studentprojectsbook - American Careers Educational Programs

Transcription

S T U D E N T
P R O J E C T S
B O O K
Copyright © 2011 by Career Communications, Inc. (ISBN 978-0-9653667-2-4)
Published by
Career Communications, Inc.
6701 West 64th Street, Suite 210
Overland Park, KS 66202
(913) 362-7788
http://www.carcom.com
All rights reserved. Permission to reproduce for classroom instructional purposes is hereby granted. All other
use of content in any manner without express permission of the publisher is prohibited. Please direct written
inquiries to Career Communications, Inc., at the above address.
Character names and related information are fictional and intended for instructional purposes only. Links to
Internet sites are provided for your convenience and do not constitute endorsement. World Wide Web sites
referred to in American Careers Business materials may have changed location, been discontinued or been
purchased by another company since these materials were published. Every effort has been made to include
active sites at the time of publication.
Case Study 1: Entrepreneur Takes Creativity to New Heights
PaThway: General Management
iNDUSTRy: Entrepreneurship
1
Projects
1.1: Sell Your Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
1.2: Support That Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
1.3: Economic Choices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
1.4: Kayaking Caleb – Going With the Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
1.5: Not Playing by the Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
1.6: Creating a Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
1.7: Marketing Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
1.8: “And the Envelope, Please …” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
Case Study 2: Big Money Media Shoots for the Stars
PaThway: Business Information Management
iNDUSTRy: Music and Entertainment
Projects
2.1: Entertaining Risks . . . . . . . . . . .
2.2: Mastering Mischief . . . . . . . . . .
2.3: Should I Buy This Business? . . .
2.4: How to Avoid a $24,000 Mistake
2.5: Track the Cash . . . . . . . . . . . . .
2.6: Speaking the Language . . . . . . .
2.7: In Concert With the Community
2.8: Designing a Space . . . . . . . . . .
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Case Study 3: Growing the Coffee Carafe
PaThway: Human Resources Management
iNDUSTRy: Food
Projects
3.1: Find the Best Candidate . . . . . . . . . . . . . . . . . . .
3.2: Protecting Your “People Investment” . . . . . . . . . .
3.3: Dealing With Deception . . . . . . . . . . . . . . . . . . .
3.4: What Kind of Dollars Do You Really Take Home?
3.5: Real-World Ethics . . . . . . . . . . . . . . . . . . . . . . . .
3.6: Mystery Shoppers . . . . . . . . . . . . . . . . . . . . . . . .
3.7: Frequent Frother . . . . . . . . . . . . . . . . . . . . . . . .
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(continued)
Case Study 4: L’Argent Apparel Company Launches
a New Brand of Jeans
PaThway: Operations Management
iNDUSTRy: Broadwoven Fabrics
Projects
4.1: Who’s Your Target? . . . . . . . . . . . . . . . . . . .
4.2: How the Job Really Gets Done . . . . . . . . . .
4.3: An Economic Challenge . . . . . . . . . . . . . . .
4.4: Do Your Money Management Skills Add Up?
4.5: Rules of the Game . . . . . . . . . . . . . . . . . . .
4.6: Trend Watching . . . . . . . . . . . . . . . . . . . . .
4.7: Risky Business . . . . . . . . . . . . . . . . . . . . . .
4.8: A Nice Idea, but Will It Make Money? . . . . .
4.9: Fashioning Increased Sales . . . . . . . . . . . . .
4.10: Mission Control . . . . . . . . . . . . . . . . . . . . .
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Case Study 5: Annual Report Memo to Staff
PaThway: Administrative Support
iNDUSTRy: Sporting Goods
Projects
5.1: Corralling Deadline Chaos . . . . . . . . . . . .
5.2: Promote a Product . . . . . . . . . . . . . . . . .
5.3: Skateboarding in Olympic Style . . . . . . . .
5.4: Show Me the Money . . . . . . . . . . . . . . . .
5.5: Fitness Means Good Business . . . . . . . . .
5.6: Inquiring Mountain Bikers Want to Know
5.7: Putting Plans Into Perspective . . . . . . . . .
Academic and Career Resources
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.135
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155
General Attitude Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .157
Performance Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .159
Business Careers Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .161
Student Notes
169
CASE STUDY 1
ENTREPRENEUR TAKES CREATIVITY TO NEW HEIGHTS
PaThway: General Management
iNDUSTRy: Entrepreneurship
Project 1.1: Sell Your Principal
Topic: Exploring Business Potential
page 5
Project 1.2: Support That Matters
Topic: Expert Resources
page 9
Project 1.3: Economic Choices
Topic: Opportunity Cost
page 13
Project 1.4: Kayaking Caleb – Going with the Flow
Topic: Cash Flow
page 15
Project 1.5: Not Playing by the Rules
Topic: Abuse of Employee Benefits
page 21
Project 1.6: Creating a Business
Topic: Legal Forms of Business
page 25
Project 1.7: Marketing Success
Topic: Adding Value to Your Product
page 29
Project 1.8: “And the Envelope, Please ....”
Topic: Teamwork
page 39
Name: ____________________________________________________Date: __________
iNDUSTRy:
Entrepreneurship
CASE STUDY 1
ENTREPRENEUR TAKES
CREATIVITY TO NEW HEIGHTS
Idaho Native Returns from Himalaya Photo Expedition
F
or over 20 years, Adoncia
Duran – known as “Addie”
to her friends – has grown
a photography business that has
taken her from Pocatello, Idaho,
to the top of the world. Today her
photos decorate magazine covers,
geography texts, office walls,
postcards, place mats, mouse
pads, cups and more, providing
income Duran uses to fund both
her business and her adventures.
However, Duran didn’t start
at the top. “I started by taking
school sports photos and photos
of friends for my high school
yearbook. I also took photos of
flowers, animals, about anything
you can think of, and made them
into posters, birthday cards,
magnets and other items to give to
my friends,” Duran said.
The idea of turning her talent
into a photography business
started in high school as well.
“I participated in an entrepreneurship project,” Duran explained.
“The name of my business was
Studio 1112. That was my family’s
home address with the word
‘studio’ in front of it. I thought
that sounded more important than
‘Addie’s Photos,’” she added.
After high school, Duran
went to photography school
in California to hone her craft.
“I worked with top professionals
in the studio, in the lab and on
photo shoots, setting up shots,
carrying equipment, doing whatever.
It was great experience,” she said.
After receiving her associate
degree, Duran apprenticed herself
to other photographers. They used
her work to feed the need for
advertising and media photography.
“I decided I could do that
myself,” Duran said. “However, I
didn’t really know what the media
were looking for, so I decided
to complete my bachelor’s degree
in mass communication at Idaho
State University. I wanted to
understand the environment
for my work. Then I could
do a better job,” she added.
Following graduation, Duran
tried freelance photojournalism.
Assignments were interesting, but
income was irregular. She needed
an office and help to handle
business details. She also became
aware of another outlet for her
work – art and wall décor. It
had a $29 million share of the
$281 billion home decorating and
furnishings market.
Yesterday’s dreams have come
true for Duran, due to hard work,
research and entrepreneurial
thinking. Today, you’ll find photo
files, business papers, equipment
and assistants at a new Studio
1112, but often you won’t
find Duran.
She and her crew likely are
away on another photo shoot
gathering images that inspire,
creating opportunities for others
and “just doing what I love
to do.” ■
PaThway:
General Management
3
Name: ____________________________________________________Date: __________
iNDUSTRy:
Entrepreneurship
Project 1.1: Sell Your Principal
Topic: Exploring Business Potential
Introduction
You and two friends want to start a school-based business. You think that starting a
business would be interesting and fun, not to mention that it will look good on a résumé
or job application to demonstrate that you have imagination and initiative. You read about
entrepreneurship in American Careers Business and even did the research suggested on
page 17. You heard stories about Adoncia Duran and found information about her in an
old high school yearbook. If you could make your business idea work, like she did, the
right business would be there for future students to pick up and continue, leaving your
school with an ongoing reminder of your contribution to the school community. Your
challenge is this: You need to sell your principal. She’s a no-nonsense kind of person, but
your experience with her is that she will work with you if you can justify a plan that she
thinks covers most, if not all, of your bases.
The Process
Identify an idea that you would like to develop into a school-based business venture.
Explore and organize your thoughts in the form of a preliminary business plan. Include
the following information:
1. Write a description of your idea.
2. Write a description of the need and the market potential including why your idea
is unique or will improve an existing idea. Why do you think your business will
be important to your school or to people? Why will it be successful?
(continued)
PaThway:
General Management
5
Project 1.1: (continued)
3. Create an outline of how you plan to communicate to your target market. Who is
your target market? How will you advertise to them? These are the people or type
of people who would be interested in your product or service.
4. Create a detailed statement of costs, including taxes, required for starting a business
and for people required to deliver the product or service. Some costs to consider:
• Purchase of goods for resale (use online prices)
• Supplies – for example, a nail technician needs nail files, polish, polish
remover, etc.
• Payroll
• Advertising costs – creating and printing flyers for example
5. What are your sources of funding? Where do you plan to get the money?
6. Write an overview of each person’s responsibility within your group. Each person
in your group must be assigned a “job.” Marketing, sales, etc.
7. Consider the projected growth and related adjustments of a new business. If your
business grows quickly and becomes popular, how do you plan to accommodate
the growth? If your business does not grow the way you had predicted, how would
you adjust?
6
PaThway:
General Management
As you gather information for each of the items, take time to consider what additional
challenges might occur at those points. Try, if you can, to think of how you’d overcome
those challenges. (Your principal will probably mention a few of them and may even
be impressed that you’ve considered them!)
Your Presentation
• Write a preliminary report addressing the steps outlined above.
• Develop an oral presentation visually outlining the ideas as set forth in the preliminary
plan. The presentation will be given to the principal in an effort to convince her that
the plan will work. This may be in the form of a PowerPoint presentation.
PaThway:
General Management
7
Name: ____________________________________________________Date: __________
iNDUSTRy:
Entrepreneurship
Project 1.2: Support That Matters
Topic: Expert Resources
Introduction
Entrepreneurs like Addie need to connect with organizations and people who have
experience and expertise in a particular area of business. They need resources besides
money, not only for starting a new venture, but also for solving business problems after the
business is launched. Reaching out to learn from experts in the field saves time, a resource
that almost always has a dollar value. Sometimes having the right support at the right time
is the crucial factor that determines whether or not a business survives.
The Process
Scan the list of websites listed on page 12 of this publication that offer resources for
entrepreneurs. Review five sites from the list. For each site you review, answer the
following questions:
1. What service or information does this resource provide?
Site 1
Site 2
Site 3
Site 4
Site 5
(continued)
PaThway:
General Management
9
2. How would you contact this resource provider?
Site 1
Site 2
Site 3
Site 4
Site 5
3. Does the information provide links to other resources? List them.
Site 1
Site 2
Site 3
Site 4
Site 5
10 PaThway: General Management
4. Is there support or advice available for online and home-based businesses?
Site 1
Site 2
Site 3
Site 4
Site 5
5. Write a question that this resource would be able to answer.
Site 1
Site 2
Site 3
Site 4
Site 5
(continued)
PaThway:
General Management
11
Identify a business or entrepreneur in your community that could use each one of the
following resources:
Website
http://www.score.org/index.html
http://www.eonetwork.org/Pages/default.aspx
http://www.census.gov/econ/cbp/index.html
http://www.sba.gov/
http://www.entrepreneurship.org/
http://www.gaebler.com/Resources-ForEntrepreneurs.htm
http://www.entrepreneur.com/
http://bx.businessweek.com/small-businessadministration/
http://www.smartentrepreneur.net/
http://web.mit.edu/e-club/hadzima/
Business
Name: ____________________________________________________Date: __________
iNDUSTRy:
Entrepreneurship
Project 1.3: Economic Choices
Topic: Opportunity Cost
You may recognize Mark Zuckerberg by name, but if not, think Facebook. According
to statistics from the Facebook Press Room – http://www.facebook.com/press/
info.php?statistics – in January 2011, Facebook had 500 million active users. About 70
percent of those users lived outside the United States and spent more than 700 billion
minutes per month on Facebook. The number of Facebook users is larger than the
population of every country in the world except China and India. Mark Zuckerberg
has a good thing going!
You can easily learn more about Zuckerberg and his work as an entrepreneur by searching
websites and reading the news. Students in Newark Public Schools in New Jersey have had
a special opportunity to appreciate more than just his Facebook connection. In September
2010, he announced his intention to contribute $100 million to the Newark school system.
Although his gift is beyond the scope of what most individuals could consider, Zuckerberg
gained attention and respect for using his business success to make a significant difference.
Whether a person is spending $100 million or $5, there are always choices to make. When
you decide, you immediately pass up other choices for what to do with what you spend –
time, money or another limited resource. If you decide to play electronic games for three
hours, you have given up the opportunity to play a team sport with friends, read a book,
do homework or any other option that you might identify, including helping out around
the house. There’s an economic term that applies. Opportunity cost is the cost of passing
up the next best choice when making a decision.
Have a little fun by considering other options that Mark Zuckerberg might have chosen for
the $100 million that he gave to Newark schools. Your options will be imaginary, of course,
unless you have access to his decision-making process.
1. Make a list of five other ways to spend the money.
2. Write a sentence to say why you included each item on your list.
3. Considering the reasons for each, select which item would be your first choice for
the $100 million. The next best alternative is the opportunity cost of the gift.
(continued)
PaThway:
General Management
13
Although the decision for where to spend the $100 million has already been made and the
opportunity cost is history, every decision has trade-offs – pluses and minuses. Complete
the following chart to identify some of those consequences.
Choice 1: Newark Public Schools
Choice 2: (Your next best alternative)
Positive consequences
Positive consequences
Negative or neutral consequences
Negative or neutral consequences
Name: ____________________________________________________Date: __________
iNDUSTRy:
Entrepreneurship
Project 1.4: Kayaking Caleb – Going with the Flow
Topic: Cash Flow
Introduction
When the U.S. Small Business Administration did a study of the reasons why so many
small businesses fail, the number one reason was inadequate front-end planning. The
minimum front-end planning identified as necessary for business success is a business
plan complete with a feasibility study and cash flow projections. The lack of appropriate
cash flow projections often results in the second most common reason for business failure
– insufficient capital for start-up and back-up as the business moves through its first
fledgling months. While you may not have much experience in projecting the cash flow
of a business, you have likely dealt with the financial aspects of daily living – cash flowing
in and cash flowing out. The following exercise, Kayaking Caleb – Going with the Flow,
provides firsthand experience in projecting personal cash flow. It indicates how timing can
be an essential factor in both personal and business financial success. Although the thought
might sound contradictory, even profitable businesses can fail because the cash flow
can leave someone like Kayaking Caleb up the creek without a financial paddle.
See how that works:
Kayaking Caleb – Going with the Flow
While Caleb was going to college, he had a part-time job taking party pictures on campus
whenever a fraternity, sorority or other campus organization had a social event. He got lots
of valuable experience taking both indoor and outdoor pictures, working with a variety
of event chairpersons, staging pictures, processing photos and even marketing the “party
pix” to individuals attending the social events. Caleb just recently graduated and decided
to start a photography business of his own but in a different community where such a
business does not presently exist. He wanted to expand the business concept to include
action pictures of individuals involved in both individual and group sports activities. Caleb
is an avid kayaker and has always wanted some pictures of himself involved in kayaking
competitions. He is sure other avid sports enthusiasts would be another market for
personal pictures.
Over the years of taking pictures for his employer, Caleb was able to invest in enough
quality photographic equipment that he thinks his equipment inventory is adequate to start
his one-person photography business. But before he dives headlong into setting up his
own business, Caleb would like to take a month off to travel across the country. He wants
to kayak some new waterways and meet with individuals who have succeeded in the
photography business to get feedback on his business concept. Caleb has decided to use
the money he received as gifts for college graduation plus some money from his meager
savings. In total, he has $2,100 set aside to pay for his trip. His journey will take him from
Portland, Oregon, to Savannah, Georgia.
(continued)
PaThway:
General Management
15
Preparation Prior to Leaving
Caleb is lucky because he has a brother, Michael, who is willing to rent him an almost new
jeep for his cross-country trip. Michael is on active duty in the military and had to leave his
jeep behind for the year. He wants $500 rent for letting his younger brother drive his jeep
across country. He is also asking that Caleb change the oil three times – once before
leaving, somewhere in the middle states and at the end of the trip. The reason that Caleb
chose to end his trip in Savannah is that he has an uncle who lives there and has offered
to keep the jeep for a month or two until Michael returns to the U.S. Then Michael will
pick up the jeep and have a nice vacation himself driving it back to Portland. An extra
bonus is that Caleb’s uncle has a wedding photography business and has offered Caleb
the chance to get a little experience taking wedding pictures during the time he spends
in Savannah. In June, he typically books two weddings a weekend on his business
calendar. He will pay Caleb $600 for his assistance, $300 for each wedding.
Caleb’s plan is to take the month of June for this trip. He will camp most of the way across
the country. He buys $250 worth of camping gear, some food supplies for $100 and a rack
for the jeep to hold his kayak ($75). He spends $30 to have the oil changed in the jeep
before leaving. To get the best possible fare, Caleb purchases his return airplane ticket for
$482 before he leaves Portland.
On the Road
Caleb estimates that he will spend $40 a day for gas and $20 a day for food. He estimates
that the average cost of a campsite is $15 a night. When he has the opportunity to kayak,
he will do it. If he kayaks in a state or national park he will have to pay a park fee of $8
a day. On open waterways, he may have to pay a retrieval fee of $20 for someone to take
him back to the launch site where he leaves the jeep. When he stops in Lincoln, Nebraska,
he will stay with a friend from college, Jake. Jake has offered him $300 to take both posed
and informal family pictures to be presented to his parents for their 25th wedding
anniversary in late July.
The following is Caleb’s planned travel schedule:
Kayaking Caleb’s Planned Travel Schedule
Week 1
Leave Monday morning
Camp all seven nights
Kayak six of the seven days, two times in two state/national parks
No retrieval fees
Week 2
Travel three days, camp three nights
Kayak all three days, once in a state/national park; one day requires a retrieval fee
Spend four days and nights with friend Jake in Lincoln. No gas, food or lodging costs
for these four days
Spend $50 to take his friend out to dinner to say thank you for his hospitality
Earn $300 shooting pictures in the Lincoln area for anniversary present
Change oil while in Lincoln ($30)
Week 3
Camp five nights, three at the beginning of the week and two at the end
Stay two nights with a kayaking buddy. No lodging cost those nights but Caleb buys
$40 worth of groceries. No gas for the two days spent with friend
Kayak three times this week and pay two retrieval fees
Week 4
Drive one day and camp that night
Kayak at state/national park one time
Arrive at Uncle’s home mid-morning of day two. Stay with uncle for the rest of the vacation
Relax at uncle’s home until time to begin job helping uncle take pictures for two weddings
including the rehearsals
No gas, food or lodging expenses once Caleb arrives at uncle’s home. Take his aunt and
uncle out for Sunday brunch to say thank you ($60)
Get oil changed for last time ($30)
Monday morning fly back to Portland
(continued)
PaThway:
General Management
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Kayaking Caleb – Cash Flow Projection
Preparations
Starting Cash
Cash In
Savings
Other
Total Cash In
Total Cash Available
(starting cash and cash in)
Cash Spent
Preparation Expenses
Trip Expenses
Total Cash Spent
Ending Cash (total cash available minus total cash spent)
Week 1
Week 2
Week 3
Week 4
Kayaking Caleb’s Adjusted Cash Flow Projection
Preparations
Week 1
Week 2
Week 3
Week 4
Starting Cash
Cash In
Savings
Other
Total Cash In
Total Cash Available
Cash Spent
Preparation Expenses
Trip Expenses
Total Cash Spent
Ending Cash (total cash available minus total cash spent)
(continued)
PaThway:
General Management
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Kayaking Caleb’s Income and Expenses
Income:
Savings
$ 2,100
Job in Lincoln
300
Job in Savannah
600
____________________________________
Total Income
$ 3,000
Expenditures:
Jeep Rental
$
500
Camping Gear
250
Food Supplies
100
Kayak Rack
75
Oil Changes
90
Plane Ticket
482
Restaurant/Thank You
110
Camping Fees
240
Gas
640
Food on the Road
360
Kayaking Costs
92
____________________________________
Total Expenditures
$ 2,939
Surplus
$
61
Name: ____________________________________________________Date: __________
iNDUSTRy:
Entrepreneurship
Project 1.5: Not Playing by the Rules
Topic: Abuse of Employee Benefits
Introduction
When Addie started her photography business, life was simpler. She worked alone or with
a temporary crew that changed as her assignments required more hands. As her business
grew, she needed to add more permanent staff and now had 55 employees. Most of her
employees worked hard and contributed enthusiastically to make the business successful.
Unfortunately, against her better judgment and an instinctive discomfort, she had recently
hired an administrative services manager who was a friend of a friend. She found that she
was spending too much of her creative energy and business development time dealing with
issues that she would never have imagined.
Addie felt that she was generous with benefits, providing group health insurance and an
option for dental and vision insurance in addition to providing for a two-week vacation
after the first six months on the job. Her first hint that something was not right was when
Bernard, her newest employee – the friend of a friend, asked for an appointment to discuss
vacation when he had been there for three weeks. She very carefully listened to his request
and told him that she would consider making an exception to his work agreement after
three months, but no earlier.
Two weeks before his three-month anniversary, he scheduled an appointment with her
on the Monday following his first three months on the job. She agreed to let him “borrow
forward” and take a four-day weekend at that time. His requests became a regular event
and although Bernard was performing well on the job, Addie was getting more and more
annoyed. When she tried to accommodate his “out-of-sequence” requests, she thought he
would appreciate her effort to be sensitive. Not only did he not appreciate her bending the
rules for him, he became more demanding each time. When Bernard had used all of his
first year’s vacation after being in his position for only seven months, Addie made a
decision. She would find the earliest opportunity to dismiss him. She had contacted her
attorney and had learned what she needed to do to dismiss him from her company. Even
though she was leaving on an extended assignment that would keep her away for six
months, she felt better knowing that when she returned, she would begin the process
as soon as possible.
(continued)
PaThway:
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21
Six months later, Addie returned. She was swamped with a multitude of tasks and didn’t
get to Bernard’s file for two weeks. The day before she had planned to schedule her first
official meeting involved in the dismissal process, Bernard came to her office and said he
wanted to take Family and Medical Leave to care for his wife’s sister who was ill. At that
point, Addie knew nothing about Family and Medical Leave. She thanked him for the
message and told him she’d get back with him. With very little research, she discovered
that his wife’s sister had two grown children, one of whom didn’t work outside the home.
In addition, she learned that Bernard’s wife was between jobs and was at home during
the day.
Your Task
1. Provide a definition for the following terms. They can be found in this projects book
glossary on pages 161- 167.
• absenteeism
• fired
• dismiss
• full-time
• personnel
• negotiation
2. Research the provisions of the Family and Medical Leave Act (FMLA) by going to the
U.S. Department of Labor website, http://www.dol.gov/whd/fmla/.
Based on your research, do you think Addie is required by law to grant the leave
to Bernard? Support your answer.
3. How do you feel Addie should respond to Bernard’s request?
4. Would you respond differently if Bernard were performing well at his job?
5. If Addie had dealt with the problem before she left on the extended work
assignment, how might her options have changed?
6. In your opinion, is there anything Addie could have or should have done before
making the decision to fire Bernard? Support your answer.
7. How do you feel employee requests for personal time can become problematic for
an employer?
8. What are some valid reasons that might cause an employer to accommodate or agree
to negotiate trade-offs?
9. Describe how legislation that is designed to protect an individual’s personal needs
can be abused in spirit, even if not according to the letter of the law.
PaThway:
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Name: ____________________________________________________Date: __________
iNDUSTRy:
Entrepreneurship
Project 1.6: Creating a Business
Topic: Legal Forms of Business
Introduction
Many times entrepreneurs have a great idea for a profitable business but, like Addie
Duran, little understanding of the legal world in which they will operate that business.
They just start their business without giving much thought to the fact that there are
a number of different types of legal organization for them to consider. Each legal form
of business may offer a variety of advantages and disadvantages to the owner(s), which,
had they been considered, might have made a difference in how they set up their business.
Following are brief summaries of how each of the most common forms of business
organizations operates. You will want to do a more extensive study of the different forms
of business organization before completing this exercise, acting in the role of a business
consultant. Pay particular attention to the advantages and disadvantages of each form
of business organization.
• Sole Proprietorship. This is without a doubt the simplest and least expensive form
of business organization. It is a business owned and operated by one person. This
individual is entirely responsible for the business’s success or failure. It may or may not
have employees, but everything that happens in the business is treated as if the proprietor
did it. It requires no legal formality in order for the business to come into existence.
If the business makes a profit, the owner collects that profit, but if the venture loses
money, the owner is responsible for paying the bills. If the business cannot pay its bills,
creditors can sue the owner to collect.
• General Partnership. Partnerships are businesses having at least two owners.
The partners pool their talents, skills and assets to operate the business. Again, there
is usually no legal formality required to bring this business into existence. Each partner
is liable for all of the debts of the business. The actions of any one partner legally bind
the other partners. States usually have a set of general rules to govern the relationship
of the individual partners to each other within the business activity, but states also permit
these rules to be changed through a written partnership agreement.
• Limited Partnership. The laws of many states allow for the formation of a limited
partnership in which the liability of most partners is limited. There must be at least one
general partner who is responsible for all debts, liabilities and other obligations of the
partnership. The liability of the remaining partners, commonly called limited partners,
is limited to the amount that they have invested in the business. A limited partner does
not take an active part in the operation of the business. If the limited partner takes
an active role in the business, he or she runs a risk of moving to the designation of
general partner. The limited partnership offers the advantage of limiting the liability
of most partners while allowing them to earn a profit or gain certain tax advantages.
(continued)
PaThway:
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• Corporation. A corporation is a separate legal entity from its owners, the shareholders.
A corporation can enter into contracts, own property and take on debt obligations.
The provision of services and/or sales of goods is the responsibility of the corporation.
In a very real sense, a corporation is a legal “person.” Because a corporation is a legal
entity, the corporation must file a tax return and pay taxes on any profits. Shareholders
contribute capital to the company and are the owners of the corporation. Shareholders
are not responsible for the debts or liabilities of the corporation. In general, a shareholder’s
liability is limited to his or her actual investment in the corporation. A shareholder can
lose an investment, but the loss cannot extend to the shareholder’s personal assets. The
disadvantages of the corporate form of business organization include the need to file
articles of incorporation with the secretary of state, to pay filing fees and to file
an annual report with the state.
• S Corporation. The “S” structure is a corporate form for smaller businesses that provides
the legal protection of a corporation, but for tax purposes, the income or loss is passed
on to the shareholders in proportion to their ownership. The corporation itself is not
taxed, but files an informational tax return. The corporation’s profits or losses are passed
through to the owners. These shareholders must report profits as supplemental income.
Ordinary tax losses are personal deductions.
• Limited Liability Company. This is the newest form of business entity in most states.
An LLC is a non-corporate business. Members of the company can be actively involved
in the business but they are shielded from liabilities. An LLC is not a corporation or
partnership but it does have corporate-like liability protection for the owners and
partnership – like flexibility in capital and management structure. This type of business
organization is often the choice of family businesses or other businesses where retention
of control and restrictions on transfer of ownership interest are important.
There are many reliable websites available offering more detail about each form of business
organization. As you go to websites, be sure you are looking at ones that discuss forms
of organization in the U.S. Following is a list of sites with sound information:
http://www.nolo.com/legal-encyclopedia/article-29618.html
http://www.sba.gov/content/incorporating-your-business
http://www.irs.gov
http://www.wikipedia.org
Select a Business Structure
Assume that you’ve had a long and successful career as an entrepreneur, have sold your
last business and have established a reputation as the one to call for advice. As a matter of
fact, you’ve had so many of those calls that you’ve decided to create your own consulting
business – giving yourself total freedom to accept or turn down requests for your services,
since you really don’t need the income.
The following descriptions of three different business enterprises are ones that you’ve
decided to advise. Each business is in the preliminary start-up phase. The operators have
been advised to make a conscious determination of the legal form of business organization
under which the business will operate. The operators have come to you and asked for
advice and direction about which form of business organization would offer the most
advantages and fewest disadvantages in their particular situations. Write a report to each
business, outlining the business structure you think would work best for the particular
venture. Explain how the structure you recommend will operate. Outline the advantages
and disadvantages of the business organization you are recommending. Keep in mind the
criteria the business operators have identified as being important to them in selecting
a form of operation.
• Business #1: A brother and sister want to start a business where he will teach martial
arts to children beginning at age 5. Upstairs in the same building, the sister will offer
various exercise classes for mothers who have dropped off a child at the martial arts
class on the first floor. The two of them are pursuing this venture while they work
toward college degrees on a part-time basis. They are passionate about their ideas, but
clearly do not understand the level of liability they are undertaking in this particular
business venture. They believe that everyone who enrolls in their classes will be supportive
and cooperative, assuming their own responsibility for accidents or unanticipated healthrelated consequences. They will each own half of the total business in that they will split
the cost of the business 50/50, but the income will be assigned to the side of the business
that generates it – the brother will get the income from the martial arts studio and the
sister will get the income from the exercise studio.
• Business #2: A young mother of two preschool children wants to establish a homebased business where she will provide desktop publishing services. She will specialize
in unique wedding invitations and wedding programs but will not be limited to only
those products. She wants the simplest possible form of business organization because
when her children reach school age, she will probably pursue a different direction,
either as an entrepreneur or as an employee who works in a setting outside her home.
• Business #3: A young man who has worked in a very fast-track technology position
has recently decided to establish a cleaning business for small offices and other small
businesses. He knows he will need several employees. His dream is to get a business
model that works and consider franchising the model in the future. He knows that in
order to make that happen, he’ll need to develop efficient procedures for employees to
follow, using a variety of commercial multipurpose cleaning products. After he identifies
those procedures, he knows he’ll need to do fairly extensive training and eventually
develop training manuals to be used when he attempts to franchise his business. He
is not in a financial position to provide the extensive capital investment required for
commercial cleaning equipment and vans to start his business at the level he envisions.
PaThway:
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Name: ____________________________________________________Date: __________
iNDUSTRy:
Entrepreneurship
Project 1.7: Marketing Success
Topic: Adding Value to Your Product
Introduction
Successful business entrepreneurs know more than just how to produce a high-quality
good or service. They know how to market their product* successfully through
differentiation. They have thought about their product on three different levels.
Level 1: Core Product
What is the core benefit or service being supplied by the product? What is the customer
really purchasing? What is the basic need that the product satisfies? When the entrepreneur
identifies the core benefit, he or she begins to see that businesses have both direct and
indirect competition. The core benefit of a neighborhood restaurant is satisfying hunger
and thirst.
Any business will have both direct and indirect competition that must be appropriately
evaluated. Direct competition comes from businesses with similar products or services.
For instance a barbecue restaurant on one corner is a direct competitor of a barbecue
restaurant that is two blocks away. Indirect competition comes from those businesses that
compete for the same dollars but with different kinds of products or services. For instance,
the indirect competitors of both barbecue restaurants include the Chinese buffet down the
street, a pizza shop and even the grocery store that sells food that someone might purchase
to prepare a meal at home.
It is essential that an entrepreneur recognize all of his or her competition in order to do
a quality job of marketing a product successfully.
Level 2: Expected Product
At this level, the entrepreneur considers the characteristics of the product that represent
the customer’s minimum expectations. For instance, if the entrepreneur is producing
pasta sauce, the minimum expectation for a sauce called “meat sauce” is that it be a
tomato-based sauce containing some meat. There might also be a minimum expectation
that it be thick enough to do more than just tint the pasta a shade of pink. Tomato juice
with meat in it would not meet the minimum expectation. It is essential that the entrepreneur
understand what the customer’s minimum expectations are for a particular business. The
minimum expectation at a fast food restaurant is that the service be quick. Not many
people expect gourmet quality at a fast food restaurant, but if the service is really slow,
the owner is likely to hear lots of complaints. Plus if consumers expect quick service and
the business is not providing it, they will be looking to your competition where that
expectation is being met.
* Throughout this project, the word product is used for either a product or a service.
(continued)
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Level 3: Value Added
These are any additional services and benefits that exceed the customer’s normal expectations
for the actual product. When you add value to your product, you begin to distinguish your
product from both its direct and indirect competition. As an entrepreneur, this is what you
want to do. Value can be added at many points in the purchase experience. The following
examples are some of the ways that entrepreneurs can add value to their product:
1. Adding value at the use level. What is the customer using this product for? Can you
give the customer ideas of other ways to use the product or other potential benefits
that the product could provide? For instance one of the most successful advertising
campaigns in history was the one for baking soda when a company first suggested
using a box in your refrigerator to absorb food odors. Then there was a focus on
using the product for certain cleaning tasks and then for cleaning a smelly drain, etc.
The campaign was directed to expanding the uses for a product that sat in almost
every kitchen cabinet in America. The product was not altered to add value. The
potential list of uses was expanded to add value.
2. Adding value at the motivation level. First you have to understand what motivates
the customer to use your product. Are there ways that you could trigger the need
for this product? Most Americans were not aware that so many places on their
body could carry an offensive odor until advertising made it a personal issue.
Think deodorant!
3. Adding value at the search level for your product. An entrepreneur has to first
understand how customers choose their particular type of business. Are customers
likely to do a Web search or open the Yellow Pages to find a particular business, or
do they ask for referrals from someone they trust? If you knew that most women
choose their hair stylist by asking friends, relatives and even acquaintances where
they get their hair cut, you might reward customers for sending you new customers
instead of spending big dollars on online advertising or on a large ad in the Yellow
Pages. Is there any way to make it easier for a potential customer to choose your
product? Can you make the buying process more convenient? Think about the
products that are placed near check-out counters.
4. Adding value at the ordering or payment level of the product. Is there any way
to make the ordering and purchasing process more convenient, less complicated,
faster? Is there a way it could be made fun? Think of the businesses that can access
your address and contact information by only entering your telephone number into
their ordering network.
5. Adding value at the delivery level. Sometimes just getting the product delivered
is an added value. The first national pizza delivery service never said they made the
best pizza in town, but in the beginning, they were the only one that delivered. Can
you structure your costs to offer free shipping for orders over a minimum amount?
Can you provide better quality customer service? Can you include assembly
or installation?
6. Adding value at the customer use level. Are there right ways and wrong ways to
use your product? Are you helping the customer to use the product correctly? Is there
any way you can make the product easier to use? Can you offer ideas for new ways
to use a product? What might you do to be sure the customer uses the product the
right way? A major vinyl flooring company stamped the brand name of the vinyl in
bold letters every three feet across the top of their no-wax vinyl flooring and included
a telephone number below the brand name. When customers called to ask how to
get the brand name washed off their new flooring, they got instructions for products
that would easily remove the printed name and also a reminder that using any kind
of wax on the flooring would ruin the finish.
7. Adding value in terms of service after the sale. How can you provide help to
customers once they have purchased your product? Is your return and exchange
policy easy for customers to understand? Are they likely to see it as fair? Do you
offer a guarantee? Would your guarantee instill confidence in the buyer? Computer
companies have learned over the past few years that their technical assistance
personnel have to be trained to talk in the everyday language that a new computer
user can understand or the customer will consider the assistance to be worthless.
8. Adding value at the end of product use. Is there anything you can do or is there
anything you should do to assist your customers in the storage or disposal process
when they are finished with your product? Can you make it more convenient and
more environmentally friendly to dispose of the product? At a time when people
are very sensitive about the potential for identity theft, could a computer company
distinguish itself by offering free software to completely erase the hard drive on
an old computer as a part of the package when a new computer is purchased?
(continued)
PaThway:
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The Value-Added Concept
SCENTED CANDLES
1. Identify the core product and the expected product.
2. Identify the direct and indirect competition for your product.
3. Generate ideas for adding value to your product.
LAWN MOWING SERVICE
(continued)
PaThway:
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PET GROOMING SERVICE
PERSONAL SHOPPING SERVICE
(continued)
PaThway:
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EDUCATIONAL TUTORING SERVICE
_______________________________________________
(Another Business Idea)
(continued)
PaThway:
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Name: ____________________________________________________Date: __________
iNDUSTRy:
Entrepreneurship
Project 1.8: “And the Envelope, Please ....”
Topic: Teamwork
Introduction
How many times has someone won an award or an election, or gained public recognition,
and you have heard them say, “Thank you, it was all me, no one else.” If that was what
people said, the Emmy Awards would be over in 15 minutes, but everyone always has
to thank the “little people.” Why? They did not win the award, election, admiration
of millions, so why do they receive credit?
The Assignment
Today, within groups of six, all of you are going to become the “little people,” except
one. One will be the award-winning photographer you just read about, Adoncia Duran.
Unfortunately, Addie has a tough decision to make. She has successfully built a business
doing what she loves. That is an amazing feat. But, she now also owns a business and
along with a business come business decisions. While she is away, there are people
making sure her business is successful. The interior designer is promoting her work to
potential clients; the administrative assistant is keeping her affairs in order, contacting key
clients, making Addie’s travel plans, keeping her life in order; the administrative services
manager is arranging art shows, lining up photo shoots, finding potential clients and
keeping the office in order; the equipment repair technician is making sure the cameras
and lights not only work but also are performing at their best and that all the equipment
is ready at a moment’s notice; and the photographer-in-training is on scene, working the
lights, helping capture the moment. They are all critical to Addie’s success, even though
she is the artist that this business is built around.
• The Decision: Unfortunately, as you read earlier, Addie has a tough decision to make.
Circumstances have changed, and she needs to downsize by laying off one of her
workers. The question is: which one? Which one of the remaining four in your group
is the least important?
• Prove Yourself: This is your chance to prove your worth and value to Studio 1112.
Do some research; find out what makes you irreplaceable. Is it your level of education,
your tasks or your experience? Use the chart on the following page to organize your
argument. You will have half the class period to create an outstanding argument to
persuade Addie that you should stay.
Meanwhile, Addie, you need to do some research of your own. Using the URLs on the
next page, look up these individuals to get a feel for who you think is most important.
One of them has to go!
(continued)
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Complete the following chart using the appropriate website:
Within your group, assign each person to one of the following roles:
Camera and Photographic Equipment Repairers –
http://online.onetcenter.org/link/summary/49-9061.00
Administrative Assistant – http://www.bls.gov/oco/ocos151.htm
Administrative Services Manager – http://www.bls.gov/oco/ocos002.htm
Interior Designer – http://www.bls.gov/oco/ocos090.htm
Photographer (Addie) – http://www.bls.gov/oco/ocos293.htm
Photographer-in-Training – http://www.bls.gov/oco/ocos264.htm
Your Job
Your level
of education
Your
responsibilities
Your MOST
important
responsibility
Why Addie
needs you!!!
• Present Yourself: You will have the second half of class for presentations. Each member
will defend his or her job. Present your evidence! Prove your worth! In front of the group
you need to explain your worth and then await your fate. Addie, you will make the final
decision about which worker must go and announce it tomorrow, telling why in front
of the entire class.
• Studio 1112’s Fate: At the beginning of class, the “Addie” from each group will tell who
is being fired and why. When each “Addie” has spoken, the teacher will then inform the
class of Studio 1112’s fate. What will the effect of the lost member be? Truly what did
that individual contribute?
• Reflection: Although Addie was the boss, could she single-handedly run the business?
Look at the following work assignments. Who could best accomplish this part of the job?
Book an airline ticket
Find new clients
Listen to client wants/needs and find the
photo that meets those needs
See a different (possibly better) angle for
a photograph
Organize a show for Addie’s photography
Make sure Addie keeps all of her
appointments on time
Get the perfect lighting while Addie continues
to snap shots
Take that perfect photograph that captures
time and place forever
Take a moment to become Addie. Write an acceptance speech for a prestigious
photography award. Who will you thank now that you know what COULD be?
Who means most? What mundane jobs help you achieve these dreams?
If you were the boss, what are the top three qualities you would look for
in an employee?
PaThway:
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CASE STUDY 2
BIG MONEY MEDIA SHOOTS FOR THE STARS!
PaThway: Business Information Management
iNDUSTRy: Music and Entertainment
Project 2.1: Entertaining Risks
Topic: Insurance
page 47
Project 2.2: Mastering Mischief
Topic: Security Issues
page 53
Project 2.3: Should I Buy This Business?
Topic: Due Diligence
page 55
Project 2.4: How to Avoid a $24,000 Mistake
Topic: Credit Cards
page 57
Project 2.5: Track the Cash
Topic: Cash Flow
page 61
Project 2.6: Speaking the Language
Topic: Accounting
page 67
Project 2.7: In Concert With the Community
Topic: Benefit of Corporate Citizenship
page 69
Project 2.8: Designing a Space
Topic: Space Management
page 73
Name: ____________________________________________________Date: __________
iNDUSTRy:
Music and Entertainment
CASE STUDY 2
Next
▲
Big Money Media
Shoots For The Stars!
PaThway:
Review ★★★★
▲
An entertainment industry rising star, concert
producer Joe D. Damoni was named chief executive
officer of Big Money Media. He replaces former
CEO Earnest Troup, who left the company to
pursue other interests.
Company president and chairman of the board
Melissa Crobert announced the CEO change at
a news conference this morning at a major New
York City hotel. Later in the day, stock prices
began to rise at the announcement of the new
company officer.
Crobert said, “We’re counting on Joe Damoni’s
excellent business background and his experience
as a successful entertainment entrepreneur to increase
business partnerships, attract the latest and greatest performing artists, and restore
client and patron confidence.”
Damoni joined Big Money Media when the company recently purchased his
growing regional concert promotion business founded in 1993. His role will be to
revitalize Big Money Media’s aging outdoor venues and sagging ticket sales, which
have averaged a flat $2 billion annually since 2004.
Big Money Media is a megabuck promotion business that owns 30 outdoor
concert sites in the U.S., several sports teams in North America and nearly 200
major theaters and amusement parks in popular international vacation spots.
In the past few years, the company had fallen on hard times due to last-minute
cancellations by performers, legal disputes and negative publicity related to site
services and crowd behavior.
According to Damoni, “Big Money Media will grow again. We have a solid asset
base, little debt and a positive cash flow. That means we can borrow money on our
property, if needed, and we have money to pay our bills. We’re taking the steps
needed to improve our management and do more future-oriented business planning.
There’s every reason to expect that revenues will grow 10 to 15 percent or more
in the next couple of years.”
Damoni added that he is in the process of developing a marketing plan to secure
corporate support. He also is making contacts with agents whom he has relied on in
the past in order to engage quality entertainment. In addition, he is in the process
of hiring seasoned professionals who will assist him in creating a pleasing and safe
environment for fans.
“I predict that our upcoming concerts will attract thousands more fans, and the
increase in ticket sales will generate the revenue and investment needed to upgrade
our sites and grow our business. In fact, I’m developing a proposal to the board to
acquire other entertainment companies and venues that can produce profits for us,”
Damoni said.
Crobert concluded that “The board is 100 percent behind Joe Damoni, and Big
Money Media will again be the industry’s top entertainment company.”
Email to a friend
★
★
★
★★
★
★
★
★
Business Information Management
45
Name: ____________________________________________________Date: __________
iNDUSTRy:
Project 2.1: Entertaining Risks
Topic: Insurance
Introduction
When you look at Big Money Media’s internal memo – printed below – you will begin
to recognize that for every concert you enjoy, lots of folks have worked behind the scenes
to make it happen. For example, this staff memo is focused on the invitation. (At this stage
of the planning process for a concert that is open to the public, the topic would probably
be advertising and promotion.) Another major topic for preplanning that you will address
in part 2 is insurance.
Part 1:
INTEROFFICE MEMO
Date:
6/28
To:
Brad, Kristi, Randal, Eric & Jan (the team assigned to this event)
From: Rachel Tyson
Re:
Maddison Brody Event
Priority: High
At the end of this memo, you will find wording for the product invitation for the
Maddison Brody event. Please review it and let me know by next Thursday if
we should make any changes. The invitations will be mailed Monday, August 29.
Just a reminder regarding the items we discussed in our meeting earlier this
month that will be delivered in a package with the invitation. Deveraux of New
York, who is sponsoring the event, is providing a bottle of Mystify perfume and
Press cologne. Designer Henri Isvik has created stunning white silk ties and
scarves for the attendees to create their own look and become a visible part
of the classy-white theme of this event. The invitations will carry the same
gem-stoned letter, inspired by the “M” on Isvik’s white silk creations.
The Scarlatti Room needs the final guest list by the end of the month. We will
address the Scarlatti Room’s logistical requirements in next week’s meeting.
Glamour and music unite for the debut of
Maddison Brody,
Cadence Records’ newest recording artist.
Watch the stage melt with her soul-soothing melodies
Surrounded by the elegance and style of The Scarlatti Room.
Adorn yourself with the enclosed creations of Henri Isvik and his
Stunning silk designs, prepared exclusively for this white-themed event.
Join Maddison
At 8:00 p.m. on October 8
In the Scarlatti Room.
(continued)
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In the memo, Rachel Tyson, the project manager for Big Money Media, asked her staff
to review the invitation and suggest changes for this “by-invitation-only” concert. Write
copy to promote a concert that is open to the public. Include date, time, location and any
other details that would inspire a large audience to buy tickets and attend the concert.
Part 2:
While she was making final arrangements to send the invitations to the Maddison Brody
event, Rachel Tyson, the project manager had a request from Deveraux of New York,
the concert sponsor, asking for a copy of the cancellation policy for the event. They
asked her to deliver the policy in a face-to-face meeting with their CFO to discuss their
insurance concerns. She immediately contacted the only person she knew in the financial
management department to ask for guidance. She put Rachel in touch with the person in
charge of risk management for the concert who could provide the paper work. She also
advised her to get a general understanding of insurance so that she could inspire confidence
in the meeting with Devereaux’s CFO.
Use the following project to give you background for this assignment:
• Brainstorm some of the possible risks that would make a concert sponsor worry. List
at least 5 areas of concern.
(continued)
48 PaThway: Business Information Management
• Find information that you can use to match the 27 insurance terms on this page and
page 50 with a definition. Then write a paragraph to summarize the ideas that you
predict you’ll need in your meeting with the CFO. Include terms from the list that relate
to your brainstormed risks.
MATCH INSURANCE TERMS
Terms
Definitions
_____
1. Accident
A. Risk management plan that, for a price, promises
reimbursement in the case of loss.
_____
2. Adjuster
B. A demand by a person or business seeking to recover
a loss. May be made against an individual.
_____
3. Agent
C. Uncertainty of loss. This is used to designate an insured
or a peril insured against.
_____
4. Application
D. One who designs and sells contracts of insurance
on behalf of an insurer. He or she does this under
both statutory and common law.
_____
5. Benefit
E. Designed to pay for financial losses associated with
minor accidents as quickly as possible. Under this
system, your own insurance company will pay medical
expenses and lost wages caused by an accident,
regardless of who caused the accident. Not every state
provides this option, and systems vary from state to state.
_____
6. Bodily Injury
F. Reimburses you for your net loss should a performance
be cancelled, postponed, rescheduled or abandoned.
_____
7. Claim
G. The printed document issued to the policyholder by the
company stating the terms of the insurance contract.
_____
8. Collision
Insurance
H. Covers damages for all sums up to your policy limits
if an accident occurs with an uninsured or hit-and-run
motorist who is determined to be legally at fault.
_____
9. Comprehensive
Insurance
I. A dishonest act by policyholders to obtain payment
of a claim that would otherwise not be covered.
It might involve lying or misrepresentation
to an insurance company or its officials.
_____ 10. Deductible
J. An unplanned, unexpected, random event that occurs
suddenly and at a specific place.
_____ 11. Disability
K. Covers damage to another person’s property and/or
bodily injury as a result of the negligence of the insured.
This insurance provides coverage for either individuals
or businesses.
_____ 12. Effective Date
L. Insurance on which all required premiums have
been paid.
(continued)
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_____ 13. Event Cancellation M. The date when the terms of an agreement, such
Insurance
as a contract or insurance policy, will apply.
_____ 14. Fraud
N. A form on which an individual seeking insurance states
facts requested by the insurer. This information and
information from other sources determines whether the
insurer decides to accept the risk, modify the coverage
offered or decline the risk.
_____ 15. Health Insurance
O. The payment that a policyholder makes to own
an insurance policy.
_____ 16. Insurance
P. Amount you must pay before the insurance company
pays the remainder of each covered loss.
_____ 17. Lapse
Q. A provision in a policy that states the circumstances
under which an insurer may choose not to renew
someone’s policy.
_____ 18. Liability Insurance R. The part of an auto insurance policy that pays for the
repair of a car after a crash.
_____ 19. No-fault Insurance S. Procedure to minimize the adverse effect of a possible
financial loss. It involves identifying potential sources
of loss, measuring the consequences of the loss and
using controls to minimize actual losses or their
financial consequences.
_____ 20. Nonrenewal
Clause
T. Amount paid by an insurance company to a claimant,
assignee or beneficiary when the insured suffers a loss.
_____ 21. Paid-up Insurance U. This coverage provides benefits for sickness or injury.
Coverage includes losses from accident, medical
expense, disability or accidental death and dismemberment.
_____ 22. Policy
V. Coverage is terminated because of nonpayment within
a specified time period.
_____ 23. Premium
W. Coverage that pays for repairs to other people’s
property you damaged in an accident.
_____ 24. Property Damage
X. A representative of an insurance company who
determines the extent of the company’s liability for loss
when a claim is filed.
_____ 25. Risk
Y. The part of an auto insurance policy that covers
extensive physical damage, or the totaling or theft of
a car.
_____ 26. Risk Management
Z. A physical or mental condition that prevents a person
from performing one or more occupational duties
on a short-term, long-term or permanent basis.
_____ 27. Uninsured
Motorist
AA. Coverage that pays for damages like medical costs and
lost salary to others.
Part 3
Now that you’ve thought about insurance for Big Money Media, take a few minutes
to think about insurance for the car that you drive or want to drive as soon as you can.
Discuss the following situations with your group to identify the insurance coverage you
need to manage the risk(s) in each.
• You’re late to a concert, and the parking lot is full. The tickets cost $50, and you don’t
want to miss the opening. The closest parking place is on a side street on a hill, in
a residential neighborhood. In your rush to get to your seats, you forget to curb your
wheels. During the concert, the brakes fail. Your car rolls down the hill, flattens a fence,
demolishes a porch and comes to rest inside the dining room of a residence. Your car
suffers minor damage, but the fence and porch are total losses. Fortunately, no one
was at home.
• You stop to pick up a friend who lives in an apartment. You park your car in a space
that is partially under his neighbor’s balcony. The neighbor knocks a potted plant off
her balcony that hits and shatters your windshield.
• While you’re driving, a car appears from nowhere and sideswipes your vehicle. The
driver who hits you flees the scene, and the police haven’t found her. Your friend hit
the windshield because the car you’re driving doesn’t have a passenger-seat air bag.
He suffers a concussion and is hospitalized for two days.
• As you were turning into a parking lot, you stopped suddenly to avoid a pedestrian,
and the car behind you hit your car. You aren’t hurt, but your car’s gas tank is punctured.
A witness calls the fire department. The person driving the car that hit you has
no insurance.
• You’re late for a movie. As you speed around the corner at a blind intersection, you run
into a moving van parked in the street. Your car is damaged but the van is barely dented.
However, the impact of the collision topples some of the van’s contents. Several items
are broken, and one of the movers suffers two cracked ribs.
• While you’re driving, a car runs a red light and hits you broadside on the driver’s side.
The other driver is insured. You have cuts and bruises and are unable to go to school
for several days. Your friend who was riding in the passenger seat appears to have
no injuries. However, six months later she begins having back pains. Your doctor tells
her that the accident is indirectly responsible.
Share and compare your answers. Create a 30-second announcement that an insurance
company might use to motivate teenage drivers to adequately insure their cars.
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Name: ____________________________________________________Date: __________
iNDUSTRy:
Project 2.2: Mastering Mischief
Topic: Security Issues
Introduction
It doesn’t take much thought to know that any time groups of people gather security
is an issue. You may or may not have realized that providing security for events adds
to the cost. The management team of any business, including a concert production
company, is ultimately responsible for everyone’s safety and security. Performers,
patrons and coworkers on the production team and even insurance companies depend
on entertainment in a venue that is safe and secure. The human resources staff works with
a number of other departments, including business, financial management and accounting,
to have personnel and procedures in place and also stay within budget.
Concert Security
Complete the following assignment to identify what plans and procedures you need for
security at one of Big Money Media’s upcoming concerts. Assume that the provider will
be bonded and insured.
1. Assume the budget for the concert is $50,000. The financial oversight staff has
suggested that no more than 8% of the budget be used for security, a service that will
function for two hours before the doors open and continue until all patrons and staff
have left the parking lot. Security personnel are typically paid $12 per hour.
2. Create a security site plan for the concert. For each station, identify the number
of individuals required to adequately secure that location.
3. If the concert starts at 8 p.m., calculate estimated time requirements for each of the
stations. Express your estimates in person hours. Don’t forget to multiply if you’ve
assigned more than one person to a station.
4. Develop a list of questions to ask potential security providers that will help you
decide which to hire. Then identify areas where you may need to adjust plans.
Security Issues Beyond the Concert
As you considered security for a concert, you may have thought about security problems
that have made the news. You may not have thought about what those incidents mean
for the individuals who were featured on the wrong side of security. Explore some
of the consequences of being charged with or convicted of a juvenile crime.
(continued)
PaThway:
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1. Begin by defining the following terms. Use the information that applies to your state
when it differs from federal law.
• Juvenile records
• Sealed records
• Expunged or destroyed records
• Class A felonies
• Class B felonies
• Class C felonies
2. Discuss and note what happens to juvenile criminal records in your state and the
applicable age for individual options.
3. Identify and note circumstances that make it possible for a person to file a motion
asking a court to seal or expunge a juvenile criminal record.
4. Identify and note circumstances that would prevent a court from sealing or expunging
a juvenile criminal record.
5. Brainstorm and note ways in which having a juvenile record can have a negative
affect on a person in later life.
Name: ____________________________________________________Date: __________
iNDUSTRy:
Project 2.3: Should I Buy This Business?
Topic: Due Diligence
Introduction
When Joe Damoni joined Big Money Media, he immediately began working on a proposal
for the board to acquire other entertainment venues. He even indicated that he would
consider a diversified approach to acquiring businesses outside the entertainment industry
that would provide direct support for the company’s ongoing operations. He knew that
the board would expect solid information and a preliminary analysis.
Before buying a new business, he will need to conduct a due diligence investigation.
Due diligence refers to research and analysis to gather information before deciding to
purchase a company. Some sources refer to it as doing your homework. It does not
guarantee success, but by looking into the financial situation, legal obligations, customer
records and other documents of business, it is easier to see if buying the business is
a good decision.
Use the following websites listed and other information you are able to access to prepare
a list of questions to ask a specific business owner whose company you might consider
buying. Choose a business from the list of businesses for sale or one that you personally
choose. Share your questions with a partner. Refine the questions and put them in a format
that you can present to an acquisition team – a group of professionals who will be ready to
help you make a final decision to buy the business or not.
Due Diligence Resources
http://www.meritusventures.com/template_assets/pdf/diligence.pdf
http://www.annarborusa.org/business-accelerator/funding-incentives/pre-seedfund/due-diligence
http://www.duediligence.net/
http://business.lovetoknow.com/wiki/Questions_to_Ask_When_Buying
_a_Business
http://www.ehow.com/info_7756622_questions-ask-seller-small-business.html
http://ezinearticles.com/?Top-10-Questions-To-Ask-When-Buying-aBusiness&id=5183612
http://www.bizquest.com/resource/questions_a_buyer_should_ask_a_seller172.html
(continued)
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http://www.brighthub.com/office/entrepreneurs/articles/47100.aspx
http://blog.certifiedbb.com/2007/04/buying-business-questions-to-ask-seller.html
Businesses for Sale
http://www.bizquest.com/
http://www.globalbx.com/ http://www.businessbroker.net/
http://www.firstlist.com/
http://www.mergerplace.com/
http://www.smallbusinesssale.com/
http://www.usabusinessforsale.com/
http://www.homebusinessesforsale.com/
http://www.smallbusinessopportunity.com/
http://us.businessesforsale.com/us/search/Businesses-for-sale
Name: ____________________________________________________Date: __________
iNDUSTRy:
Project 2.4: How to Avoid a $24,000 Mistake
Topic: Credit Cards
Introduction
Your family is in fast-forward. The manager of a regional amusement park is a family
friend. He stopped by last night to say that the company that supplies and markets the
park’s most popular souvenirs on a contract basis had just closed its doors, no explanation.
Company staff just didn’t show up. The booths are dark. It’s early in April, the beginning
of the park’s busiest season. The manager wonders if your family would be willing to help
him out for the summer by contracting to supply and market T-shirts. He thinks there’s
about a 10-day supply of T-shirts at the park. For several reasons, including the fact that
you haven’t found a summer job that appeals to you, you’ve decided to go for it.
Because your turnaround time is so short, you’ve decided that you don’t have time
to take a loan from the bank. You’ll rely on credit cards to fund your start-up costs.
You think that it’s a good use of credit, or is it?
Complete this project to learn more about why and how you need to manage credit.
Part 1: The History of Credit
Start at the beginning: How did people in earlier societies pay for what they needed?
Put the following forms of payment in order, beginning with the earliest:
• Debit cards
• Paper currency
• Cattle and crops
• Precious metal coins
• Credit cards
• Cowrie shells
• ATMs
• Base metal coins
• Digital cash
(continued)
PaThway:
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Part 2: Background Information
1. Take notes on the information that your instructor gives you regarding credit use
in today’s culture. Then brainstorm answers to the following questions. List any
additional questions you’d want to explore before you commit to a final decision
to fund your business venture using credit cards.
• What do you need to know before you would choose to use credit?
• What are some advantages and disadvantages of buying on credit?
• How can you get a credit card?
• What types of credit cards are available?
• Where can you shop for a credit card?
• What do you need to know to avoid credit trouble?
2. Make a plan with your group to get information from the following sources to share
and compare with information from your classmates.
• Interview at least two people who use credit.
• Find and read at least two print or electronic articles about using credit.
3. Use what you learn to refine your answers.
Part 3: Analyze a Credit Purchase
1. Bring a newspaper or online ad to class for an item you’d like to buy. Then complete
the following sequence to help you decide whether or not to buy it and, if so, how
you would pay. You’ll probably want to use a credit cost calculator. Look for
one at http://www.bankrate.com/calculators/managing-debt/minimumpayment-calculator.aspx
• List options for how you might pay for it.
• How many hours would you have to work to pay for it? (Identify a source and pay
rate for your income.)
• If you buy the item on credit, how long will it take for you to pay it off if you make
only the minimum payment?
2. Describe in writing how you would justify making this purchase with your parents
or another responsible adult.
3. You’re ready to think now about financing and buying a car, for most of us a major
purchase. Review the online inventory of a local automotive dealer or the classified
section of your local newspaper to find a vehicle you’d like to own. Then look for
a favorable interest rate, and calculate monthly payments. The Internet may help
you find special interest rate offers. You may use the website that you used earlier
to determine a payoff time.
4. Now that you know a basic monthly payment for the car you want, check out
a sometimes-complicating factor. When you apply for credit, lenders will check
your FICO® score to see if you are a good credit risk. Check out your own FICO®
score on the estimator found at http://www.bankrate.com/brm/fico/calc.asp.
Part 4: Choose one of the following items, and prepare to debate the statement: This
is an item that would be wise to buy on credit. The value justifies the cost.
•
•
•
•
•
•
•
•
•
•
•
DVD player
Speakers for your car
Groceries
Concert tickets
Costume jewelry
Shoes
Digital camera
Vacation
Exercise equipment
CD
Others with the approval of your instructor
PaThway:
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Name: ____________________________________________________Date: __________
iNDUSTRy:
Project 2.5: Track the Cash
Topic: Cash Flow
Introduction
You have just been promoted from payroll clerk to senior accounting manager at Lakes
Region Advertising Services, a growing marketing business. The company provides various
marketing and advertising services to businesses in and around the Lakes Region. Some
of the services provided include media buying, marketing plans, graphic design,
copywriting and photography.
One of your new responsibilities is to track the cash flow for the business in order to help
the owner make decisions about spending. On the occasion that there is a negative cash
flow, Lakes Region Advertising Services has an account with a local bank to “borrow” the
money necessary to function for that month, but this is not an ideal solution. The owner
is concerned that the business isn’t making as much money as it should. He’s asked you
to review the cash flow for the past 6 months and make recommendations based on what
you learn.
Your Task
Use the income and expense information below to complete the monthly cash flow chart,
recording income and expenses, and carrying over positive or negative cash flow from
one month to the next.
MONTH 1
Income
Receive payment from clients for invoices:
Dani’s Donuts
$
$ 2,500
Jaspar, Franklin & Co.
$ 1,000
$ 2,000
Electric bill
$
300
Telephone bill
$
378
Monthly payroll
$ 7,000
Housekeeping service
$
250
Groceries
(weekly employee breakfasts)
$
450
Vending Machine stock
(sodas for employees)
$
96
Gift cards for employees’ birthdays
$
200
Office Supplies
$
75
$ 2,100
KNTW Radio
$
MGTHealthcare
$ 3,000
Outpatient Surgery, Inc.
Building rent
557
Gabinis Auto Sales
Process Concepts
Expenses
850
$ 1,000
(continued)
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MONTH 2
Income
Dani’s Donuts
$
Gabinis Auto Sales
$ 1,500
Expenses
Building rent
$ 2,000
Electric bill
$
285
Telephone bill
$
331
Monthly payroll
$ 6,300
$
250
Groceries
$
390
$
88
$
100
Television for waiting room
$
379
750
$
900
Process Concepts
$
750
KNTW Radio
$ 1,500
MGTHealthcare
$ 4,000
MONTH 3
Income
Dani’s Donuts
$ 1,500
Gabinis Auto Sales
$ 3,500
$
Building rent
$ 2,000
Electric bill
$
375
Telephone bill
$
410
Monthly payroll
$ 8,500
$
250
Groceries
$
375
$
100
$
75
New couch and end tables
for waiting room
$ 3,000
500
Process Concepts
$ 2,500
KNTW Radio
$ 1,850
MGTHealthcare
$ 3,000
$ 1,000
Wellsville Manufacturing
Expenses
$ 3,000
(continued)
MONTH 4
Income
Dani’s Donuts
$
Gabinis Auto Sales
$ 1,200
Expenses
Building rent
$ 2,000
Electric bill
$
462
Telephone bill
$
480
Monthly payroll
$ 8,250
$
250
Groceries
$
415
$
95
$
100
Office supplies
$
217
500
Process Concepts
$
500
KNTW Radio
$ 1,000
MGTHealthcare
$ 1,000
$ 1,000
$ 3,500
MONTH 5
Income
Dani’s Donuts
$
Gabinis Auto Sales
$ 1,200
Process Concepts
$
Expenses
Building rent
$ 2,000
Electric bill
$
475
Telephone bill
$
411
Monthly payroll
$ 8,200
$
250
Groceries
$
375
$
120
$
100
Company appreciation party
$ 1,000
500
500
KNTW Radio
$ 1,000
MGTHealthcare
$ 1,000
$ 1,000
$ 3,500
(continued)
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MONTH 6
Income
Dani’s Donuts
$
Gabinis Auto Sales
$ 5,000
Expenses
Building rent
$ 2,000
Electric bill
$
350
Telephone bill
$
300
Monthly payroll
$ 7,500
$
250
Groceries
$
322
$
85
750
$ 2,000
Process Concepts
$
900
KNTW Radio
$ 2,200
MGTHealthcare
$ 1,500
$ 2,000
$ 4,500
Month 1
Starting Cash
Month 2
Month 3
Month 4
Month 5
Month 6
-0-
income
(money received)
Total Cash Received
Total Cash available
Expenses
Total Expenses
Ending Cash Balance
(total cash available
minus total cash spent)
(continued)
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1. What is your ending cash balance?
2. Reviewing your chart, summarize why you think the owner wants help with
managing cash flow?
3. Did the business experience all positive cash flow? If not, what happened? How
many months reported a positive cash balance? How many months reported
a negative cash balance?
4. The owner has asked you for recommendations to keep the cash flow positive.
What do you recommend? Are there areas that could be cut? Write a recommendation
to the owner regarding adjustments from this point forward. Be specific!
Name: ____________________________________________________Date: __________
iNDUSTRy:
Project 2.6: Speaking the Language
Topic: Accounting
Earnest Troup, the former CEO of Big Money Media, had reached a point in his career
where he wanted to start his own venture. He very much appreciated what he had learned
in the executive suite, but now, as a new entrepreneur, he realized that he would no
longer be able to walk to an office down the hall to get answers for his accounting
questions. He wasn’t at all sorry for his decision, but recognized a new area where he
needed to get up to speed. His dream was to eventually grow the company to establish
an accounting department. Until that day, however, he was the one in charge. Working
with a public accountant was the answer.
Because Earnest, Ernie to his friends, was borrowing money to start his business and also
working with a couple of silent partners, his lender and the silent partners had asked for
information that he wasn’t able to provide. He needed help from his accountant and had
made an appointment. He knew that the accountant’s bill would be directly related to the
length of the appointment and at this point, he was all for keeping costs as low as possible.
One way to minimize the time – and the bill – was to go in with carefully organized and
specific questions.
Find a definition for each of the following terms, and then write a question that Ernie
could ask his accountant in order to understand and communicate the meaning of the term:
• Asset
• Liability
• Net worth
• Start-up costs
• Interest
• Total expenses
• Variable expenses
• Fixed expenses
• Gross income
• Cash flow statement
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Name: ____________________________________________________Date: __________
iNDUSTRy:
Project 2.7: In Concert With the Community
Topic: Benefit of Corporate Citizenship
Introduction
One of the problems for Big Money Media is negative publicity in the local media. In order
to regain goodwill in the community, the company has decided to choose a deserving
local charity and raise money for a sizeable donation. Joe Damoni, the new CEO, believes
a benefit concert would be beneficial for both the charity and Big Money Media. You have
been chosen to plan and coordinate the benefit concert. Damoni believes the event should
be targeted for young adult audiences. He wants to review your proposal for this project
BEFORE you implement your plan.
Your Task
You have a budget of $30,000 to sponsor the event, and the rest of the costs must come
from sponsors and ticket sales. The money left after expenses have been paid, or the
“profit,” will be your donation to the deserving charity.
Part 1: Preliminary Report to CEO
1. Please provide the following information in the preliminary report:
• The charitable organization chosen, why you chose it and a little background or
history about the organization
• An explanation of how supporting your chosen charity will help the company
foster goodwill for the company in the community
• Musical guest possibilities
• Venue, complete with seating numbers and venue concession information
(How many concession locations? Is it rented concession space or contracted
concession space?)
• Possible sponsors and how you will motivate them to participate
• Estimated budget with a break-even analysis. Use the following chart:
(continued)
PaThway:
69
EvENT BUDgET
item
Estimated amount
Musical Group Cost
Venue Rental
Event Insurance
Concessions
Advertising
Souvenirs
Subtotal
(Add all above.)
Less Budget Allocation
- $30,000
Total Estimated
Expenses
2. Given the ticket price of $25.00 per person and your total expenses, how many
tickets must you sell in order to break even with the event?
Part 2: Organization and Implementation
Now that your preliminary budget is in place, you’re ready to proceed.
1. Break down your benefit concert into tasks.
2. Create a timeline to complete all tasks.
3. Put together a sponsorship package for potential sponsors:
• Design different levels of packages dependent upon the amount
of money contributed.
• Create catchy names for each sponsorship level.
4. Come up with a ticketing plan:
• Will you use in-house ticketing, a ticketing agent like Ticketmaster or a combination?
• How will you design and produce the ticket so that people cannot forget it?
Create a ticket prototype that would be worthy of a souvenir.
5. Develop a promotional campaign for your concert:
• Create a slogan.
• Create a logo for merchandising.
• Design an advertising campaign to promote the concert.
6. Design a security plan for the event:
• Number of gates open
• Number of people working each gate
• Number of event workers, in-house security and staff
• Contraband policy
• Rainout policy and/or ticket return policy
7. Develop a secure method of collecting money from ticket windows from “day of” sales:
• One person in charge
• Secure collection of money
• Place to count money
• Number of security people in place while you count
• Required documentation
• Escorted deposit to bank
• How you will reconcile and verify ticket sales with money collected
8. Create external merchandise products for souvenirs:
• Make a list of at least 25 possibilities.
• Narrow down to 10 possibilities.
• Produce one of the ideas as a prototype.
9. Write a news release for the local media (local entertainment blogs, newspapers, radio
stations, TV channels and cable companies) outlining all details of the concert event.
Also develop social media posts to create buzz about the event.
10. Develop a newsworthy way to present the check to the recipient.
Part 3: Results
Use your estimated budget and the following information to complete the actual budget
and final summary charts on the next page to close out your benefit concert. Assume that:
• Actual expenses were 15% above each projected expense.
• The venue sold out and the ticket price was $25.
• Each person spent an average of $10 at concessions.
• One-half of the attendees spent an average of $20 each on merchandise.
(continued)
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FiNal SUMMaRy
aCTUal EXPENSES
item
item
actual amount
Musical Group Cost
Total Ticket Sales
Venue Rental
Total Concession
Sales
Event Insurance
Total Merchandise
Sales
Concessions
Advertising
Total Sponsorship
Income
Souvenirs
gross Money
Collected
(Add above totals.)
Subtotal
(Add all above.)
Less Budget
Allocation
Total actual
Expenses
- $30,000
Less Total
Actual Expenses
Net Total Donation
to Charity
actual amount
Name: ____________________________________________________Date: __________
iNDUSTRy:
Project 2.8: Designing a Space
Topic: Space Management
Introduction
The event coordinator for one of Big Money Media’s upcoming concerts has asked your
administrative support department to produce a floor plan for the indoor arena. Do a rough
preliminary sketch, and use an electronic design program for the finished sketch if one
is available to you. The business department wants to make sure that the site request
doesn’t cause the project to go over budget. This venue provides cost options related
to area and facilities used (elevators, restrooms, concession booths, etc.), not a flat fee
for available space.
Your Assignment
Part 1: The coordinator has given you her request for an ideal floor plan. If costs exceed
budget, she’ll need to make adjustments. Use the following information to create a scale
drawing of the main floor of the arena.
• The arena floor is 200 feet from the stage to the first row of permanent seating
in the back and 160 feet between the first rows of permanent seating on each side.
• The stage dimensions are 40 feet x 60 feet x 5 feet.
• The seating area covers approximately 40 feet of floor space on each side and twice
that area in the back.
• The outer area behind the side permanent seating is approximately 35 feet wide.
• The outer area behind the stage and back permanent seating is approximately
60 feet wide.
• There is an area in each corner of the outer space, behind the seats, that can be used
for concessions.
• Public restrooms are located in the outer space behind the back seating area and also
on each side, about midway between the stage and the back.
• The area behind the stage has flexible space that can be configured with semi-portable
partitions to accommodate specific requirements for a particular event.
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After you complete the drawing, calculate the area of each of the following spaces:
• The arena floor:
• The dressing rooms:
• The green room:
• The on-site production office:
Part 2: Now that you have the basic plan, you’re ready to customize and identify space
for this concert.
• The loading dock and service entrances are one level below the main floor. Locate
where you would place service elevators the day of the concert. Assume that there are
multiple elevators and your decision will be to choose which one(s) are to be used for
this event.
• Identify where and how you would configure space for the following:
- Two large dressing rooms for the opening act performers
- A dressing room for the star
- The green room
- A production office to provide business services
- Which concession areas you will open
• Indicate which entrances attendees will use and where you want to take tickets.
Part 3: Note suggestions for adapting the space, based on the following considerations:
• The total fixed-seating capacity is 4,500. Is it possible to close some seating sections for
this event and move the stage? (For each section of seating that you eliminate, you can
move the stage forward 30 feet. You’ll reduce the seating capacity by 600 by closing
one section on each side, 300 per section. The maximum number of sections that you
may close is four, two on each side.)
• Are there enough restrooms to accommodate this number? Will you need to request
portable units?
• How many exits will you need and which ones do you recommend using?
• How many concession areas will you need?
CASE STUDY 3
GROWING THE COFFEE CARAFE
PaThway: Human Resources Management
iNDUSTRy: Food
Project 3.1: Find the Best Candidate
Topic: Interviews
page 79
Project 3.2: Protecting Your “People Investment”
Topic: Staff Retention
page 83
Project 3.3: Dealing With Deception
Topic: Performance Review
page 85
Project 3.4: What Kind of Dollars Do You Really Take Home?
Topic: Payroll Deductions
page 87
Project 3.5: Real-World Ethics
Topic: Employee Pilferage
page 91
Project 3.6: Mystery Shoppers
Topic: Quality Service
page 95
Project 3.7: Frequent Frother
Topic: Customer Loyalty Program
page 97
Name: ____________________________________________________Date: __________
iNDUSTRy:
Food
CASE STUDY 3
CHAPTER THREE
Growing The
Coffee Carafe
In just a few short years, The Coffee Carafe had grown from a one-store coffee shop near
a college campus to a multistore corporation with locations in major cities and college towns
throughout the Midwest. The expansion was funded both by sales growth and some
conservative bank loans. However, fast growth had come with some fast-growing problems.
The company’s strengths remained the same. Stores were located in areas that would attract
busy singles and couples of all ages, a growing demographic. Sales figures and marketing
research indicated that the products were still appealing. Customers could count on organically
grown, freshly made coffees and food, plus fun personal and gift items that were provided in
a friendly, pub-like environment.
However the company’s founders had not anticipated having to deal with growing problems.
• Since the beginning, The Coffee Carafe had averaged a steady 12 percent annual
growth rate, till now. Expenses were increasing even faster. With decreasing profits,
management would have to cut corners. If so, would customers leave? Would investors
decide not to lend The Coffee Carafe any more money, fearing the
company wouldn’t be able to pay back its loans?
• Annual employee turnover rates in the retail industry are 31 percent on average.
A few years ago, when The Coffee Carafe had fewer locations, turnover statistics were
lower than average. Turnover now topped 50 percent. More and more
management time and dollars were spent training workers who left after just
a few months. Again, what was happening? How could management deal more
effectively with the problem?
• On top of that, competition was growing. In fact, some competing coffee companies
were parking their stores either across the street or down the road from city-based
outlets of The Coffee Carafe. What could be done to keep regular customers and attract
new ones whose purchases would fund future revenues?
Opportunities to grow nationally and internationally will not happen unless management
initiates some changes. An outside business consultant recommended a first step in the
turnaround process: to develop and implement a systemwide hiring, orientation, training and
incentive program to reduce turnover. Her conclusion was that the future success of
the company would depend on investing in quality people who can play a major role in
restoring the company’s financial health.
PaThway:
Human Resources Management
77
Name: ____________________________________________________Date: __________
iNDUSTRy:
Food
Project 3.1: Find the Best Candidate
Topic: Interviews
Introduction
Owning a business like The Coffee Carafe means that interviews for prospective employees
will take place frequently, as turnover in this type of job is high. Practice this process from
the perspective of a person preparing for an interview.
You have an outstanding résumé and a GPA that is off the charts, plus you’re drop-dead
gorgeous – all the ingredients that will allow you to walk into any position you want. The
human resources department and all the staff will welcome you with open arms, right?
Maybe you should take another look at what it takes to be selected for your dream job.
All of those attributes are a great beginning, but you’ll need to present yourself well
in an interview for most jobs.
An interview begins before the interview. Careful preparation is key. Take a look at what
else an applicant needs to do to get the best job offer.
• Do your homework. Learn all you can about the company or organization.
• Know exactly where you need to be and how you’ll get there, including where you will
park if you drive. Try out your plan at least one day before your appointment.
• Arrive 5-15 minutes early. Allow time for unexpected delays.
• Be prepared with extra résumé copies, notepad and pen.
• Plan what you will wear. That means that you’re dressing for the interview, not the
position. Some experts say to dress slightly above the standard expected for the position
you hope will be yours. How you look has everything to do with the first impression you
make. You probably have about 30 seconds to make that impression.
• Have references available. Ask for permission before you provide a name.
• Practice the manners and behavior you will use so that it will come naturally.
Make eye contact.
Speak with an appropriate voice – not too loud and not too soft.
Smile.
Shake hands confidently but not aggressively.
Your Task
Although you may not be ready for an interview now, when you are you’ll be glad that
you paid some attention to the issues. Use this project as a way to think more about how
some of those issues come into play. Begin by reading each of the three vignettes and the
Job Interview Scoring Guide. Pay special attention to the process that you will use to score
each of the applicants in the vignettes. Discuss your results and ideas before writing a
recommendation. If you recommend selecting an applicant whose score isn’t the highest,
be ready to justify your reasons.
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Applicant 1
Thomas Allen Fitzpatrick III came with multiple copies of his résumé, wearing a shirt
stained with coffee and a little perspiration because he was nervous. He adjusted his tie
and straightened his jacket as he walked confidently into the conference room. After he sat
down, he immediately had an opportunity to tell what he wanted to about himself. He said
that he was born and raised in Chicago. “My mother still lives there, and I think I would
like this job because it’s the sort of thing I’m looking to do. I’d like to work here and make
money doing sales. I’m a people person and I like interacting with people. I sold stereo
equipment before, and I know that I could really contribute to your company selling …
you know … your product.” One of the interview panel asked him what exactly he knew
about the company and the product. Thomas said, “I know that you make and sell motors
for oil drilling machines. And it’s something I’d like to do.” Thomas was then asked to
describe his greatest strength and his biggest weakness. He said, “My biggest strength is
that I’m a people person. People like me, and I like them. They trust me. I think it’s what
makes me such a good salesperson. My biggest weakness is that I’m a perfectionist. I work
too hard a lot of the time, and if it’s not exactly perfect, I’m not satisfied. I’m my own
hardest critic.” The interview team thanked him for coming in and told him they would
have a decision within the next week.
Applicant 2
Salleigh Winston rushed into the reception area 15 minutes after her interview was
scheduled. She apologized to the waiting group and explained that there was an accident
that had delayed traffic. Although she knew that her hair and makeup needed attention,
she felt that it was better not to make the interview panel wait longer. When she was asked
to tell about herself, she said that because her father was in the military, she had lived all
over the United States and in Germany and Japan. “I speak four languages and spent a
great deal of time working with large property owners in Oklahoma, Texas and western
Kansas in my last work assignment. The reason I’d like to work with your company is
because even though it’s small, it’s one of the fastest-growing companies in what is
becoming a very important niche. Last year alone, your sales to large property owners
with oil wells on their land showed an increase of 15 percent. I think that’s just the
beginning. I believe I can use my already-established relationships to help you take
your motors to the masses and make them the number one oil pump motor in the
United States.”
The panel was impressed with the fact that she had done her homework and invited her
to describe more details about her ideas for a sales strategy. She left copies of her résumé,
carefully organized in blue presentation folders with the cover sheet visible under the clear
plastic cover. They shook hands all around. Salleigh left, stopped at a coffee shop to write
notes to say thank you to each person on the panel and dropped them in a mailbox on her
way home.
80 PaThway: Human Resources Management
Applicant 3
Nancy Torne-Pantz sat in the quiet reception area whispering her power words to herself
and waited to be called into the conference room. She knew she wasn’t the most qualified
for the job, but as far as she was concerned, her experience with cattle on her parents’
ranch in Texas made her an authority on four things: land, cattle, oil wells and what makes
people tick.
She was smoothing the skirt of her tailored silk suit when the receptionist told her that the
interview panel was ready for her. As she walked into the room, she said, “Hi. I’m Nancy
Torne-Pantz, and you don’t need to bother looking any further. I’m the woman for the job.
Now I know I’m not the most qualified person for the job, but let me tell you that I can
do it. I know I can. I’m from Texas. I know the land. I know the people, and I know about
oil wells. It makes sense then that I know about oil pump motors.” Nancy then told the
group that she would leave her résumé, but warned them that her previous experience
was not related to this position. She felt that it wouldn’t matter because she was obviously
so well-suited for the job.
(continued)
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Job Interview Scoring Guide
Name of Applicant:
Position:
Areas for
Consideration
Needs
Improvement
Adequate
Superior
Responsibility
Comes late with
no résumé or
references.
Comes on time
with résumé.
Comes early
with résumé.
Preparation
Has no information
about the company
or the position.
Has some idea
of what the
company does.
Has read and
reflected on
company; can
respond to questions
with relevant ideas.
Appearance
No attention to
dress or grooming.
Dress is appropriate;
grooming is lacking.
Dress and grooming
are appropriate.
Attitude
Passive and
detached.
Interested but not
focused on issues
that matter.
Interested in the
position and
focused on
relevant issues.
Responses
Yes and no or
short answers.
Well-crafted
responses that
sound rehearsed.
Listens, reflects on
the question and
responds with
confidence;
substantial ideas.
Scoring Process
For each applicant, circle the level in each area that most closely describes the applicant.
Using the following numerical rating, total the points for each. Superior = 3; Adequate = 2;
Needs Improvement = 1. Use the results to write your recommendation for which applicant
to hire. Justify your choice by referring to both the numerical results and relevant details
from the applicant’s description.
Name: ____________________________________________________Date: __________
iNDUSTRy:
Food
Project 3.2: Protecting Your “People Investment”
Topic: Staff Retention
Introduction
You read in The Coffee Carafe case study that a consultant recommended developing and
implementing a program to reduce employee turnover. Although the recommendation
was comprehensive and included attention to each phase of the employment cycle, the
management team decided to begin with an incentive program to reward and motivate
good employees. They know that the “institutional memory” these folks contribute cannot
be easily transferred in written procedures and official documents. As a result, when good
employees leave, the costs are great, both in dollars and in the time that it takes a new
employee to reach a comparable level of skills, intuitive sense and judgment.
Your Task
Before the management team can make decisions about and implement an incentive
program, they need to evaluate costs. The team would like a two-tiered proposal. The
thought is that one of the two tiers might be implemented for all staff, according to their
length of employment. The second tier would offer bigger incentives for longer service.
If the costs for that tier are too great, they would take a more modest approach. Develop
a proposal that you, as a human resource manager, believe would build staff commitment
and loyalty. Before you begin, assume:
• The salary and benefits package is competitive.
• The company leadership team regularly shares information and results with employees.
• A significant number of leadership team members routinely recognize individual efforts
with specific feedback that goes beyond the more trivial “Great job” or “Thanks for
your effort.”
Some ideas to consider for your proposal:
•
•
•
•
•
•
•
•
•
Time off
Job sharing
Telecommuting
Flextime
Office space
On-site child care
Personal shopping service
Preferred parking
Others
(continued)
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1. For each item that you include in your proposal, add a symbol to indicate the
level of financial commitment that it would require. Add a key to explain your
coding system.
2. Share and compare your proposal with at least one other group. Revise one of the
proposals to include the best ideas from each, being careful not to fragment the
overall structure of a unified proposal. Then submit your revised work to share
with the class.
Name: ____________________________________________________Date: __________
iNDUSTRy:
Food
Project 3.3: Dealing With Deception
Topic: Performance Review
Introduction
Aimee Buwalda had been celebrating her latest business success. She had started with
a business plan and filed all the necessary paperwork to begin her own start-up bakery
as a sole proprietorship to supply muffins and cookies to neighborhood coffee companies.
She wanted her products to be known for being fresh and tasty as well as using healthy
ingredients like products at The Coffee Carafe, where she used to work. She used industry
resources to recognize that timing is everything for delivering fresh baked goods. Her plan
had worked! She had so many orders that she couldn’t continue as a one-person business.
She decided to use her talents and skills in production and hire a delivery person.
Like The Coffee Carafe, she had carefully interviewed five applicants for the position.
She felt totally happy with her selection process. Colton Bechelmeyer seemed to have an
impeccable work ethic, and she felt she could trust him in an unsupervised role. Aimee
was happily managing production and record keeping when she began to notice a gradual
drop in revenue from two of her locations. She had chosen all of her locations carefully
based on traffic patterns. She had contracted with two assisted living facilities to provide
healthy snacks and fresh baked goods for an aging population that had money to spend,
but no transportation. Early on, revenue from those two locations exceeded her
expectations and had even grown steadily.
Because she was puzzled, she decided to make some unannounced random visits to the
two locations. She was horrified to find stale cookies, muffins with mold and pastries that
she knew had come from her ovens more than two weeks before. When she spoke with
several of the residents, she realized that no one had seen her route driver for at least two
weeks. Now on a mission, she stopped by the student union near one of her highestproducing locations and found her route driver with a group of students playing video
games. Not wanting to create a negative scene on the spot, she returned to her office,
marked her calendar to make repeat visits next week on Colton’s scheduled delivery dates.
Following those visits, that included more conversations indicating the same results, she
wrote up her observations and e-mailed Colton asking for a meeting the following day.
(continued)
PaThway:
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Your Task
Work with a partner, who will assume the role of Colton in the following official written
performance review. As you discuss the issues, maintain a respectful attitude toward Colton
as a person, while being explicitly clear about the need to create an action plan to remedy
the situation.
TASTES THAT REFRESH
Healthy and Fresh Baked Goods
Written Performance Review
NAME Colton Bechelmeyer
DATE January 20, XXXX
POSITION Route Driver
DATE IN POSITION June 5, XXXX
SUPERVISOR Aimee Buwalda
LOCATION Various
Description of Concern (Performance Improvement Plan areas currently needing your attention and
positive response):
1. Performance of Duties. For the past three months, revenue from two of our locations has been
declining. Site visits produced the following observations in each location: stale cookies, muffins
with mold and pastries that were dry and crumbling.
2. Work Agreement: On both January 5 and 12, XXXX, you were observed during work hours,
in uniform, playing video games in the student union.
3. Attitude. When interviewed, seven different individuals in the assisted living facilities
reluctantly reported that when they had seen you in the past, you ignored their greeting
and blocked the entrance to the coffee lounge with your supply cart.
Regular follow-up and, if needed, adjustments to the plan will occur at weekly intervals in face-toface meetings. Following the successful completion of this plan and the ongoing successful
maintenance of your performance, you will again be eligible for a base salary increase.
ACTION PLAN FOR EACH PERFORMANCE IMPROVEMENT AREA
In order to improve, I will:
My supervisor will:
This performance change will be measured by:
______________________________
Employee Signature
_______
Date
________________________
Supervisor Signature
_______
Date
Your signature acknowledges receipt of this document and does not necessarily indicate agreement. Please add
additional pages or pertinent comments, if necessary.
Name: ____________________________________________________Date: __________
iNDUSTRy:
Food
Project 3.4: What Kind of Dollars Do You Really Take Home?
Topic: Payroll Deductions
Introduction
JBC Manufacturing Company produces and distributes a complete line of carryout bags and
supplies for the restaurant business, including The Coffee Carafe. The company specializes
in bags that have an extra-wide handle for easy loading, can be made in custom sizes and
colors, and are grease and moisture resistant. The management team is keenly aware that
a package is the first image a customer sees. The company views its product as more than
a food carrier. It is a product line that helps restaurants with indirect marketing.
At JBC, the payroll clerk is responsible for paying employees in an accurate, timely manner.
The work involves compiling and processing time sheets necessary for a semimonthly
payroll. Although some businesses have a software program for employee time records,
JBC currently uses paper. Employees fill out weekly time sheets that need to be verified.
The clerk usually enters information from the time sheet into a software program, but
checks each sheet for accuracy. Before paychecks are written, the payroll clerk must
compute employees’ gross pay and net (take-home) pay. The payroll clerk also must
be able to explain to employees how their net pay has been calculated even though
the printout is computer generated.
Congratulations! You have just been hired as a JBC payroll clerk. Complete the following
work sheet for three JBC employees.
JBC Employees
Fred Charles
Customer Support Clerk
$10 per hour
Steve Fisher
Production Supervisor
$23 per hour
Ian Goode
Truck Driver
$18 per hour
(continued)
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PAYROLL WORKSHEET
Name: _______________________________ Social Security Number: ____________________
Job Title: _________________________________________ Salary: _______________________
1. Regular weekly pay is $___________ an hour X _______ hours worked.
The employee’s gross pay is ____________.
2. Social Security withholding tax is 4.2% of the employee’s gross pay.
3. Medicare withholding tax is 1.45% of the employee’s gross pay.
4. State income tax withholding is _____% of gross pay.
5. Estimated federal income tax withholding is 20% of gross pay.
6. Net pay is _____________. (Compute below or use a calculator.)
PAYROLL WORKSHEET
Job Title: _________________________________________ Salary: _______________________
PAYROLL WORKSHEET
Job Title: _________________________________________ Salary: _______________________
Net Pay
Federal
State
Medicare
Social Security
Gross Pay
Job Title
Hours Worked
Employee
Pay / Hour
Fred Charles
Steve Fisher
Ian Goode
PaThway:
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Name: ____________________________________________________Date: __________
iNDUSTRy:
Food
Project 3.5: Real-World Ethics
Topic: Employee Pilferage
Part 1: Make Hard Choices
One of your coworkers at The Coffee Carafe is your best friend, Sandy. Sandy is a hard
worker who prepares the food items for display and sales. Your company philosophy
is to only sell food that is presented in good condition with no visible flaws. Flawed food
is set aside so that employees can take the “mess ups” home for personal consumption.
You notice that Sandy intentionally “messes up” three or more muffins each night she
is on shift. Are Sandy’s actions considered stealing from the company? How should you
handle the situation?
Part 2: Analyze Costs
You are compiling your weekly report. You record gross sales of $25,873. From those sales,
you estimate the cost of goods sold (CGS) to be $7,137.00. An actual check of inventory
calculates your actual CGS to be $8,935.00.
How much of a shortage does your CGS reflect?
How can you explain the difference in estimated CGS and actual CGS?
If 60%-75% of a business’s losses come from employee pilferage, is The Coffee Carafe’s
weekly loss greater than, equal to or less than the 60%-75% national average?
If you currently work at a place of business, have you noticed employee pilferage?
If yes, describe the situation. Is there something you can do about it?
(continued)
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Part 3: The Inventory
As the inventory control manager of the coffee shop, you are responsible for ordering
supplies. You know there are many items that you must keep on hand in large quantities,
and you place an order for these items each week. Given the information on the chart on
the next page, determine the quantities you are to order this week and their prices.
Part 4: Summarize Your Thoughts
If you were in charge of hiring and training employees for The Coffee Carafe or another
food business, how would you address the problem of employee pilferage before it
happened? Write a paragraph that might be included in either a conversation with a new
employee or in a printed handbook for staff. Try to make your message positive, but also
communicate facts and figures to make your point.
Part 3: The Inventory
Item
Quantity
Needed in
Inventory
Quantity
on Hand
Italian Roast Coffee Beans
100 lbs
20 lbs
50 lb bags
$297.50
Hawaiian Blend Coffee Beans
150 lbs
10 lbs
50 lb bags
$395.75
Organic Blend Coffee Blend
150 lbs
25 lbs
50 lb bags
$263.30
Arabica Coffee Beans
200 lbs
50 lbs
50 lb bags
$315.50
Expresso Roast Coffee Beans
200 lbs
10 lbs
50 lb bags
$245.25
Vanilla Flavored Syrup
14 bottles
2 bottles
1 case =
6 bottles
$59.70
Caramel Flavored Syrup
20 bottles
3 bottles
1 case =
6 bottles
$65.70
Mint Flavored Syrup
8 bottles
3 bottles
1 case =
6 bottles
$65.70
Mocha Flavored Syrup
10 bottles
4 bottles
1 case =
6 bottles
$71.70
Whole Milk
150 gallons
5 gallons
Exact
amount
$2.10/gal
100 gallons 10 gallons
Exact
Amount
$2.10/gal
Skim Milk
Quantity
Needed
Quantity
Shipped
in Units
Quantity
of Units
Needed
Price
per Unit
8 oz logo cups with lid
2500
300
1 case =
1000 cups
$50.00
3000
400
1 case =
1000 cups
$60.00
2500
200
1 case =
1000 cups
$70.00
Blueberry Muffins
200
10
1 dozen
$28.95
Apple Cinnamon Muffins
150
3
1 dozen
$28.95
Almond Pistachio Biscotti
170
30
1 case =
24 pieces
$19.95
Chocolate Biscotti
250
25
1 case =
24 pieces
$19.95
Total
Price
Subtotal
Tax 8.75%
Shipping 5% of Subtotal
Total
PaThway:
93
Name: ____________________________________________________Date: __________
iNDUSTRy:
Food
Project 3.6: Mystery Shoppers
Topic: Quality Service
Introduction
You read about how The Coffee Carafe realized that hiring and keeping high-quality
employees affects business results. Richard Hausemen, Chief Financial Officer of Cyndee’s
Creamy Custard, another food retail business that sells frozen custard, just learned that a
new competitor is opening a few blocks away and will provide mostly the same products.
He knows that to keep Cyndee’s business competitive and attract new customers, he needs
to pay close attention to every detail of the operation. In his last trade publication, he read
about businesses using mystery shoppers to improve customer satisfaction, which impacts
sales and profitability.
He contacted Coni Wahl, a representative of Secretly Shopping, Inc., to explore the
possibility of using mystery shoppers to make sure that customers were having positive
experiences. Coni made sure that Hausemen knew that their work could be one important
part of an operational improvement program. They could provide important research, but
he would need to establish procedures to deal with the information in order to get the best
results. Together they developed a list of concerns.
Your Task
Use the following list to create a reporting form that mystery shoppers could use
to evaluate the quality of service as a retail food customer.
• Parking
• Employee courtesy: friendliness, body language, facial expression
• Atmosphere: lighting, smells, use of color
• Cleanliness
• Clutter
• Speed of service
• Order accuracy
• Quality of food
• Serving size and proportions
• Correct change
Make arrangements to use your reporting form to evaluate a visit that you make with
a partner to a food service business. Discuss the experience. Then share and compare with
others from your class. Write a paragraph to summarize how using mystery shoppers might
be used to improve customer satisfaction and how customer satisfaction can impact sales
and profitability.
PaThway:
95
Name: ____________________________________________________Date: __________
iNDUSTRy:
Food
Project 3.7: Frequent Frother
Topic: Customer Loyalty Program
Introduction
The Coffee Carafe, as you know from reading the case study, is a regional chain of coffee
shops that has been highly successful because it originally offered a unique product
in communities that had not had access to specialty coffees. However, the company
is beginning to feel the squeeze of competition from national coffee company chains.
The national chains have greater overall name recognition and are beginning to place
stores in close proximity to the local outlets of the more successful Coffee Carafe locations.
The marketing department has launched a major advertising campaign emphasizing the
unique character and consistently high quality of this smaller company’s stores and
products. As a result of the increased advertising budget, the individual sites are seeing
an increase in the number of new customers visiting their shops. Even so, the foundation
of The Coffee Carafe business is still repeat visits of the loyal customers who identify with
The Coffee Carafe as their own hometown coffee store. The owners are now realizing that
they need to begin communicating their appreciation to their current customers and
encourage them to remain loyal as a next step in their marketing campaign.
The marketing department is encouraging the owners to initiate their own version of
a customer loyalty card. They will call it their “Frequent Frother” reward system. Instead
of issuing Frequent Frother cards, which many customers find irritating, they will have
a simple application process, and then the customer will be assigned a four-number PIN.
When customers reach the point of paying for each purchase, they will be asked if they are
members of the Frequent Frother reward system. If the answer is yes, they will be asked
for their PIN number and it will be entered into the computerized cash register at the point
of sale. The computer then keeps track of the number of beverages purchased over time.
Every 12th beverage will be free to the customer. The cash register will alert the sales
associate when customers are eligible for their free beverage. If a customer has forgotten
his or her PIN, the sales associate can ask for the customer’s telephone number and type
it into the register to bring up the customer’s forgotten PIN. Patrons will be encouraged
to memorize their PIN, but the sales associate can also furnish customers with a Frequent
Frother business card on which their PIN is handwritten. The card can be easily stored
in a wallet.
(continued)
PaThway:
97
The Coffee Carafe would also like to reward their Frequent Frother customers by acknowledging
their birthdays. Customers’ beverage of choice will be provided free of charge on their
birthday or the first time they make a beverage purchase in the week following their
birthday. When the PIN number is entered into the register, the internal computer will notify
the sales associate that it is the customer’s birthday week and will calculate the customer’s
bill with the beverage at zero cost. The sales associate will be encouraged to tactfully
extend birthday greetings to the customer and let the customer know that The Coffee
Carafe is providing the birthday beverage to say thank you for loyal patronage.
Another way The Coffee Carafe will use the Frequent Frother reward system to instill
loyalty is that 3-4 times a year stores will send out a coupon which the customer can
exchange for a free muffin, beverage or cookie. The coupons will be mailed to the address
on the Frequent Frother application or can be sent via e-mail if the customer prefers.
Part 1: Your assignment is to design an attractive application form on one side of a 4" x 6"
postcard. You may incorporate graphics if you want, but be sure the application provides
all needed information. Check also that you ask for no more information than is actually
needed. Provide an option on the application form for the customer to opt out of either
or both – the birthday or the coupon component of the Frequent Frother membership plan.
On the back of the card, summarize the benefits and policies governing Frequent Frother
membership. Keep in mind that you are trying to encourage a loyal customer to take
advantage of the Frequent Frother membership as you write this benefit/policy summary.
Part 2: You also need to develop two pages for the Sales Associate Training Manual.
The first page should describe the Frequent Frother program. The explanation should
highlight the benefits to both the customer and The Coffee Carafe of having the sales
associate enroll more customers in the Frequent Frother program. It should also outline
the policies governing the program. The second page for the Sales Associate Training
Manual should outline the appropriate method to be used by the sales associate to:
• Introduce a customer to the concept of the Frequent Frother program.
• Explain to the customer how the Frequent Frother program works.
• Encourage a customer to take the time to complete the program application.
• Ask a customer if he or she is enrolled in the Frequent Frother program without irritating
a repeat customer who has elected not to enroll in the program.
• Handle a customer who is sure he or she has enrolled in the program but has forgotten
his or her PIN.
• Acknowledge a customer’s birthday, tactfully and thoughtfully, no matter his or her age,
and let the customer know that the birthday beverage is on the house. Keep in mind that
not everyone enjoys having a big thing made out of birthdays. Include information about
the appropriate way to handle acknowledging a customer’s birthday if he or she is part
of a group.
• Reassure the customer who questions whether he or she wants to give the coffee house
so much personal information.
CASE STUDY 4
L’ARGENT APPAREL COMPANY LAUNCHES A NEW BRAND OF JEANS
PaThway: Operations Management
iNDUSTRy: Broadwoven Fabrics
Project 4.1: Who’s Your Target?
Topic: Target Marketing
page 103
Project 4.2: How the Job Really Gets Done
Topic: Create a New Organizational Chart
page 107
Project 4.3: An Economic Challenge
Topic: Managing Fuel Costs
page 111
Project 4.4: Do Your Money Management Skills Add Up?
Topic: Managing Business Finances
page 113
Project 4.5: Rules of the Game
Topic: Resolving Conflicts
page 115
Project 4.6: Trend Watching
Topic: Product Allocation
page 117
Project 4.7: Risky Business
Topic: Safety in the Workplace
page 121
Project 4.8: A Nice Idea, but Will It Make Money?
Topic: Break-Even Analysis
page 123
Project 4.9: Fashioning Increased Sales
Topic: Fashion Show
page 125
Project 4.10: Mission Control
Topic: Company Policy Manual
page 129
Name: ____________________________________________________Date: __________
iNDUSTRy:
Broadwoven Fabrics
CASE STUDY 4
Snapshot Company Profile
growth
Profitability
L’ARGENT APPAREL COMPANY LAUNCHES
A NEW BRAND OF JEANS
L’Argent Apparel, Inc., designs, manufactures, markets, distributes
and licenses casual apparel and accessories for men and women
ages 14 and above. L’Argent lines include denim, cotton and
cotton-blend clothing such as jeans, slacks, shorts, skirts, dresses,
woven and knit shirts and jackets. L’Argent also licenses its brands
to other manufacturers who produce and distribute
accessories and other products that complement L’Argent
merchandise. L’Argent brands include the company’s original
Toughies outdoor and work clothes lines, the 8HR corporate
casual lines and Jazzz! casual wear. L’Argent products are sold
through retail department and specialty stores and companyowned boutiques in North America, Europe and Asia.
To improve profits while maintaining competitive pricing, L’Argent
Apparel, Inc., closed its last U.S. manufacturing plant. These
operations will be handled outside the U.S., where workers are
paid less than U.S. workers. The company also anticipates
increased sales because young adults quickly adopt the latest
trends in fashions, particularly high-dollar fashions perceived to
have high status among their peers. However, both the company
and the brand are unfamiliar to the target market, whose brand
loyalty currently resides with competitors’ products. Also,
competitors may produce other similar high-dollar lines to keep
loyal customers from trying L’Argent’s new brand.
PaThway:
JEANS
An international industry giant since 1922, L’Argent Apparel, Inc.,
recently has struggled to maintain earnings and profits in the
face of relentless attacks on its specialty clothing lines, the
fashion jeans line in particular. However, stock prices appear to be
on the upswing, thanks to industry buzz that L’Argent plans
to launch a new brand aimed at young single adults with dollars to
spend. Does the company have a chance at a turnaround?
A look at L’Argent’s history and recent management activities
may predict the future.
Operations Management 101
Name: ____________________________________________________Date: __________
iNDUSTRy:
Broadwoven Fabrics
Project 4.1: Who’s Your Target?
Topic: Target Marketing
Introduction
Marketing is more than “… if we make it, they will buy it.” Successful entrepreneurs have
a clear understanding of who will most likely buy their products or services. They know
precisely what a group of customers want, where those customers live and what they can
afford to spend on a product or service. That group of customers – the target market –
needs to be large enough to sustain a business on an ongoing basis.
The better a business is at identifying potential customers, the more successful that business
will be in meeting those customers’ needs and wants. The benefit of understanding the
market is more efficient production and delivery.
Target markets are based on specific segments of the total market. Those specific segments
are identified because they represent shared interests, needs, buying habits and other
characteristics that include the following profiles:
1. Demographic profiles – objective factors that include age, gender, race or ethnicity,
education, occupation and income
2. Geographic profiles – location-based factors that include country, state, city, mobile
workers and lifestyle setting (rural vs. urban)
3. Psychographic profiles – personality traits such as attitudes, beliefs, life experiences,
needs and wants
4. Consumer profiles – customer-based factors such as loyalty, shopping frequency and
a willingness to purchase from the Internet
Your Task
Consider those profiles as you read the descriptions of people on the following page.
(continued)
PaThway:
Descriptions
1. High school student, male, lives in a rural location, interested in a healthy lifestyle,
limited income, never traveled out of the state, no one in his family has ever attended
college, wants to get a job after high school graduation
2. High school student, female, lives in an urban location, interested in a healthy
lifestyle, generous allowance from parents, part-time job, taking AP classes
3. A 35-year-old female business professional, college graduate, lives in a suburban
neighborhood, world traveler, organizes business lunches and dinners and other
business entertainment, works hard and plays hard, ambitious fitness goals, little
time for shopping
4. A 50-year-old male factory shift worker, high school education, grandfather to three
toddlers, lives in an urban setting, hobbies are hunting, fishing and motorcycling
(continued)
104 PaThway: Operations Management
Use the profiles on page 103 to identify which of the following businesses would include
each of the four individuals from page 104 in their target market.
Business
1
2
3
4
High-end retail coffee shop
Convenience store selling gasoline and a variety
of snacks and soft drinks
Electronics store
Cell phone store
Discount store
Clothing store focused on trendy fashion
Clothing store focused on high fashion
Clothing store focused on economical clothes
Soft drinks
Costume/fashion jewelry store
Fine jewelry store
Expensive fashion shoe store
Trendy/fad shoe store
Professional sports team ticket outlet
College athletic department selling individual and
season tickets to games and events
Ballet and symphony tickets
Fitness center
Fast food restaurant
Gourmet restaurant
Name brand motorcycle dealer
Luxury car dealer
Sports car dealer
Used car dealer
(continued)
PaThway:
Summary
Write a statement that the marketing department of one of the businesses could use to
justify spending money to target a particular segment of the population. Write another
statement that the same marketing department could use to justify not spending money
Name: ____________________________________________________Date: __________
iNDUSTRy:
Broadwoven Fabrics
Project 4.2: How the Job Really Gets Done
Topic: Create a New Organizational Chart
Introduction
In your position as CEO of L’Argent, an international apparel company, you are very
aware of the fact that there are a few winners and thousands of losers in your industry.
You need assurance that your company has an organizational structure in place to keep
L’Argent from running off the tracks. Your company grew very quickly, and personnel
were added just to get the job done, without attention to duplicate work assignments
and a climate to encourage creative genius.
You know that the way information flows through a company is crucial to success. It either
hinders or enhances productivity. A traditional organizational chart is a way to view a company.
The chart lists each position in independent boxes, connected by lines to indicate supervision
and reporting responsibilities. A traditional chart shows management’s image of the way
things should operate. It is a written record of a company’s structure. This type of chart
shows formal relationships, but nothing of the pattern of human relationships, and may
quickly become dated.
It’s time to evaluate. You start by taking a look at your company’s traditional organizational
chart on the next page.
(continued)
PaThway:
L’ARGENT ORGANIZATIONAL CHART
President and CEO
Vice President
of Sales
Director of Business
Analysis and
Accounting
Director of
Human Resources
• Customer
Service
Vice President
of Operations
• Compensation
& Benefits
• Budget
Analyst
• Price
Analyst
Director of
Retail
Development
Merchandise
Manager
Director of
Marketing
• West
Regional
Director
Director of
Production
• Warehouse
Manager
• Atlantic
• Route
Regional
Salesperson
Director
• Distribution
• Midwest
Workers
Regional
Director
• Southern
Regional
Director
Research &
Development
Director
Producer
• Trend
Consultant
Director of
Graphic
Design
• Pattern
Maker
Artistic
Artistic
Director
Director
• Artist
• Photographer
When reviewing the chart, it is apparent to you that the true success of your company has
relied not on the relationships shown in the traditional chart, but on the informal structure
of how employees really work. After you recover from what was a surprising new insight,
you recognize that you don’t want to leave the inner workings of your staff to chance.
You decide to ask your human resources department for a list of L’Argent employee job
titles and share it with your management team, calling on them to help with an informal
chart to describe how the work really was getting done. To prepare for the process, you
ask each person to read the following information and come to a meeting prepared
to create an organigraph.
An organigraph is different from a traditional chart. It’s a graphic illustration of the way the
actual work gets done. Henry Mintzberg, a professor at McGill University in Montreal and
a professor of organization at INSEAD in Fontainebleau, France, uses the term to describe
an organization that is not a fixed set of patterns, but people interacting in a web. This
chart allows open-ended communication and continuous movement of people and ideas,
allowing people to work cooperatively, not independently. Read the article describing
Mintzberg’s ideas on http://hbswk.hbs.edu/archive1898.html to understand his
explanation of the process. Another website to help you understand informal organizational
chart structure is http://hbswk.hbs.edu/archive14171.html.
Working in your group, use the following list of employee job titles to construct an
organigraph for L’Argent. As your team designs the structure, think of the mission and
vision of a clothing manufacturing company. It’s probably going to be related to creating
products that are fun and fashionable using ideas that are fresh. Be prepared to share your
chart and justify your decisions.
Employee List
President and CEO
Vice President of Sales
Vice President of Operations
Director of Human Resources
Director of Business Analysis
and Accounting
Director of Graphic Design
Artistic Director
Research and Development Director
Warehouse Manager
Director of Retail Development
Director of Production
Director of Marketing
West, Atlantic, Midwest and Southern
Regional Directors
Merchandise Manager
Route Salesperson
Distribution Workers
Budget Analyst
Price Analyst
Artist
Pattern Maker
Photographer
Trend Consultant
Producer
PaThway:
Name: ____________________________________________________Date: __________
iNDUSTRy:
Broadwoven Fabrics
Project 4.3: An Economic Challenge
Topic: Managing Fuel Costs
Introduction
You are the business and development manager of a department store that ships clothing
from a regional distribution center to area stores. You just got a couple of unsettling
e-mail messages. One from the distribution manager said the order of L’Argent jeans just
arrived and he needs the distribution plan. Another from the shipping manager said that
the company that provides ground transportation from the center to your retail stores
is increasing costs by 23%, due to the increased cost of fuel. The increase is effective
immediately. The next bill will be based on the new rate. The first request was easy
to handle. You simply attached another copy of the plan to your reply. The information
in the second e-mail is not as easily resolved. You know that you have no control over
the transportation company’s decision, but you are aware that you need to analyze what
the increase in cost will mean to your profits and pricing decisions.
Your Task
Use the following information to answer questions that will help you analyze your
new situation:
• Annual shipping costs
• Items shipped/sold annually
• Average price per item
• Average cost per item
• Projected increase in shipping
• Projected increase in shipping price
• Total annual revenues
• Gross margin per item
$ 200,000
1,000,000
$ 30
$ 15
23%
$ 0.04
$ 30,000,000
50%
1. What is the original per-item cost of shipping? Calculate the original annual shipping
costs as a percentage of annual revenues.
2. What is the projected increase in unit price when you add the new shipping costs?
(continued)
PaThway:
3. Calculate the total dollar impact of the shipping increase and also the revised annual
cost of shipping.
4. What is the revised shipping cost per item?
5. What percentage of total revenue do the shipping costs now represent?
6. How many extra items will the company need to sell to break even (avoid lowering
your profit)? What is the percentage increase of the number of those extra items?
Now that you have analyzed the numbers, you’re ready to make a proposal to your
management team. Prepare a report that you can use with them to make decisions. Include
projected dollar impact, the adjusted percentage of revenue, the extra units that need
to be sold to cover new costs and the percentage of that increase.
Name: ____________________________________________________Date: __________
iNDUSTRy:
Broadwoven Fabrics
Project 4.4: Do Your Money Management Skills Add Up?
Topic: Managing Business Finances
Introduction
If you own a business, you’ll need to manage money. You’ll either have the financial and
accounting skills to do it, or you’ll want to pay for those services. Most likely you’ll
combine the two strategies. Imagine the following scenario to check out your skills and
understanding.
A Financial Process
You and your partner have decided to establish a “C” Corporation to sell software for the
broadwoven fabrics industry. You know that you have aggressive competition from bigname companies. Your business plan, which includes the following details, is to both sell
and provide technical support:
• Your start-up costs are $132,000.
• You’ve been approved for a $100,000 5-year loan with a fixed interest rate of 8.5%.
(You and your partner will each use $16,000 from savings.)
• The current estimated value of your business is $150,000.
• Your projected monthly expenses are:
Rent: $8,212 (includes utilities, except for telephone)
Inventory: $25,000
Wages: $15,000 (includes payroll taxes and cost of benefits)
Loan Payment Principal: $2,040
• You expect the corporation’s average monthly income for the first year to be $55,000.
Work with a partner or in a group to answer the following questions developed to assess
your financial and accounting skills and understanding:
1. What is the corporation’s projected annual income?
2. What is the corporation’s estimated annual expense total?
3. How much more income than expenses do you estimate for the corporation’s
first year in business?
(continued)
PaThway:
4. Using your answer from number 3 and a corporate income tax table, calculate an
estimate for business income tax. Consult a local resource, or use the information
from http://www.irs.gov to locate the Internal Revenue Service form 1120A and
instructions for completing the form, which include the tax rate.
5. After taxes, how much cash will you have for unexpected expenses and for growing
your business?
6. What other expenses might your business need to cover? (Talk with a business owner
before you complete a final answer.)
Discuss and compare results with another group. Share insights from the business owner.
Brainstorm reasons that business employees, as well as owners, need financial information.
Name: ____________________________________________________Date: __________
iNDUSTRy:
Broadwoven Fabrics
Project 4.5: Rules of the Game
Topic: Resolving Conflicts
Introduction
If you have a chance to investigate the way broadwoven fabric companies structure their
work, you’ll probably discover that many of their work settings aren’t the usual 9-5
operations. Creative minds usually produce their best work in a less formal atmosphere.
Some challenges for folks who work in collaborative informal structures are to keep
production flowing, meet deadlines and maintain quality work from loosely defined teams.
A common problem, particularly when deadlines are imminent, is conflict among and
between teams. Successful marketing depends on successful research and development.
This depends on business analysis as well as the business financial management and
accounting teams. All of these folks depend on administrative and information support.
In this project you’ll have an opportunity to consider what you know and have observed
about conflict resolution.
Reflect on the Topic
Have you ever had a major disagreement with one of your friends or family members?
If you haven’t, celebrate the fact that you’re in an extremely small minority. Most of us
get into conflicts that need to be resolved. You know that there are better ways to reach
a mutually acceptable agreement by working together on issues. In your personal life, you
know that there are consequences when you let the conflict get out of control. You also
know that it’s satisfying when you make a positive effort to work together. If you transfer
the setting to the workplace, the disagreements usually have some financial consequences
for the business. Time and emotional energy that could be used for productive effort get
spent on the conflict.
Think about the consequences of not resolving conflicts in a work setting. If you realize
that the work will suffer, you’re right on target. The negative energy that you spend
delays progress, which is costly. Now is a good time to develop skills that will help you
in personal, school and work situations.
Practice the Process
• Identify an issue that is causing stress between you and one other person.
• List as much information as you can that relates to the conflict.
• Be as fair as you can as you separate the real issues from ones that aren’t really so major.
• Generate options that you’d be willing to consider for resolving the real issues.
(continued)
PaThway:
Write an e-mail message that you could send to the individual, asking for a time to meet
and discuss how you might resolve the disagreement. Ask a person you trust to read your
message to make sure that your language is emotionally neutral. The words that you use
are important, but so is the feeling tone. You want the person to know that you genuinely
respect his or her needs. Without a sincere effort to work together, you will only perpetuate
the conflict. Rewrite any portions of your message that carry negative undertones. Decide
whether or not you wish to proceed with the process. If yes, send the message. If the
individual agrees to a meeting:
• Meet with the individual. Agree on a goal to restore a positive relationship.
• Listen to each other’s issues. Discuss perceptions to clarify and acknowledge
an understanding, if not an agreement.
• Prioritize your own request, and identify areas where you’d be willing to compromise.
Make an agreement that includes a clear statement of what each of you will contribute
in the future.
Expand the Process
• Choose one of the individuals described in your copy of American Careers Business.
• Identify a work-related issue that might cause conflict with a co-worker and also with
a client if it were not resolved. Describe how the unresolved disagreement would affect
progress in getting the work done.
• Discuss your thoughts with at least one other person.
• Talk with an individual working in this business pathway to learn what issues have
created conflict on the job. Share what you learn with your class.
Name: ____________________________________________________Date: __________
iNDUSTRy:
Broadwoven Fabrics
Project 4.6: Trend Watching
Topic: Product Allocation
Introduction
As marketing manager for a very large department store, you have been asked to prepare
a report with a detailed analysis of blue jeans sales in your region for the past year. Your
chief executive officer (CEO) wants the management team to take a closer look at how you
manage the jeans inventory. The goal is to reposition this very popular department to reach
the maximum number of market segments without having surplus inventory. You will need
the following information to prepare the report.
Historical Perspective
Apparel industry sources indicate that jeans are the most widely chosen clothing item
among both teenage males and females. Last year the management team decided to focus
on the teenage market. Men and women of all ages buy and wear jeans, but the postteenage market was not a focus for last year’s product allocation decisions.
The following information describes last year’s planning projections and estimates for
product allocation:
• 70% hot labels, such as the new line of L’Argent jeans, in the $125 to $165 price range
• 15% basic brand jeans in the $50 price range
• 10% off-brand labels that are typically discounted in the $20 to $35 price range
• 5% custom market starting at $1,000 a pair
At the time, the management team had limited supporting information for preferences
within each of the categories. Therefore, we chose to offer a balanced selection of color,
cut, finish and fit, except for the custom line, which is individually designed and tailored.
(continued)
PaThway:
Previous Year’s Results
Annual gross sales for blue jeans in the region: $11,211,000
Annual sales results from each of the three regional locations:
Location 1: Total Gross Sales = $5,365,000
•
•
•
•
Hot labels
Basic brands
Off-brand labels
Custom
$ 3,950,000
920,000
85,000
410,000
The sales manager reports frustrating contacts with custom designers. Their time allotment for
her account couldn’t meet her demand. Her customers sometimes waited twice the estimated
delivery time. She thinks that at least 100 potential custom customers took their business
to a competitor.
•
•
•
•
Hot labels
Basic brands
Off-brand labels
Custom
$ 325,600
1,230,000
550,900
2,500
The sales manager’s report indicates that he had trouble keeping both off-brand and basic
brands in stock. He has a large number of hot labels hanging on the racks. He feels that
he lost sales during the time he was waiting for inventory, but he doesn’t know how to
estimate an exact number.
•
•
•
•
Hot labels
Basic brands
Off-brand labels
Custom
$ 710,000
1,925,000
1,067,000
35,000
The sales manager expresses surprise at the number of customers who bought basic
brands. He was expecting much more demand for hot labels. He thinks some portion
of this volume came from the post-teenage market.
Your Report
Work with your team that includes representatives from management, accounting, human
resources, your own marketing department and support staff to gather the following
information. Then prepare your report with recommendations for the coming year.
1. What is the variance between projected and actual sales for each of the three locations?
Create a variance report based on your calculations from the three locations.
2. Based on the discrepancies for each category in each location, write a summary for
each location to communicate which decisions were successful and which were off
the mark. Include your initial thoughts about why below.
Location 1:
Location 2:
Location 3:
3. Write a description of the demographic characteristics that you think would produce
the sales results for each of the three reporting locations. Gather data related to
income, unemployment rate and age distribution for a specific city or area that you
identify, one that closely matches your description. Use the following resources and
others that are available to you:
http://www.esri.com/data/esri_data/tapestry.html – The Community Tapestry link
http://zip4.usps.com/zip4/welcome.jsp – Find a ZIP code for a particular area
http://censusscope.org/us/chart_income.html
http://www2.fdic.gov/recon – Find regional economic conditions
http://www.econdata.net/index.html – Find recent economic data from the
U.S. Department of Labor
http://www.fedstats.gov/qf
(continued)
PaThway:
4. What questions might you ask each sales manager before making recommendations
to the management team?
Location 1:
Location 2:
Location 3:
5. Develop a strategy to answer the following questions for each of the three locations:
• What is the teenage population?
• What is their potential buying power?
• How often does a typical consumer buy a pair of blue jeans?
• Where do typical consumers buy their jeans?
• What other factors besides price influence their buying decisions?
6. Organize the information in a format that the management team can
readily understand.
Name: ____________________________________________________Date: __________
iNDUSTRy:
Broadwoven Fabrics
Project 4.7: Risky Business
Topic: Safety in the Workplace
Introduction
In every business career that you might consider, there are risks. Some cause more concern
than others. Business owners and managers are responsible for providing a work environment
that is both safe and healthy. You probably know that there are laws to take care of the
owner or manager who tries to ignore health and safety responsibilities.
The good news is that it’s not that hard to avoid the most common hazards. If you know
what the risks are, you have a better chance of keeping your business safe and healthy.
Your Task
Part 1: You will find each of the job titles in the Risky Business chart on the next page
in some sector of the broadwoven fabrics industry. Match each job title with an injury
or condition that is a risk for a person working in that position by writing one or more
letters from the risk column in the space provided.
Part 2: Choose one of the job titles in the Risky Business chart. Research and find more
information about workplace injuries or conditions that are specific risks for that individual.
Assume that you’ve been assigned to mentor that person as a new employee in the work
setting. Write a friendly reminder that you could share with a person new to the job.
(continued)
PaThway:
RISKY BUSINESS
Job Title
Risks
1. _________________
Apparel design director
A. Chemical burns
2. _________________
Compliance manager
B. Collisions with a piece
of heavy equipment
3. _________________
Clothing sorter
C. Back strains
4. _________________
Customer service
representative
D. Bruises
5. _________________
Apparel pattern maker
E. Muscle sprains
6. _________________
Sewing machine operator
F. Contact with
a hot object
7. _________________
Retail salesperson
G. Falls
8. _________________
Garment presser
H. Cuts
9. _________________
Weaving manager
I. Hits from flying objects
10. _________________
Retail store manager
J. Carpal tunnel
syndrome
11. _________________
Environmental engineer
K. Hearing impairment
12. _________________
Quality control manager
L. Assaults
13. _________________
Graphic artist
M. Torn rotator cuff
14. _________________
Warehouse picker/packer
N. Sleep disorders
15. _________________
Loss prevention manager
O. Puncture wounds
Name: ____________________________________________________Date: __________
iNDUSTRy:
Broadwoven Fabrics
Project 4.8: A Nice Idea, but Will It Make Money?
Topic: Break-Even Analysis
Introduction
Michael and Belinda, two designers with L’Argent Apparel Company, have just pitched
an idea for a new line of clothing they would like the opportunity to develop. The decision
makers with L’Argent are very excited about the concept because it offers a unique product
to a relatively small but affluent target market. Michael and Belinda’s idea is to design
clothes that appeal to environmentally conscious young adults who also want their buying
habits to support socially-responsible causes – homeless shelters, abused children and
other community-based support groups.
The actual clothing will be premium denim creations that appeal to fashion-conscious
individuals – limited editions with options to customize, and also priced at a level that
allows each garment sale to make a significant contribution to a worthy cause. The original
proposal includes a consumer advisory board to research and identify causes that would
appeal to the target market.
Because this proposal will be expensive to bring to market, the decision makers have
asked Michael and Belinda to develop both sales projections and a break-even analysis
to be sure the clothing line could generate enough profit to be worth the investment by
their company. Break-even analysis uses the total cost of producing the specific clothing
line to determine how many units of the line would need to be sold to begin generating
a profit. The break-even point is calculated using basic formulas. It allows a business such
as L’Argent to express a product’s break-even point in terms of units sold. That break-even
point is then compared to realistic sales projections to determine if a product even has
a hope of being profitable for the company.
(continued)
PaThway:
Your Assignment
Your assignment is to use the basic break-even formula and the data provided below
to determine the number of clothing items the company must sell before a profit would
be generated.
BREAK-EVEN BASICS
Basic Break-Even Formula:
Break-even Point (# of units) = Fixed Costs/(Selling Price - Unit Variable Cost)
Fixed Costs: Those costs that stay the same no matter what the level of sales.
Selling Price: In this case, the selling price would be the wholesale price charged to retailers
who would actually sell the product to end consumers. Keep in mind that retailers typically
double the wholesale price to determine the retail price paid by consumers.
Variable Costs: These are the costs that will vary directly with the number of items actually
sold by the apparel company.
Production Costs: Costs for producing the clothing are:
• Design of the clothing – One year of work for one specialized fashion designer, $80,720.
• Design assistants – Three technical designers will work 3 months to develop the different
components of the basic clothing line. Design assistants typically earn a salary of $55,000
a year.
• Technical writer – One technical writer will work 2 weeks to write the instructions to go
with the clothing production. Technical writers typically earn a salary of $55,000 a year.
• Label and hang tag design – Cost of designing the labels and tags is $500.
Manufacturing Costs:
• Clothing garment manufacturing – Estimated at $48.00 each.
• Label reproduction – $.75 per label.
• Hang tag manufacture – Cost of producing the hang tags is $.75 per unit.
• Shipping costs – Average cost of shipping 25 garments to an individual retailer would
be $312.
Overhead assigned to this project: $75,000. Overhead is the cost of operating L’Argent.
It includes a portion of the salary for every person who works in the company office as well
as a share of the cost of even having company offices.
Attorney fees for trademarking the product: $50,000.
Marketing: A major marketing campaign directed to the end consumer (those who will wear
the garments) – $2,000,000.
Wholesale selling price of each garment: $150.00
Name: ____________________________________________________Date: __________
iNDUSTRy:
Broadwoven Fabrics
Project 4.9: Fashioning Increased Sales
Topic: Fashion Show
Introduction
As the marketing coordinator for a chain of retail department stores in your area, you have
been asked to put together a team to organize and produce a fashion show. The purpose is
to promote a new line of L’Argent jeans and to increase the sales of jeans in your stores.
The team members from your stores include a promotions manager, an event planner, a
human resource representative and a store display representative.
Part 1: In order to pull the fashion show together, you know you have the following lists
of tasks to accomplish before you can report back to the company CEO with results from
the fashion show:
1. Find a venue.
• Select a venue that will accommodate the fashion show.
• Determine seating size and arrangement.
• Draw layout of the fashion show venue.
(continued)
PaThway:
2. Develop a fashion show theme.
• Create a logo.
• Create a slogan and theme.
• Generate a list of music that will reflect the mood of the fashion show.
3. Select clothing for the fashion show.
• Your team has decided to feature 100 pairs of jeans during the show. Use the jean
sales figures from Location 1 in project 4.6 to determine the number of jeans that
you want to show in each category: hot labels, basic brands, off-brand jeans,
custom jeans. Choose accessories to accentuate but not overpower the jeans.
Number of Hot Labels:
Accessories:
Number of Basic Brands Jeans:
Accessories:
Number of Off-Brand Jeans:
Accessories:
Number of Custom Jeans:
Accessories:
4. Select models for the fashion show.
• Determine how many models you will need.
• Decide on a process to choose actual store employees to model clothes in order
to give the fashion show an “average person” feel.
5. Develop a promotional campaign.
• Choose at least two different media in which to advertise the show.
• Draft one sample of advertising for each medium you choose.
• Create a special invitation to send to your credit card purchasers.
• Plan for a sweepstakes to give out prizes for attendees.
6. Plan publicity.
• Write a news release for your fashion show for the local media (newspapers, radio
stations and television outlets). Be sure to promote the new L’Argent jeans line.
• Develop an employee relations campaign to reward employees who volunteer
to be in the show and those who are selected to be in the show.
(continued)
PaThway:
7. Create a backdrop and decorations that tie in your fashion show theme.
8. Plan a ticket sales campaign.
• Determine pricing for tickets.
• Decide how you will sell tickets.
9. Develop a chart to assign team members’ responsibilities.
10. Set up a timeline to reflect due dates for completion of each part of the fashion show.
11. Develop a plan to broadcast the fashion show live on a website for customers who
can’t make the show in person.
Part 2: In your role as marketing coordinator, you are the “person in charge” of the fashion
show. You will be responsible for the final report to your CEO that includes descriptions
and results for each of the individual tasks, as well as a summary of the whole event. Create
a form with spaces designed specifically to report results for each section of the process.
Name: ____________________________________________________Date: __________
iNDUSTRy:
Broadwoven Fabrics
Project 4.10: Mission Control
Topic: Company Policy Manual
Introduction
Londonne James arrived at her office with a long list of personal things to do. She sat down
at her desk in the customer service department, signed onto her computer and went to work
on the list. A single mother of a four-year-old, she desperately needed to locate a new
apartment and didn’t want to drive all over town to find one. In addition, she needed
to get ready for her son’s birthday next week and she didn’t have time to send invitations
or shop for party supplies and presents.
Londonne’s customer service supervisor walked by her desk just as she was finishing the
party invitations. When she asked Londonne what she was doing and tried to discuss the
problem, Londonne said she was not cheating the company out of work. “After all, this
is a fashion company, and everyone else spends personal time online.”
Cybershopping, cyberspace, netiquette, cyberslacking, cyberinsurance, cybercrime, cyberlaw
and multishirking are terms that came to Londonne’s supervisor’s mind. She realized that
Internet access in the workplace has created the need for policies to regulate electronic
communication. At the same time that technological advances have made the workplace
more efficient, they’ve also exposed employers to new types of privacy concerns.
In your position as administrative assistant to Londonne’s supervisor, you soon became
a part of the conversation when you were asked to do some research for her. Luckily, she
gave you some background thinking in order to let you know that she wanted a thorough
response. She told you that she recognized a new urgency to stay in business and out of
court. Your company had not dealt with the fact that electronic communication means new
electronic risks. Some of these risks include lost productivity, viral infections, hacker attacks,
workplace lawsuits, security breaches, not to mention fines and imprisonment. She wanted
to make a proposal to the management team that would motivate them to update the
company policy manual. The current edition has served the company well as far as providing
strategic information and communicating the mission and vision of the company to all
employees. The problem is that it hasn’t been updated to include an “E-Policy” section
to limit liability and exposure.
Your Task
Provide a definition for each of the following terms. Keep in mind that your supervisor will
use them to demonstrate a need for the new policy. As you find and record each definition,
provide a brief example that will help your supervisor communicate with a group that may
not recognize the immediate need.
(continued)
PaThway:
• Computer virus
• Cybercrime
• Cyberlaw
• Cybershop
• Cyberslacking
• Cyberspace
• Email
• Email policies
• Hacking
• Internet
• Netiquette
• Networked
• Online
• Website
• Web surf
CASE STUDY 5
ANNUAL REPORT MEMO TO STAFF
PaThway: Administrative Support
iNDUSTRy: Sporting Goods
Project 5.1: Corralling Deadline Chaos
Topic: Project Timeline
page 135
Project 5.2: Promote a Product
Topic: Global Marketing
page 137
Project 5.3: Skateboarding in Olympic Style
Topic: Promote an Idea
page 139
Project 5.4: Show Me the Money
Topic: Managing Delinquent Accounts
page 143
Project 5.5: Fitness Means Good Business
Topic: Recognizing Potential
page 147
Project 5.6: Inquiring Mountain Bikers Want to Know
Topic: Analyzing Environmental Impact
page 149
Project 5.7: Putting Plans Into Perspective
Topic: SWOT Analysis
page 151
Name: ____________________________________________________Date: __________
iNDUSTRy:
Sporting Goods
CASE STUDY 5
ANNUAL REPORT MEMO TO STAFF
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From:
Date:
Subject:
To:
President and Chief Executive Officer <[email protected]>
Today, 11:42 a.m.
Upcoming annual report
All executive staff, department managers and assistants <Leadership Team>
As you know, H&D Sports, Inc., along with the entire U.S. sporting equipment industry, is looking
forward to using our past performance to guide us toward new growth in the coming year. Although
sales of recreational transportation – bikes, boats, snowmobiles, etc. – have grown 10 percent,
sales of other equipment have grown only 2 percent. Since participation in tennis, fishing, shooting
and a few other sports has been declining for years, we are happy to share in that 2 percent
growth rate. Of course, this information will be reflected in our upcoming annual report to
stockholders, prospective investors and others who are interested in our company.
Schedule: Because we plan to distribute the report three months from today, your contribution to
the report is due in my office within the month. After I review the information, the public relations
department will have another month to compile and edit everyone’s information, take photos and
design the report. Then the legal and accounting departments will have two weeks to review
materials prior to printing and distribution.
Tasks: I strongly encourage all executives and managers to work with your administrative
assistants to keep the schedule moving. Here are some of your tasks:
• The accounting department will be responsible for writing the financial summary and
working with the auditors to prepare financial statements, tables and charts.
• your division or department will summarize strategies to increase sales in the next
fiscal year for your brand or product line, including new research, campaigns, new
markets, new designs, new products or whatever else you have in mind.
• Remember that integrity is part of our mission. Therefore, we expect that you will not
hide any problems, but address them by emphasizing strategies to reduce expenses and
grow sales. Also, be sure to tie your information to your financial statements.
Please contact my administrative assistant if you have questions. Thank you.
▲
▼
PaThway:
Administrative Support 133
Name: ____________________________________________________Date: __________
iNDUSTRy:
Sporting Goods
Project 5.1: Corralling Deadline Chaos
Topic: Project Timeline
Introduction
As senior administrative assistant to the president and chief executive officer of H&D
Sports, Inc., Estelle Janos’s job is very similar to jobs covered on pages 9 and 35-39
of American Careers Business. Not only does she write the annual report e-mail to the
leadership team on behalf of her boss, but she also must follow up with administrative
personnel on tasks and timelines.
An annual report is a comprehensive record of company news and financial performance
from the previous year. The final report is due in three months. Estelle must have a preliminary
timeline ready for the CEO to review in just a couple of days. It would be so much easier
if the company had project planning software. Then she could enter proposed schedules
from each department as she received them, and the draft timeline could be created
quickly to share with the CEO.
Estelle made lists of the people she needed to call and the questions she needed to ask
regarding the time it will take to complete annual report tasks. One by one, she received
the needed responses, which she compiled into the following report.
(continued)
PaThway:
TIMELINE ESTIMATES
FOR ANNUAL REPORT ACTIVITIES
Sporting Equipment Division
A narrative and accounting’s figures for the year and projections for next year will
be e-mailed in two weeks.
Athletic Footwear Division
Accounting is doing projections, and narrative should be ready in a week.
Athletic Clothing Division
The division will need at least a month or even more to project next year’s income and expenses.
Recreational Transportation Division
Facts and figures will be sent in two to three weeks.
Public Relations Department
Compile and rewrite the narrative – two weeks
Schedule and process photos of our products and the leadership team – three weeks
Prepare a draft for review – a month
Bind and ship the report back to us and then mail to the stockholders – two weeks
Accounting Department
Accounting has completed draft financials and is working on projections for next year.
It will take two months to prepare them for publication in the annual report.
Legal Department
It will take two weeks for the chief attorney and outside consultants to review the final
draft of the report when the advertising agency delivers it.
Your Tasks
Estelle Janos has asked you as her administrative assistant to draft a preliminary timeline
for the annual report.
Part 1: Prepare the preliminary project timeline. The document may be done by hand or
by using spreadsheet software or the tables function of a word processing or layout program.
Part 2: When the preliminary project timeline is complete, the following documents need
to be prepared:
• A memo noting any potential problems in meeting the three-month deadline
• A list of dates when she needs to check back with division and department staff
on progress toward projected deadlines
• A memo describing at least three timeline software options you’ve researched that will
speed up project planning, along with comments about features, benefits and pricing
136 PaThway: Administrative Support
Name: ____________________________________________________Date: __________
iNDUSTRy:
Sporting Goods
Project 5.2: Promote a Product
Topic: Global Marketing
Introduction
Today’s world of business is global. At one time, international business was unique.
Although some products and services may be targeted toward a specific country or culture,
many opportunities are not limited by geographic boundaries. In many cases, the challenges
lie in understanding and communicating with a specific group of potential customers.
Expanding the distribution of a product to include a new group of international customers
requires learning more about those customers’ wants and needs.
Your Task
Part 1: Choose a product that has the potential to meet the needs of new customers
in a specific country outside the borders of the United States. Knowing that costs will
be a consideration, make sure that there is a significant demand for the product.
Part 2: Identify demographic, lifestyle, consumer attitudes and habits of the country you
select. Be alert and aware of any cultural sensitivities that may apply.
Part 3: Create a promotional message to introduce the product. Be aware that you may
need to work with a language translator to refine and finalize the message.
PaThway:
Name: ____________________________________________________Date: __________
iNDUSTRy:
Sporting Goods
Project 5.3: Skateboarding in Olympic Style
Topic: Promote an Idea
Introduction
As an executive assistant to the management team of a skateboard manufacturer that
supplies H&D Sports, Inc., you’ve recently noticed and discussed with your teenage son’s
friends that events included in both the summer and winter Olympics appeal to an older
crowd. You’ve all recognized a recent effort to include some events that represent your
generation. When you shared these conversations with your team, they realized a business
opportunity. Together you decided to organize a plan to include skateboarding as an
Olympic event.
The Research
Work with a team of four, you and three classmates, to develop plans for your initiative.
Begin the process by gathering the following information:
1. Who is responsible for deciding? Learn as much as you can about the group that has
decision-making power, approximate ages, personal interests, etc.
2. What events have been added, and removed, over time? What motivated the change?
3. What skateboarding sports marketing organizations have statistics to build support
for your idea?
4. How would adding this new event contribute to the image, number of participants,
spectators, financial success, etc., of the Olympic Games?
Analyze Team Skills
Consider what strengths and weaknesses each of your team members brings to the project.
You may discover duplications and missing skills at this point.
Plan a Strategy
Outline a strategy for a campaign that has the best chance to achieve your goal. Include
a presentation to the organizing committee and any other major stakeholders. Will you use
only face-to-face meetings? Will you include any other media features? Estimate a time
to make each presentation and work backward to assign tasks.
(continued)
PaThway:
Assign Tasks
Using the strategy that you outlined, list tasks that are required for each step. Include
these required roles and add others that you feel are necessary: research analyst, organizer,
contact coordinator to communicate with specific outside organizations, presentation
developer(s), presenter(s), equipment operator(s), desktop publisher, etc. Now look at
your team members’ strengths to determine who is best prepared to accomplish each task.
At this point, you may discover that you need outside help for one or more of the
assignments. Consider who has access to and is willing to use their connections with
an outside resource. Discuss realistic time expectations. Make sure that the responsible
individual(s) are committed to the timeline. Determine whether or not your timeline for
each of the detailed tasks allows you to be ready for your final presentations. Make
necessary adjustments. Although this plan makes specific persons responsible for a task,
identify times when individuals may be available to provide support for another part
of the project.
Deliver the Message
Share your written and oral presentations with the class. Compare your thought process
and work with other groups. Evaluate strengths and weaknesses from each presentation.
List questions and issues that would be required for next steps in the campaign.
Dream a Little
Assume now that your campaign was successful. Your company has been invited to send
a representative who will work with planning and logistics for the first-ever skateboarding
event at the next summer Olympics! Although your idea has been well received at all
points, you know that you can speak with more authority than the folks who have less
experience with skateboards.
Read and discuss the information in the following news release that features a product
from another sector in the sporting goods industry. Then create your own news release
to announce the new Olympic event.
2036 Whitewater Road • Middletown, MT 59698 • (406) 644-7476
FOR IMMEDIATE RELEASE
Contact: Kalua Sims
(406) 644-7476, ext. 23
JOHN’S INFLATABLE BOATS, INC., ROLLS OUT NEW DESIGN
Middletown, Montana – John’s Inflatable Boats, Inc., a leader in outdoor recreation
inflatable products, is ready to introduce its latest and greatest design. It’s a
one-person boat made from a pliable rubber and designed to carry more weight
and handle bigger waters than earlier models. CEO Tom Hauyler, whose father
John started the company 35 years ago, says that a growing number of people
involved in water sports need boats that can hold more weight.
“When we realized that consumers were using our boats for extended
overnight trips, we knew they needed more space and cargo capacity,” said
Hauyler. “When our research and development department began to research
the need, we recognized a business opportunity that will help us keep our
position as a leader in the industry,” he added.
This latest model features pointed front and rear ends, as well as an extra two
inches in tube diameter. The pointed ends and extra tube diameter make taking
on bigger waves safer, while carrying the extra cargo required to stay out in the
woods for multiple days. The new design is frameless. The pliable rubber makes
it possible to fold the boat up and carry it in the backpack that’s included in the
package. Now everyone can carry a boat to their favorite remote fishing location.
Hauyler invites anyone who’s interested in trying one out to stop by the
showroom at 2036 Whitewater Road in Middletown and to take out a boat for
the day.
PaThway:
Name: ____________________________________________________Date: __________
iNDUSTRy:
Sporting Goods
Project 5.4: Show Me the Money
Topic: Managing Delinquent Accounts
Introduction
Your teacher will facilitate a discussion about delinquent accounts. Take notes during
the discussion. The discussion will include answers to the following questions:
1. What is a delinquent account?
2. Why might an account be delinquent?
3. What should a company do with delinquent accounts?
4. Why can’t these accounts be ignored?
5. What does it mean when someone says, “It’s a delicate balance between collecting
the money and losing an account?”
Write a paragraph(s) summarizing what you have learned about delinquent accounts.
The Assignment
As an assistant in the accounting department of a major snowboard manufacturer that
supplies H&D Sports, Inc., you have asked your accounts receivable clerk to take over the
responsibility of communicating with clients whose payments are late. The assignment is
to use information from the monthly Aging Accounts Receivable Report to contact clients
and motivate them to pay. Your company policy is to telephone clients whose accounts are
31-60 days late and follow up with an e-mail reminder. Accounts that are 61-90 days past
the invoice date get an official letter signed by the chief financial officer. Clients whose
accounts have aged more than 120 days are given one last opportunity to pay before
they are sent to a collection agency.
AGING ACCOUNTS RECEIvABlE REPORT
9/30
Company Name
Contact Person
Phone #
31-60
Days
Boards, Etc.
Bill Kaisle
888.323.5565
X
Board Business
Kelsie Wilmot
800.797.4731
At the Peak
Fred Arnest
888.505.9368
HillTop Horizons
Geoffry Willems
888.655.7007
61-90
Days
91-120
Days
Over 120
Days
X
X
X
(continued)
PaThway:
Part 1: Work with a partner to gather details to draft a delinquent account letter. Using the
space below each paragraph description, list three or four ideas to indicate what you each
believe should be included in the paragraph of the letter. This letter should be designed
as the first notice. The account is 31-60 days past due.
Paragraph One: This is an introductory paragraph. State why you are writing the letter.
Paragraph Two: This is a supporting details paragraph. Here you should give the specifics
that must be taken care of. Include what could happen if there is a failure to take action.
Paragraph Three: This is the closing paragraph. It should include due dates and numbers
for contact. There should be some type of polite ending looking toward the future.
Part 2: Type a draft copy of the letter. Use the notes and ideas gathered during the
introductory discussion as well as any other information you can gather from the Web.
Your document should provide the following:
A place to fill in
… the name and address of the person/business who will receive the letter
… the amount owed
… the length of time overdue
… the due date
Remember, this draft is a sample of a first-time collection letter.
Part 3: Compose and type two more delinquent account letters. Complete the letters using
the delinquent letter sample that you and your partner created in part 2.
1. Write a letter to Boards, Etc. The contact person and phone number is located on
page 143 of this Student Projects Book. You must create an appropriate and complete
address. Please note, this account is 31-60 days past due. Your teacher will supply
a delinquent account letter rubric.
2. You are ready now to write another delinquent letter. You may choose between
At the Peak and HillTop Horizons. All of the information you need is on page 143
of the Student Projects Book. Hint: These two companies are past due either 91-120
days or over 120 days. Adjust your letter so that it is appropriate – it cannot be the
same as your first letter. Take into account the length of time the account has been
delinquent. You can do a Web search and find samples of delinquent letters if you
need to. Use the delinquent account letter rubric for this letter, also.
PaThway:
Name: ____________________________________________________Date: __________
iNDUSTRy:
Sporting Goods
Project 5.5: Fitness Means Good Business
Topic: Recognizing Potential
Introduction
You just became a member of a work team in a sporting goods trade association. H&D
Sports, Inc., is a prominent member of your organization. Besides working on promotional
events that might be fun, you also will be looking for ways to increase sales of sporting
goods by promoting health and fitness through exercise, physical activity and team sports.
That’s the focus of a proposed legislative initiative from the National Sporting Goods
Manufacturing Association. The entire industry is looking for ways to encourage active
participation from a business perspective and also to respond to health concerns.
At all points in the initiative, you will be expected to recognize ways to meet and exceed
the group’s goals by building on each individual team member’s abilities. Whether you’re
dealing with politicians or members of the association, the success of the industry initiative
will depend on recognizing human potential as you evaluate where you are in the process
and identify strategies to take the next steps toward the group’s goals. This ability to
appreciate positive attributes in others will serve you well personally in relationships
and also in learning situations.
Your Task
Try out your awareness of what habits and qualities contribute to your friends’ and family
members’ successes. Be prepared to listen and observe carefully. Choose a situation
in which you have observed or can observe an individual perform a task. Record your
observations related to the following questions. You may want to include ideas that you
know from other sources, not just your own observations.
1. What does the person do before beginning the task?
2. What role, if any, do others contribute to the positive results?
3. When do they make their contribution, before, during or after the process?
(continued)
PaThway:
4. How does the individual monitor and adjust the process to achieve a quality result?
5. How does the individual appear to manage time, keep a steady pace, stop for
frequent breaks, etc.?
6. Describe the immediate work area.
7. Describe the surrounding area.
8. What type of self-talk does the individual engage in? (You may need to ask what he
or she was thinking about if the person isn’t speaking aloud.)
9. Describe the body language and facial expressions of the individual you’re observing.
10. Describe the body language and facial expressions of any other persons who are
working with the person you’re observing.
Write a paragraph to summarize your thoughts about why the observations you made
would be useful to a person working in a human services career. Then add thoughts about
why a client, student or another individual receiving services would appreciate this
sensitive awareness. Share and discuss your thoughts.
Name: ____________________________________________________Date: __________
iNDUSTRy:
Sporting Goods
Project 5.6: Inquiring Mountain Bikers Want to Know
Topic: Analyzing Environmental Impact
Introduction
When the board of directors of a national mountain biking association last met, the agenda
item that got the most attention was a growing regional concern related to the environmental
impact of mountain bike traffic on trails and surrounding areas. In some geographic regions,
bicycle sales and related equipment have been flat and even trending down. In response,
the board voted on a public education initiative. One strategy is to provide members
with information they can use to educate the public. In your work as a communications
specialist, you’ve been asked to prepare an educational brochure that your member
associates can use to address customer concerns.
The Research
Explore the topic of mountain bike riding to learn as much as you can about the following
issues: participation, sites, a generally-accepted philosophy and related “rules of the trail.”
Then explore the environmental impact of hiking, horseback riding, all-terrain vehicle
traffic and other similar sports. Compare what you’ve learned to mountain biking in a way
that you think would contribute to restoring a more positive image of the sport. You
will find information to begin your search on the Adventure Cycling Association website
at http://www.adv-cycling.org/index.cfm. If you do a search for mountain bike
associations, you’ll find dozens of regional organizations that are dedicated to the sport.
If you discover negative environmental consequences, try to determine what has been
done as well as what might be done to avoid those unintended results.
The Brochure
Create an informational brochure that could be posted on your association website
or distributed to your members. Then prepare a list of postal zones where mountain
biking would be a popular sport, making them prime locations for mailing the brochure.
PaThway:
Name: ____________________________________________________Date: __________
iNDUSTRy:
Sporting Goods
Project 5.7: Putting Plans Into Perspective
Topic: SWOT Analysis
Introduction
As the office manager of a local fitness center that has always prided itself on customer
service and a wide range of equipment for your members, the owner has recently asked
for your thoughts and ideas related to the following situation. Over the years, your center
has always been able to show a profit. However, recently your profits have not been going
up according to past patterns. He believes that this trend might be due to your equipment
being dated or even that your center may have reached its membership capacity. While
you both agree that you would like to update the equipment, you realize that there is still
little room for growth in doing so. The threat of competition has been an issue that your
center has not had to deal with so far. Since you are the only fitness center in town,
expanding and building a new center is an option that should be considered. In order
to make a decision, you decide to perform a SWOT analysis, using the observations and
insights from every staff member. It is your task to gather and organize the information
and prepare it for distribution.
A SWOT analysis is a simple and quick tool that is used by businesses or organizations
to help make decisions for a variety of different situations. SWOT is an acronym for strengths,
weaknesses, opportunities and threats. The SWOT analysis provides a framework that
is easy to read but is more in depth than a list of pros and cons. The strengths and
weaknesses are the internal part of the analysis and measure the business’s internal
capabilities. The opportunities and threats are the external part of the analysis and
measure how the external environment will affect the business.
Your Task
Part 1: Organize Information
You collected the information listed on the next page from members of the staff. Organize
it in the appropriate section of a SWOT analysis grid such as the one on page 152.
(continued)
PaThway:
•
•
•
•
•
•
•
•
•
•
•
Strong customer service
Update equipment
No plan for how to be more profitable
Higher membership fee
Profits have been steady
No “free weights”
The only fitness center in the area
Competition could enter the market
Equipment becoming outdated
Could lead to a franchise
Capital outlay for new equipment
• Knowledge of how to successfully
run a fitness center
• Facility is too small
• Early profits could be small
• Potential for increased profits
• Increase name recognition
• A growing number of members
• Expand to larger fitness center
• Some members travel far to use the center
• Increased expectations of equipment,
facilities and service
Strengths:
Weaknesses:
•
•
•
•
•
•
•
•
•
•
Opportunities:
Threats:
•
•
•
•
•
•
•
•
•
•
•
(continued)
Part 2: Analyze Threats
After looking at the SWOT analysis, your owner decided to further examine the threats.
To do this carefully, he needs research to identify cost of new equipment for the fitness
center. Crucial to the research will be quality and prices. Using a $50,000 budget, he has
asked you to find new fitness equipment for the center that is technologically advanced
in the following three areas: cardio and aerobic, body building and strength (think free
weights). Also consider items, such as monitoring devices, fitness balls, jump ropes and
others, that would appeal to your target market. Prepare an itemized list that includes
equipment, costs and subtotals for each of the three categories.
Part 3: Maximize Opportunities
After looking at threats and analyzing costs, the owner has decided to move ahead with
plans for a new center. One important issue now is to create a plan to acquire additional
members. Work with a staff team and appropriate outside professionals to develop
marketing tools and messages that will bring in new members, retain current members and
increase name recognition; for example, ads, special deals, health benefits, etc. Include
a slogan, a jingle and a 30-second radio spot. You’ll probably want to include health
benefits in as many ways as possible. Then design some indirect sales tools that include
letterhead and business cards.
PaThway:
GENERAL ATTITUDE SURVEY
page 157
PERFORMANCE ASSESSMENT
page 159
BUSINESS CAREERS GLOSSARY
page 161
GENERAL ATTITUDE SURVEY
Read each of the following items. For questions 1-14, decide and circle one of the
following numbers that indicates your response. Items 15-18 require written responses.
5 = strongly agree, 4 = somewhat agree, 3 = neither agree nor disagree,
2 = somewhat disagree, 1 = strongly disagree
1. I believe that the work I do in school classes will help me be successful in a career
in business.
5
4
3
2
1
2. It is easy for me to recognize the practical and creative ideas and talents that
my teammates contribute when we work on an assignment together.
5
4
3
2
1
3. I believe it is important to participate in extracurricular school and community
activities because they help me learn more about my interests and strengths,
what I know and what I can do well.
5
4
3
2
1
4. Turning in assignments on time is important to me.
5
4
3
2
1
5. Learning to solve problems by using information and skills from more than one class
will help me be successful in school.
5
4
3
2
1
will help me be successful in my life outside of school.
5
4
3
2
1
will help me be successful in a future business career.
5
4
3
2
1
(continued)
General Attitude Survey 157
General Atitude Survey: (continued)
8. I believe that if my parents and other adults trust me, they will be more likely to help
and encourage me.
5
4
3
2
1
9. Most adults who are important in my life enjoy their careers.
5
4
3
2
1
10. I have a plan for education after I graduate from high school.
5
4
3
2
1
11. Arriving on time to class and other scheduled events is important to me.
5
4
3
2
1
12. Communicating clearly, either in writing or speaking, is an important requirement
for success in every career.
5
4
3
2
1
13. I have a strong sense of the fact that every career requires an ongoing effort
to understand and apply technology in specialized settings.
5
4
3
2
1
14. At this time, I have a serious interest in pursuing a career in business.
5
4
3
2
1
15. I can name at least one ability, something I do well, that I could use in a business
workplace assignment. Name the ability.
16. I know at least one business career that I’d like to learn more about with the thought
of pursuing it. Name it.
17. I know at least one business career that I’d never want to pursue. Name it.
18. I can name at least two examples of how setting goals has helped me to improve
my knowledge or skills. Name them.
158 General Attitude Survey
PERFORMANCE ASSESSMENT
Now that you’ve learned more about the world of business, marketing and finance,
take a few minutes to reflect on both what you know and how you feel about what
you’ve learned.
1. Use the information from your student text or this student project book to list
the five business pathways. (Don’t be concerned now with the interest ranking line.
You’ll use it for item number 3.)
Interest
Ranking
Pathway Name
________
_____________________________________________________________
________
_____________________________________________________________
________
_____________________________________________________________
________
_____________________________________________________________
________
_____________________________________________________________
2. What are 10 things about yourself that would make you a good employee? Rank them
in order 1 to 10, with 1 being the most important.
3. Think or refresh your memory by reading about the work that professionals do in
each of the five pathways. On the short line in front of each pathway name, number
the pathways in the order of your interest, using number 1 to indicate the pathway
in which you would have the most interest and number 5, the least.
(continued)
Performance Assessment 159
Performance Assessment: (continued)
4. Write a paragraph to summarize your level of interest in business as a career for your
future. If you have no interest at this time, focus your message on how understanding
more about business will help you in another career cluster or as a consumer
of business products and services. Then check one of the following to describe
your interest in a business, marketing or finance career:
■ Definitely
■ Maybe
■ Probably Not
■ Definitely Not
5. Choose one of the following headlines that you will use to analyze and respond
to the tasks that follow:
• Profits Strong, Sales Disappoint
• Competition is Forever
• Tossing Out a Chief Executive
• U.S. Companies Rethinking Marketing in Europe
• Millionaire in the Making
• 10 Ways a Baby Is Like a CEO
• Please Don’t Call the Customers Dead
• Confidence Down Among Consumers
• Starting a New Job? Don’t Blow It
• What’s Your Money Secret?
• Hiring Surge
• Grocery Store of the Future
• Consumers Looking Past Commercials
• Rise in Dismissals Over Ethics
• Wild Demand and Competition for New Product
• The Right Way to Be Good About Credit
Write a news story that might go with the headline, including two topics, one that
focuses on the business management or owner’s perspective and the other from
consumers’ points of view. Remember to include answers to those questions that
you probably learned in a communications class: who, what, where, why, how.
Depending on the topic, you may want to add one other: if.
The headline and story appeared in the morning paper in the city where the business
or home office is located. The CEO called a meeting at 10 a.m. to respond to the
information. Write a brief description about how each department or division might
be affected by the news.
Management
Accounting
Human Resources
Marketing
Administrative Support
160 Performance Assessment
BUSINESS CAREERS GLOSSARY
A
Absenteeism: Habitually not present at work.
Accountant: Individual who keeps or inspects
financial records and prepares reports and tax returns.
Accounting: A system that provides quantitative
information about the finances of a person
or business entity.
Accounts receivable: A list of money owed on
current accounts that a company expects to collect.
Acronym: A name or a word that is developed
by combining the first letters or first few letters
of a series of words.
Acquisition: Something purchased or gained.
Actuary: Individual who calculates statistical
risks such as life expectancy, often for the
insurance industry.
Administrator: A business manager who usually
reports to a department or other director.
Advertising: A paid message that is communicated
through media to influence the purchasing behavior
of the audience.
Allocation: An amount of money set aside to spend
for a specific purpose.
Amortization: Payment of debt on a regular basis
over time; an allowance made for depreciation,
or decrease, in the value of property over time.
Analysis: The examination and separation of
a business-related situation or problem into major
parts to understand the item in question and make
appropriate recommendations.
Analyst: Individual who performs a detailed
examination of systems, procedures, financial
information or other aspects of a business and
suggests improvements.
Annual report: A yearly formal financial statement.
Annuity: Usually payment of insurance-based
retirement savings at monthly or yearly intervals.
Application: An employment form requesting
pertinent personal and job history information;
a computer program.
Appraiser: An individual whose job is to estimate
the value or worth of property, equipment or
other items.
Apprentice: Participant in a training program.
Aptitude: A natural ability.
Assess: To evaluate; to set a value; to determine
a rate, such as a tax rate or a fine.
Assets: Items of value, such as property,
merchandise for sale (inventory), equipment,
investments, payments to be received, intellectual
property (copyrighted information), respected
trademarks (brand names), etc.
Association: Usually a not-for-profit business
organized to support or promote the aims of members.
Auditor: A person, usually a certified public
accountant, who examines the financial records of
businesses or individuals to determine if records are
accurate and meet accepted accounting standards.
B
Back order: An order to be filled when replacement
items arrive.
Bait-and-switch: An unethical or illegal practice
of advertising a low-cost item to attract buyers and
then attempting to sell them another, more highprofit item.
Bank: A business establishment formed to maintain
money for savings and checking accounts, issue
loans and credit, and deal in negotiable securities.
Bargaining unit: A group of employees whose
union represents them in employment negotiations.
Brainstorm: To consider an issue as a group based
on gut feelings or knowledge, without inhibitions.
Benefit: In marketing, the positive reasons for
purchasing a product or service; in human resources,
items in addition to wages that are part of an
employment agreement, such as health insurance,
vacation days, sick days, etc.
Board of directors: Individuals who determine
major company policies or make major decisions
for a company, such as buying another business.
Brand: A recognized mark, label or name of
a product that’s often a registered trademark;
a recognized company name.
Budget: A plan for distributing income; typical
budget categories include salaries, benefits, product
development, advertising and public relations,
rent, loan payments, purchases of equipment and
supplies, maintenance, taxes, travel, etc.
Business: A commercial or industrial enterprise
or establishment that provides a product or service
for the purpose of earning a profit.
Business plan: A document prepared to chart
the course of a company, often to secure
a capital investment.
C
Candidate: A person seeking or being considered
for a job.
Capital: Wealth, including investments, property
and other assets; the net worth of a business (assets
minus debts and other liabilities).
Cash flow: An estimate of cash receipts and
expenditures for a given period of time.
Certification: Confirm as accurate or true.
Business Careers Glossary 161
Change agent: An individual or an entity that
transforms the way things are done.
Channel: In marketing, the way in which a seller
communicates with and sells products or services
to a buyer.
Chief executive officer (CEO): Top company
manager who reports to the board of directors
and has final authority over the daily operation
of a company. Also see “president.”
Chief financial officer (CFO): Top company
manager in charge of financial planning and
record keeping.
Clients: Customers of professional service businesses
such as law firms, advertising agencies, real estate
companies, etc.
Cohort: In marketing, a group defined by age,
economic or social status, interests, etc.
Commerce: Buying and selling of goods.
Commission: The fee or a percentage of sales paid
to a salesperson, stockbroker or other individual
involved in a business transaction.
Company: A term used in general to describe
a for-profit business formed by a group; for example,
K.L. Smythe & Co.
Competitiveness: Likeliness of a business to
succeed in an industry with similar businesses.
Competitor: A business rival who seeks to sell
a similar product or service to customers in
similar markets.
Compensation: Wages and other items of value,
such as insurance, stock, retirement plans, etc.,
provided to employees for their service.
Compromise: A settlement of differences or
a trade-off of one factor of comparable value
for another.
Contingency: An unexpected event or possible
future emergency that businesses include in budget,
disaster or other planning.
Conservative: Using caution and a careful attitude,
not taking excessive risk; understating assets and
revenues and overstating liabilities and expenses.
Consultant: A person or organization that provides
professional advice for a fee.
Contract: An agreement between people that
is enforceable by law.
Consumer: An individual, such as a customer, who
purchases goods or services for personal use.
Controller: A chief accountant; also spelled
comptroller, but pronounced the same.
Convention: A large regional or national meeting
of individuals involved in similar businesses,
professions, industries or trades.
Coordinator: The manager of a business function
or project who usually reports to an administrator
or director.
162 Business Careers Glossary
Cost of goods sold: The amount of money that
represents the cost of buying raw materials and
producing finished products.
Cost-of-living allowance: A bonus paid
to employees to cover unplanned increases
in the prices of food, clothing, energy, etc.
Corporation: A kind of business legally created
to operate as an individual capable of buying and
selling, entering into contracts, etc.
Credentials: Certificates, degrees or other
evidence of education, training or preparation
for employment.
Credit: Financial reputation or status; arrangement
to pay a loan; a payment toward a debt; a plan
to use other peoples’ money.
Creditor: One to whom money is owed.
Cubicle: An office workspace usually formed by
an arrangement of partitions; often called a “cube.”
Cursor: A movable, often blinking indicator that
marks a position on a video screen.
D
Data: Facts frequently used to make decisions.
Database: A large, organized body of information
stored on a computer that can be retrieved
or updated as needed.
Debit: A deduction from an account.
Debt: An obligation to pay or something owed.
Debtor: One who owes money.
Deduction: An amount subtracted from an account.
Demographic: A population statistic that relates
to socioeconomic factors such as age, income,
gender, occupation, education or family size.
Department director: The manager of multiple
similar business functions; usually reports to
a division director or company vice president.
Development: Producing or improving a product.
Differentiation strategy: Establishing a unique
image for a product or brand.
Disclosure: Release of both positive and
negative information.
Discount: A reduced price; a deduction from
a debt, usually for early payment.
Dismiss: To terminate employment, or to fire from
a job.
Distribution: How goods move from manufacturers
and suppliers.
Division: A unit of a company that operates
independently within the company.
Downsize: To reduce the layers of management
or dismiss a portion of the workforce in order
to increase organizational productivity and profits.
E
E-mail: A system for sending and storing
electronic messages.
Employee: One who works for money and
benefits in return for providing services.
E-marketing: Using electronic media to promote
goods or services.
Enterprise: A term often applied to a newly
formed business.
Entrepreneur: One who develops a business
based on his or her own business concept.
Environmental impact: Analysis of the expected
effects of an action on the surrounding natural
and fabricated environment.
Equity: The net worth of a company; the value
of a property after mortgage debt has been
deducted; fairness, impartiality, equality.
Executive: A top manager, such as a general
manager, a chief executive officer, a president
or a vice president of a company.
Expenditure: Use of money or time.
F
Fast track: The quickest way to achieve a goal; used
in human resources or politics to describe someone
selected for rapid advancement, as in “She’s on the
fast track” or “It’s a fast-track job.”
Feature: Distinct parts or characteristics of a product
or service.
Felony: A serious crime punishable by more than
a year in prison or by death. Examples of felonies
are domestic and child abuse, arson, assault and
battery, serious driving offenses, drug and gun
offenses, fraud, murder, robbery and others.
Financing: Funding to create or grow a business
or to help it produce more wealth.
Financial statement: Written record of the financial
status of a business organization or individual.
Fired: Permanently dismissed from employment
due to lack of job performance, lack of ethics or
violations of company rules. Also see “laid off.”
Flat: Unchanged, no significant rise or decline; for
example, “Holiday sales were flat.”
Flex time: An arrangement where an employee
decides when to report for work and when to leave,
as long as the employee works a required number
of hours.
Forecasting: Predicting future business conditions
based on research.
Format: A plan for the arrangement and presentation
of data.
Franchise: A license to market goods or services
in a specific area.
Fulfillment: A process that involves warehousing,
packaging and distributing products.
Full-time: Adjective that describes a typical work
period, such as a 40-hour workweek. Also see
“part-time.”
G
H
Glass ceiling: Describes an unwritten barrier
to higher levels of employment for women
and minorities.
Grid: An arrangement of intersecting horizontal
and vertical lines.
Gross margin: The difference between sales and
the cost of goods sold.
Gross pay: Salary before deductions for taxes,
Social Security and employee benefit contributions.
Gross sales: The amount of sales before deductions
for cost of goods sold, discounts, returns, taxes, etc.
Hard drive: A computer drive that reads information
stored on a computers hard disk.
Hardware: Computer equipment.
Headquarters: The main business office
of a company.
Hourly: Adjective describing a unit of pay or
persons who are paid by the hour and usually
eligible for “overtime” pay. Also see “salary”
and “salaried.”
Human resources (HR): People employed
in an organization; a company’s personnel
recruitment, management and benefits functions.
I
Incentive: A bonus, award or other stimulus that
encourages someone to take action or work harder.
Income: Money received for services, the sale of
products or property, or earnings on an investment.
Industry: A specific branch of manufacturing or
trade or a large-scale business activity, such as the
automotive industry, the construction industry, the
health services industry, the retail industry, etc.
Initiative: The ability to create or begin.
Insurance: A system where individuals and
companies pay “premiums” to a company that will
reimburse them in the event of a loss.
Internal Revenue Service (IRS): A federal
government agency responsible for tax collection.
Interest: Money paid for the use of money; for
example, money paid on a savings account or money
paid on a loan.
Internet: A network that connects computers around
the world.
Intranet: A private network that connects computers
within a company, for example.
Inventory: An itemized list of a firm’s raw materials,
work in process, supplies used in operations and
finished goods.
Invest: To commit money to an enterprise in order
to secure income or gain a financial return for
the investor.
Investment: Property such as stocks, mutual funds,
real estate, etc., acquired with the expectation
of obtaining future income or capital gain.
Investor: One who purchases an asset expecting
financial rewards.
K
L
Keyboard: As a noun, a computer “peripheral” used
used to enter text or data into a computer; as a verb,
to type text or data into a computer.
Laid off: Temporarily or permanently dismissed from
work not because of bad performance or ethical
violations, but because of company problems, such
as lack of sales, “downsizing” or the seasonal nature
of some jobs.
LAN: Abbreviation for “local area network,” a system
of linking electronic equipment, such as computers
or phones, within a company office or building.
Also see “WAN.”
Liability: An obligation, a debt; in accounting,
a bookkeeping entry on a balance sheet showing
the amount of debts that must be paid.
Line: Goods that are produced or sold.
Loan: Transfer of money or property from one
owner, called the lender, allowing another person,
the borrower, to use the money or property. The
borrower promises to return the money or property
after a specified period with payment for its use,
called interest.
Logo: A name, symbol or other special representation of a company name used as a trademark.
M
Management: Persons in charge of operating
a business; the act of managing.
Manufacture: To make or fashion a finished product
by hand or machinery, especially in large quantities.
Market: A public place where products or services
are offered for sale, directly or through intermediaries;
an identifiable group with a need or desire for
a product or service.
Marketing: The process related to promotion
of goods or services.
Marketing plan: A written document that details
a company’s marketing effort.
Marketplace: A term used to describe the world
of business where products and services are bought
and sold.
Media: A term used in advertising, marketing,
politics and public relations to refer to television and
radio, magazines, newspapers, the Internet and other
“channels” or means of communicating with large
“audiences” or groups of people.
Memorandum (memo): A brief written note.
Merchandise: Products that are bought and sold.
Merchandising: The plan that involves marketing
the right merchandise or service at the right time,
in the right quantities and at the right price.
Merger: The combining of two or more companies.
Merit pay: In some companies, a raise in pay
or a bonus based on the quality of work.
MIS: Abbreviation for “management information
system,” an integrated, networked, computer-based
system that combines data and information from all
departments of a company and can be accessed
to help make management decisions.
Mission statement: The written definition
of a corporation’s vision and values.
Monitor: A video display screen.
Moonlight: To work a second job, often at night.
Mouse: A computer “peripheral” used as a pointing
device to position a “cursor” on a video screen.
N
O
Negotiation: The process of making an agreement.
In business, the terms of an agreement often are
written in the form of a “contract.”
Network: A system of computers that have been
connected to share information; individuals connected
by profession, trade, career, business or other
relationship who provide mutual support.
Niche: In marketing, a particular group or “cohort”
that would be interested in a product or service;
for example, sports fans would be interested in teamrelated athletic clothing.
Notice: A written announcement, such as a notice
of sale, a notice of resignation, etc.
Opt out: Choose to not participate.
Order: A written request for materials, such as
merchandise, often including processing and
delivery instructions; an instruction; a method
of arrangement, such as alphabetical order
or chronological order.
Organigraph: A graphic illustration of the way work
gets done in a company.
Organizational structure: The way in which
interrelated groups within an organization are
structured in terms of authority and responsibility.
Organizations: Structures through which roles
and responsibilities function to accomplish
predetermined objectives.
Overhead: Costs of running a business that are
not associated with an item or service.
Overtime: Hours worked in addition to the regular
schedule; for hourly employees, additional pay for
those hours usually computed at a higher pay rate
such as “time and a half.”
P
Packaging: Material or process used for making
packages; the art or style of presenting merchandise
for sale.
Partner: One of two or more persons who operate
a business and share in the profits and risks.
Part-time: Adjective that describes a work schedule
that’s shorter than the number of hours in a typical
work period. Also see “full-time.”
Pension: Monthly payment to long-term employees
who have retired from the company, usually based
on length of service and a percentage of wages.
Payment: A sum of money paid to satisfy a claim
or debt.
Payroll: A total sum of money a business pays its
workers; list of employees and what they are paid.
Payroll taxes: Taxes collected on wages and
salaries, such as federal, state and sometimes local
income tax and taxes for Social Security (FICA)
and unemployment insurance.
Performance: What is required to fulfill
an obligation or a promise; a high level
of product capability.
Peripheral: Computer-related equipment or
“hardware,” such as a keyboard, mouse, DVD
or other disk drive, etc.
Personnel: People who are employed by or are
active in an organization’s workforce.
Pilferage: The act of stealing a small amount.
PIN: Abbreviation for “personal identification
number,” used to access automatic teller machines
(ATMs), bank accounts, computers etc.
Pitch: An attempt to persuade, promote or sell
to a “target audience.”
Point of sale (POS), point of purchase (POP):
A place where a product can be purchased; a system
for capturing the time and place of a sale for
purposes such as credit checking, inventory
updating, employee scheduling, etc. Also used as
an adjective; for example, “point-of-sale advertising”
or “point-of-purchase promotion,” such as special
displays, food or product samples, etc.
Premium: An “incentive,” such as a bonus, prize or
award; an amount usually paid monthly, quarterly,
semiannually or annually for insurance.
Presentation: Formally showing or displaying
publicly something to enlighten an audience and/or
persuade them to commit to a course of action.
President: Highest-ranking legal officer of a
corporation and a member of the board of directors;
typically provides leadership and direction for the
company, but not day-to-day management; also
see “chief executive officer.”
Principal: A term describing the highest-ranking
executive in a company, such as a president or chief
executive officer; a person empowered to represent
these individuals.
Prioritize: To arrange in an order based
on importance or timeliness.
Probation: A trial period during which employers
assess whether or not new employees are able
to meet job expectations.
Productivity: The rate at which goods and services
are produced.
Profit: Income received from selling products and
services for more than the cost of producing them.
Profitability: Ability to earn a profit, expressed
as a percentage of earnings on sales.
Programmer: A person who prepares instructions
for computers.
Projection: Use of trends and assumptions
to estimate future performance.
Promotion: An activity designed to increase sales
of a product or service that may include advertising;
advancement to a higher position in a company.
Prototype: An original, full-scale and usually
working model of a new product that serves as
a basis for later stages of product development or
other versions of a product.
Q
R
QMS: Abbreviation for “quality management system.”
See “Six Sigma” and “TQM” for more information.
Qualifications: Employment-related credentials,
experience, abilities and accomplishments.
References: Individuals who are willing to verify
a person’s abilities to do a job and to recommend
a person for a job; also letters of recommendation.
Representative: A person who can act on behalf
of a company within the scope of the person’s
position, such as a customer service representative
or a sales representative, or in a legal or other
official capacity.
Research and development (R & D): Futureoriented activities related to discovering, developing
and testing new products, procedures or services
for the marketplace.
Resignation: A letter, memo or other notification
indicating one’s intention to leave a job.
Résumé: A brief account of one’s background,
education, qualifications and work experiences.
Retail: The sale of a product or small quantity
of products directly to a “consumer.” Also
see “wholesale.”
Retire: To leave regular employment due to age
or length of service.
Revenue: Income earned.
S
Salary: Fixed amount of pay usually based on
an annual amount that’s divided into biweekly,
semimonthly or monthly payments to an employee.
Salaried: Adjective describing an employee who
receives a salary rather than hourly pay.
Schedule: A timetable for completing tasks.
Sector: A part or division of the economy,
as in private sector or public sector.
Semimonthly: Something that happens twice
a month.
Server: A central computer on a network where
software programs, databases and files are stored;
a computer that processes requests for documents
such as Web pages.
Share: A unit of stock or a portion of a mutual
fund or other investment that entitles the owner
to a proportion of any profits that are distributed.
Six Sigma: This statistics-related standard refers
to a quality management system based on the work
of W. Edwards Deming, an American physicist and
statistician (http://www.deming.org/theman
/index.html.) The aim of this process management
program is to reduce manufacturing defects to 3.4
in a million. The term also is used in a more general
sense to describe a business improvement program.
Search the American Society for Quality at
http://www.asq.org and http://www.asq.org
/six-sigma-training for more information. Also see
http://www.answers.com/six%20sigma. Then
look up “TQM” to find out more about another
approach to quality management.
Slogan: An attention-getting word or phrase used
to promote products or services; for example,
“We try harder” and “Which iPod are you?”
Software: Computer programs that direct the
operation of computer hardware.
Specifications: Detailed description of an item
or items being purchased or manufactured and the
terms of agreement related to price, payment
schedule, discounts, delivery or distribution, etc.
Spell-checker: A function usually provided with
popular computer word processing programs that
checks for spelling errors in a document.
Spreadsheet: A software tool typically used for
accounting purposes that organizes and
calculates numerical data and displays the results
in rows and columns on a computer screen.
Stakeholders: Persons who have an interest
in a business or other enterprise.
Standard & Poor’s: The name of a company
that provides credit ratings of companies, financial
market indices, such as the S&P 500®, and other
products and services related to financial decision
making, such as Standard & Poor’s Equity Research
and Standard & Poor’s Interactive Stock Reports.
Start-up: A new business venture that has recently
begun operating.
Statistics: A field of mathematics that deals with
collecting, analyzing, interpreting and presenting
numerical data.
Stock: A share of a company, typically a publically
traded company on the New York Stock Exchange
or others. Also items intended for sale or distribution.
Stockholder: A person or organization with
ownership in a corporation.
Strategy: A management plan of action or a method
for completing objectives.
Structure: The way parts are arranged, or any
constructed improvement to a site.
Subsidiary: A branch, division or local unit
of a business.
Subtotal: Total of a part intended to be added
to other amounts.
Supply: To furnish a commodity offered at a given
price or available for meeting a demand.
SWOT: An acronym for strengths, weaknesses,
opportunities and threats, an approach to analyzing
internal and external characteristics of companies and
the environment in which they operate.
T
U
V
Target market: A group of similar persons for
whom a company creates a product specifically
fitting the needs and preferences of that group;
also known as a “target audience.”
Telecommuting: A way of working by using
telecommunications to transmit information
to an office without being physically present.
Time and a half: One and one-half times the pay
of hourly employees who work more than the
established number of full-time hours in a pay
period. For example, if a full-time hourly worker’s
regular pay is $9.00 an hour, the worker’s overtime
pay would be $13.50 an hour. In some situations,
“double time” may apply, such as working on
a holiday.
Timeline: A chronological arrangement of activities
or events.
TQM: An abbreviation for “total quality management,”
TQM is a quality management system whose aim
is to improve manufacturing and service over time
based on continuous feedback. TQM measurements
are based on standards and guidelines of the
International Organization for Standardization (ISO),
a federation of national standards bodies from over
100 countries. The American National Standards
Institute (ANSI) represents the U.S. with ISO
and other standards-setting organizations. Their
work allows companies to exchange goods and
services internationally, which helps them
compete worldwide. For more information, see
http://www.answers.com/TQM, http://www
.ansi.org and http://www.iso.org/iso/en
/ISOOnline.frontpage. Also see “Six Sigma,”
another quality management system (QMS).
Turnover: The number of times a given stock
of goods is sold and replaced during an accounting
period; total number of workers hired divided by
the number replaced during a given period of time.
Union: A labor organization, such as the United
Auto Workers, that represents members in workrelated negotiations with employers. Also see
“bargaining unit.”
URL: Abbreviation for “uniform resource locator,”
an Internet address; for example, http://www.bls
.gov/oco/home.htm.
Update: Provide current information to an individual
or group of persons, or bring information up
to date.
Value: Monetary worth of all goods and services
arising from ownership.
Variance: The difference between actual cost and
standard cost for direct material, labor and overhead;
the difference between a projected amount and
actual results.
Vendor: An organization or person who supplies
or sells.
Venture: An entrepreneurial activity assuming
a degree of risk.
Venue: The place where something happens.
Vice president: The second highest-ranking officer
of a corporation who reports to the president.
Typically companies have vice presidents for all
major functions, such as a vice president of sales;
a vice president of finance, a vice president
of manufacturing, etc. Vice presidents usually
manage a division made up of several departments
or other major functions.
W
WAN: Abbreviation for “wide area network,”
a system of linking electronic equipment over
a large geographic area by means of telephone
lines, satellite dishes, etc. Also see “LAN.”
Warehouse: A large building used for
storing products.
Warranty: A guarantee that a product meets
expectations related to quantity, quality, size,
condition, service and other features.
Webmaster: A person who develops, maintains
or manages a website.
Wholesale: The sale of large quantities of products
at discounted prices to retail businesses for resale
in smaller units at marked-up prices.
World Wide Web: A system for sending multimedia
documents (text and graphics) over the “Internet.”
Also see “e-mail.” The World Wide Web Consortium
(W3C) develops standards for Web protocols,
such as html, URLs, etc. For more information,
go to http://www.w3.org/Consortium and
http://www.answers.com/World%20Wide
%20Web%20consortium.
NOTES
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ll■ career communications, inc.
6701 W. 64th Street, Suite 210 • Overland Park, KS 66202
913-362-7788 • [email protected]
www.carcom.com

studentprojectsbook - American Careers Educational Programs

Transcription

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