BUS650 Study Guide

Navigating this Study Guide

Study Guide Structure

In this study guide, the sections in each unit (1a., 1b., etc.) are the learning outcomes of that unit. 

Beneath each learning outcome are:

• questions for you to answer independently;
• a brief summary of the learning outcome topic; and
• and resources related to the learning outcome. 

At the end of each unit, there is also a list of suggested vocabulary words.

How to Use this Study Guide

1. Review the entire course by reading the learning outcome summaries and suggested resources.
2. Test your understanding of the course information by answering questions related to each unit learning outcome and defining and memorizing the vocabulary words at the end of each unit.

By clicking on the gear button on the top right of the screen, you can print the study guide. Then you can make notes, highlight, and underline as you work.

Through reviewing and completing the study guide, you should gain a deeper understanding of each learning outcome in the course and be better prepared for the final exam!

Unit 1: Your Role as an Entrepreneurial Leader

1a. Analyze the difference between management and leadership as an entrepreneur

• What are the main differences between a leader and a manager?
• What are the three main roles of a manager?
• What is important to consider about the interpersonal, decisional, and informational roles of managers?
• What are the major duties managers perform?

Managers take on three main roles, which include interpersonal, decisional, and informational. Within the interpersonal role, they may be figureheads, such as by signing contracts, and they also perform other formal duties. As part of this role, they also lead their people by motivating, training, and communicating. The decisional role of managers involves initiating projects, idea generation, taking corrective action, and resolving disputes. They also allocate resources and negotiate. The informational role is one where they provide data to employees and other managers.

Manager responsibilities include long-range planning, controlling, environmental scanning, supervision, coordination, working with customs and the community, solving internal issues, monitoring planning, and scheduling the organization's production of products or services. There are four levels in the management hierarchy. The first is a rank-and-file employee, followed by first-line managers, middle management, and executive management. Each of these levels of management requires a different set of skills; for example, executive managers may use more conceptual skills, which are high-level thinking and strategic skills, while first-line managers use more technical skills. All levels of management use human relations skills. Management is different from leadership in that management focuses more on tasks, while leadership uses interpersonal skills to get things done. 

To review, see What is an Entrepreneurial Leader?.

1b. Categorize the characteristics and behaviors of a leader

• What are common leadership traits, and how do they differ from behaviors?
• How do leader behaviors impact relationships and tasks?
• What are the different types of entrepreneurs?

While leadership traits are important, leadership behaviors are important too. Leader traits might include drive and self-confidence, but behaviors determine how leaders act in certain situations. Regarding leader behaviors, consideration is the relationship-oriented behavior of a leader, while initiating structure is the task-oriented behavior. For example, consideration behavior might include being supportive and friendly, while initiating structure might include deciding what needs to be done and how to do it.

The Leadership Grid is one way to look at leadership concerns, such as concern for people (consideration behavior) and concern for production (initiating structure behavior). The level of concern for production and people may place leaders in five different categories of leader behaviors: accommodating, sound, status quo, indifferent, and controlling. 

When we consider leadership behaviors and traits, it is important to look at the types of entrepreneurs. The first is a classic entrepreneur, a risk-taker who starts a company based on innovative ideas. A multipreneur is someone who starts a series of companies over some time. Perhaps the most common type of entrepreneur manager is an intrapreneur, which means within their organization, they display leadership behaviors and traits that allow them to be entrepreneurial in their own companies.

To review, see Leader Behaviors and Types of Entrepreneurs.

1c. Compare and contrast the difference between elements of the POLC model

• How do each of the elements of the POLC model differ from each other? How are they the same?
• How might you apply leadership in planning, organizing, and controlling as an entrepreneur?
• In terms of leadership, how do you see each of the elements of the POLC model used?

While we've been addressing the elements of leadership, understanding the POLC model from a leadership perspective is important. The POLC model stands for Planning, Organizing, Leading, and Controlling. As you can see, leading is one of the main roles of management.

Planning involves anticipating potential problems or opportunities and developing goals, objectives, policies, and procedures around the organizational needs. There are many different types of planning, such as strategic planning, which has a timeframe of 1–5 years, to operational planning, which addresses the methods that will be used to meet the goals and objectives.

Organizing involves dividing tasks, grouping jobs and employees, and assigning responsibility. Ultimately, organizing involves coordinating and allocating resources effectively to carry out the planning phase.

Controlling is the process of assessing the organizational progress toward accomplishing goals. It involves setting standards, measuring performance, comparing performance to standards, taking corrective action, and using the information gained from this process to set future performance standards.

Leading is the ability to effectively guide and motivate others toward achieving goals. Several leadership styles can be used, and often, the leadership style is based on the particular situation or people being led.

To review, see Introduction to the POLC Model.

1d. Examine characteristics of different types of entrepreneurs, such as confidence and self-efficacy

• What leadership traits do you possess that will make you a great entrepreneurial leader?
• What leadership traits do you think are most important to be successful?
• Why do you think high self-monitoring is an important trait in leadership?

The trait approach to leadership involves core personality traits that make a leader successful. They can include elements like drive, honesty, integrity, self-confidence, cognitive ability, self-efficacy, knowledge of the business, and other traits such as charisma, creativity, and adaptiveness.

Dispositional traits describe mood and disposition. People who have positive affective traits exhibit an active mood and strong enthusiasm. Many leaders have positive affective traits.

High self-monitoring is a personality trait that refers to the strength of an individual's ability and willingness to read verbal and non-verbal cues. The ability to do this allows one to alter behavior so their self-presentation fits a certain situation. High self-monitors often end up as leaders in organizations.

Understanding strengths, weaknesses, opportunities, and threats (SWOT) can help develop leadership traits and abilities. Many leaders perform a SWOT analysis on themselves to assess their strengths and areas they want to work on.

To review, see The Difference between Leadership Traits and Behaviors.

Unit 1 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• classic entrepreneur
• conceptual skills
• consideration behavior
• controlling
• decisional role
• dispositional traits
• initiating structure
• interpersonal role
• intrapreneur
• Leadership Grid
• leading
• multipreneur
• organizing
• planning
• self-monitoring
• strengths, weaknesses, opportunities, and threats (SWOT)
• trait approach to leadership

Unit 2: Motivating Your Team

2a. Apply motivation theories to motivate employees and the organization as a whole

• Which theory do you see being applied to motivate you in your current or past organization?
• What are the main differences between needs-based theories and process motivational theories?
• How can you use these theories as a leader in your business or organization?

Motivation is what energizes, maintains, and controls behavior. Motivated employees tend to have a high level of innovation and produce higher-quality work. There are two main sources of motivation: internal and external. Within this, managers can motivate people using several motivation theories: need-based, behavior-based, cognition-based, and job-oriented.

Maslow's Hierarchy of Needs is a needs-based motivational theory that includes human needs, which a leader can leverage to motivate others. The levels in the hierarchy include physiological, safety, love/belonging, esteem, and self-actualization. The ERG Theory addresses that humans are motivated based on three main needs: existence, relatedness, and growth. These needs are based on Maslow's earlier work.

One behavior-based theory is the Two-Factor Theory of Motivation, which looks at hygiene factors like working conditions and salary. In contrast, motivators are intrinsic and relate to the job, such as achievement, interesting work, and growth opportunities. 

Cognition-based theories include the Equity Theory, which says we compare our inputs and outputs to others and are more motivated if there is equality between salary and inputs but less motivated if, for example, someone is earning more but is perceived to give fewer inputs and outputs to the organization. Expectancy Theory says we will put in as much effort as we expect to receive rewards (either intrinsic or extrinsic rewards). 

Job-based theories look at factors such as job design, job enlargement, and job rotation to attempt to motivate people based on ensuring their work is rewarding.

To review, see Motivation Theories and How to Apply Motivation as a Leader.

2b. Compare and contrast the variety of ways entrepreneurial leaders communicate effectively

• What is the communication process?
• How does non-verbal communication impact leaders?
• What medium of communication should be used in a variety of situations?
• What are the directions of communication?

Managerial communication is key for effective entrepreneurial leaders. For effective communication, understanding the meaning of encoding, medium, decoding, effects, and noise are important, as they are how messages are received. 

Leaders engage in oral communication, often in decisional roles or informational roles. Communication types can include oral, written, and non-verbal communication. Daily interactions with managers might include reading, speaking, listening, and writing. Within these types of communication, understanding what influences communication, such as perception, interaction, involvement, and organizational design, can help us be better communicators as leaders. When we consider non-verbal communication, this might include boy language, eye contact, facial expressions, posture, touch, and space.

When we communicate as leaders, we want to consider the information channel and its level of richness. For example, a face-to-face conversation is high in richness, while a formal written document is low in richness. As leaders in our organization, knowing when to use verbal versus written communication is important, such as using written communication when conveying facts but using verbal communication if feelings and emotions are involved. 

Organizational communication travels in many directions: downward, laterally, upward, and diagonally. 

To review, see Communication Types and Channels and Types of Communication.

2c. Identify methods to manage and motivate human capital, such as through intrinsic and extrinsic means

• How does ethics impact employee motivation?
• How might you, as an entrepreneur, ensure diversity and inclusion to grow your business?
• What are some methods of employee development and investing in human capital that can help your business succeed?

Ethics and social responsibility can assist in motivating employees, as most people prefer to work with an ethical company. Stereotyping can lead to discriminatory behavior, which leads to prejudice and ingroup favoritism. We want to avoid these as we try to motivate people. Part of avoiding these assumptions is ensuring we follow the law regarding diversity, such as avoiding discrimination based on age, disability, genetic information, national origin, pregnancy, race/color, religion, and sex. We also addressed sexual harassment and equal pay as part of our discussion on diversity and multiculturalism. 

Investing in human capital and allowing for talent development through performance management can help build profitable and successful companies. 

To review, see:

• Stereotypes, Discrimination and the Entrepreneur
• Ethical Entrepreneurial Leadership
• Diversity, Inclusion, and the Law
• Investing in Human Capital

2d. Propose elements of organizational culture to apply to a business

• What external environment elements are important to consider as part of goal setting?
• What is the main difference between a mechanistic and an organic organizational structure?
• How does the Competing Values Framework assist us in developing a company culture?
• How do you set SMART goals?

This section addresses elements of organizational culture and how culture can impact goal-setting within organizations. The external environment consists of economic forces, technological forces, sociocultural forces, national disasters, and government and political forces. Understanding these elements and changes for each will help the entrepreneur make better, more informed decisions.

Part of organizational culture also involves organizational structures. Most small start-ups begin as an organic structure, with few policies and rules, but eventually end up being a mechanistic structure, a more formalized structure that is usually necessary to facilitate running a larger organization. 

One of the important elements of culture involves the internal environment, such as ensuring all employees have shared values, providing the structure and systems are in place to help the organization meet goals, and, of course, making sure the people with the right mix of skills and abilities work for the organization. According to the Competing Values Framework, we can look at organizations as either internally or externally focused and their level of control to try and determine company culture.

Winning organizations, big or small, set goals with these cultural elements in mind. Companies should always set SMART goals, which are specific, measurable, attainable, realistic, and time-bound.

To review, see Culture and Goal Setting.

Unit 2 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• Competing Values Framework
• Equity Theory
• ERG Theory
• Expectancy Theory
• external environment
• Maslow's Hierarchy of Needs
• mechanistic structure
• motivation
• organic structure
• SMART goals
• Two-Factor Theory of Motivation   

Unit 3: Leadership Styles

3a. Explain the variety of leadership styles, such as situational leadership, and their similarities and differences

• Why is it important to use a different leadership style depending on the situation?
• Can using a laissez-faire approach be useful in some situations?
• What is the difference between task-centered and employee-centered leadership?

In this section, you learned about the different types of leadership styles. While there are many styles, it is important to note that most leaders tend to lean toward one style or another. However, it is good to consider various leadership situations and which style might be best for a given scenario.

Leaders tend to be either task-centered or employee-centered. Task-centered leaders are focused on the tasks that need to be done and the elements required to get the tasks done. Employee-centered leaders focus on relationship-building and supporting employees. Many leaders combine both of these qualities to be effective. 

Another leadership style is autocratic, democratic, or laissez-faire. Autocratic leaders tend to make all of the decisions without employee involvement. Democratic leaders involve employees in decision-making processes, while laissez-faire leaders are hands-off and allow employees to make decisions independently. The choice of style used is often dependent on the situation. 

Some models look at the best leadership style depending on the situation and other factors. Fielder's Contingency Model looks at three elements, leader-member relations, task structure, and leader position power, to determine the highest performance and to help leaders understand when a more task-centered approach should be used versus an employee-centered approach. Similarly, the Path-Goal Theory addresses situational forces, such as the employee's characteristics and the leader's behavior, to determine the best approach. Among these approaches are supportive, directive, participative, and achievement-oriented leadership. 

Transformational leadership inspires others with vision, while servant leadership focuses on employee development.

To review, see:

• Leadership Approaches
• Servant Leadership
• Situational Approaches to Leadership

3b. Examine the leadership styles and entrepreneurial leadership effectiveness based on the traits and behaviors of successful leaders

• How might you see authentic leadership in practice?
• What elements of destructive leadership should we be concerned about as leaders?
• What makes an ineffective leader?

Authentic leadership is the idea that leaders symbolize four unique components. The first is self-regulation, internal moral values and principles, balanced processes in decision-making, transparency, and a leader's self-awareness. It has been found that authentic leadership can generate higher productivity and creativity in organizations, which, of course, is essential for entrepreneurs.

Often, the reasons for poor or negative sides of leadership are a result of destructive leader behaviors and the effects of these behaviors on followers. Destructive leadership is focused on dominance, coercion, and self-orientation, while ineffective leadership is often a result of the leader's incompetence, rigidness, or lack of self-control. As a follower, these leadership styles can produce job dissatisfaction and reduce employee commitment, stress, and loss of trust. 

To review, see Authentic Leaders and Being a Follower.

Unit 3 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• authentic leadership
• autocratic leaders
• democratic leaders
• destructive leadership
• employee-centered leaders
• Fielder's Contingency Model
• ineffective leadership
• laissez-faire leaders
• Path-Goal Theory
• servant leadership
• task-centered leaders
• transformational leadership

Unit 4: Entrepreneurial Tasks and Leadership Challenges

4a. Compare and contrast models for effective decision-making and critical thinking skills

• What are the two main types of decisions, and what method would you use to make these decisions?
• How does emotional intelligence impact decision-making?
• What are the barriers to effective decision-making?

One of the important things entrepreneurs and leaders do is make decisions. We can divide decision-making into two main types of decisions: reactive decision-making and reflective decision-making.

Reactive decision-making means making decisions based on intuition, and these decisions are usually made quickly. Reflection decision-making involves making a complex and novel decision, where time will be spent trying to make the best decision. Managers typically make both types of decisions based on the situation.

Similarly, managers often make programmed decisions, which are decisions repeated over time, using heuristics, which are mental shortcuts used to make these decisions. Non-programmed decisions are unusual decisions where we don't have a set of heuristics to help guide us.

The decision-making process consists of six steps:

1. Recognize a decision needs to be made
2. Generate multiple alternatives
3. Analyze the alternatives
4. Select the best options
5. Implement the alternative
6. Evaluate the effectiveness of the decision.

Emotional intelligence is the ability to recognize, understand, pay attention to, and manage one's own emotions and the emotions of others. Emotional intelligence has four main factors, which include self-awareness (the ability to understand one's emotions), self-regulation (the ability to handle one's self in a variety of situations and not overreact or underreact), social skills (the ability to read a room, for example), and empathy (the ability to understand another's situation).

There are barriers to effective decision-making, which include bounded rationality (the idea for complex issues, we can't be completely rational due to all of the unknowns), escalation of commitment (when a person remains committed to a poor decision), time constraints, uncertainty, and our personal biases. 

Logical fallacies can impact decision-making too, such as false cause, which means that because two things are related, one causes the other, and ad hominem, which relates to personal biases toward a person and their suggestions rather than considering the merit of their input.

To review, see Decision-Making as a Leader.

4b. Determine the most effective change management model as an entrepreneur

• What are the different types of change an organization can undergo?
• How might a leader apply a change model to ensure employees accept change?
• How might an entrepreneurial leader look for abundance-based changes?

There are three main types of organizational changes. A structural change is a type of change where an organization may restructure, such as by reorganizing departments. Sometimes, these changes are needed as a business venture grows or offers different products and services. A technological change is implementing new technology, such as a human resource management system. A culture change focuses on creating different thinking patterns and behaviors within an organization.

Within these major types of changes, companies can have incremental change, which is small refinements. Transformational change is a significant shift in the organization. Strategic change can be incremental or transformational and allows a company to align its strategy with the other necessary support systems. When we think about change, we can think of it as abundance-based change (aiming for greater success) or deficit-based change (something that is not working and needs to change). Within this, some changes may come from the top down (such as when change comes from the upper levels of management), while others may be emergent or come from the bottom up (such as when employees initiate change).

Depending on an organization's stage, it may need to adhere to a more simplistic organizational structure but then develop more formal systems and structures as it grows. 

Leaders must harness the ability to change quickly and frequently. Several models for implementing change, such as Lewin's Three-Step Model and Kotter's Eight-Step Plan, can help managers and leaders shepherd change in their organizations. 

To review, see Types of Organizational Changes and Change Management.
 

4c. Distinguish the principles required for effective team dynamics to assist in meeting entrepreneurial goals

• Why are teams important in entrepreneurial organizations?
• Why are team and group norms important to understand as a leader?
• What five team dysfunctions should you be aware of as a leader?

A team is a small number of people with complementary skills committed to a common purchase, goals, and approach to meet the goals. The five elements that make a team function include common commitment, specific performance goals, complementary skills, commitment to how the work gets done, and mutual accountability. There are two main types of teams: formal and informal. Formal teams are usually permanent and work under a single supervision. They are always created with proper authority, such as by the nature of the organizational chart. Informal teams are usually formed by the team members themselves and are outside of the form hierarchy of the organizational structure.

Every team goes through the team development process. Tuckman's Model of Team Development consists of four stages, and in each stage, there is more of a focus on the task versus the relationship building. The stages are forming, storming, norming, and performing.

Within teams, individuals are expected to behave in a certain way. Role identity refers to the actions and attitudes consistent within a particular role, while role perception is our view of how we should act in certain situations. Role expectations are how others believe one should act in a given situation, and role conflict occurs when the duties of one role conflict with those of another. Teams also have norms, which are the things commonly accepted in the team. These can be performance norms, appearance norms, social arrangement norms, and allocation of resources norms. When teams have high performance norms and high cohesiveness norms, the team usually has increased productivity.

Conflict is inevitable in teams, and team members can take a constructive or destructive, active or passive approach to conflict. When leading teams, the goal should be to take a constructive-active approach.

Besides conflict, teams should be aware of dysfunctions. The five dysfunctions of a team, according to Patrick Lencioni, include:

1. The absence of trust
2. Fear of conflict
3. Lack of commitment
4. Avoidance of accountability
5. Inattention to team results

To review, see:

• Building a Team
• Group and Individual Behaviors
• Team Dysfunctions

4d. Evaluate principles as they relate to talent management, such as performance management approaches

• What are some methods that can be used to manage employee performance?
• How do you see the progressive discipline process in your current or past organization?
• What are the advantages of using a Total Rewards Strategy for employees?

One of the important duties of managers and leaders is to manage the performance of their employees. Pay-for-performance models are focused on how the best employees can be rewarded in organizations. Many companies also look at a total rewards strategy to motivate, which includes compensation, benefits, work-life balance, recognition, performance management, and talent development. 

There are both internal and external factors that may impact performance. Internal performance factors include conflict within the organization, such as when employees have poor time management skills, don't enjoy the job, or have career goals that are not met. External performance factors could include poor job design, lack of management support, or a mismatch between employee skills and job.

At times, it may be necessary to discipline an employee based on actions that are not acceptable. A specific process that is fair and the same for everyone should be followed when handling such issues. Organizations might have mandated issues, or they may see performance issues as being a single incident or a behavior pattern. Many organizations use a progressive discipline process, which involves taking corrective action to improve employee performance. 

There are several types of employee separations, such as absconding, when an employee stops showing up to work with no formal resignation. A severance package, that is, compensation given to an employee when they leave the organization, will vary greatly based on the individual employee contract and the country in which they are working.

Part of managing performance is developing a system where you can give formal and informal feedback. A performance appraisal system is typically a formal system in which feedback can be given. Several methods can be used to rate employee performance, and each has advantages and disadvantages.

To review, see Feedback and Performance and Managing Performance and Non-Performance.

4e. Analyze power and politics, and conflict management as it relates to entrepreneurship

• What are the different types of power?
• Which types of power are most effective in leadership?
• What types of conflict have you been involved in personally or professionally?
• What tips would you give someone who is negotiating a pay raise?

The concept of power is related to authority, which is the right to seek compliance from others, and leadership, as you already know, is focused on getting desired responses beyond just having an employee listen to you because of your power in the organization.

There are several bases of power leaders might use in various situations.

• Referent power is the power someone may have if people look up to them because of their personal qualities.
• Expert power is the type of power that occurs as a result of expertise and experience.
• Legitimate power is the type of power that occurs due to someone's position or title in an organization.
• Reward power is the type of power that occurs when a person has power over someone because they can give them rewards, such as a pay raise.
• Coercive power is power derived from the ability of one person to punish another, such as by writing them up, or physical power based on physical strength.

Usually, there will be more employee cooperation and commitment when a leader uses referent or expert power.

In organizations, people sometimes use power tactics, which might include controlling information, controlling access to people, controlling an agenda, and several others. Of course, as leaders, we want to use our power ethically. 

In many organizations, there is also politics. Politics often occurs in organizations with high employee competition and high organizational complexity. Limited resources and change are all reasons people might use power in an organization.

Conflict in organizations is inevitable, as we've discussed earlier. There are four main types of conflict:

1. Intrapersonal conflict (within oneself)
2. Interpersonal conflict (between two people)
3. Intragroup conflict (in a team)
4. Intergroup conflict (groups or teams in conflict with each other).

People deal with conflict by competing, collaborating, avoiding, accommodating, and compromising. There is no best method – often, the method depends on the individuals involved and the conflict itself.

When we look at negotiations, there are four common characteristics:

1. The parties are interdependent
2. Each party wants to achieve the best for themselves
3. The parties are motivated and capable of influencing one another
4. The parties believe they can reach an agreement

To successfully negotiate, one first should prepare and plan, define ground rules, clarify what the other party wants, justify your wants, bargain and problem-solve, and close and implement. Personality, gender, and cultural differences influence negotiations.

Leaders often will set goals. It is important to set goals using the SMART method: specific, measurable, attainable, realistic, and time-bound.

To review, see:

• Types of Power
• Conflict Management
• Goal Setting Strategies

4f. Apply goal-setting principles to motivate an organization

• What personal and business/career or entrepreneurship goals do you have?
• How can you make sure your goals are SMART?
• What kind of self-reflection should you do to help you meet your goals?

The first step in a leadership plan is determining your goals as a person and leader in your organization. The SMART goal method should be used, and short-term, medium-term, and long-term goals will be considered. 

Once you've set goals, you can look at what skills you may need to meet your goals. For example, perhaps you want to open a financial analysis firm but need more work understanding personal investing. In this step, you'd address the skills required to meet your goals. The next step is to write plans to meet the goals. In other words, what are the smaller, specific steps you need to take to reach your SMART goals and develop the skills you've identified earlier? Also, working on self-assessment, such as identifying the personality traits you might need, is important here.

To review, see You Try It: Create a Leadership Development Plan.

Unit 4 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• absconding
• abundance-based change
• bounded rationality
• coercive power
• culture change
• deficit-based change
• empathy
• escalation of commitment
• expert power
• external performance factor
• formal team
• incremental change
• informal team
• intergroup conflict
• internal performance factor
• interpersonal conflict
• intragroup conflict
• intrapersonal conflict
• legitimate power
• non-programmed decision
• norm
• pay-for-performance
• performance appraisal system
• programmed decision
• reactive decision-making
• referent power
• reflection decision-making
• reward power
• role conflict
• role expectations
• role identity
• self-awareness
• self-regulation
• social skills
• strategic change
• structural change
• team
• technological change
• total rewards strategy
• transformational change
• Tuckman's Model of Team Development