Entrepreneurship Chapter 2

Key business functions

Activities common to all businesses. I.e. Sales, operations, accounting, finance and human resources.

Industry-specific knowledge

Activities, skills and knowledge, specific to business in an industry.

Promotion Focus

An entrepreneur's attention to maximizing gains and pursuing opportunities likely to lead to gains.

Prevention Focus

An entrepreneur's attention to minimizing losses, with a bias toward inaction or protective action to prevent loss.

Passion

An intense positive feeling an entrepreneur has toward the business or the idea behind the business.

Regulatory Focus

E's regulate their behavior from more of a promotion (emphasis on accomplishment and multiple options) than a prevention (avoiding negative outcomes, considering fewer options) emphasis.

Comprehensive Planners

Entrepreneurs who develop long-range plans for all aspects of the business. Long term.

Habit Driven Planners

Entrepreneurs who do not plan, preferring to let all actions be dictated by their routines.

Opportunistic Planners

Entrepreneurs who start with a goal instead of a plan and look for opportunities to achieve it. Short term

Entrepreneurial alertness

Motivated propensity to formulate an image of the future; to process information differently, challenge assumptions, and see opportunity where others don't.

Cognitive Biases

Optimism bias, illusion of control, law of small numbers.

Standard Business Practice

A business action that has been widely adopted within an industry or occupation.

Cognition

A person's way of perceiving and thinking about his or her experience. How you think about the world around you.

Expert Business Professionalization

A situation that occurs when all the major functions of a firm are conducted according to the standard business practices of its industry.

Minimalized Business Professionalization

A situation that occurs when the entrepreneur does nearly everything in the simplest way possible.

Reactive Planners

Entrepreneurs with a passive approach who wait for cues from the environment to determine what actions to take. Short term.

Competencies

Forms of business-related expertise. Forms the base of your advantage in the market.

Opportunity Competencies

Skills necessary to identify and exploit elements of the business environment that can lead to a profitable and sustainable business.

Signal Detection

Tendency to be more concerned with recognizing stimuli that are present than correctly concluding stimuli are not present.

Prospect Theory

Tendency to focus more on opportunities for gain they will forfeit if they overlook an opportunity; E's prefer to avoid loss when focusing on gains but seek risk when focusing on losses.

Resource Competencies

The ability or skill of the entrepreneur at finding expendable components necessary to the operation of the business. Time, information, location, financing, raw materials, expertise.

Action

The visible behavior a person takes. Must exploit an opportunity

Basic Business Competency

Understanding the organizational and business processes of a firm.

Critical-point planners

Entrepreneurs who develop plans focused on the most important aspect of the business first. Relatively short term.

Determination Competencies

Skills identified with the energy and focus needed to bring a business into existence.

New-Venture Team

The group of founders, key employees and advisors that move a new venture from an idea to a fully functioning firm. Anyone involved in turning the idea into the business.

Specialized Business Professionalization

A situation that occurs when businesses have founders or owners who are passionate about one or two of the key business functions, such as sales, operations, accounting, finance or human resources.

Perseverance

The ability to stick with some activity even when it takes a long time, and when a successful or unsuccessful outcome is not immediately known. Learned optimism.

Liabilities of newness

The fact that new companies often falter because the people involved can't adjust fast enough to their new roles and because the firm lacks a track record of success.