Ent 396 Chapter 13

What are the Issues that can occur when Transitioning from Entrepreneurial to Managerial:

-A highly centralized decision-making system -An overdependence on one or two key individuals -An inadequate managerial skills and training -A paternalistic atmosphere

Strategic Positions:

-Are often not obvious, and finding them requires creativity and insight. -Are unique positions that have been available but sometimes overlooked by established competitors. -Can help entrepreneurial ventures prosper by occupying a position that a competitor once held but has ceded.

The Key Steps in Managing Growth and Change?

-Creating a growth task force -Planning for growth with strategies -Maintaining a growth culture -Developing an outside board of advisors

What are the Components of Entrepreneurial Leadership:

-Determining the firm's purpose or vision. -Exploiting and maintaining the core competencies. -Developing human capital. -Sustaining an effective organizational culture. -Emphasizing ethical practices. -Establishing balanced organizational controls.

Fatal mistakes that entrepreneurs fall prey to in their attempt to implement a strategy:

-Fatal Vision #1: Misunderstanding industry attractiveness -Fatal Vision #2: No real competitive advantage -Fatal Vision #3: Pursuing an unattainable competitive position -Fatal Vision #4: Compromising strategy for growth -Fatal Vision #5: Failure to explicitly communicate the venture's strategy to employees -Fatal Vision #n Not having (finding) enough customers

What are Internal Constraints on Managing Growth:

-Lack of growth capital -Limited spans of control -Loss of entrepreneurial vitality

The Major Stages in a Venture's Life Cycle are:

-New-venture development -Start-up activities -Growth -Business stabilization -Innovation or decline

What do Entrepreneurs do?

-Perceive a unique opportunity -Pursue the opportunity -Believe that success of the venture is possible

How to remain adaptive and innovative:

-Share the entrepreneur's vision -Increase the perception of opportunity -Institutionalize change as the venture's goal -Instill the desire to be innovative: •A reward system •An environment that allows for failure •Flexible operations The development of venture teams

What are Unique Managerial Concerns of Growing Ventures?

-The Distinctiveness of Small Size -The One-Person-Band Syndrome -Time Management -Community Pressures -Continuous Learning

_________ is when the firm either continues its success by acquiring other innovative firms and develops new products/services or it goes into decline.

Innovation or decline

Building Dynamic Capabilities in the 21st century: -__________—through the utilization of the creativity and knowledge from employees -__________—through the search for external competencies to complement the firm's existing capabilities

Internally Externally

__________ are activities associated with the initial formulation of the new venture's general philosophy, mission, scope, and direction

New-venture development

_________ a create a formal business plan, searching for capital, carrying out marketing activities, and developing the entrepreneurial team.

Start-up activities

__________ is taking entrepreneurial action using a strategic perspective.

Strategic entrepreneurship

_________ is the formulation of long-range plans for the effective management of market opportunities and threats in light of a venture's strengths and weaknesses.

Strategic planning

Successful growth-oriented firms have consistent themes:

-The entrepreneur is able to envision and anticipate the firm as a larger entity. -The team needed for tomorrow is hired and developed today. -The original core vision of the firm is constantly and zealously reinforced. -New "big-company" processes are introduced gradually as supplements to, rather than replacements for, existing approaches. -Hierarchy is minimized. -Employees hold a financial stake in the firm.

The need for formal, systematic planning arises when:

-The firm is expanding with constantly increasing customers, people and operations -A high degree of uncertainty exists -There is a lack of adequate experience -There is strong competition

The Managerial Point of View on Balancing the Focus:

-What resources do I control? -What structure determines our organization's relationship to its market? -How can I minimize the impact of others on my ability to perform? -What opportunity is appropriate?

The Entrepreneur's Point of View on Balancing the Focus:

-Where is the opportunity? -How do I capitalize on it? -What resources do I need? -How do I gain control over them? -What structure is best?

Entrepreneurs or entrepreneurial managers must be able to:

-identify opportunities not perceived by others. -take actions to exploit the opportunities. -establish a competitive advantage.

Basic Steps in Strategic Planning:

1.Examine the internal and external environments of the venture (SWOT—strengths, weaknesses, opportunities, threats). 2.Formulate the venture's long-range and short-range strategies (mission, objectives, strategies, policies). 3.Implement the strategic plan (programs, budgets, procedures). 4.Evaluate the performance of the strategy. 5.Take follow-up action through continuous feedback.

Reasons for the Lack of Strategic Planning:

1.Time scarcity 2.Lack of knowledge 3.Lack of expertise/skills 4.Lack of trust and openness 5.Perception of high cost 6.Belief a plan is not needed 7.Venture too uncertain

_________ increases opportunity for its employees, initiates change, and instills a desire to be innovative.

An Entrepreneurial Firm

_________ is a "swing" stage that precedes the period when the firm either swings toward greater profitability or toward decline and failure.

Business stabilization

__________ arises when an entrepreneur attempts to manage the fast-paced, growth oriented company.

Entrepreneurial Leadership

__________ are conditions in which new products or services can satisfy a need in the market.

Entrepreneurial Opportunities

All research indicates:

Firms that engage in strategic planning are more effective than those that do not. The planning process, rather than merely the plans, is a key to successful performance.

__________ is the leadership transitions from an entrepreneurial one-person focus to a managerial team-orientation to cope the growth of the venture.

Growth

Strategic Planning Categories: -Category I: No written plan -Category II: Moderately sophisticated planning -Category III: Sophisticated planning •Results: More than 88% of firms with Category ____ or ____ planning performed at or above the industry average compared with only 40% of firms with Category ____ planning.

II III I

Managing Paradox and Contradiction: -Bureaucratization versus _________ -Environment versus _________ -Strategic emphases: Quality versus _________ versus __________

decentralization strategy Cost, Innovation

"People don't do what you _________ but what you _________."

expect inspect

Most entrepreneurs' planning for their ventures is _________ and _________.

informal unsystematic

Strategic planning includes:

•Defining the venture's mission •Developing strategies •Specifying achievable objectives •Setting policy guidelines