Business Foundations Final Exam

Maslow's hierarchy of needs

A sequence of human needs in the order of their importance.

Physiological needs

The things we require to survive.

Safety needs

The human requirements for love and affection and a sense of belonging.

Esteem needs

The need for respect and recognition from others and a sense of our own accomplishment and worth (self-esteem).

Self-actualization needs

The need to grow, develop, and become all that we are capable of being.

Alderfer's ERG Theory

A theory that categorizes human needs into Existence, Relatedness, and Growth.

Existence needs (E)

This is similar to Maslow's physiological needs and safety needs.

Relatedness needs (R)

This is similar to Maslow's belonging needs.

Growth needs (G)

This is similar to Maslow's esteem needs and self-actualization needs.

Key difference between Maslow and Alderfer

Maslow theorized that human needs are met sequentially, while Alderfer believed individuals could pursue different needs simultaneously.

Herzberg's Motivation-Hygiene Theory

The idea that satisfaction and dissatisfaction are separate and distinct dimensions.

Motivation Factors

Job factors that increase motivation, although their absence does not necessarily result in dissatisfaction.

Hygiene factors

Job factors that reduce dissatisfaction when present to an acceptable degree but that do not necessarily result in higher levels of motivation.

McClelland's Acquired Needs Theory

A theory stating that people's needs are shaped over time and formatted by life experiences and cultural background.

Need for Achievement

Desire to excel; achievement-oriented; set their own goals; thrive on feedback.

Need for Affiliation

Desire to belong to a group and to be liked; need to fit in; extremely social.

Need for Power

Desire to control and influence the behavior of others.

Institutional power

Power exerted for the good of the organization.

Personal Power

Manipulating others for personal gain.

Adam's Equity Theory

A theory of motivation based on the premise that people are motivated to obtain and preserve equitable treatment for themselves.

Vroom's Expectancy Theory

A model of motivation based on the assumption that motivation depends on how much we want something and on how likely we think to get it.

Goal-Setting Theory

A theory of motivation suggesting that employees are motivated to achieve goals that they and their managers establish together.

Extrinsic Motivation

Behaviors that are driven by external rewards such as money, fame, grades, benefits, recognition.

Intrinsic Rewards

Job satisfaction, intellectually stimulating work, opportunities to grow

Barriers to Effective Communication

Poor communication skills can lead to miscommunication, conflict, delays, low morale, and slower career progression.

Defensive Listening

Listener feels threatened; planning their response

Offensive Listener

Listener is finding fault in what is being said

Selective Listener

Listener only hears what they want to hear

Pretend Listener

Pretending to listen out of politeness with no desire to really understand

Active

Concentrating on the true message as an effort to understand that the speaker is saying

Active Listening Tips

• Listen from a stance of curiosity

• Control your agenda

• Don’t second guess what the speaker is about to say

• Don’t interrupt. Wait until you are certain the speaker has finished talking before you speak

• Paraphrase the speaker’s words to ensure understanding

• Ask more questions than giving answers

• 2:1 Ratio-listen twice as much as you talk

• Take Notes

Gossip

• Up to 90% of conversations and 15% of emails entail gossip

How to control Gossip

1. Be honest and open

2. Ask for Opinions

3. Encourage social gatherings among employees

4. Hold meetings in informal settings (coffee house) or try a walking meeting

Five types of Barriers to Cross-Cultural Communication

Ethnocentrism

Use of Informal Language

Participation Norms

Conflict

Constructive Criticism

Ethnocentrism

The tendency to think one's culture or ethnicity is superior to everyone else's

• Solution: be curious about other cultures

Use of Informal Language

Slang, euphemisms, proverbs

Participation Norms

Vary in different countries. In Japan, junior members of the team wait to speak until a senior team member has spoken to them

Conflict

Varies by country. Asian cultures place emphasis on "saving face" and avoid openly expressing disagreement. Latin cultures may engage vigorously and loudly in disagreements

Constructive Criticism

High context cultures use more nuanced language to deliver feedback. Low context cultures use very direct language when giving feedback

What is the biggest barrier in cross-cultural communication

Ethnocentrism because it often leads to many misunderstandings

Step 1 of Manufacturing

Production Planning: how many pounds/cases of each product are needed to fill customer orders?

Step 2 of Manufacturing

Routing: Shaping, batter/coating, breading, frying, packaging

Step 3 of Manufacturing

Scheduling: which products will be produced on which line? How many shifts?

Step 4 of Manufacturing

Dispatching: Actual production of the product

Step 5 of Manufacturing

Follow-up: Did the number of pounds/cases produced match the target? Were all of the raw materials needed in place? Did the finished goods pass inspection?

Lack of Quality Control can result in

• Damaged Reputation

• Loss of Revenue

• Customer Dissatisfaction

• Lean Manufacturing

• Agile Manufacturing

Additive Manufacturing

3-D printing

Statistical Quality Control

Statistical methods; Taking samples of products and using statistics to measure product quality compared to specifications

Six Sigma

Statistical methods to analyze defect to improve operations

Lean Six Sigma

Combines eliminating waste with improving quality

Net Promoter Score Survey

A one question survey that measure customer loyalty and satisfaction

Digital Transformation

Integrating Technology into all aspects of the business to improve efficiency for customers and employees alike

Supply Chain Management

The coordination of the flow of goods and services from production to the delivery of the final product

Logistics

Moving things from Point A to point B (is more about movement)

Big Data

The large volumes pf structured and unstructured data flowing into an organization on a daily basis

Small Data

May be used to provide insight into customers and their wants/needs

Database

An organized collection of data (customer database, sales database, human resources database, supplier database, production and inventory, etc.)

Data Warehouse

Where multiple databases are stored

Data Mining

The process of analyzing data to generate usable information; looking for patterns in the data

Descriptive Analytics

Uses data to summarize what has happened in the past or is happening currently

Diagnostic Analytics

Focuses on past performance and explaining why it happened

Predictive Analytics

Focuses on making prediction about the future

Prescriptive Analytics

Provides recommendations for future actions to drive desired business outcomes

Classification Data Mining Tool

Examines data to create categories, then assigns each item in the data set to the appropriate category

Regressions Data Mining Tool

Examines historical data for two related variables (x and y) to make predictions about the future

Clustering Data Mining Tool

Looks for similarities and patterns in the data to create groups or clusters

Association and Sequence Identification Data Mining Tool

Uses data to identify patterns in purchasing behavior such as which products are purchased together

Forecasting Data Mining Tool

Uses the statistical method of regression to predict future events

Optimization Data Mining Tool

Uses insights from best case scenarios to make decisions that optimize the business overall by reducing costs, find efficiencies, and automating repetitive tasks.

Data Visualization Data Mining Tool

Turns a bunch of numbers and statist into easily digestible images such as bar graphs, pie charts, line graphs, etc.

4 Challenges to Business Analytics Implementation

• Executive Distrust

• Poor Collaboration

• Lack of Commitment

• Poor Quality Data

Executive Distrust

Top execs are accustomed to following their instincts based on years of successful business experience

Poor Collaboration

Between IT and business units can undermine the implementation and use of business analytics

Lack of Commitment

The cost of implementing business analytics is high and the timeline to build a reliable system can be long; some businesses back out before they can reap the benefits

Poor Quality Data

"Garbage in, garbage out." Leads to poor quality decisions, which then leads to lack of confidence in business analytics

Is the business profitable?

Income Statement

Is the business financially healthy?

Balance Sheet

Does the business have enough cash to operate and meet financial obligations?

Statement of Cash Flows

Elements of a Balance Sheet

• Assets

• Liabilities

• Owner’s equity

Net Income

• Revenues

• Expenses

• Famous Bottom Line (net income)

Statement of Cash Flows

• Cash Inflows

• Cash outflows

• Revenue from Sales

• Borrowing

• Purchasing plant and equipment

• Selling Assets

Accounting Equation

Assets = liabilities + owner's equity

Debt-to-Equity

Dividing total liabilities by total equity

Return on Sales

Net Income/Sales

Current Ratio

Current Assets/Current Liabilities

Quick Ratio

(Cash + short-term investments + current receivables)/ current liabilities

Return on Equity

Net Income/Shareholders' (or Owners') Equity

Financial Accounting

Recording financial transactions to produce financial statements

Managerial Accounting

Interpreting financial data to make better operating decisions

Cost Accounting

Primarily used to record and analyze manufacturing costs and how they can be better managed

External Auditing

Examination of financial statement by an independent party with the purpose of expressing an opinion as to fairness of presentation

Internal Auditing

Examination of accounting procedures and controls inside an organization to ensure compliance with laws

Tax Accounting

Financial reporting required by tax authorities as well as helping business better plan for tax implications

Behavioral Accounting

Looks at how accounting systems impact employee behavior

Forensic Accounting

Focuses on financial investigations related to fraud and other illegal activity

Financial Management

The process of planning, controlling and overseeing the financial activities of a business to ensure effective use of financial resources to achieve the business's goals

Debt Funding

• Borrow funds from lenders

• Debt must be paid back to lender

• Lenders have NO ownership of the business, no decision-making authority

• Lenders have a legal right to be repaid

• Borrower must pay interest

• Interest is tax deductible

Equity Funding

• Company gives up a portion of ownership to investors

• No guarantee investors will be paid back

• Investors have voting rights and expect input on decisions

• No legal obligation to pay dividends

• Investors expect value of shares to increase

• Dividends are NOT tax deductible

Budgeting

Estimate of how much the business will earn in revenue and how much it will spend in the coming month, quarter or year

Forecasting

Estimating future financial results over 3-5 years