Chapter 14: Leading the Growing
Company and Planning for Management Succession
Objectives |
|
Upon completion of this chapter, you will be able to:
- Explain the challenges involved in the entrepreneur's role as leader and
what it takes to be a successful leader.
- Describe the importance of hiring the right employees and how to avoid
making hiring mistakes.
- Explain how to build the kind of company culture and structure to support
the entrepreneur's mission and goals and to motivate employees to achieve them.
4. Discuss the ways in which entrepreneurs can motivate their workers to
higher levels of performance.
- Describe the steps in developing a management succession plan for a growing
business that will allow a smooth transition of leadership to the next
generation.
Chapter 14: Leading the Growing
Company and Planning for Management Succession
Chapter Overview
|
|
- Explain the challenges involved in the entrepreneur's role as leader
and what it takes to be a successful leader.
- Leadership is the process of influencing and inspiring others to work to
achieve a common goal and then giving them the power and the freedom to achieve
it.
- Management and leadership are not the same; yet both are essential to a
small company's success. Leadership without management is unbridled; management
without leadership is uninspired. Leadership gets a small business going;
management keeps it going.
- Describe the importance of hiring the right employees and how to
avoid making hiring mistakes.
- The decision to hire a new employee is an important one for every business,
but its impact is magnified many times in a small company. Every "new hire" a
business owner makes determines the heights to which the company can climb - or
the depths to which it will plunge.
- To avoid making hiring mistakes, entrepreneurs should: develop meaningful
job descriptions and job specifications; plan and conduct an effective
interview; and check references before hiring any employee.
- Explain how to build the kind of company culture and structure to
support the entrepreneur's mission and goals and to motivate employees to
achieve them.
- Company culture is the distinctive, unwritten code of conduct that governs
the behavior, attitudes, relationships, and style of an organization. Culture
arises from an entrepreneur's consistent and relentless pursuit of a set of core
values that everyone in the company can believe in. Small companies' flexible
structures can be a major competitive weapon.
- Entrepreneurs rely on six different management styles to guide their
companies as they grow. The first three (craftsman, classic, and coordinator)
involve running a company without any management assistance and are best suited
for small companies in the early stages of growth; the last three
(Entrepreneur-plus-employee team, small partnership, big-team venture) rely on a
team approach to run the company as its growth rate heats up.
- Team-based management is growing in popularity among small firms. Companies
that use teams effectively report significant gains in quality, reductions in
cycle time, lower costs, increased customer satisfaction, and improved employee
motivation and morale.
- Discuss the ways in which entrepreneurs can motivate their workers to
higher levels of performance.
- Motivation is the degree of effort an employee exerts to accomplish a task;
it shows up as excitement about work. Four important tools of motivation
include: empowerment, job design, rewards and compensation, and feedback.
- Empowerment involves giving workers at every level of the organization the
power, the freedom, and the responsibility to control their own work, to make
decisions, and to take action to meet the company's objectives.
- Job design techniques for enhancing employee motivation include: job
enlargement, job rotation, job enrichment, flextime, job sharing, and flexplace
(which includes telecommuting).
- Money is an important motivator for many workers, but not the only one. The
key to using rewards such as recognition and praise and to motivate involves
tailoring them to the needs and characteristics of the workers.
- Giving employees timely, relevant feedback about their job performances
through a performance appraisal system can also be a powerful motivator.
- Describe the steps in developing a management succession plan for a
growing business that will allow a smooth transition of leadership to the next
generation.
- As their companies grow, entrepreneurs must begin to plan for passing the
leadership baton to the next generation well in advance. A succession plan is a
crucial element in successfully transferring a company to the next generation.
Preparing a succession plan involves five steps: 1. Select the successor; 2.
Create a survival kit for the successor; 3. Groom the successor; 4. Promote an
environment of trust and respect; and, 5. Cope with the financial realities of
estate taxes.
Chapter 14: The Foundations of
Entrepreneurship
Small Business
Assignments |
|
Answer 5 of the following questions:
1. What is the difference between leadership and management?
2. What behaviors do effective leaders exhibit?
3. Why is it so important for small companies to hire the right
employees? What can small business owners do to avoid making hiring
mistakes?
4. What is a job description? A job specification? What
functions do they serve in the hiring process?
5. What is empowerment? What benefits does it offer workers?
The company? What must a small business manager do to make empowerment
work in a company?
6. Is money the "best" motivator? How do pay-for-performance
compensations systems work? What other rewards are available to small
business managers to use as motivators? How effective are they?
7.. What is performance appraisal? What are the most common
mistakes managers make in performance appraisals? What should small
business managers do to avoid making these mistakes?
8. Describe the options a business owner wanting to pass the family
business on to the next generation can take to minimize the impact of estate
taxes.
Chapter 14: Leading the Growing
Company and Planning for Management Succession
Small Business Links
|
|
Substance Abuse and Treatment
Leadership and Management
Human Resources Management
Family Businesses
Employee Stock Ownership Plans (ESOPs)