Welcome to Week 15!

Entrepreneurship: Chapter 10 and 11Ashton Converse

Corporate Governance and Organizational Structure and Controls

Objectives/Schedule

• Welcome• Final Exam will be on Thursday December 27th

• End of the Semester Information• Quick Speech of Learning Outside of Class and

Cases– Cases start on page 292

• Review• Chapter 10• Business Plan Discussions– Feedback and Future Outlook

Final Exam• Final Exam will be on December 27th

• Final Presentations and Report are due on December 26th during class.– This means the final exam will not be complex.

• Final Presentation are part of final exam score!!!

– Final exam will cover all information after the midterm exam.

– Review PPT’s– Look at the website– Use the book and end chapter summaries– Use notes and articles

End of the Semester Schedule

• Today, December 12th, we will finish chapter 9 and start working on chapter 10– Cooperative Strategies and Corporate Governance

• Tomorrow, December 13th, we will finish chapter 10 and start chapter 11– Organizational Structure and Controls

• Next Wednesday, December 19th, we will complete chapter 11 and chapter 12– Strategic Leadership, Reminder about Cases

Application Cases

• There are several case studies in the back of the book.

• These cases start on page 292 • They offer you an opportunity to apply your

thinking and learn more outside of class• Class rooms can help you learn, but they may

not always be the best…curiosity with tools opens more understanding

Review

1. What is Cooperative Strategy?

2. What is a strategic alliance?

3. What does joint venture mean?

4. What is an example of a joint venture?

5. What are reasons for strategic alliances?

Discussion of Corporate Governance

How do you think corporations making more rules and policies for their companies has influenced changed the lives of CEO’s and managers?• In some ways more free• In some ways easier• Does rid large problems or cheating• But more polices can create more decisions for

managers as well as decrease their job• Important to execute/perform properly (done well

Corporate Governance

• The set of mechanisms used to manage the relationship among stakeholders and to determine and control the strategic direction and performance of organizations.

• Rules, policies, and expectations for the company

• Making sure core strategies and the company direction is being accomplished (shareholders impact)

Relation to Agency Relationships

• Separation between owners and managers creates an agency relationship

Agency Relationship• Exists when one or more persons hire another

person or persons as decision-making experts to perform services

• Shareholders, Executives, Consultants, Insured Clients (more information on Figure 10.1, pg. 228)

Is it Free Service?

Agency Costs• The sum of incentive costs, monitoring costs

enforcement costs, and individual financial losses.

Advantages• Encourages investments and helps internal

controlDisadvantages• Can increase costs, too much government

control

Welcome to Day 2 of Week 15!

• Welcome: hope you are awake and ready to go!

• Review: what did we discuss yesterday?• Complete Chapter 10: corporate governance• Start Chapter 11: Organizational Structure– Check it out on the internet

• Discuss Business Plans– Work on New items…letter to investors, budget,

and local laws

Review: Do You Remember?

• What is Cooperative Strategy?– Working together with other businesses to share

resources, technology, skills, capabilities, and more• What is Corporate Governance?– Policies, rules, and a system of watching to make

sure decisions are made for the shareholders wealth (government control and company control)

• What is Agency Relationships?– When a person is hired to help make decisions for a

company

Separation of Ownership

• Companies several decades ago use to all be owned by families– The business would be passed on to a family

member after the owner could not run the company anymore

• As firms grew larger, “separation of ownership” began – Control of the firm changed from entrepreneurs to

professional managers– Filling jobs with trained people

Group Discussion Time!

Discuss with others around you the following question. Be ready to write a few answer on the board.• Think about and write down as many things

that you know about the board of directors.– Who are they?– What do they do?– Titles, Positions, Power, and more…

Board of Directors Diagram

Shareholders: hold the most power and elect the board of Directors• Board of Directors: make the policies, work to

maximize shareholders wealth– CEO: the most powerful board member• President: makes day-to-day decisions and activities

– Others such as managers, accountants, CFO, assistant managers, custodians, maintenance, and other various employees.

Effectiveness of Board Directors

Many Boards have started making changes to meet the deeper wants of the shareholders. • Increases in the diversity of the backgrounds

of board members (diverse, all different)• Strengthening internal management and

accounting control systems• More detailed evaluation of the board • Changing the compensation of the directors• Bring in outside directors

Executive Compensation: Board

• The techniques used for determining board members compensation for decision making all differ. – There are positive and negative sides of each

technique to decide on what their compensation total should be

– Even if you find a “good” compensation plan, this plan will probably not be the same in another company or country (make shareholders happy)

– Read the article on page 237-238 to see more!

Chapter 11: Organizational Structure

What does the word strategy mean?• A plan, or idea used to reach a goal

What does structure mean then?• The specific necessary parts used to build

something larger

Why is it important to know both of these and their differences?

Different Style of Learning

We will go through several questions from the back of the book on page 267. The first person to get the correct answer and explain their answer to the class will receive a prize next week.1. What is organization structure and what are

organizational controls?2. What are the differences between strategic

controls and financial controls?

3. What does it mean when someone says that strategy and structure have a reciprocal relationship?

4. What organizational structures are used to implement the multidomestic, global, and transnational international strategies?

5. What is a strategic network?

Different Style of Learning

Feedback on Presentations

In Summary• Overall, very visual and eye catching

– My attention was fully yours.

Several Areas of Improvements• Eye Contact• Too many returns being money (don’t want to lose)• Some PPT’s were visual, but hard to read• Everyone needs to participate in talking (only the

spokesperson can speak more)• Speak to the audience, keep away from just reading• Speak clear, have a good flow, know your company

Business Plan Report and Presentation Wrap-Up Discussions

Please Write Down and Discuss with your team if you have completed the following areas of your business plan.• Company Name• Company Logo/Trademark• Mission Statement• Vision Statement• Competitive Advantage• Importance of Company and What it does

Business Plan Report and Presentation Wrap-Up Discussions Continued

Please Write Down and Discuss with your team if you have completed the following areas of your business plan:

• Location (specific city)– How it will help the city and area

• Investors– And what they get in return (not just money)

• 5 Year Business Goals (be realistic)• Contact Information and Time to meet Outside

of Class• *Letter to Investors (professional)• *Budget for 1st and 2nd Year

Make a List of What to Finish• Improve your information– Use correct words and grammar– Does it sound professional?– Do you know the words and able to explain them in

English and Chinese?• Write a professional Letter to Investors– Include info of why to invest and what in return

• Budget for the first 2 years– Estimate/Guess (realistically) how much money you need

and how much you will spend for each year• What are the business laws for that city?– Find out the local laws, requirements, and overall laws

Final Presentation and Report• Your Presentation and Report do not need to

be the same. – Your Report will include all the areas of the

business plan and any other extra information you would like to place in there.

• Your Report must be typed and turned in on the day of your presentation.

• It must be professional and organized – Company Name and Names on Front Page Cover– Page numbers, Titles, Underline, bold, and more

Presentation DetailsYour Presentation must be professional and will include the following things: (at the least)

• Company Name, Presenter Names– Company Logo/Trademark

• Mission Statement• Competitive Advantage– Be creative and realistic…what are your DIFFERNCES

• Importance of Company and What it does• Location (specific city)– How it will help the city and area (be creative, show map)

• Investors– And what they get in return (not just money)

• Budget for 1st and 2nd Year

Rubric• I will give you a rubric next week for my

expectations of your presentations and reports.• The report can be as long as you want, but make

sure it is professional and detailed in answering each part of your business plan.

• The presentation should be around 10-12 minutes long with everyone speaking during the presentation. – Be creative and make a unique presentation– What will be your competitive advantage in this

presentation to get the highest grade?

Final Exam• Final Exam will be on December 27th

• Final Presentations and Report are due on December 26th during class.– This means the final exam will not be complex.

• Final Presentation are part of final exam score!!!

– Final exam will cover all information after the midterm exam.

– Review PPT’s– Look at the website– Use the book and end chapter summaries– Use notes and articles

End of the Semester Schedule

• Today, December 12th, we will finish chapter 9 and start working on chapter 10– Cooperative Strategies and Corporate Governance

• Tomorrow, December 13th, we will finish chapter 10 and start chapter 11– Organizational Structure and Controls

• Next Wednesday, December 19th, we will complete chapter 11 and chapter 12– Strategic Leadership, Reminder about Cases

Finish the Semester Well

LET IT SNOW!!!! ********** ** ***** ** **** **** *** *** *** **Glad to be your teacher and hope you have a great weekend!!!

If you have questions, email me and I will try to answer them as quick as possible!