Importance of Body Language in Personality Development
Importance of Body Language in Personality Development
Importance of Body Language in Personality Development
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Body language, which is best defined as a non-verbal form of communication showed
through facial expressions, gestures, posture, and body movements, says a lot about
one’s personality. In essence, if you want to achieve an effective personality, you will
also need to improve your body language.
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There are many ways you can improve your body language, but like most things, it
needs practice and consistency so that it will become part of you, and not just
something you can do for a certain period of time. If you want to develop your
personality in a positive way, you need to be aware of your own body language and
make sure it adheres to what is generally perceived as positive body language.
These are just some of the different body language examples that you should follow.
Maintaining eye contact is a sign of respect and interest towards the other person. If
someone is talking and you make sure you are keeping your eyes focused on them
then this will make them feel that you are in fact interested in what they have to
say.
Another body language is your facial expression. If you are always frowning, this
would indicate that you have a negative aura, and this will push others away.
Whereas if you are constantly seen smiling, you are going to attract other sunny and
happy people to you.
Posture is also very important. You need to sit properly, avoid slouching, and if you
can, keep an open posture at all times, leaning towards the speaker whenever
necessary, to show that you are interested.
Just as there are various body language movements and expressions you need to
have, there are also those you need to do away with. These kinds of body language
are negative, and not at all helpful in projecting a pleasant or winning personality.
• Fidgeting. This would only indicate nervousness and will make the other person
doubt your credibility or your ability.
• Standing too close. When you are too close to someone, physically, it will make
the other person uncomfortable and will also trigger them to think you are invading
their personal space.
• Staring. Though it may not always be the case, staring is considered rude. While
you maintain eye contact towards the other person, do not overdo it to the point of
staring.
• Crossing your arms. This would indicate resistance on your part, so if someone is
talking to you and you are crossing your arms, you will make the other person think
that you really are not agreeing to what they have to say and you are making it
known to them.
As mentioned earlier, it is recommended that you keep practicing in order for these
body languages to become natural for you. Now that you are already aware of the
do’s and don’ts, you can easily figure out which ones you need to get used to and
which ones you need to get rid of. And little by little, on a daily basis, you need to
practice and maintain good body language. Constantly remind yourself of what
gestures, movements, and expressions you should have until it will be innate in you.
Your personality can be molded into what you have always wanted. You can attain a
winning personality which everyone will admire you for. While you can always work
on the way you verbally communicate, improve your confidence, and build a positive
aura around you, you also need to be aware of your own body language. Look at
yourself in the mirror while you talk and notice every form of body language you
portray. Are these positive? If there are those that you do not like, make an effort to
eliminate them.
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Great speakers are not born, they are made. Before they became great speakers,
they underwent a rather difficult process of honing their skills, talents, and yes, even
their personality. You too can become one as long as you are committed and geared
towards self-improvement. It is not an easy feat, but it is possible, nonetheless.
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Mannerism
Building personal confidence is something that many people desire to do but find
themselves at crossroads while in the endeavor. Everyone admires a person with self
confidence and we all want to be like them. Take for instance Barrack Obama who
moves crowds by his mannerism and self confidence which he exudes.
Personal confidence and good mannerism otherwise known as a pleasing personality
are things which can be learned if one is serious about them and has an interest. I
come from the school of thought that no one is born with these mannerism but they
are learnt and picked along the way.
The first and most important of these habits is the smile. It has been researched that
it takes forty three muscles to frown and only seventeen to smile. A smile improves
your personal appearance. It makes those around you relax, and there is no tension
when people smile at each other. A smile is the most beautiful picture in the world.
Above all, the smile declares that I come in peace not war. Therefore, your personal
appearance determines how other will relate to you.
The second thing is your handshake. The handshake tells much about your self
esteem especially when you are meeting someone for the first time. A good
handshake should be firm, not too gentle and not too tight. It should not last too
long, probably three seconds at most. A good handshake shows sincerity.
There are more personal attributes that one needs to foster self esteem and build
self confidence. Click the blog link appearing below and learn more about self
improvement tips and thus achieve personal development.
Stephen shares his wisdom and experience in Personal Development that will
definitely add value to your life. Visit his Inspirational and Motivational Website at:
Self Improvement Tips and start living a purposeful life.
ACCLIMATIZATION
"Limit your physical activity until you become accustomed to the heat."1
A minority of public heat warning web sites advise older people to acclimatize gradually to heat in order to
build up their physiologic defences.2 However, the degree to which they can acclimatize to heat the way
young, fit people do is relatively unclear. Pre-seasonal advice on acclimatization may also be useful for
people who are newly at-risk, people who have recently moved to warmer climates, or for parts of the
world where extreme heat is becoming more frequent.
The Possibilities and Limitations of Acclimatization for Protection Against Extreme Heat
Our survey of current hot weather messaging found little mention of acclimatization, or instructions on
how to acclimatize as a means to protect against elevated temperatures.2
Protective benefits of acclimatization
Early observational studies evaluated acclimatization as a protective factor against heat-related
mortality.3-5 It has been noted that extreme heat episodes, later in the summer, typically extract a lesser
toll of heat-related deaths than heat waves of equal levels of intensity in late spring and early summer.4, 6
While this relative drop in impacts later in summer may be partly attributable to an early summer
reduction in the pool of vulnerable people after the first heat event, evidence suggests that survivors of
the first heat wave become physiologically acclimatized and hence deal more effectively with subsequent
episodes of extreme heat.6
Adaptive behaviours and physiological changes that enable people to better cope with heat can be
described as short-term or long-term. Long-term adaptation to heat (sometimes termed “acclimation”) is
largely dependent on behavioural adjustments (clothing, activity level, etc.) as well as cultural changes
(housing design, use of air-conditioning, siestas, etc.). Short-term acclimatization depends on physiologic
changes, typically over a period of days to weeks, that represent reduced strain for a given heat load.
The changes associated with acclimatization include more effective sweating mechanism (lower volumes
and salt content) as well as cardiovascular changes.
Temperature indices, used currently by meteorologists to convey the combined comfort impact of heat
and humidity (Humidex in Canada/Heat Index in the US), use current day values only, without taking
previous weather into account.6 This may not give an accurate picture of risk due to exposure to heat (and
humidity) over time, or of the potential of acclimatization in mitigating this risk.
What is the evidence that gradual exposure to heat may confer benefits to older or vulnerable
populations?
Physiological studies on typical subjects:
Extensive experimental studies were carried out, mostly in the 1960s/1970s on fit, young, male subjects
largely in support of increasing fitness and productivity in industrial settings,7, 8 in sports training, and for
military manoeuvres in tropical climates. Subjects exposed to vigorous exercise in heated thermal
chambers were found to have improved heat stress responses (heart rate, core temperature, stroke
volume) after a period of several days.9-12
Measurements of certain stress parameters following this type of controlled, artificial acclimatization
generally show improvement starting around day three, with increases up to days 10-14.7-12
For workers in hot environments, the ACGIH threshold limit values (TLVs) set different guidelines for the
acclimatized and the unacclimatized.13
Physiological studies on atypical subjects:
We were unable to find experimental studies of acclimatization using subjects older than 60, but two
studies based on older men still in the workforce were found.14, 15 Lind, in 1970 published the results of
the influence of age and heat exposure on two groups of British coal miners.14 The average age of the
younger group was 27 (range 23 – 31), while that of the older group was 47 (range 39 – 53). Thermal
chamber experiments, where subjects simulated an eight-hour-day’s work, were carried out over a two
week period, but temperatures were varied randomly between neutral, warm, and hot so acclimatization
effects were not significant. However, differences between the age groups was marked in hot conditions;
older men showed a pattern of consistently higher core temperature, less sweat during work and more
during rest, and indicators of increased cardiac strain. Lind concluded that rates of acclimatization in the
older group may be delayed and diminished.14
Robinson conducted a small study where he retested men between the ages of 44 and 60 (mean age 52),
who had completed thermal chamber acclimatization studies 21 years prior, to see if they could obtain the
same level of acclimatization to heat.15 All but one of four subjects tolerated work in the heat as well or
better than 21 years earlier. Essentially the same pattern of change in heart rate, rectal temperature, and
average skin temperature was obtained after 5 – 13 days of exposure, as was seen in the earlier study.
Physiologic age-related changes:
Circulatory system
With the elderly, there is a decreased ability to pump and redistribute blood to the skin. There is a decline
in cardiac reserve and age-related reduction in vascularity which subsequently decreases peripheral blood
flow. These changes would reduce the efficiency with which heat can be removed.16 Furthermore,
conditions such as atherosclerosis, heart failure, and hypertension reduce even further the body’s ability
to respond to extreme heat.17
Sweat glands
Sweat gland function gradually declines in the age range of the 70s and 80s.18 Aging causes a reduction in
the number of sweat glands and the sweat gland response.17 Lifetime ultraviolet exposure and other
environmental factors contribute with chronological age to reduce sweat gland responsiveness.19
Cardiovascular disease—how does it affect heat response?
Aging is associated with reduced cardiac output as well as less redistribution of blood flow from the
intestinal and renal circulations.20 In a study comparing the cardiovascular responses of young and old
men during direct passive heating to the limits of thermal tolerance, Minson et al. found that reduced
cardiac output was primarily the result of a lower stroke volume, since the older men were able to
increase their heart rate to a similar extent as the young men.21 However, the older men had to attain a
greater proportion of their heart rate reserve. People suffering from cardiac disease are unable to
augment their cardiac output adequately to produce the necessary level of vasodilation to dissipate heat
by evaporation, conduction, and convection.21
Behavioural age-related and chronic disease-related changes
Described risk factors for death or morbidity during severe heat episodes characterize the “at risk”
population as being socially isolated and elderly (esp. over 75 years old),22 living in urban areas, often
housebound or unable to care for themselves independently, and disproportionately living in institutions.23-
26
From experimental studies on people in their 40s and 50s, it appears that healthy older people may be
able to attain levels of physiologic acclimatization close to younger counterparts, but lack of activity and
lack of exposure to a range of temperatures may deprive them of the opportunity to effect this protective
adaptation.15 However, people with cardiac and renal impairment may not be able to achieve these
results.
Can air conditioner use impede “natural” warm weather acclimatization?
No scientific papers have addressed the issue of failure to achieve acclimatization by air conditioning use
among the older population who are most at risk for heat-related mortality.
Ellis cites reductions in indoor temperature limits (from 25.6˚C to 23.3˚C ) on U.S. Navy ships as
evidence that modern sailors acclimatized to air-conditioned decks have lost their long-term
acclimatization to heat.3 In his 1972 study of mortality from heat illness in the US, Ellis criticizes the
design requirements of modern buildings which rely entirely on air conditioning and lack windows that
open. He states that these structures are at the mercy of power supplies.3 He illustrates this danger by
citing the case when 21 of 89 residents of a nursing home in Florida became hyperpyrexic and five died
when the air-conditioning system was shut down for repairs.27 Ellis reports significant mortality excess
from the summer of 1970 in New York resulting from electrical power cuts during a heat wave.3
What advice regarding acclimatization should we give to vulnerable populations?
• Acclimatization to heat appears to be protective in both experimental and epidemiologic studies.
Several public heat-warning websites target this advice to people exercising or playing sports in the
heat; however, ways to effect heat adaptation in vulnerable people remains unclear. Experiments on
men as old as 60 suggest that training in thermal chambers can promote physiologic changes which
indicate an improvement in cardiovascular and sweating mechanisms to lower heat strain.
• Among frequent recommendation, given for heat protection, is to stay in a cool or air-conditioned
environment. This advice seems well supported by evidence to protect vulnerable people from episodes
of extreme or unusual heat (see subsequent section on mechanical air cooling). However, there may
be benefits derived from some degree of heat exposure when temperatures are not as extreme. It is
possible that the avoidance of outdoor temperatures and strenuous exercise deprive seniors of the
opportunity to achieve some degree of acclimatization. Experiments on men as old as 60 suggest that
training in thermal chambers can promote physiologic changes which indicate an improvement in
cardiovascular and endocrine mechanisms to lower heat strain.15
• Research into the benefits and limits of heat acclimatization in vulnerable populations is
extremely limited. We still do not know to what extent these changes can be attained by people in their
70s and 80s, people who do not engage in strenuous exercise, or those with chronic medical
conditions. More research needs to be done to answer these questions.
1. Organizational Culture
Introduction
Basically, organizational culture is the personality of the organization. Culture is comprised of the
assumptions, values, norms and tangible signs (artifacts) of organization’s members and their
behaviors. Members of an organization soon come to sense the particular culture of an
organization. Culture is one of those terms that are difficult to express distinctly, but everyone
knows it when they sense it. For example, the culture of a large, profit corporation is quite different
than that of a hospital which is quite different than that of a university. You can tell the culture of an
organization by looking at the arrangement of furniture, what they brag about, what members wear,
etc. -- similar to what you can use to get a feeling about someone's personality.
Corporate culture can be looked at as a system. Inputs include feedback from, e.g., society,
professions, laws, stories, heroes, values on competition or service, etc. The process is based on
our assumptions, values and norms, e.g., our values on money, time, facilities, space and people.
Outputs or effects of our culture are, e.g., organizational behaviors, technologies, strategies, image,
products, services, appearance, etc.
The concept of culture is particularly important when attempting to manage organization-wide
change. Practitioners are coming to realize that, despite the best-laid plans, organizational change
must include not only changing structures and processes, but also changing the corporate culture
as well.
There's been a great deal of literature generated over the past decade about the concept of
organizational culture -- particularly in regard to learning how to change organizational culture.
Organizational change efforts are rumored to fail the vast majority of the time. Usually, this failure is
credited to lack of understanding about the strong role of culture and the role it plays in
organizations. That's one of the reasons that many strategic planners now place as much emphasis
on identifying strategic values as they do mission and vision.
Key Characteristics of Corporate Culture
Innovation and Risk Taking: The degree to which employees are encouraged to be innovative and
take risks.
Attention to Detail: The degree to which employees are expected exhibit precision, analysis and
attention to detail.
Outcome Orientation: The degree to which management focuses on results or outcomes rather
than on the techniques and processes used to achieve those outcomes.
People Orientation: The degree to which management decisions are take into consideration and
the effect of outcomes on people within the organization.
Team Orientation: The degree to which work activities are organized around teams rather than
individuals.
Aggressiveness: The degree to which people are aggressive and competitive rather easy going
Stability: The degree to which organizational activities emphasize maintaining the status quo in
contrast to growth.
Some Types of Culture
There are different types of culture just like there are different types of personality.
Authoritarian Culture
There is centralization of power with the leader and obedience to orders and discipline are
stressed. Any disobedience is punished severely to set an example to others. The basic
assumption is that the leader always acts in the interests of the organization.
Participative Culture
Participative culture tends to emerge where most organizational members see themselves as
equals and take part in decision-making.
Mechanistic Culture
The mechanistic culture exhibits the values of bureaucracy. Organizational jobs are created around
narrow specializations and people think of their careers mainly within these specializations. There
is a great deal of departmental loyalty and inter-departmental animosity. This sort of culture resists
change and innovation.
Organic Culture
In this case, authority hierarchy, departmental boundaries, rules and regulations, etc. are all
frowned up. The main emphasis is on task accomplishment, team work and free flow of
communication. The culture stresses flexibility, consultation, change and innovation.
Sub-cultures and Dominant culture
Each department of an organization may have its own culture representing a sub-culture of the
system. An organizational culture emerges when there is integration of all the departments into a
unified whole.
Researcher Jeffrey Sonnenfeld identified the following four types of cultures.
Academy Culture
Employees are highly skilled and tend to stay in the organization, while working their way up the
ranks. The organization provides a stable environment in which employees can develop and
exercise their skills. Examples are universities, hospitals, large corporations, etc.
Baseball Team Culture
Employees are " free agents" who have highly prized skills. They are in high demand and can
rather easily get jobs elsewhere. This type of culture exists in fast-paced, high-risk organizations,
such as investment banking, advertising, etc.
Club Culture
The most important requirement for employees in this culture is to fit into the group. Usually
employees start at the bottom and stay with the organization. The organization promotes from
within and highly values seniority. Examples are the military, some law firms, etc.
Fortress Culture
Employees don't know if they'll be laid off or not. These organizations often undergo massive
reorganization. There are many opportunities for those with timely, specialized skills. Examples are
savings and loans, large car companies, etc.
Importance of Organizational Culture
Employees should to be engaged in their work. They yearn for work that is enjoyable, meaningful
and engaging. When they are engaged they are safer on the job, more productive and more willing
and able to delight customers. It is for these basic reasons that organizational culture matters. It is
the right thing for an organization to do - to think about the work environment, working relationships
and “how employees do things here.”
Focusing on building and sustaining an organizational culture is one way of showing that people
are the organization’s most valuable asset.
A strong culture is a talent-attractor - The organizational culture is part of the package that
prospective employees look at when assessing the organization. Gone are the days of selecting
the person you want from a large eager pool. The talent market is tighter and those looking for a
new organization are more selective than ever. The best people want more than a salary and good
benefits. They want an environment they can enjoy and succeed in.
A strong culture is talent-retainer - How likely are people to stay if they have other options and don’t
love where they are? The organizational culture is a key component of a person’s desire to stay.
A strong culture engages people - People want to be engaged in their work. The culture can
engage people. Engagement creates greater productivity, which can impact profitability.
A strong culture creates energy and momentum - Build a culture that is vibrant and allows people to
be valued and express themselves and it will create a very real energy. That positive energy will
permeate the organization and create a new momentum for success. Energy is contagious and will
build on itself, reinforcing the culture and the attractiveness of the organization.
A strong culture changes the view of “work” - Most people have a negative connotation of the word
‘work’. When the organization creates a culture that is attractive, people’s view of “going to work”
will change.
A strong culture creates greater synergy - A strong culture brings people together. When people
have the opportunity to (and are expected to) communicate and get to know each other better, they
will find new connections. These connections will lead to new ideas and greater productivity - in
other words, it will be creating synergy. Literally, 1 + 1 + right culture = more than 10.
A strong culture makes everyone more successful - Any one of the other six reasons should be
reason enough to focus on organizational culture. But the bottom line is that an investment of time,
talent and focus on organizational culture will give all of the above benefits. Not only is creating a
better culture a good thing to do for the human capital in the business, it makes good business
sense too.
Culture – Input and Output
Culture is learned. It is both a product of action and a conditioning element of future action, an input
and an output. The internal environment consists of the social and technical systems of the
organization. Thus, in part, culture is the product of these socio-technical systems. They consist of
the decision-making, planning and control procedures of the organization, its technology, and the
procedures for recruitment, selection and training; and are influenced by the common beliefs,
attitudes and values of the members of the organization.
The strategies, structures, procedures and behaviors adopted by management create a work
environment. However, if managers have been members of the organization for some time they are
themselves a product of the culture.
As culture is both an input and an output, it is likely to be self-perpetuating and highly resistant to
change. Figure 7.2 demonstrates how culture is both an input and output.
Figure 7.2 (Adapted from Williams et al 1989)
Adapted from Williams et al, 1989The OrganizationExternal Environment Legislation Politics
Technology Education Society Market place Competitors Consumers EconomystrategyStructure,
systems, technologyWork EnvironmentWork tasks, goals and proceduresWork group
behaviorManager behaviorCulture: common beliefs, values and attitudesCharacteristic patterns of
behavior
Organizational Culture vs. National Culture
Based on the research of Dr. Geert Hofstede, There are differences between national and
organizational cultures. For global companies it is important to understand both, organizational and
national culture, in order to impact organizational performance.
In a recent ITAP seminar, Dr. Geert Hofstede discussed “Integrating Corporate Practices and
National Cultural Values.” The topic is highly relevant to organizations operating in a volatile global
economic environment. While economic turmoil creates challenges and failures, it also creates
opportunities as evidenced in a large number of mergers and takeovers: Doosan and Bobcat,
Lloyds and HBOS, Barclays and Lehman Brothers, Citigroup and Wachovia. The list is long. Many
of these names have strong national brand identity. They are goliaths (giants) with offices in many
economic centers around the world. How should they integrate to become one organization?
Our national culture relates to our deeply held values regarding, for example, good vs. evil, normal
vs. abnormal, safe vs. dangerous, and rational vs. irrational. National cultural values are learned
early, held deeply and change slowly over the course of generations.
Organizational culture, on the other hand, is comprised of broad guidelines which are rooted in
organizational practices learned on the job. Experts agree that changing organizational culture is
difficult and takes time. What is often overlooked or at least underestimated when two or more
companies merge is how the underlying personal values of employees impact how they perceive
the corporate culture, etc. A person can learn to adapt to processes and priorities, and a person
can be persuaded to follow the exemplar behaviors of leaders in an organization. But if these
priorities and leadership traits go against the deeply held national cultural values of employees,
corporate values (processes and practices) will be undermined. What is appropriate in one
national setting is wholly offensive in another. What is rational in one national setting is wholly
irrational in another. And, corporate culture never trumps (outdoes) national culture.
The answer, then, lies not in abandoning efforts to unify organizations after a merger or cancelling
efforts to build high performance culture, but in overlaying and harmonizing local interpretations of
corporate practices to cultural norms.
In organizational theory, culture is a commonly researched subject matter. A link is often drawn
between a strong organizational culture and dominance in the market place. Culture is shaped by
an organization’s unique history and situational growth. It can be defined as the values, beliefs, and
expectations more or less shared by the organization’s members. It affects the way a company
does business and makes known relevant employees, customers, suppliers, and competitors.
Managers and upper level executives are responsible for instilling the values and norms into
employees so they not only know what is expected of them, but are eager to perform in such a way
as to benefit the company.
“A top-rate administrator is able to create sources of meaning and identification by providing an
atmosphere that is rewarding for its employees and customers.” Scott and Davis, 2007
A nation’s culture, similar to that of an organization, is comprised of the symbols, values, rituals,
and traditions of the people living in a particular region. Language, food, and family traditions are all
rooted in national culture. How people behave in public verse, how they behave within their own
home is also associated with values and standards of their nation. Cultures usually differ in
relationships between the individual and society, ways of dealing with conflict, relationships to
authority, and conceptions of class and gender. All of these things are comparable to organizational
culture, just on a grander scale.
Of Hamburger and Social Space: Consuming McDonald’s in Beijing - The article reviewed the
development of the Western fast-food sector and the local responses of people in Beijing. The
Chinese are recognized for their great traditions and rich culture and so, it was questioned whether
McDonald’s would be able to translate its well established business model from the West into
something suitable for people in the East. Even with all the doubt, McDonald’s was able to take
Asia by storm with irrefutable success, but how? When globalizing the golden arches, did
management try and adapt to the local culture or were they dependent on the locals adapting to its
established organizational culture; which way did the flow of information go?
Creation of a Culture
The founders of an organization generally tend to have a large impact on establishing the early
culture. The organization’s culture results from the interaction between the founder(s) biases and
assumptions and what the original members of the organization learn from their own experiences.
o An organization’s culture comes from what it has done before and the degree of
success it has had. The ultimate source of an organization’s culture is its founders.
o The founders of an organization traditionally have a major impact on that organization’s
early culture.
o They had the vision; they are unconstrained by previous customs or ideologies.
o The small size of new organizations facilitates the founders’ imposition of the vision on
all organizational members.
o Culture creation occurs in three ways:
o First, founders hire and keep only employees who think and feel the way they do.
o Second, they indoctrinate and socialize these employees to their way of thinking and
feeling.
o The founders’ own behavior acts as a role model that encourages employees to identify
with them and thereby internalize their beliefs, values, and assumptions.
o When the organization succeeds, the founders’ entire personality becomes embedded
in the culture of the organization.
Keeping a Culture Alive
There are practices within the organization that act to maintain it by giving employees a set of similar
experiences. Three forces play a particularly important part in sustaining a culture: selection practices, the
actions of top management, and socialization methods.
o Selection
o The explicit goal of the selection process is to identify and hire individuals who have the
knowledge, skills, and abilities to perform the jobs within the organization successfully.
o The final decision as to who is hired will be significantly influenced by the decision
maker’s judgment of how well the candidates will fit into the organization. This results in the hiring of
people who have values consistent with those of the organization.
o Additionally, the selection process provides information to applicants about the
organization. Selection, therefore, becomes a two-way street.
Example—applicants for entry-level positions in brand management at Procter & Gamble (P&G). Each
encounter seeks corroborating evidence of the traits that the firm believes correlate highly with “what counts”
for success at P&G.
o Top management
o The actions of top management, what they say and how they behave, establish norms
that filter down through the organization as to:
o Risk-taking.
o How much freedom managers should give their employees.
o What is appropriate dress?
o What actions will pay off in terms of pay raises, promotions, and other rewards?
o Socialization
o New employees are not fully indoctrinated in the organization’s culture. They are
unfamiliar with the organization’s culture and are potentially likely to disturb the beliefs and customs
that are in place.
Socialization
The process through which the employees are proselytized about the customs and traditions of the
organization is known as socialization. It is the process of adaptation by which new employees are to
understand the basic values and norms for becoming ‘accepted’ members of the organization. Socialization
is a process made up of three stages: pre-arrival, encounter, and metamorphosis.
o The first stage, pre-arrival, encompasses all the learning that occurs before a new
member joins.
o In the second stage, encounter, the new employee sees what the organization is really
like and confronts the possibility that expectations and reality may diverge.
o In the third stage, metamorphosis, the relatively long-lasting changes take place. The
new employee masters the skills required for his/her job, successfully performs his/her new roles, and
makes the adjustments to his/her work group’s values and norm.
Rituals
Rituals are repetitive sequences of activities that express and reinforce the key values of the organization,
what goals are most important, which people are important, and which are expendable.
Material Symbols
The material symbols convey to employees who is important, the degree of egalitarianism desired by top
management, and the kinds of behavior that are appropriate.
Language
Many organizations and units use language as a way to identify members of a culture or subculture. By
learning this language, members attest to their acceptance of the culture and help to preserve it.
New employees are frequently overwhelmed with acronyms and jargon that, after six months on the job,
have become fully part of their language.
Culture is transmitted to employees in a number of ways; for example, through stories, rituals, material
symbols and language. The process of developing and sustaining organizational culture is illustrated by the
following figure by Robbins:
Figure 7.1 (Adapted from Robbins 1989, page 479)
Conclusion
The future holds promise for companies that understand and nurture their cultures. Cultures are not only
able to create an environment, but they also adapt to diverse and changing circumstances. As organizations
begin to experience a revolution in structures, the study of culture and the implications for change will
become more important. Understanding of work group subcultures within an organization’s culture will
influence strategies for changing organizational culture and overcoming resistance to change programs.
Changing an organization’s culture may be extremely difficult, as the processes that support a particular
organization or a departmental method of working are both interrelated and varied. Organizational culture is
self-perpetuating and highly resistant to change. Changes may cause confusion, conflict and resistance.
Managers need to understand the nature and role of culture and how it may be altered. When the role of
culture is more clearly defined, managers can better understand its importance in managing organizational
change and its impact on day-to-day decision-making.
Continuous Learning
A Basic Definition
Simply put, continuous learning is the ability to learn to learn. Learning need not be
a linear event where a learner goes to a formal learning program, gains areas of
knowledge and skills about a process, and then the learning ceases. If the learner
can view life (including work) as a "learning program", then the learner can continue
to learn from almost everything in life. As a result, the learner continues to expand
his or her capacity for living, including working.
1. Recognizes priorities or overall values about themselves and how they want
to live and work -- they have a personal vision
2. Takes an active role in the world and work
3. Continues to reflect on their experiences in the world and work/LI>
4. Seeks ongoing feedback about the world (including work) and their activities
in it (which is why working in teams, using 360-degree appraisals, etc., are so
important in organizations)
5. Remains as open as possible to the feedback (which requires a fair degree of
personal maturity)
6. Makes ongoing adjustments, based on ongoing feedback, to the way they live
their lives and conduct their work in order to more closely meet their priorities
and values
Company Description
This part of the business plan describes the company thoroughly, already established
or about to be, and the basic business concept. When you write a company
description, you should cover the following:
• Company name
• Form of organization. (Sole Proprietor, Partnership, etc.)
• Ownership — full name of the owner/owners
• Location, offices headquarters, branches. Explain the benefits of the
location
• Definition of the business. The products or services will be outlined
without too much detail. A more thorough description will appear in the
chapter on products. It will also describe the reasons for and advantages of
the choice of product or service.
• History of the company. If the business is new, give a short historical
sketch of the idea behind the foundation of the company. For an already
established business, explain its origin, and the development of the product
or service over time. Include some historical data on sales and profits. After
giving the historical background, outline the current status of your business.
State the business history and purpose of the company clearly.
• Company goals — plans to be accomplished over coming years (up to
five years in advance), and how these are going to relate to the investment
you are seeking. Keep the the goals realistic and credible.
• Future plans for the growth and expansion of the company. Will you
keep the business smal? Do you plan to expand extensively? Link this to the
projected investment. Once again, be moderate and keep things simple and
believable.
Company Description
Kundo, Inc., a Massachusetts based company, will operate Abonda, a single unit,
medium-size restaurant serving healthy, contemporary style food. The restaurant
will be located at 645 Deacon Street in Cambridge, Massachusetts.
Mission Statement
The company's goal is that of a multi-faceted success. Our first responsibility is to
the financial well-being of the restaurant. We will meet this goal while trying to
consider; 1) the effect of our products on the health and well being of our customers
(and our staff), 2) the impact that our business practices and choices will have on
the environment, and 3) the high quality of attitude, fairness, understanding, and
generosity between management, staff, customers, and vendors. Awareness of all
these factors and the responsible actions that result will give our efforts a sense of
purpose and meaning beyond our basic financial goals.
Development & Status
The company was incorporated in September of 1995 and elected sub-chapter S.
The founders are Jack Morton and Wilma Mason. Jack is the President and Wilma the
Vice President. There is a total of 10,000 shares of common stock issued. Wilma and
Jack each own 3,000 and the remainder are retained by the company for future
distribution. In addition they have loaned the company $25,000 of their own money
for research and start-up costs.
A suitable site for the first restaurant was found last month and lease negotiations
are in the final stages. The location will be on Deacon Street, just outside Harvard
Square and close to a dense population of the target market. When the lease is
signed there will be three months of free rent for construction and in that time the
balance of the start-up funds must be raised. With that phase completed, Abonda
Restaurant can then open and the operations phase of the project can begin.
Future Plans
If the business is meeting its projections by month nine, we will start scouting for a
second location and develop plans for the next unit. Our five year goal is to have 3
restaurants in the greater Boston area with a combined annual profit of between
$500,000 and $1,000,000.
Target market
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Contents
[hide]
• 1 Market segmentations
• 2 Strategies for Reaching Target Markets
• 3 Examples
• 4 The Psychology of Target Marketing
• 5 References
1. Briefly state your target market and the needs you will be fulfilling.
Ask yourself why you choose this particular business, who your products/services are
meant for, who you want to do business with, and what is unique about your product.
Let's say you are planning to sell products used in automotive detailing. You decide that
vehicle owners are your broad target market. Your business will help them keep their
vehicles clean and shiny.
2. Next, break this large market down into smaller sections (segmentation).
There are people who restore classic automobiles. There are people who drive an old
clunker and run it through the car wash occasionally. There are people who own "status"
automobiles. There are truck owners, motorcycle owners…. Your job is to consider
various subgroups and decide upon your niche market. Remember, there are auto owner
who don't care about keeping the vehicle clean and shiny. Then there are those who
care, but lack the time and the interest to do the work themselves. They take their vehicle
to a shop. Others only worry about auto detailing when it is time for a trade in. You reject
these segments as unsuitable for your niche market. After consideration, you decide that
your market segment will be automobile owners who have both the time and the interest
to do their own detailing work -- people who enjoy puttering with their vehicles, who have
the time to spend, and who take pride in their vehicle's appearance.
Do you think that there are enough potential customers in that group to support your
business? Are you supplying a service that is not readily available to them from other
sources? If yes, move to step three.
Finished defining your target market and the research backs it up?
Congratulations. Now for the fun part. Develop a marketing plan that will reach these potential
customers and watch the sales start happening!
Competitive Analysis
Background
Understanding the strengths and weaknesses of the enterprise in relation to its competition is
essential for both the identification of best strategic options, and the prioritization of investment
within operating units. It is basic in assisting the enterprise in answering the three basic
questions:
Exit planning (so that improved performance will lead to greater returns);
Survival and recovery planning so that major weaknesses in the operation can be rapidly identified;
A reduction in the requirement for change management as it steadily moves the enterprise towards
higher and higher levels of efficiency and operating performance.
Understanding the scope of the competition
The valuable concept of marketing myopia emphasises the need for the enterprise to define
precisely the market sector in which it is operating and the firms against which it is truly
competing. Through an analysis of product/ service positioning, the purchase portfolio, the value
chain, and substitute behaviour, the essential first step of accurate market definition can be
completed.
Any competitive assessment must be based on the management of information and responsibility
for planning and controlling change. Building competitive understanding into the enterprise is
greatly enhanced by the creation of knowledge centres which focus operational actions on key
performance indicators, benchmarks and targets. As benchmarks are approached the enterprise
naturally gains in competitive performance – major gaps between existing levels of achievement
and benchmarks will highlight areas for investment, and generate projects for investment
appraisal and action planning and implementation.
With knowledge centers providing the basis for bottom up planning and review throughout the
planning cycle (including the planning effectiveness review), problems and opportunities for
competitive advancement also become clearer.
Competitive ranking
Any understanding of competitive position must rely on an analysis of ranking against other
companies in the relevant sector of the market. As the enterprise ranking improves for each
factor, so will the overall competitive position. Ideally, all the data should be quantitative and
derive from information collected for industry benchmarks, but because of the broad range of
competitive factors subjective assessments will be necessary for several components of a typical
competitive analysis.
Such an assessment should certainly be completed for each annual planning session, and for
crucial elements where the enterprise is significantly adrift from its benchmark, on a more regular
basis.
Any competitive analysis should start with the critical success factors. Those these vary in detail
from sector to sector, a general classification of 12 topics is applicable to all enterprises.
Leadership. The depth and breadth of enterprise leadership will establish its ability to identify and
carry through effective strategies and the management of change. Measurements such as the
diversity index and the internal satisfaction survey will provide the basis for greater objectivity in
measuring leadership effectiveness.
Core competence. The level of skills within the enterprise and its match with the demands of the
market will be a vital tool in creating and building competitive advantage. It will be greatly assisted
by the development of knowledge centers, a balanced scorecard of objectives based on key
performance indicators, and the decentralisation of planning and budgeting.
Stakeholder support. The support of all key stakeholders – employees, suppliers (including
financial suppliers), shareholders, and government will be important in ensuring that the
enterprise can both survive and more importantly build on its existing competitive advantage.
Focus. Concentration on key customers, suppliers, markets and products will all influence
competitive advantage. Analysis of the customer spread ratio, market spread ratio, product
spread ratio, product age profile, finance profile, debt allocation ratio, EBITA capital allocation
ratio, will all provide clear evidence of the degree of focus within the enterprise.
Awareness. Awareness is vital to all enterprises, as unless they are part of the purchase portfolio
they cannot be considered for purchase. An assessment of levels of awareness will depend on
advertising research, and be generated by a mixture of market coverage, word of mouth, and
promotional investment.
Trial. New customers can only be gained through trial, which defines this as another critical
success factor. Levels of trial will depend on a variety of factors including advertising, relative
advantage and ease of trial, all of which will require regular reviews of the marketing mix and
research feedback through customer panels, market research and mystery shopper techniques.
Repeat purchase. Customers must be maintained for the enterprise to remain stable and grow its
overall competitiveness. The higher the level of repeat purchase and the faster the customer
transition period from levels of low consumption towards that of an established customer, the
better the long term prospects of the enterprise. Measuring such factors as the expectation
fulfillment gap through customer satisfaction surveys and other components of the marketing mix
against key competitors will be essential to drive higher levels of repeat purchase.
Strategic consistency with market drivers. It is essential that the enterprise controls its response
to market forces (PEST) and does not merely react to it. Measuring the degree of existing (and
more importantly future) strategic fit will be a vital element in any competitive comparison. The
balance between the seven strategic options (do nothing, withdrawal, consolidation, market
penetration, market development, product development, diversification) identifying the level of risk
that each enterprise is willing to accept.
Risk management. Each enterprise will need to effectively manage risk, with a subjective
assessment of past successes and failures providing a reasonable measure of how well each
organisation manages risk.
Pricing power. The ability of the enterprise to achieve adequate levels of profitability will be vital, It
will be achieved by the inter-relationship of the product/ service offering, the power of the buyers,
and the economic leverage of the enterprise. Measurement of pricing power will be seen in
pricing elasticity, and overall levels of gross profit.
Financial viability. Financial viability is the essential measure of whether the enterprise will be
able to continue to operate. It will be a combination of levels of profit, cash flow, return on capital
employed, debt levels and ease of raising additional finance. Comparisons can be easily made
with other companies via the analysis of financial data.
Labour productivity. Concentrating on labour productivity as a critical success factor will drive
skills, decentralise planning and control and lower costs, all generating significant competitive
advantage.
Other factors
A number of other factors will influence competitive advantage and will often be sector specific.
Some of these can be identified as possibly being of general application.
Speed. Speed of response (or time based competition) is considered to be an important lever of
competitive advantage in many sectors.
Location. For many service based enterprises, location may be a critical success factor as it will
be central to building awareness and achieving trial.
Barriers to entry. The status of barriers to entry may also be of vital importance to many
enterprises in creating and maintaining competitive advantage.
Market coverage. Control over the distribution channels and market share percentages may also
be an important competitive tool.
Threat of entrants. The threat of entrants may for certain sectors be an important competitive
problem.
Threat of substitutes. In common with entrants, the threat of substitutes may also be an important
competitive problem in some sectors.
Competitive score
From the combination of competitive importance and ranking a simple table can be developed
which clearly defines competitive strengths and weaknesses, opportunities and threats (SWOT),
setting priorities for investment. Creating the SWOT analysis in this way enables the planner to
transfer the most important elements directly to a chart within the business plan, which can be
regularly updated within the planning cycle.
The lower the score, the higher the overall competitive advantage. Using the competitive score as
a key performance indicator will allow the enterprise to continuously review its overall competitive
advantage and identify trends in specific operational areas.
Strategy is the determination of the basic long-term goals and objectives of an enterprise,
the courses of action to be taken and the allocation of resources that would be needed for
carrying out these goals. Thus, strategy is not an end in itself but rather a means to an
end. It is this which makes it vital 'must have' ingredient in any business. It is normally
included in the marketing and business plans of organisations.
It is also a process and normally considered under three broad aspects or stages namely
strategy analysis, which is the stage where through analysis the strategist identifies the
opportunities, strengths, weakness and threats in the environment; strategy formulation,
which is the stage where a choice is made from among numerous and potential ones; and
strategy implementation which is when the chosen strategy is translated into organisation
action.
Strategy is, therefore, developing and shaping organisation's goals and objectives
providing the needed response to the environment (for competitive advantage) and
providing good corporate governance. As had already been pointed out strategy and
business planning are somewhat linked.
'Strategy' is normally part of the business and marketing planning processes.
Industry and competitive analysis form part of the first stages of business planning and
strategy. However, there is some distinction between the two.
Industry analysis is trying to identify the forces which affect the level of competition in
an industry. Research has proved that industry analysis is very effective at the strategic
business unit level (SBU) because if it is done at a generalised level it reduces its value.
Thus, this analysis would be done at the SBU level still with the industry in mind
applying Porter's five forces - threat of entry, the power of buyers, the power of suppliers,
and threat of substitutes and competitive rivalry - to show the effect of the environment
on the industry as a whole.
The threat of entry: this is the extent to which other interested parties are able to enter the
industry. It is dependent on the barriers or restrictions of entry into the industry. There are
quite a number of examples here but few might be explained. Some of the examples are
economies of scale, capital required in a business, access to distribution channels,
expected retaliation (i.e. if a competitor fears the existing firm's retaliation), legislation or
government action and differentiation. In analysing the barriers, consideration is given to
which barriers are prevalent, the extent of prevention, the organisation's position and any
loopholes.
The power of buyers: This analysis the influence buyers wield on the industry in
question. Based on the organisation's supply claim the power intensity is felt. For
example in the grocery retailing in the UK where there is a concentration of buyers few
retailers particularly the supermarkets dominate the market.
Also when the cost of changing suppliers does not involve high cost, buyers can
manipulate the system. There is also the threat of backward integration if prices and
quality from suppliers are considered unsatisfactory. It is gainsaying the fact that a good
knowledge of such issues is a potential determinant of a firm's strategy. Also when there
is price-war (intense) between competitors, buyers can manipulate the system, e.g. low-
cost carriers on Airbus and Boeing.
Relating somewhat to the above is the power of suppliers: when consumers of a particular
supplier are scattered, the supplier can wield power in that industry. A brand name image
can also assist a supplier to become powerful. In Ghana for example the brand name
''Graphic'' has become a household name such that if anyone wants to buy any brand of
newspaper, the word ''Graphic'' is used. Like Gucci and Coca- Cola as well, most retailers
stock these to enable them win over shoppers because of the brand.
A significant benefit to be culled from this in formulating any strategy is to attack the
brand name or increase marketing cost based on the knowledge gained here.
The next force is threat of substitutes coming into the industry. These could come in one
or more of these product- by-product (e.g. fax for postal service, and email for fax,
substitution as need by a new product, generic substitution (i.e. products competing for
need) and doing without e.g. beer, tobacco, cannabis.
In planning a business or formulating a strategy, therefore, there is the need to find out
how risky is the substitute on the product or service of the organization; can the service or
product stand the threat posed by the substitutes? or how easily can consumers switch to
these substitutes.
Intensity of rivalry: This concerns the possible entry of competitors into the industry;
availability of substitutes and buyers and suppliers control. When this position of the
existing organization changes. How can it be affected by the competition? The following
must also be considered. Competition is intense where competitors are of equal size e.g.
the computer engine search industry until Google emerged. Market growth rates and
global customers may increase competition. Also where there is little or no differentiation
customers can be easily swayed; acquisition and mergers also enhance a firm's grip in an
industry and thus give it a competitive edge. High fixed cost in an industry through high
capital intensity result in competitors cutting prices e.g. Boeing and Airbus.
Like the other analysis a good grasp of the information here is a starting point for
successful strategy formulation and business planning.
Whereas industry analysis concerns itself with the issues pertaining in the industry which
affects the industry, competitive analysis looks at the marketing and financial indicators,
mission statements, R& Ds, and product developments to ascertain where competitors are
focusing their priorities and resources.
Some of the marketing aspects to consider under the competitive (competitor) analysis
may include finding out how competitors are meeting customer needs in the range of
goods or services on offer, affordable pricing, unique features. Consideration must also
be sought on the quality and reliability of services and goods provided by competitors.
For example Toyota has recently slashed engineering cost for Camry by 30% and was
able to launch a new longer wider Sienna Mivan that has a fold-flat rear seat and priced it
$1,000 less than its predecessor. Others may include obtaining information either by
intelligence or through annual reports, as information are not easily disclosed (for fear of
capitalizing on by competitors) over all market share whether that is growing declining or
stable, share of specific markets e.g. the UK or US Market; launch of new brands or
product - Toyota launched a new brand in the US in 2003; 'Scion' aimed at younger
buyers, other aspects which might provide relevant marketing information on competitor
analysis are changes in promotional tactics, distribution channels and not the least
addition of new production or service facilities to improve efficiency and cut cost. A
good and recent example is Asda installing radio frequency identification (RFID), a
device which would be used to scan bar codes of incoming goods which could save Asda
$8.35 billion annually. Fortune, 'Wal-Mart keeps the change', November 10,2003 pp 23.
Financial analysis will need to consider the performance of competitors. The competitors'
investment programme in relation to R&D, diversification (mergers and acquisitions as
well as staff training and development must also be assessed and analysed. R&D is
especially vital in the big companies; it is a key to their survival despite its usually long-
term results. Microsoft for example is spending billions to develop its own search engine
that will be incorporated in both its online service MSN and its new operating system due
in 2006 to combat Google's dominance in the search engine industry. Fortune, 22
December 2003 pp
To make easier analysis, Porter developed a model, a matrix, which compares the five
forces against three levels of intensity, low, medium and high (see fig 1 below). Based on
the experience of a well-known retail group in the UK, the illustration portrays one of
intense competition from rivals and a high need to maintain its customer base against
them. In business planning and strategy, industry analysis helps in the positioning of the
business and in the right environment (i.e. getting adapted to the environment and the
formulation of strategy. Competitor analysis on the other hand influences business
planning and strategy by providing the marketing, financial and other key information
about competitors which will help in the business planning and formulating a strategy
that will give the organisation the needed competitive advantage.
Marketing/Sales
The marketing and sales organization is analyzed for its strengths and current activities.
Factors to consider include:
Customer Services
The strength of the customer service function has a strong influence on long term market
success. Factors to consider include:
• Experience of the Customer Service manager in the areas of similar offerings and
customers, quality control, technical support, product documentation, sales and
marketing.
• The availability of technical support to service your offering after it is purchased.
• One or more factors that causes your customer support to stand out as unique in the
eyes of the customer.
• Accessibility of service outlets for the customer.
• The reputation of the enterprise for customer service.
Conclusion
After defining your strategy you must use the information you have gathered to determine
whether this strategy will achieve the objective of making your enterprise competitive in the
marketplace. Two of the most important assessments are described below.
Cost To Enter Market
This is an analysis of the factors that will influence your costs to achieve significant market
penetration. Factors to consider include:
Profit Potential
This is an analysis of the factors that could influence the potential for generating and
maintaining profits over an extended period. Factors to consider include:
Information Technology
The strategies for developing a training function will depend on cost and
implementation. Most organizations have in-house training, while others bring
in outside consultants to perform training in areas that are general to most
companies, such as groupware, computer applications, leadership and human
relations. All these training initiatives strengthen the organization through the
acquisition of knowledge for a particular project, department or concept.
Quality Assurance
5. Information systems (IS) planning is vital to any business plan. The right
system configuration can save time and enhance information processing. If a
company is a manufacturing company, it would make sense to find a
manufacturing information system instead of an information system built for
an insurance company. IS planning can reflect what type of software and
hardware is needed for management and operations. A strategy can be
finding a turnkey software solution or a custom-made application package.
There are many functions of a business and operational plan. The objective in
establishing a solid plan that can be revised and updated is to identify the
processes of the organization, continually monitor objectives and plans
through a compliance process, and implement the applicable information
system to streamline information and processing through the organization.
Even the best new concept or existing plan will fail if executed poorly. The
Management Team section of the business plan must prove to the investor why
the key company personnel are "eminently qualified" to execute on the business
model.
The Management Team section should include biographies of key team members
and detail their responsibilities. It is important that these biographies are not
merely resumes that include the educational backgrounds and previous job titles
and responsibilities of the team members. Rather, biographies should highlight
the most relevant past positions that the individuals have held and specific
successes in each. These successes could include launching and growing new
businesses or managing divisions of established companies.
Team member biographies should be tailored to the company's growth stage. For
instance, a start-up company should emphasize its management's success
launching and growing companies. A more mature company should emphasize
how team members have successfully operated within the framework of larger
enterprises.
Depending upon the stage of the company, key functional areas may be missing
from the team. This is acceptable provided that the plan clearly defines the roles
that these individuals will play and identifies the key characteristics of the
individuals that will be hired. However, it is generally not favorable if personnel
are missing for ultra-critical roles. For example, a plan that is fundamentally a
marketing play should not seek financing without a stellar marketing team.
The Management Team section should also include biographies of the company's
Advisory Board and/or Board of Directors. While having well-known
advisors/board members adds credibility to the business plan, it is highly
effective to explain how these advisors will directly impact the company through
strategic advice and/or providing conduits to key clients, partners, suppliers, etc.
Share |
Even the best new concept or existing plan will fail if executed poorly. The Management Team section of
the business plan must prove to the investor why the key company personnel are "eminently qualified" to
execute on the business model.
The Management Team section should include biographies of key team members and detail their
responsibilities. It is important that these biographies are not merely resumes that include the educational
backgrounds and previous job titles and responsibilities of the team members. Rather, biographies should
highlight the most relevant past positions that the individuals have held and specific successes in each.
These successes could include launching and growing new businesses or managing divisions of established
companies.
Team member biographies should be tailored to the company's growth stage. For instance, a start-up
company should emphasize its management's success launching and growing companies. A more mature
company should emphasize how team members have successfully operated within the framework of larger
enterprises.
Depending upon the stage of the company, key functional areas may be missing from the team. This is
acceptable provided that the plan clearly defines the roles that these individuals will play and identifies the
key characteristics of the individuals that will be hired. However, it is generally not favorable if personnel are
missing for ultra-critical roles. For example, a plan that is fundamentally a marketing play should not seek
financing without a stellar marketing team.
The Management Team section should also include biographies of the company's Advisory Board and/or
Board of Directors. While having well-known advisors/board members adds credibility to the business plan, it
is highly effective to explain how these advisors will directly impact the company through strategic advice
and/or providing conduits to key clients, partners, suppliers, etc.
In summary, the Management Team section of the business plan is an opportunity to prove to investors that
your company has the necessary talent to succeed. Rather than waste this opportunity by merely showing
employee resumes, which could be included in the Appendix, the section should be used to explain
precisely how the team is uniquely qualified to execute the venture in its present state.
As President of www.growthink.com, Dave Lavinsky has helped the company become one of the premier
business plan development firms. Since its inception, Growthink has developed over 200 business plans.
Growthink clients have collectively raised over $750 million in financing, launched numerous new product
and service lines and gained competitive advantage and market share.
Business plan
Working capital
Cash conversion cycle
Return on capital
Economic value added
Just in time
Economic order quantity
Discounts and
allowances
Factoring (finance)
Capital budgeting
Capital investment
decisions
The investment decision
The financing decision
Sections
Managerial finance
Financial accounting
Management accounting
Mergers and acquisitions
Balance sheet analysis
Business plan
Corporate action
Societal components
Financial market
Financial market
participants
Corporate finance
Personal finance
Public finance
Banks and Banking
Financial regulation
Clawback
This box: view · talk · edit
A business plan is a formal statement of a set of business goals, the reasons why
they are believed attainable, and the plan for reaching those goals. It may also
contain background information about the organization or team attempting to reach
those goals.
Business plans may also target changes in perception and branding by the customer,
client, tax-payer, or larger community. When the existing business is to assume a
major change or when planning a new venture - a 3 to 5 year business plan is
essential.[citation needed]
Contents
[hide]
• 1 Audience
• 2 Content
• 3 Presentation formats
• 4 Revisiting the business plan
o 4.1 Cost overruns and revenue shortfalls
• 5 Legal and liability issues
o 5.1 Disclosure requirements
o 5.2 Limitations on content and audience
• 6 Open business plans
• 7 Uses
o 7.1 Venture capital
o 7.2 Public offerings
o 7.3 Within corporations
7.3.1 Fundraising
7.3.2 Total quality management
7.3.3 Management by objective
7.3.4 Strategic planning
o 7.4 Education
7.4.1 K-12
• 8 Not for profit businesses
• 9 Satires
• 10 See also
• 11 References
[edit] Audience
Business plans may be internally or externally focused. Externally focused plans
target goals that are important to external stakeholders, particularly financial
stakeholders. They typically have detailed information about the organization or
team attempting to reach the goals. With for-profit entities, external stakeholders
include investors and customers.[1] External stake-holders of non-profits include donors
and the clients of the non-profit's services.[2] For government agencies, external
stakeholders include tax-payers, higher-level government agencies, and international
lending bodies such as the IMF, the World Bank, various economic agencies of the UN,
and development banks.
Internally focused business plans target intermediate goals required to reach the
external goals. They may cover the development of a new product, a new service, a
new IT system, a restructuring of finance, the refurbishing of a factory or a
restructuring of the organization. An internal business plan is often developed in
conjunction with a balanced scorecard or a list of critical success factors. This allows
success of the plan to be measured using non-financial measures. Business plans
that identify and target internal goals, but provide only general guidance on how
they will be met are called strategic plans.
Operational plans describe the goals of an internal organization, working group or
department.[3] Project plans, sometimes known as project frameworks, describe the
goals of a particular project. They may also address the project's place within the
organization's larger strategic goals.[4]
[edit] Content
For more details on this topic, see Content of a business plan.
Business plans are decision-making tools. There is no fixed content for a business
plan. Rather the content and format of the business plan is determined by the goals
and audience. A business plan represents all aspects of business planning process;
declaring vision and strategy alongside sub-plans to cover marketing, finance,
operations, human resources as well as a legal plan, when required. A business plan
is a bind summary of those disciplinary plans.
For example, a business plan for a non-profit might discuss the fit between the
business plan and the organization’s mission. Banks are quite concerned about
defaults, so a business plan for a bank loan will build a convincing case for the
organization’s ability to repay the loan. Venture capitalists are primarily concerned
about initial investment, feasibility, and exit valuation. A business plan for a project
requiring equity financing will need to explain why current resources, upcoming
growth opportunities, and sustainable competitive advantage will lead to a high exit
valuation.
Preparing a business plan draws on a wide range of knowledge from many different
business disciplines: finance, human resource management, intellectual property
management, supply chain management, operations management, and marketing, among
others.[5] It can be helpful to view the business plan as a collection of sub-plans, one
for each of the main business disciplines.[6]
"... a good business plan can help to make a good business credible, understandable,
and attractive to someone who is unfamiliar with the business. Writing a good
business plan can’t guarantee success, but it can go a long way toward reducing the
odds of failure." [6]
• an oral presentation - a hopefully entertaining slide show and oral narrative that is
meant to trigger discussion and interest potential investors in reading the written
presentation. The content of the presentation is usually limited to the executive
summary and a few key graphs showing financial trends and key decision making
benchmarks. If a new product is being proposed and time permits, a
demonstration of the product may also be included.
[edit] Uses
[edit] Venture capital
• Business plan contests - provides a way for venture capitals to find promising
projects.
• Venture capital assessment of business plans - focus on qualitative factors such as
team.
[edit] Fundraising
Fundraising is the primary purpose for many business plans, since they are related to
the inherent probable success/failure of the company risk.
[edit] Education
[edit] K-12
Business plans are used in some primary and secondary programs to teach economic
principles.[10] Wikiversity has a Lunar Boom Town project where students of all ages can
collaborate with designing and revising business models and practice evaluating
them to learn practical business planning techniques and methodology.
[edit] Satires
The business plan is the subject of many satires. Satires are used both to express
cynicism about business plans and as an educational tool to improve the quality of
business plans. For example,
• In the article "South Park's" Investing Lesson, The Motley Fool columnist "Fool on
the Hill" uses the Underpants Gnomes to illustrate the fallacy of focusing on goals
without a clear implementation strategy. The Underpants Gnomes episode
satirizes the business plans of the Dot-com era.
• Balance Sheets
• Income Statements
• Statement of Cash Flow
Creditors will want to look at the balance sheet to determine the amount of assets
that can be used for collateral. The net worth is also an important factor for investors
and lenders. The income statement and statement of cash flows is also a good indicator
for creditors to determine the company’s ability to repay their debt. Likewise,
investors want to get an idea the company’s ability to pay dividends on their
investment.
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Your executive summary, business plan, and/or pitch deck are often the only basis investors have for
deciding whether or not to pursue further discussions with you. And you only get one shot. If your startup
venture needs equity or debt financing, you'll ultimately save time and money - and improve your chances of
success - by hiring the best business plan consultant you can find.
Our professional consultants understand the needs of entrepreneurs, and will help you develop an
exceptional business plan, executive summary, financial forecast, and investor pitch deck. Want proof? Just
have a quick look at what our clients say about us. Need more convincing? Contact us now for a free
consultation!
Raise Capital: Over two-thirds of our clients have succeeded in raising capital or selling their companies.1
That's pretty amazing in a world where fewer than 1 in 250 plans ever get funded. We challenge you to find
another consulting firm that can make this claim. A business plan developed by Cayenne Consulting could
make the difference between your success and failure.
Develop the Right Strategy: Most so-called "business plan consultants" simply take what you say and put it
on paper. We go much deeper and help you develop the most viable strategy for success, which we then
communicate in a compelling business plan.
Save Time: Save literally hundreds of hours... valuable time you can devote to your products, customers,
and company.
Save Money: We are not cheap, but about half of our clients came to us after a business plan prepared by a
less qualified consultant did not work out. Why not get it right the first time and save money?
Work with Experts: Our business plan consultants are second to none. We are experienced entrepreneurs
and understand what you are going through. We have deep and broad experience in creating and executing
upon business models of all kinds. We have a keen sense of what works in the marketplace and what
doesn't. Many of us have MBAs or PhDs from schools like Harvard, Stanford, MIT, Wharton, CalTech,
Cornell, Columbia, and Chicago. We also have experts in market research, FDA/regulatory issues, financial
modeling, and other fields.
One Consultant: Some firms assign a team of consultants to your business. That means you're paying to get
multiple individuals up to speed. This approach is costly, and makes it difficult to ensure that all materials
have the same "voice" and consistency. Our approach avoids these problems. (Having said that, we will
happily assign a team to you if that's the best solution for your particular needs.)
Get it Right the First Time: Learn about the pros and cons of various approaches to developing business
plans.
No Salespeople: We don't have a slick sales professional "sell" you and then hand you off to a junior
consultant you know nothing about. From Day 1, you will deal directly with the senior consultant who will
actually work with you. That way, you know exactly what you're getting.
Ongoing Support: We don't stop when the business plan is done. We have a talented team ready to help
you implement it as well, either on a retained basis as interim members of your founding team or on a
project basis, as needed.
Investors see thousands of business plans each year, even in this down market. Apart from a referral from a
trusted source, the business plan is the only basis they have for deciding whether or not to invite an
entrepreneur to their offices for an initial meeting.
With so many opportunities, most investors simply focus on finding reasons to say no. They reason that
entrepreneurs who know what they are doing will not make fundamental mistakes. Every mistake counts
against you.
Benefits
Course content
All our Presentations Skills training courses are designed to meet the specific needs of our clients
depending on their personal/organisational requirements and existing skills set. The Communicaid
presentation skills course, Presenting to an International Audience, includes:
Approach
Presentation skills training is available seven days a week, 365 days a year, either at one of our
training centres in London, Paris, Frankfurt and New York or at your offices in any location
worldwide. We usually recommend a one or two day course but can also offer a more flexible
format to suit your schedule.
Suitably tailored materials will be used throughout your course and your trainer will film or record
your presentations in order to provide you with detailed feedback.
The most appropriate training format, content and approach for your presentation skills course will
be discussed during your diagnostic consultancy (please click here to read more about our
approach).
Your Presentation skills trainer will be assigned to you following the results of your diagnostic
consultancy according to your objectives and areas of focus. Detailed below is a sample profile of a
member of our Presentation Skills training team.
AGLT
AGLT is a professional communication skills specialist, delivering high level communication skills
programmes, including Negotiations, Presentation Skills and Business Correspondence to major
corporate and public sector clients. As one of Communicaid’s core presentation skills trainers, she
has designed and delivered presentation skills training programmes to delegates from The Home
Office, Deutsche Bank, EBRD, Cadbury Schweppes and Unicredit.
Previously, AGLT worked in education, managing a modern language department in the UK for
many years before relocating to France in 2000 where she joined an international training company
overseeing the delivery of communication skills training to multinational clients.
When you're preparing a presentation, what do you need to know about your
audience?
The short answer: as much relevant information as possible. But just where do you
begin?
presentations skills
'fearlessness in an assembly'..
You are not alone if the thought of speaking in public scares you. Giving a
presentation is worrying for many people. Presenting or speaking to an audience
regularly tops the list in surveys of people's top fears - more than heights, flying or
dying.
Put another way, to quote the popular saying which features in many presentations
about giving presentations and public speaking:
"Most people would prefer to be lying in the casket rather than giving the eulogy."
I first heard a speaker called Michelle Ray use this quote in the early 1990s. The
quote is often credited to Jerry Seinfeld, although the basic message is much older.
For example (thanks Dr N Ashraf) the ancient Tamil work Thirukkural (also called
Tirrukural) includes the following words in its aptly titled chapter, Fearlessness in an
Assembly:
"Many are ready to even die in battle, but few can face an assembly without nerves."
(Couplet 723, from Thirukkural/Tirrukural, also called the Kural - a seminal guide to
life and ethics attributed to the Tamil poet Thiruvalluvar, said to have lived between
about 200-10BC. )
I am grateful also to R Ersapah for an alternative translation of couplet 723, and
below, a more modern literal interpretation:
"Many encountering death in face of foe will hold their ground; who speak undaunted
in the council hall are rarely found."
i.e...
"Many indeed may (fearlessly) die in the presence of (their) foes; (but) few are those
who are fearless in the assembly (of the learned)."
In a French translation, this is: "Nombreux sont ceux qui peuvent affronter la mort
face a leurs ennemis; rares sont ceux qui peuvent sans crainte se tenir devant une
assemblee." The title of Tirrukural's chapter 73 is: Not to dread the Council, (in
French: Ne pas craindre les assemblees). Couplet 727 says, amusingly and incisively:
"The learning of him who is diffident before an assembly is like the shining sword of
an hermaphrodite in the presence of his foes..." In French: "Les connaissances de
celui qui a peur des auditoires sont comme l'epee tranchante que tient l'eunuque en
presence de son ennemi..." I am informed (thanks again R Ersapah) that all of
chapter 73 fits the theme of public speech being one of the greatest challenges many
people face in their lives. This is further evidence that speaking in public is not just a
modern fear - it's been with humankind for at least 2,000 years. (The English
translation of Tirrukural comprises various chapters such as Domestic Virtues, Ascetic
Virtue, Royalty, Ministers of State, The Essentials of a State. The English Translations
are by Rev Dr G U Pope and Rev W H Drew. The French translation is by a Mauritian
author M Sangeelee.)
If you know any other old examples of this analogy please contact me.
A common physical reaction to having to speak in public is a release of adrenaline
and cortisol into our system, which is sometimes likened to drinking several cups of
coffee. Even experienced speakers feel their heart thumping very excitedly indeed.
This sensational reaction to speaking in public is certainly not only felt by novices,
and even some of the great professional actors and entertainers suffer with real
physical sickness before taking the stage or podium.
You are not alone. Speaking in public is genuinely scary for most people, including
many whom outwardly seem very calm.
Our primitive brain shuts down normal functions as the 'fight or flight' impulse takes
over. (See FEAR under the acronyms section - warning - there is some adult content
among the acronyms for training and presentations.)
But don't worry - your audience wants you to succeed. They're on your side.
They're glad it's you up there and not them.
All you need to do is follow the guidelines contained on this page, and everything will
be fine. As the saying goes, don't try to get rid of the butterflies - just get them flying
in formation.
(Incidentally if you know the origins the wonderful butterfly metaphor - typically
given as "There is nothing wrong with stomach butterflies! You just have to get them
to fly in formation!" - please tell me. First see the attribution information for the
butterflies metaphor on the inspirational quotes page.)
So, how do you settle the butterflies and get them flying in formation?
Good preparation is the key to confidence, which is the key to you being
relaxed, and this settles the butterflies.
Good preparation and rehearsal will reduce your nerves by 75%, increase the
likelihood of avoiding errors to 95%. (Source: Fred Pryor Organisation, a significant
provider of seminars and open presentation events.)
And so this is the most important rule for effective presentations and public speaking:
Prepare, which means plan it, and practise it.
Then you'll be in control, and confident. Your audience will see this and respond
accordingly, which in turn will help build your confidence, and dare we imagine, you
might even start to enjoy yourself too.
• Sound-clips
• Straw polls (a series of hands-up votes/reactions which you
record and then announce results)
• Inviting a volunteer to take the stage with you (for a carefully
planned reason)
• Audience participation exercises
• Asking the audience to do something physical (clapping, deep
breathing, blinking, finger-snapping, shouting, and other more
inventive ideas)
• Asking the audience to engage with each other (for example
introductions to person in next chair)
• Funny quotations (be careful not to offend anyone)
• Inspirational quotations
• Acronyms
For longer presentations, if you're not an experienced speaker, aim to have a break
every 45-60 minutes for people to get up and stretch their legs, otherwise you'll be
losing them regardless of the amount of variety and diversion you include.
Take the pressure off yourself by not speaking all the time. Get the audience doing
things, and make use of all the communications senses available.
Interestingly the use of visual aids generally heightens retention of the spoken word -
it is said by some up to 70%, although this figure is without scientific reference. That
said, do not reject its validity. The figure is demonstrably and substantially more than
70% for certain things, for example: try memorising a person's face from purely a
verbal description, compared with actually seeing the face. A verbal or written
description is only fractionally as memorable as actually seeing anything which has
more than a basic level of complexity.
Some people refer to the following figures on the subject of information retention,
which are taken from Edgar Dale's theory called the Cone of Experience: Read 10% -
Heard 20% - Seen 30% - Heard and Seen 50% - Said 70% - Said and Done 90%. The
original work by Edgar Dale was considerably more than a line of statistics. The ideas
date back to 1946, and are subject to debate and different interpretation. These
figures should therefore be regarded as much more symbolic than scientifically
accurate, especially when quoted out of the context of Edgar Dale's wider work.
1. define purpose
2. gather content and presentation ideas
3. structure the subject matter
4. develop how to present it
5. prepare presentation
6. practice
7. plan, experience, control the environment
8. 'dress rehearsal' if warranted
• business presentations
• public speaking
• powerpoint tips
• training
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Have you ever felt like a rock star? Even just for a minute? It's a heady experience and it feels
as if the moon and stars were perfectly aligned to support the successful moment. If you
make business presentations, speak to groups, or provide training classes, you may have
experienced speaking moments when all of the pieces came together seamlessly.
These business presentation skills tips will help you develop business presentation skills - and
perhaps one day - allow you to experience a rock star moment. Just starting out? These
business presentation skills tips will help you form the foundation that will fuel your speaking
comfort level and success.
These are the three cornerstone skills for developing and making effective business
presentations.
• Knowledge of the requested topic is also critical; if you don’t know the topic well, the
amount of time you spend in preparation and the amount of stress you experience will
multiply - possibly past your ability to do an effective business presentation. Only accept
and do business presentations that you are confident you can handle. Don't try to be a
super hero. But, you also need to occasionally push the window of your comfort zone, or
you won't continue your own growth.
Even HR training, on topics such as policies, need not be dry and boring. Have stories to
share and ideas and examples that will engage your audience. For effective business
presentations, you may want to include a couple of questions that you ask your audience
members to discuss with the person sitting next to them.
If you cannot do these three foundational business presentation skills, maybe you're not the
right person to make the business presentation. In these additional tips about effective
business presentations, I’m assuming that you are and can.
The Importance of Think Time Before a Business Presentation: The most important
preparation for your business presentation is often not the obvious. It’s the thought time and
research time you spend for weeks in advance of the meeting once you understand your
audience's needs.
When you finally prepare your presentation, you are clear on the concepts you want to
present, the needs of the audience, and the value you can add to the occasion. The think time
allows you to zero in on the audience and its needs.
Limit the Content and the Goals of Your Business Presentation: No matter how much
time you have allotted for your business presentation, you don’t have time to tell the audience
everything you know. For speakers with years of experience, the temptation to overwhelm the
audience with everything you know must be avoided. You’ll bore them, annoy them, and fail to
earn fans.
The good news is that all of your "think time" and knowledge of your audience allows you to
zero in on the most important concepts in the topic for your business presentation. In a 30-90
minute presentation, you have time to make 4-6 key points. You really don't have time for
much more if you are illustrating your points and providing examples.
Begin Your Business Presentation in an Attention Gaining Manner: Start your business
presentation with a startling fact, a question, a revelation, or a pertinent story. Once you have
gained the audience's attention, tell them what you will talk about during your business
presentation. Make your core or thesis point, then build your business presentation around the
4-6 key points referenced. Finish by summarizing what you told them.
You basically tell them what you will tell them, tell them, and then, tell them what you told
them, to achieve maximum impact.
Limit the Use of Visuals and Powerpoint in Your Business Presentation: Unless you
need to illustrate key points, the use of visuals and powerpoint presentations that provide
bullet points of your spoken words is boring and redundant. A prop or slide is helpful only
when it is needed to illustrate a key point.
Your attendees would much rather that you prepared detailed handouts that they can take
back to work. Another plus? If the audience members are not taking notes and not reading a
screen, they are much more likely to listen to you. And, you are the value add - right?
Focus on the Value You Bring Your Audience in Your Business Presentation: Love your
audience and know and believe that you are bringing them information they need and will
value. Respect them by being yourself. It's not about you; it's about them. Speak from your
heart and your most deeply held beliefs.
If you speak or make business presentations, you'll eventually have your own two minutes as
a rock star. Cool. Then, you'll go back to writing, Human Resources, management, or
whatever it is that you do at work.
But, you'll be better for the interaction, the feedback, the experience, and the fact that you
added some value to multiple lives. Can life get any better than that?
Business presentations have such wonderful potential to influence thinking and change lives.
Business presentation skills elevate and add value to your ability to contribute and to influence
others. I trust these tips about business presentations skills helped.
Presentation Skills Training
Tailored and In-House Presentation Skills Training
Impact Factory has been running presentation skills training for 18 years. We have 17 hugely
versatile presentation skills trainers who have a 92 years experience between them. We have
trained tens of thousands of presenters over the years.
All our trainers are developed through a unique and rigorous internal training programme
designed to entrench best practice. Our unique person centred approach ensures that anyone
developing their presentation skills with us becomes the best presenter they can possibly be.
Our Presentation Skills Training can be tailored in-house to address specific issues within your
company, it can be delivered one to one, or you can attend open courses.
Yes! The number one phobia that most people share is making a presentation; speaking in
front of a group of other people: colleagues, strangers, it doesn't seem to matter - it's scary.
You may have people who are new to the presentation 'game' and who need to understand
just what happens to them when they have to stand and deliver and how they can become
confident and effective presenters.
You may have people who have been around the presentation block and are in a rut, giving
acceptable, but not brilliant presentations.
You may have people who have to present detailed and technical information without putting
their audience to sleep. Presenting detailed information may be important but if the
presenter's audience aren't engaged then they've made their job of putting across information
even harder.
All of these people could benefit from our confidence-
building Presentation Skills programmes.
However there is very little presentation skills training that really addresses the key issue of
Working Your Audience.
The power and opportunity we are given every time we make a presentation before an
audience or even sit around a table with a captive group of people is huge.
It is often the rather unnerving experience of being on the receiving end of twenty pairs of
eyes looking at us in polite silence as if to say "Yes? ... So?"
It is this energy that can be harnessed to make dynamic, lively, memorable and effective
presentations.
Our 'Working Your Audience' Presentation Skills Programme gives delegates clear insight into
how the dynamic of a presenter and their audience works, enabling them to make really
effective presentations.