employees
Eight actvities under production and operations 1. Capacity 2. Production Layout 3. Scheduling (make sure the products or services are available at times of peak customer demand) 4. Quality Management 5. Inventory Management 6. Technology 7. Facility Location 8. Cost Control
Just-in-time (JIT) inventory-management systems Purchase smaller amounts of supplies more frequently to reduce inventories and ensure a steady supply of products for distribution
What is sales function? Near-term activities involved in transferring the product or service from the business to the customer
Four functions of marketing 1. Promote and distribute products in the marketplace 2. Provides support for the sales staff 3. Conducts research to design products that customers will be interested in purchasing 4. Determines the appropriate pricing for the products
Four p's of marketing 1. Product 2. Price 3. Placement / Distribution 4. Promotion (e.g. advertising, public relations, personal selling, providing incentives for customers to buy etc.)
Research and Development 1. Design new product offerings and test them to make sure they do what they’re designed to do before they’re offered to the public 2. Develop new products and redesigns old ones to meet changing market demands
Finance - Responsible for obtaining credit to meet the organization’s needs, granting credit to customers, investing and managing cash for maximum return on investment (ROI), and establishing banking relationships for the organization. - Provide technical expertise for the analysis of current operations or proposals for new business directions and the projection of future financial needs
Accounting Responsible for recording financial transactions within an organization
Information Technology Manage systems such as voicemail, computer networks, software, websites, and the Internet as well as the data collected by these systems
Four factors contributing to an engaged workforce identified by Buckingham and Coffman 1. Identify the best fit for employees. 2. Concentrate on individual employee strengths. 3. Clearly establish desired results. 4. Look for talent as well as knowledge, skills, and abilities (KSAs) when selecting employees.
Three themes in research on engagement 1. Leadership: The most important connection for employees is the one they have with their direct manager or supervisor, and how this relationship is managed directly affects their level of engagement. 2. Professional Development: begins with the selection process when employers hire talented candidates who demonstrate potential for, and interest in, professional growth opportunities 3. Employee Recognition
Four stages of orgnization life cycle 1. Startup 2. Growth 3. Maturity 4. Decline
HR’s Role in Organizations 1. Strategic role: Establishing recruiting and retention plans, developing performance-management systems, managing change and leading or participating in reengineering or restructuring programs 2. Administrative role: manages compliance issues related to government regulations, maintains employee and benefit records, and ensures the confidentiality of employee information 3. Operational role: manage the employee relations and recruiting functions
Strategy uses the strengths of a business to its competitive advantage in the marketplace
goal the direction the business will take and what it will achieve
objective a specific description of the practical steps that will be taken to achieve the business goals
Long-range plans 3 to 5 years
midrange plans 1 to 3 years
short-range plans 6 to 12 months
Five elements of the strategic planning process 1. Pre-planning stage (Decide on: Process Participants Time frame Planning tools Statistical models SWOT analysis PEST analysis Porter’s 5 forces) 2. Environmental Scan (Internal scan & External scan): Where are we now? 3. Formulate Strategy: Where do we want to be? 4. Implement Strategy: How do we get there? 5. Evaluate Strategy and make adjustments
Six elements need to be identified from an environmental scan and its corresponding activities 1. General Business Environment: Who is hiring, what price points are selling, trends, and the culture 2. Industry Practices and Developments: Changes in the industry, as well as an evaluation of the competition 3. Technological Advances: Technology related to streamlining practices, automation, and database management 4. Economic Environment: Economic indicators, product positioning, and new product needs 5. Changes in the Labor Force Population: unemployment rate, availability of labor by skill set, and demographic shifts 6. Legal and Regulatory Environment: Compliance with new regulations or regulations that have been triggered by employment numbers
Four elements created during strategy formulation 1. Vision Statement 2. Mission Statement
Vision Statement Describe what will carry the organization into the future and what it will accomplish
Mission Statement Describe how the organization will achieve the vision
Core Competencies the parts of their operations that they do best and that set them apart from the competition
Corporate Values Statement a way for the executive team to communicate their standards for how the organization will conduct business (e.g. integrity, excellence, teamwork, customer service, and mutual respect etc.)
SMART model 1. Specific: should be descriptive enough to guide business-unit managers in developing action plans that will accomplish the goal. 2. Measurable: must include a method for determining when it has been met. 3. Action-Oriented: must describe the actions that will be taken. 4. Realistic: must be high enough to challenge the organization or individual but not so high that it’s unachievable. 5. Time-Based: must include a time frame for completion.
Two elements of Strategy Implementation 1. Develop Tactical Goals: describes what will be accomplished to achieve the strategy. 2. Develop Action Plans: breaks down the tactical goal into steps to be taken by an individual, a team, or an operating group to accomplish the tactical goal.
HCMP Human Capital Management Plan
Four questions an HCMP or Strategic HR Plan should answer 1. Where are we now? 2. Where do we want to be? 3. How will we get there? 4. How will we know when we arrive? IMPORTANT: must align with the corporate strategy and goals and help achieve the desired business results
Six common components of an HCMP or a strategic HR plan 1. HR statement of strategic direction 2. Desired results or goals 3. Objectives 4. Action plans 5. Communication plan 6. Measurement
HR statement of strategic direction The HR team gathers information from the organization’s strategic plan, external sources (such as labor market demographics), and internal sources (other functional areas of the organization), and so on, to clearly understand the workforce requirements for organization goals, what resources are available to achieve those goals, and the timing of deliverables.
Desired results or goals what will the HR function contribute to the organization’s strategic goals? E.g. “Attract and retain skilled workers to assemble the new product line.”
Objectives What, specifically, will HR do to achieve its goals? For example, “Reduce time to hire.”
Action plans Identify the steps to be taken to achieve the objectives. E.g. “Hire contract recruiter with expertise in sourcing candidates with required skills.”
Communication plan If necessary to achieve the objective, describe how HR will notify the organization of changes. For example, “Conduct workshop for production supervisors on hiring for retention.”
Measurement The means used to measure success of the HCMP coincide with other measures used by the organization. E.g. If the technical workforce in the production department needs to be increased to accommodate a new product line, a hiring target of x number of employees can be used.
Standard expense items in a HR function budget - Salaries - Payroll taxes - Benefits - Equipment and supplies - Repairs and maintenance - Training and development (for HR team) - Travel - Professional services - Outsourced services (e.g. HRIS, payroll ) - Liability insurance (often managed by the accounting or finance function) - Software (often purchased through the IT function) - Computer hardware (often purchased through the IT function) - Employee awards - Performance increases - Temporary replacements - Recruiting fees
Human Capital Projections A budgetary activity in which HR attempts to measure the value of human resources by 1. Taking into account the elements of the HCMP 2. Identifying the current competencies of the existing internal workforce 3. Creating the competitive advantage by analyzing the skill set of the current employees and matching it to the skill sets necessary to accomplish the strategic objectives. >>>>From here, the gap is documented, and a plan is created to develop the competencies necessary to meet performance targets.
Six factors a Human Captial Projects need to take into account 1. Necessary skill set of the workforce to achieve both short-term and long-term objectives as communicated through the strategic plan 2. Current skill set of the workforce, measured through the performance management system 3. Creation of a plan to address any deficiencies 4. Decision to build or buy/develop the talent in-house or hire from the external labor force 5. Cost of implementation 6. Return on the investment in the human resource
Four basic management functions 1. Planning 2. Organizing 3. Directing 4. Controlling
Organizing - Managers are responsible for providing a structure within which employees are able to complete their work. - Factors to consider: 1. what work needs to be done; 2. how employees interact and with whom; 3. decision-making process in the organization; 4. how work is delegated
Three issues need to be consider when developing an organization structure 1. whether management is centralized or decentralized 2. nature of the functions 3. the span of control for each manager
a centralized organization # a decentralized organization the decision-making authority is concentrated at higher levels in the organization # the decision-making authority is delegated to lower levels
two types of business functions 1. line functions (e.g. operations and sales, which make decisions about operating needs) 2. staff functions (e.g. human resources and finance, which don’t make operating decisions but do advise line managers)
span of control refers to the number of employees that one manager can directly supervise
Directing Managers must establish relationships with the employees they supervise to encourage and support them in accomplishing their goals.
Controlling used by managers to ensure that the strategies, tactics, and plans developed during the planning process are implemented
Common methods for controlling operations 1. Six Sigma 2. Total quality management (TQM) 3. Management by objectives (MBO)
a strategic relationship - advances the contribution of the HR function toward achieving organization goals - is built between individuals defined as stakeholders (i.e. employees, management hierarchy, shareholders, and community)
Internal Relationships is built over time as the HR function establishes its credibility with the executive team, management, employees, and vendors
HR activities define labor-management relationships - Creating policies, procedures, and rules - Complying with legal and regulatory directives - Analyzing jobs from which job descriptions and performance metrics are developed - Employing strategic HCMPs to ensure that the workforce has the appropriate skill set to achieve the corporate objectives identified through the strategic planning process
External Relationships a network of individuals whose work influences or intersects with an organization’s goals E.g. Corporate Responsibility
PEO professional employer organization
BPO provider business process outsource provider
Corporate responsibility (CR) a business behavior that is focused on building external strategic relationships
How does an organization identify which CR objectives to address? Porter's five forces (e.g. the local economy, the skill set of the national labor force, and the global marketplace)
Sustainability Behavior that doesn’t deplete the resources used to achieve an outcome. These resources include time, labor, and finances, all three of which have a significant impact on the long-term health of a corporation.
Seven types of structural changes that may affect workforce population 1. Reengineering 2. Corporate Restructuring 3. Workforce Expansion 4. Workforce Reduction 5. Mergers and Acquisitions 6. Divestitures 7. Offshoring and Outsourcing Decisions and Management
Reengineering look at the entire organization to simplify or eliminate unnecessary processes with the goal of increasing customer satisfaction through improvements in efficiency
Corporate Restructuring look at individual units in the organization to reduce or eliminate redundancy or bureaucratic processes in order to reduce costs and increase production
Workforce Expansion a large number of employees enter an organization within a short period of time
Workforce Reduction or reductions in force (RIFs) or downsizing, or rightsizing used to decrease expenses by reducing the size of the workforce
a merger two or more organizations are combined into a single entity with the goal of leveraging the assets of both into a more successful entity
an acquisition one organization, generally a corporation, purchases or trades stock to gain controlling interest in another
What is a hostile acquisition? occurs when the management and board of directors of the company being acquired object to the takeover. Hostile takeovers are usually antagonistic, with the acquiring company purchasing shares on the open stock market. This type of acquisition can negatively affect employee morale as rumors about mass layoffs circulate among the staff of the target organization.
HR's role in the due-diligence process prior to a merger or an acquisition To review and collect information of the employment practices of the target company (e.g. Documents, Compensation, Policies and procedures, Equal opportunity compliance, Legal compliance, Labor relations, Legal exposure etc.)
Divestitures a company asset such as a product line, a division, or another part of an organization is sold or somehow disposed
offshoring a process of moving production or service processes to other countries to realize cost savings
outsourcing contracts internal business services to outside organizations that specialize in the specific process, such as payroll processing, IT, security, or janitorial services
Three steps help reduce employee anxiety in case of structural changes 1. Keep employees in the loop about the actual situation. 2. If there are actions that employees can take to remedy the situation, tell them what they can do. 3. When talking to employees, be honest and truthful. Don’t hide the facts.
Enterprise Risk Management a practice of forecasting possible risks to the organization and taking steps to mitigate their impact on operations
How to identify risks in HR management? HR Audits
What do HR audits do? - Identifies areas that may be out of compliance with legal requirements or are in need of updating because of strategic changes within the organization - Defines elements that are working well
areas a complete HR audit should cover policies and practices in all the functional areas of HR including: - hiring - compensation & benefits - training and development programs - employee relations - records management - legal and regulatory compliance - safety
examples of types of HR audits HR - Hiring Statistics at All Levels of Employees: What percentage of your management team are protected-class individuals? - Recruiting Sources: Which recruiting sources offer the most diverse pool of qualified applicants? - Data Security: Review components such as the security of confidential information, breaches in the process, and the validity of control measures. - I9 Audits: Verify procedures, and conduct a review to reduce penalties associated with improperly completed forms. - Harassment Claim Management: Review training records, conduct an employee survey to ensure that claims are taken seriously, and review the policy to ensure compliance with both state and federal laws.
Insurance Policies 1. Employment practices liability insurance (EPLI) 2. Self-insuring: to pay out-of-pocket should the risk occur (where the risk is low)
Four areas/ways to identify risk and protects organization 1. HR Audits 2. Insurance policies 3. Employee Handbooks 4. Litigation Statistics
a pocket veto if the president fails to sign a bill for 10 days and the Congress adjourns/is not in session before the 10-day period is up, the bill won’t become law
How does an unsigned bill become law? When Congress is in session, a bill that remains unsigned for 10 days will become law without the president’s signature.
Three types of administrative law impact employment relationships 1. Agency rules and regulations 2. Agency orders 3. Executive orders
How do federal agencies develop enforcement regulations? 1. Develop rules or regulations 2. Publish them in the Federal Register 3. Collect the public comment on the proposals 4. Publishes final rules that take effect no less than 30 days after the date of public notice
Federal Register the official daily publication for rules, proposals, and notices of federal agencies and the Office of the President
agency orders orders issued by some federal agencies (e.g. the National Labor Relations Board, the EEOC) to comply with federal laws in administrative law courts. The orders issued by an administrative law judge (ALJ) in these cases have the effect of law, and many of these decisions are published in the Federal Register as well.
ALJ Administrative Law Judge
EO executive order (issued by the president of the United States and become law after they have been published in the Federal Register for 30 days)
Lobbying is an activity in which anyone can participate when they want to influence new laws and regulations
common issues when deciding to open a facility in a new country 1. The rate of pay for the new hire 2. Offer letters or employment contracts that comply with foreign and U.S. laws 3. The impact of foreign tax structures on the corporate income statement 4. Details of starting operations in a new country for the first time, such as complying with payroll-processing regulations, understanding foreign stock-option rules, and creating intercompany agreements 5. How day-to-day support will be delivered 6. Corporate tax filings 7. Cultural and practical differences
low-context culture (America, Canada, Western Europe) - take their cues from what others say to them - prefer clear descriptions, unambiguous communication, and highly specific - do not rely and trust relationships in business communication - rely on spoken or written word
high-context culture (Japanese, East Asian, Latin American) - people rely more on nonverbal clues and relationships to discern what is meant - share common values & assumption - not necessary to say thing explicitly