Market Intercourses Quarter

Enterprise Acquisitions Quarter (hereinafter, the Quarter) is the first of four lectures of Operations Quadrivium (hereinafter, the Quadrivium):

• The Quarter is designed to introduce its learners to enterprise discovery, or, in other words, to concepts related to obtaining data needed to administer the enterprise effort; and
• The Quadrivium examines concepts of administering various types of enterprises known as enterprise administration as a whole.

The Quadrivium is the first of seven modules of Septem Artes Administrativi, which is a course designed to introduce its learners to general concepts in business administration, management, and organizational behavior.

Outline

The predecessor lecture is Social Leadership Quarter.

Concepts

1. Enterprise acquisition.
   • Organizational resource. An organization's asset -- including financial, physical, human, intangible, and structural/cultural -- that is used to develop, manufacture, and deliver products to its customers.
2. Capital. Monetary assets currently available for use. Entrepreneurs raise capital to start a company and continue raising capital to grow the company.
   • Round. Startups raise capital from VC firms in individual rounds, depending on the stage of the company. The first round is usually a Seed round followed by Series A, B, and C rounds if necessary. In rare cases rounds can go as far as Series F, as was the case with Box.net.
   • Seed. The seed round is the first official round of financing for a startup. At this point a company is usually raising funds for proof of concept and/or to build out a prototype and is referred to as a "seed stage" company.
   • Series. Refers to the specific round of financing a company is raising. For example, company X is raising their Series A round.
   • Equity. “In finance, equity is ownership in any asset after all debts associated with that asset are paid off.” (Source: Investopedia) Equity = Assets minus Liabilities. In terms of startup, it is commonly used to describe a business giving up a percentage of ownership in exchange for cash. An equity investor is then entitled to share in any future profits and/or sale of business assets (after debts are paid off).
3. Company acquisition. When one company buys controlling stake in another company. Can be friendly (agreed upon) or hostile (no agreement).
4. Recruitment. Locating, identifying, and attracting capable applicants.
   • Global sourcing. Purchasing materials and labor from around the world wherever it is cheapest.
   • Job specification. A written statement of the minimum qualifications a person must possess to perform a given job successfully.
   • Job description. A written statement that describes a job.
   • Decruitment. Reducing an organization's workforce.
   • Downsizing. The planned elimination of jobs in an organization.
5. Selection. Screening job applicants to ensure that the most appropriate candidates are hired.
   • Situational judgment test. A substantive selection test that asks applicants how they would perform in a variety of job situations; the answers are then compared to the answers of high-performing employees.
   • Work sample test. A hands-on simulation of part or all of the work that applicants for routine jobs must perform.
   • Panel interview. A structured interview conducted with a candidate and a number of panel members in a joint meeting.
   • Assessment center. An off-site place where candidates are given a set of performance simulation tests designed to evaluate their managerial potential.
   • Critical incident. A way of evaluating the behaviors that are key in making the difference between executing a job effectively and executing it ineffectively.
   • Behaviorally anchored rating scale. A scale that combine major elements from the critical incident and graphic rating scale approaches. The appraiser rates the employees based on items along a continuum, but the points are examples of actual behavior on the given job rather than general descriptions or traits.
6. Socialization. A process that adapts employees to the organization's culture.
   • Socialization. The process that helps employees adapt to the organization's culture.
   • Prearrival stage. The period of learning in the socialization process that occurs before a new employee joins the organization.
   • Realistic job preview. A preview of a job that provides both positive and negative information about the job and the company.
   • Realistic job preview. A substantive selection test that is a job tryout to assess talent versus experience.
   • Encounter stage. The stage in the socialization process in which a new employee sees what the organization is really like and confronts the possibility that expectations and reality may diverge.
   • Metamorphosis stage. The stage in the socialization process in which a new employee changes and adjusts to the job, work group, and organization.
   • Orientation. Introducing a new employee to her or his job and the organization.
7. Work resource. A thing within an individual's control that can be used to solve work demands.
   • Work demand. A responsibility, pressure, obligation, and even uncertainty that individuals face in the workplace.
   • SaaS. Software as a service. A software product that is hosted remotely, usually over the internet (a.k.a. "in the cloud").
   • Intellectual property. Proprietary information that's critical to an organization's efficient and effective functioning and competitiveness.

Roles

1. Buyer.
2. Seller.

Methods

1. Solicitation.
2. Preaward meeting. A meeting to aid ranking of prospective suppliers before final award determination and to examine their facilities or capabilities.

Instruments

1. Solicitation request.
   • Request for information (RFI). A requirements document issued to solicit vendor input on a proposed process or product. An RFI is used when the issuing organization seeks to compare different alternatives or is uncertain regarding the available options
   • Request for proposal (RFP). A requirements document issued when an organization is seeking a formal proposal from vendors. An RFP typically requires that the proposals be submitted following a specific process and using sealed bids which will be evaluated against a formal evaluation methodology.
   • Request for proposal. A formal invitation containing a scope of work which seeks a formal response (proposal) describing both methodology and compensation to form the basis of a contract.
   • Request for quote (RFQ). An informal solicitation of proposals from vendors.
   • Request for quotation. A formal invitation to submit a price for goods and/or services as specified.
2. Non-disclosure agreement (NDA). Non-disclosure agreement. An agreement between two parties to protect sensitive or confidential information, such as trade secrets, from being shared with outside parties.

Results

1. Contract. A legally-binding agreement by which the material/services could be acquired.
   • Contract award. The final outcome of acquisition process in which generally the contract is awarded to one prospective supplier. Both the parties sign a legally binding contract formalizing the statement of work (SOW), terms and conditions, form of contract, pricing and measures of performance.
2. Fixed-price contract. A contract, which scope is well-defined and risks are relatively low. In most cases, this contract type is considered to be favorable for the buyer.
   • Fixed price plus incentive fee contract (FPPIF). Comprised of target cost, target profit, target price, ceiling price and a share ratio.
   • Firm fixed price contract (FFP). A lump sum contract where the supplier agrees to furnish material or services at a fixed price.
3. Cost-reimbursable contract. A contract, which scope is not well-defined and risks are relatively high. In most cases, this contract type is considered to be favorable for the seller.
   • Cost plus percentage of cost (CPPC). Provide for a reimbursement of allowable cost of services performed plus an agreed upon percentage of the estimated cost as profit.
   • Cost plus fixed fee contract (CPFF). Provide reimbursement of allowable cost plus a fixed fee which is paid proportionately as the contract progresses.
   • Cost plus incentive fee contract (CPIF). Provide the supplier for cost of delivered performance along with a predetermined fee as a bonus.
4. Time and material contract (T&M). A contract, which is often used for staff augmentation.

Practices

1. • Screening. Techniques used for reviewing, analyzing, ranking and selecting the best alternative for the proposed action.
   • Information Systems. A structured, interacting, complex of persons, machines, and procedures designed to produce information which is collected from both internal and external sources for use as a basis for decision-making in specific contract/procurement actions.
   • Sources Selection. The process of selecting sources whose resources, credibility and performance is expected to meet the contract/procurement objectives within a competitive range of cost.
   • Identification. Identification of potential sources who could provide the specified material or services. These sources could be identified either from the firm/project list of vendors/consultants or by advertising the need of procurement.
   • Qualifications. A review of the experience, past performance, capabilities, resources and current work loads of the potential sources.
   • Data Review. Review of capabilities and performance related data to determine its adequacy.
   • Data Verification. Verification of data to check its accuracy.
   • Valuation. Overall review of capabilities and ranking of prospective suppliers either to request for proposals or to enter into negotiations for the award of the contract.
   • Ranking. Qualitative or quantitative determinations of prospective supplier's capabilities and qualifications in order to select one or more sources to provide proposed material/ services.
   • Sole Source. Only one source which could fulfill the requirements of the procurement.
   • Bid Protests. The process by which an unsuccessful supplier may seek remedy for unjust awards.
   • Notice to Proceed. Formal request to start the work.
   • Work Authorization/Release. In case where work is to be performed in segments due to technical or funding limitations, work authorization/release authorizes specified work to be performed during a specified period.
   • Inspection. Examination or measurement of work to verify whether an item or activity conforms to a specific requirement.
   • Non-conformance. A deficiency in characteristics, documentation or procedure that renders the quality of material/service unacceptable or undeterminate.
   • Stop Work Order. Request for interim stoppage of work due to nonconformance, or funding or technical limitations.
   • Audits. A planned and documented activity performed by qualified personnel to determine by investigation, examination, or evaluation of objective evidence the adequacy and compliance with established procedures or the applicable documents and the effectiveness of implementation.
   • Dispute. Disagreements not settled by mutual consent which could be decided by litigation.
   • Organizational Performance. A comprehensive review of the original specification, statement of work, scope and contract modifications, with a purpose to avoid pitfalls in future procurements.
   • Contractor's Performance. A comprehensive review of contractor's technical and cost performance and work delivery schedules.

The successor lecture is Stakeholder Engagement Quarter.