Market Intercourses Quarter

Market Engagement 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. Market engagement.
   • Enterprise 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. Market research. The activity of gathering information about both or either consumers' needs and preferences and/or sellers' products on the market. Sometimes, the research is considered being the first phase of the market analysis.
   • Environmental scanning. Screening information to detect emerging trends.
3. Benchmarking. The search for the best practices among competitors or noncompetitors that lead to their superior performance.
   • Benchmarking. A comparison of a process or system's cost, time, quality, or other metrics to those of leading peer organizations to identify opportunities for improvement.
   • Benchmark. The standard of excellence against which to measure and compare.
   • Benchmark. The process by which a startup company measures their current success. An investor measures a company's growth by determining whether or not they have met certain benchmarks. For example, company A has met the benchmark of having X amount of recurring revenue after 2 years in the market.
   • Comparative analysis. Performing a feature by feature comparison of two or more products to determine trends or patterns.
4. Procurement.
5. Potential source.
   • Source qualification. A review of the experience, past performance, capabilities, resources and current work loads of the potential sources.
   • Sole source. Only one source which could fulfill the requirements of the procurement.
6. Work authorization (or work 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.
   • Bid protest. The process by which an unsuccessful supplier may seek remedy for unjust awards.
   • Non-conformance. A deficiency in characteristics, documentation or procedure that renders the quality of material/service unacceptable or undeterminate.
   • Dispute. Disagreements not settled by mutual consent which could be decided by litigation.
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.
8. Human resource.
9. Recruitment. Locating, identifying, and attracting capable applicants.
   • Global sourcing. Purchasing materials and labor from around the world wherever it is cheapest.
   • Decruitment. Reducing an organization's workforce.
   • Downsizing. The planned elimination of jobs in an organization.
10. 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.
    • 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.
    • Onboarding.
11. Financial resource. 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.
12. Corporate acquisition. When one company buys controlling stake in another company. Can be friendly (agreed upon) or hostile (no agreement).
13. Negotiation. A process in which two or more parties exchange goods or services and attempt to agree on the exchange rate for them.
    • Fixed pie. The belief that there is only a set amount of goods and services to be divided up between the parties.
    • Distributive bargaining. Negotiation that seeks to divide up a fixed amount of resources; a win-lose situation.
    • BATNA. The best alternative to a negotiated agreement; the least the individual should accept.
    • Integrative bargaining. Negotiation that seeks one or more settlements that can create a win-win solution.
    • Zero-sum approach. An approach that treats the reward "pie" as fixed, such as that any gains by one individual are at the expense of another.
    • Trade-off. Losing one quality or aspect of something in return for gaining another quality or aspect.

Roles

1. Buyer.
2. Seller (or supplier, contractor). The provider of products.
3. Third party.
   • Arbitrator. A third party to a negotiation who has the authority to dictate an agreement.
   • Conciliator. A trusted third party who provides an informal communication link between the negotiator and the opponent.
   • Mediator. A neutral third party who facilitates a negotiated solution by using reasoning, persuasion, and suggestions for alternatives.
4. Employment candidate.

Methods

1. Resourcing model.
   • Source solicitation.
   • Sourcing. 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.
   • Screening. Techniques used for reviewing, analyzing, ranking and selecting the best alternative for the proposed action.
   • Source 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.
   • Source settlement.
2. Competence assessment. Screening job applicants to ensure that the most appropriate candidates are hired.
   • Panel interview. A structured interview conducted with a candidate and a number of panel members in a joint meeting.
   • 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.
   • 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.
3. 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.
3. Job description. A written statement that describes a job.
   • Job specification. A written statement of the minimum qualifications a person must possess to perform a given job successfully.
4. Competence assessment tool. 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.
   • Assessment center. An off-site place where candidates are given a set of performance simulation tests designed to evaluate their managerial potential.
   • Agreement.
5. Contract. A mutually-binding agreement by which a buyer is obligated to acquire specified deliverables from a seller. Usually, but not necessarily, the buyer pays the seller. A contract may define other obligations of the buyer and the seller.
   • 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.
   • Contract administration. Managing the relationship with the seller.
   • Contract closeout. Completion and settlement of the contract, including resolution of any open items.
6. Fixed-price contract. The contract that establishes a fixed total price for a well-defined deliverable. Since both the price and the product scope are well-defined, the buyer's risks are usually relatively low. Fixed-price contracts may also include incentives for meeting or exceeding selected project objectives, such as schedule targets. In most cases, this type of contract is considered to be favorable for the buyer.
   • Firm-fixed-price contract (FFP contract). A lump sum contract in which the seller agrees to provide the buyer with a deliverable at a fixed amount (as defined by the contract), regardless of the seller's costs.
   • Fixed-price-plus-incentive-fee contract (FPPIF contract). A contract in which the buyer pays the seller a set amount (as defined by the contract), and the seller can earn an additional amount if the seller meets defined performance criteria.
7. Cost-reimbursable contract. The contract that establishes reimbursements (in simple words, payments) to the seller for its actual costs. These costs are usually classified as direct costs (costs incurred directly by the project, such as wages for members of the project team) and indirect costs (costs allocated to the project by the performing organization as a cost of doing business, such as salaries for corporate executives). Indirect costs are usually calculated as a percentage of direct costs. Cost-reimbursable contracts often include incentives for meeting or exceeding selected project objectives, such as schedule targets or total cost. Since the product scope is not well-defined, the buyer's risks are usually relatively high. In most cases, this type of contract is considered to be favorable for the seller.
   • Cost-plus-percentage-of-cost contract (CPPC contract). A contract in which the buyer reimburses the seller for the seller's allowable costs (allowable costs are defined by the contract) plus an agreed upon percentage of the estimated cost as profit.
   • Cost-plus-fixed-fee contract (CPFF contract). A contract in which the buyer reimburses the seller for the seller's allowable costs (allowable costs are defined by the contract) plus a fixed amount of profit (fee), which is paid proportionately as the contract progresses. In other words, the buyer provides the seller for cost of delivered performance along with a predetermined fee as a bonus.
   • Cost-plus-incentive-fee contract (CPIF contract). A contract in which the buyer reimburses the seller for the seller's allowable costs (allowable costs are defined by the contract) plus an additional amount if the seller meets some performance criteria defined in the contract.
8. Time and material contract (T&M). The contract that includes payments for both time and material reimbursement. A time and material contract resembles a fixed-price contract because the price for time is fixed. Thus, the parties should agree on the rates for different categories of staffers. However, since the amount of time is not defined, a time and material contract resembles a cost-reimbursable contract as well. Similarly to cost-reimbursable contracts, time and material contracts are open ended, their full values are not defined at the time of the award, and, therefore, these contracts can grow in contract value. Time and material contracts are often used for employment arrangements and staff augmentation.
9. Authorization document.
   • Employment offer.
   • Notice to proceed. Formal request to start the work.
   • Stop work order. Request for interim stoppage of work due to nonconformance, or funding or technical limitations.

Practices

The successor lecture is Risk Analysis Quarter.