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Real Estate Brokerage: A Management Guide 8th Edition
Laurel D. McAdams Joan m. Sobeck
Copyright © 2013 Kaplan, Inc. All rights reserved.
Chapter 1
The Challenge of Change
© 2013 Kaplan, Inc.
I. The Challenge of Change
© 2013 Kaplan, Inc.
A. Impact of Low Interest Rates
B. The Next Wave
II. The Big Picture
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A. Change Is Necessary
B. What Will a Real Estate Company be Doing?
C. What Is the Role for MLS?
D. What Will Consumers Want?
E. Where Will the Real Estate Office Be?
F. What Will a Real Estate Company Look Like?
5
III. The Future Picture
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G. Who Will Be Leading the Company in the Next Ten Years?
H. What’s the Next Generation’s American Dream?
I. What Will Professional Associations Be Doing?
J. What Will Industry Regulations Look Like?
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III. The Future Picture
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IV. A Final Thought
A. Although the real estate industry is still about real estate, the way that it does business is definitely changed
B. All businesses face similar challenges
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V. Conclusion
A. Change is inevitable
B. Be open-minded and innovative
Chapter 2
Leadership
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I. Character of a Leader
A. Most Revered Traits
1. Integrity2. Honesty3. Trustworthiness4. Loyalty5. Respect
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II. Values and Ethics
A. Values and Ethics
B. Power
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III. Leadership Qualities
A. Vision
B. Ego and Empathy
C. Team Building
D. Decisiveness
E. Accountability
F. Delegation
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IV. Leaders versus Managers
A. Two separate roles
B. Leadership Development
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V. Conclusion
A. Leaders have powerful influence over group or organization
B. Leaders inspire a following, thus they become role models
Chapter 3
Management Skills
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I. Leadership development is about personal development that makes people leaders
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II. Management Styles
A. Dictatorial Style
B. Autocratic Style
C. Participatory Style
D. Laissez-Faire Style
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III. Managerial Behavior
A. Manager needs certain skills to manage all the behavior
B. Managing People
C. Managing Generations
D. Team Building
E. Managing Diversity
F. Managing the Manager
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IV. Assuming the Position
A. Is a promotion a good thing?
B. Are you suited for the job?
C. How do you make the transition?
D. So you want to be a sales manager?
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V. Conclusion
A. Management style sets the tone for work environment
B. Environment is melting pot of individuals and behaviors
Chapter 4
Communications andDecision Making
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I. Oral Communication
A. People communicate with tone of voice, facial expressions, and body language
B. Benefit from visual and auditory messages with face-to-face communication
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II. Business Writing
A. Writing for business considerations
B. Goal and Audience
C. Content and Organization
D. Write and Rewrite
E. Headlines and Delivery
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III. Pick Your Forum
A. Say It Face-to-Face
B. Put It in Writing
C. Hold a Meeting
D. Speaking in Public
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IV. Decision Making
A. Decisions fall into four categories
1.Entrepreneurial or institutional
decisions2. Corrective
decisions3. Resource
decisions4. Mediation
decisions
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IV. Decision Making
B. Classic Decision Making
C. Variables in Decision making
D. Implementing Decisions
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V. Conclusion
A. Flow of information in an organization serves many purposes for managers, the people they supervise, and the people the managers report to
B. Funneling the volume of information in ways that reach the intended recipients in a timely, accurate, and efficient manner is the challenge of good communications
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V. Conclusion
C. Organizations depend on the fluid exchange of information to function efficiently so that management can make
quality decisions and its directives can be implemented
Chapter 5
Analyzing the Business Environment
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I. Complex times require more professional advice and assistance
A. A company’s plan is only as good as the analysis of the business environment and the assumptions we make about the
future
B. Assumptions must anticipate change
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I. Complex times require more professional advice and assistance
C. Contingency planning is as important as the master plan
D. Intervention must be swift for the company to remain a viable
economic organization
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II. Economic Factors
A. Monitoring key economic indicators enables the company to identify opportunities
B. Gross domestic product (GDP)
C. Inflationary Cycles
D. Consumer Confidence
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III. Political Factors
A. As public policy makers wrestle with complex problems of society, their
solutions impact many sectors including the business community, and real estate in particular.
B. Corporate development
C. Economic growth and development
D. Environment issues
E. Regulating the industry
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IV. Sociological Factors
A. The population in, or general makeup of, the community affects the services the company provides.
B. Baby boomers and their offspring
C. Maturing adults
D. Population shifts
E. Culturally diverse populations
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V. Conclusion
A. Strategically position a company in the local business environment
Chapter 6
Analyzing the Market
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I. Analyzing Business Opportunities
A. The purpose is to examine all of the who, what, where, how, when possibilities in the market place.
B. Geographic Markets
C. Service Markets
D. Agency Services
E. Defining Your Market
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II. Analyzing the Competition
A. Competition forces companies to press the limits of their creativity in order to provide consumers with the price and service benefits of a free enterprise system.
B. Market Share
C. Competitive Edge
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III. Analyzing Your Organization
A. One of the most valuable lessons a company learns about itself is the result of looking to consumers and competitive forces in the marketplace.
B. Gather information so that you can answer these questions
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IV. Conclusion
A. The market analysis, along with the analysis of the business climate,
arms the company with the information it needs to take the next step
B. Information will guide decisions about target markets and services
and the ways that the company will position itself in the competitive environment
Chapter 7
Developing a Plan
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I. Planning Rationale
A. The purpose of planning is to commit the organization’s financial and human resources to those selected activities that will yield the greatest return on the investment
B. Properly constructed plans tell the organization what it wants to
accomplish and provides a general framework for how the organization intends to do this.
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I. Planning Rationale
C. Plans must be resilient so that organizations can be responsive and resist the temptation to change course.
D. The foundation of the plan is a thorough analysis of the past, present and likely future
E. Planning must be integrated throughout the organization.
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I. Planning Rationale
F. Planning requires commitment from everyone in the organization.
G. A plan must be implemented.
H. All of the other functions of management depend on a business
plan that becomes the primary tool for measuring the effectiveness of the organization.
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I. Planning Rationale
I. A business plan is only a management tool.
J. Have fun being in business and don’t give up on your business venture if your plans don’t materialize in the first year.
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II. Your Business Plan
A. Your own business plan begins with the research into the business and market’s environment, and your company’s service and compatibility with demand, strengths and weaknesses, human resources, operating structure, technology systems and financial positions
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II. Your Business Plan
B. Mission
C. General Objectives
D. Goals
E. Strategies
F. Contingency Plans
G. Putting All the Pieces Together
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III. Implementing a Plan
A. Tactical Planning
B. The Business Plan
C. Back to the Long-Range Plan
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IV. Conclusion
A. Planning will become as routine as any other business activity.
B. An annual review of the long-range plan forms the basis for the next
plan.
Chapter 8
Structuring the Organization
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I. Life Cycles
A. Birth Stage
B. Growth Stage
C. Midlife (not crisis) Stage
D. Maturity Stage
E. Decline (hopefully not)
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II. Legal Ownership
A. One of the most fundamental decisions is the “who” and the “how” with respect to the company’s ownership.
B. Sole Proprietorship
C. Corporations
D. S Corporation
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II. Legal Ownership
E. General Partnership
F. Limited Partnership
G. Limited Liability Companies
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III. Mode of Operation
A. Independent
B. Franchise
C. National Corporations
D. Local Affiliations
E. Affiliated Business Arrangements (AfBA)
F. Multiple Listing Services
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IV. Mergers and Acquisitions
A. Combining forces in the marketplace
B. Evaluating a Business
C. Transition
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V. Internal Structure
A. An internal operating structure is essentially the organization of work, and the process of structuring that work involves a series of steps.
B. One-person Organization
C. One- to ten-agent organization
D. Monolithic Organization
E. Decentralized Organization
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VI. Chain of Command
A. By establishing a formal hierarchy, an organization charts the chain of command that provides an orderly process for making decisions, issuing instructions, and commanding or directing work.
B. Job Descriptions
C. Informal Organization
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VII. Conclusion
A. Giving structure to an organization gives it the orderly form it needs to execute the business plan.
B. Broker and other owners must decide the most suitable form of legal ownership and appropriate business affiliations.
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VII. Conclusion
C. Organizations need an internal structure that groups work in a logical, efficient manner with a chain of command that clearly defines the path of decision- making authority.
Chapter 9
Structuring Business Systems
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I. The office projects an image of the company
A. Public area must instill confidence that this is good place to do business.
B. The backroom operations takes care of the administrative functions that the public doesn’t see and has no reason to see.
© 2013 Kaplan, Inc.
I. The office projects an image of the company
C. Facilities must be tailored to suit the work.
D. Since significant financial resources are committed to the company’s facilities and systems, the company needs to shop wisely.
© 2013 Kaplan, Inc.
II. Your Office
A. Real estate licensing laws are still rooted in the permanence of a physical office
complete with fixed signage, telephones, and the like.
B. The office today is a place that supports wherever the people workC. The virtual office combines off-site communications with a high-profile
professional address, which reduces the cost of traditional offices while also maintaining a professional presence.
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II. Your Office
D. Majority of real estate salespeople today work off-site but use the company’s
office as their official mailing address and business meeting and service center, with on-site personnel being their receptionists, answering services, and support assistants.
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II. Your Office
E. Location
F. Site
G. Size
H. Design and Décor
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III. Communications and Information Systems
A. Overview
B. The System
C. Software
D. Hardware
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III. Communications and Information Systems
E. System Maintenance
F. Technical Support
G. Preserving the Database
H. Other Modes of Communicating
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III. Communications and Information Systems
I. Communicating with People Who Are Hearing Impaired
J. Communicating with People Who are Visually Impaired
K. Multilingual Communications
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IV. Facilities Management
A. Facility management is a professional specialty of its own.
B. Security in the Office
C. Safety in the Office
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V. Conclusion
A. Select facilities that are suitably provisioned with the equipment and other systems that a company
needs to function efficiently.
B. Money well spent when it enhances the company’s image and the environment in which its people work.
Chapter 10
Structuring the Finances
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I. The Financials
A. Balance Sheet
B. Income Statement (income and expense or profit and loss statement)
C. Cash Flow Statement
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II. Financial Resources
A. Start up companies rely on aid from outside resources
B. Financial Projections
C. Procuring Financing
D. Financing Portfolio
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III. General Operating Budget
A. Preparing a budget is an essential management function
B. Gross Income
C. Operating Expenses
D. Net Income
E. Profit Centers
F. Variable Expense Budgets
G. Monthly Operating Budgets
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IV. Prudent Procedures
A. The financial statements portray an accurate picture of a company’s
financial condition only if the financial date from which the statements are generated are accurate.
B. Trust or Escrow Accounts
C. Security
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V. Conclusion
A. Structuring a company’s finances is a function of aligning its resources in the most cost-efficient ways to accomplish the company’s business plan.
B. Budgets are the most useful tools for keeping a tight rein on the
organization’s finances
Chapter 11
Business Policies and Procedures
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I. Developing Policies and Procedures
A. The purpose of a policy and procedures manual is to support the structure and the systems the organization creates to maintain order and to control the organization.
B. Policies and procedures need to be committed to writing.
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I. Developing Policies and Procedures
C. To assist personnel in managing themselves, management should
develop the following:
1. Policies and Procedures Manual
2. Personnel Procedures Manual
3. Employee Handbook
D. Rules about making rules
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II. Business Ethics
A. Code of conduct is fundamental
B. The Heart of Ethics
C. Code of Ethics
D. Institutionalizing Ethics
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III. Professionalism
A. The term profession commonly denotes people and/or industries as worthy of a higher status because they require highly specialized knowledge and skill and intense academic training in the classic sense.
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III. Professionalism
B. In this text, professional encompasses a broader set of traits and behaviors,
distinguished from ethical which is rooted in morality and value systems.
C. Professional Standards
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III. Policies and Procedures
A. Normally set forth in a manual to tell people “the way we work” in the organization.
B. Policy and procedures manuals must be used.
C. A policy and procedures manual is also a public declaration about certain
policies that have legal implications.
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III. Policies and Procedures
D. Contains company’s philosophy, policies and procedures; supports company’s business ethics; and reflects the specific jobs that people are expected to perform and the standards by which the company delivers its services.
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III. Policies and Procedures
E. General Business Policies
F. Employee Policies
G. Procedures for Independent Contractors/Salespeople
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IV. Conclusion
A. Many systems and processes need to come together so that an organization can function.
B. Policies and procedures are one more of those systems.
Chapter 12
Marketing and Advertising
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I. Marketing is about packaging and placement
A. The way for a company to grow its business is to increase its base of consumers.
B. A marketing plan provides the messaging that puts a face on the company
and its services and gets that face in the right places to capture the minds of
consumers.
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II. Market Identity
A. The company makes a statement about who it is with the name it chooses, the design of its logo and the selection of a slogan (i.e., brand).
B. What’s in a Name?
C. What’s in the Signature?
D. What’s the Plan?
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III. The Digital Media Business
A. Today’s display advertising is an online banner or digital video, and the Web is as mass as it gets.
B. Web sites
C. Blogs and Social Media
D. The Apps World
E. Online Advertising
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IV. Tradition Meets the 21st Century
A. Broadcast and Print Media
B. Press Releases
C. Letters to the Editor
D. Media Resource
E. Newsletters
F. Flyers and Brochures
G. Directories
H. Branding Opportunities
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V. Marketing Properties
A. A strategy for marketing listings is an important part of your company’s marketing plan.
B. Photography
C. Ad Placement
D. Brochures and Flyers
E. Open Houses
F. Yard Signs
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VI. The Company’s Image
A. Everything a company does and says affects its brand and its relationship with the public.
B. Direct Marketing and Solicitation
C. Telephone Consumer Protection Act
D. Harassment
E. Blockbusting/panic selling
F. Company image
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V. Conclusion
A. What people see about a company is what drives business for the company, which makes marketing a core activity for every organization, not an expendable accessory.
B. There is no one right marketing plan for everyone, only the one that delivers the messages in the venues that suit the individual company and its audience.
C. Marketing is all about engagement, not just creating visibility.
Chapter 13
The Practical and Legal Realities of Staffing
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I. Personnel Positions
A. Clerical and Administrative Support Positions
B. Personal Assistants
C. Managerial Positions
D. Sales Force
E. Job Qualifications
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II. Compensation Management
A. Pay is significant factor in company’s ability to recruit, motivate, and retain personnel.
B. Pay plans
C. Equity
D. Justice
E. Sales Compensation
F. Managerial Compensation
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III. Legalities of Employment
A. Equal Employment Practices
B. Anti-Harassment Policies
C. Safety in the Workplace
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IV. Conclusion
A. The foundation of the staffing function is the company’s personnel policies and procedures.
Chapter 14
Recruiting, Selecting, and Hiring the Staff
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I. Employer of Choice
A. The most trusted companies are in the best position to be that employer of
choice.
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II. Employment Process
A. The steps in the process are: recruiting, prescreening, formal interviews, selection, and then hiringB. Recruiting
C. Prescreening
D. Formal Interviews
E. Selection
F. Hiring
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III. Recruiting Salespeople
A. A company is recruiting and salespeople are selecting
B. Recruiting Experienced Talent
C. Recruiting Unlicensed Talent
D. Recruiting Brochures
E. Career Seminars
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III. Recruiting Salespeople
F. Licensing Courses
G. Trial Training Sessions
H. Scholarships
I. Direct Mail
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IV. Selecting Salespeople
A. The process of prescreening candidates, conducting formal interviews and then selecting sales staff is not different than it is for any other personnel position.
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V. Conclusion
A. The future of a company rests in the hands of the people it hires.
B. A methodical selection process provides the information needed to make appropriate choices, which benefits both the company and the candidates.
Chapter 15
Professional Development
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I. Once people are hired, the manager’s job begins
A. The manager must provide leadership, cultivate talent, and create a favorable workplace environment.
B. Directing is not a matter of barking orders.
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II. Indoctrination
A. Indoctrination is not a onetime event or a single program but a process that begins the first day a new hire steps into the office and continues for several weeks or months while the newcomer gets acquainted with the organization and learns what’s expected.
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II. Indoctrination
B. Orientation Programs
C. Assessing New Hires
D. Business Plans
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III. Professional Competence
A. Developing professional competence is a process.
B. Training Programs
C. Mentoring Programs
D. Cross Training
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IV. Engagement in the Organization
A. Companies can develop people and their professional development through
collaborative efforts in meetings
B. Problem-Identification Meetings
C. Brainstorming Meetings
D. Decision-Making Meetings
E. Attitude and Recognition
F. Retreats
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V. Additional Opportunities
A. There is a wide range of additional opportunities for professional development outside the
organization
B. Professional organizations conduct seminars and training programs and offer designations people can
pursue
C. Don’t overlook management and support and administrative staff
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VI. Conclusion
A. When people feel satisfied with their jobs, the place in which they work,
and the progress they are making toward their career goals, they can be more productive for the company.
B. The company that supports continuous learning opportunities is also able to retain key talent.
Chapter 16
Coaching Performance
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I. The Manager as Coach
A. The manager provides feedback to help people develop their strengths and
correct their weaknesses.
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II. Managing Employees and Independent Contractors
A. The nature of the relationship that exists between the company and the individual members of the staff affects the way you direct them.
B. The typical working relationship in this country exists between employers and employees.
C. Independent contractors (IC) work in much different environment.
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II. Managing Employees and Independent Contractors
D. When you have both employees and independent contractors working in your organization, you have to
adjust your management accordingly.
E. The key to working with ICs is an effective (not controlling) manager.
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III. Performance Management
A. The goal of management is to forge a psychological contract between
the company and the workers, a commitment between
the company and the workers
B. Performance Criteria
C. Personal Business Plan
D. Performance Feedback
E. Performance Incentives
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IV. Performance Appraisals
A. A two-step process: Rate the individual’s performance and communicate and manage with that information.
B. Develop a list of performance-based issues with which you can rate a
person
C. Rating Performance
D. Performance Interviews
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V. Retention
A. The work culture or environment that you create to recruit salespeople is
the same environment that you expect will keep them with you
B. Employee Relations
C. Problem Solving
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VI. Resignation and Termination
A. A common law doctrine of employment is employment-at-will (EAW)
B. Resignation
C. Termination
D. Exit Interviews
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VII. Conclusion
A. Despite all of the difficult personnel decisions management has to make
and all the legal issues that are part of the process, the most rewarding part of a manager’s job is watching people
thrive under the manager’s direction.
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VII. Conclusion
B. While some of those directions come in the form of formal performance criteria and are faced in performance reviews, the coach, teacher, and counselor part
of the job is as energizing for the manager as it is for the people being supervised.
Chapter 17
Critiquing Operations
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I. Management of Information
A. Today’s computer systems are able to generate reports about almost any
aspect of the operation and to do so with little effort
B. The value of the information is only as good as the data in the system
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I. Management of Information
C. Transaction or Service Files
D. License Records
E. Personnel Records
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II. Managing With Information
A. Use information to analyze the company’s status
B. Watch trends in the flow of money to identify if corrective actions are
necessary
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III. Maximizing Income
A. Strive to maximize income, regardless of whether the company is meeting its projections or needs to take corrective steps to get back on track
B. Business Sectors
C. Pricing Strategies
D. Quality Service Standards
E. Quality Control
F. Problem Solving
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IV. Minimizing Expenses
A. Make more efficient use of your money by monitoring expenses and instituting certain cost-containment measures
B. Personnel Costs
C. Marketing and Advertising
D. Costs of Sales
E. Economies in the office
F. Manage Cash
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V. Looking into the Future
A. What the company learns as it monitors this year’s activities is important for charting its course in the future
B. Growing the Enterprise
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VI. Conclusion
A. Critiquing operations involves monitoring all aspects of the business and making adjustments where necessary.
B. The goal is to ensure that there is a business to manage next year.
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VI. Conclusion
C. The information management learns about the company can be used to either praise progress or remedy faults.
D. Controlling should not restrict the organization, but rather should
inspire the company to grow by directing resources to the most productive activities.
Chapter 18
Managing Risk
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I. Risk is inherent in any business venture
A. There is more risk with any interaction with the public.
B. The challenge is to learn how to insulate the company from
threats to the business.
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II. Protecting the Institution
A. Protecting the Brand
B. Protecting the License
C. Planning Succession
D. Cyber Security
E. Workplace Fraud
F. Natural Disasters
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III. Risk Management Culture
A. A risk management culture is an environment that proactively infuses responsibility for managing risk in everyone in the organization
B. Identify Risk
C. Analyze Risk
D. Evaluate Alternatives
E. Handling a Risk
F. Additional Offense
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IV. Defense in Risk Management
A. The risk management culture enables the organization to present a suitable defense should that become necessary
B. Documentation
C. Insurance
D. Dispute Resolution
E. Arbitration Between Brokers
© 2013 Kaplan, Inc.
V. Conclusion
A. The purpose of risk management is to be attentive to threats to the organization.
B. An organization manages risk not just in the way it attempts to avoid the
indiscretions that create vulnerability but also in the ways it prepares to defend
itself should the need arise.