GB370 Review, gb370 quiz 6, Chapter 6: Starting Your Own Business, gb370 chapters 4&10, gb370 unit 10, gb370 ch.13

Local strategy

Company's operations are adapted to fit some specific countries.

Social institution

Complex of positions, roles, norms, and values lodged in particular types of social structures and organizing relatively stable patterns of human resources with respect to fundamental problems in . . . sustaining viable societal structures within a given environment.

ERG theory

Compresses Maslow's five need categories into three: existence, relatedness, and growth.

Process conflict

Conflict about the best way to do something; conflict that is task-oriented and constructive, and not focused on the individuals involved.

Relationship conflict

Conflict between individuals that is based on personal (or personality) differences; this type of conflict tends to be destructive rather than constructive.

Community relations

Contact must be maintained and nurtured with representatives from various constituencies outside the company, including state and federal agencies, local civic groups, and suppliers.

Sun Tzu

developed subdivisions, various rankings of authority, and the use of colors as coordination between units.

Max Weber

developed the idea that organizations should be formalized and legalistic in their operations.

The past two decades have shown a heightened interest in...

entrepreneurial careers

multipreneurs

entrepreneurs who start a series of companies

Contingency school

explained that there were no universal laws in management, due to a wide variety of variables that influence relationships and create unique situations, and that each situation required a different response.

Company overview

explains the type of company, such as manufacturing, retail, or service; provides background information on the company if it already exists; and describes the proposed form of organization—sole proprietorship, partnership, or corporation.

Operating plan

explains the type of manufacturing or operating system to be used and describes the facilities, labor, raw materials, and product-processing requirements.

Sources of equity financing are...

family and friends, business partners, venture capital firms, and private or angel investors

Who supports new ventures?

federal, state, and local governments

What remains a key issue for most startups?

finding financing

operational planning

first-line strategic planning consisting of specific daily and short-term actions that employees will perform to make the company function.

Although... is crucial for any startup, particularly in quickly changing markets, ... is essential.

flexibility, planning

*equity financing*

funds invested in new ventures in exchange for part ownership

Licensing

Contractual agreement whereby a company is given the right to another company's trademarks, know-how, and other intangible assets in return for a royalty or a fee.

14 principles of management

Created by Henri Fayol.

Five functions of management

Created by Henri Fayol: planning, organizing, staffing, controlling, and directing.

Adhocracy culture

Creates an environment of innovating, visioning the future, accepting of managing change, and risk taking, rule-breaking, experimentation, entrepreneurship, and uncertainty.

Modern bureaucracy

Decisions should be made on a formal basis, rather than what a bureaucrat felt was correct. Weber stressed that knowledge, not birth circumstances, should be the basis of hiring and promotion within a bureaucracy.

Nonprogrammed decisions

Decisions that are novel and not based on well-defined or known criteria.

Programmed decisions

Decisions that are repeated over time and for which an existing set of rules can be developed.

boundary conditions

Define the degree of discretion that is available to employees for self-directed action.

Corporate culture

Defines how motivating employees' beliefs, behaviors, relationships, and ways they work creates a culture that is based on the values the organization believes in.

Masculinity

Degree to which a society emphasizes traditional masculine qualities, such as advancement and earnings.

Individualism

Degree to which a society focuses on the relationship of the individual to the group.

Political risk

Degree to which political decisions can impact a business's ability to survive in a country.

Social stratification

Degree to which social benefits are unequally distributed; those patterns are perpetuated for life.

mechanistic bureaucratic structure

Describes organizations characterized by (1) centralized authority, (2) formalized procedures and practices, and (3) specialized functions. They are usually resistant to change.

Competing Values Framework

Developed by Kim Cameron and Robert Quinn this model is used for diagnosing an organization's cultural effectiveness and examining its fit with its environment.

effort-performance expectancy

E1, the perceived probability that effort will lead to performance (or E ➨ P).

performance-outcome expectancy

E2, the perceived relationship between performance and outcomes (or P ➨ O).

What countries are efficiency driven economies?

Ecuador, Indonesia, Chile, and Columbia

What are the four types of categories in an environment for an entrepreneur?

Education, information technology, demographic and economic trends, and globalization

*information technology*

helps entrepreneurs work quickly and efficiently, provide attentive customer service, and increases sales

Hierarchy culture

Emphasizes efficiency, process and cost control, organizational improvement, technical expertise, precision, problem solving, elimination of errors, logical, cautious and conservative, management and operational analysis, careful decision making.

Buying an Existing Business:

Employees and suppliers are in place to serve established customers The company's good or service is well known in the marketplace Necessary permits and licenses are already secured In some cases, financing may be easier for an existing business

Vision

how to make business ideas successful

Management plan

identifies the key players—active investors, management team, board members, and advisors— citing the experience and competence they possess.

Applying for a bank or SBA-backed loan requires careful preparation, planning and analysis:

Entrepreneur's credit history will be important A professional and detailed business plan is necessary A track record of profits may make it easier to obtain bank financing

intrapreneurs

Entrepreneurs who apply their creativity, vision, and risk-taking within a large corporation, rather than starting a company of their own.

Enterprise Zones

Entrepreneurship is also through specific geographic areas designated for economic revitalization.

Technological forces

Environmental influence on organizations where speed, price, service, and quality of products and services are dimensions of organizations' competitive advantage in this era.

Complex-Unstable environments

Environments that have a large number of external elements, and elements are dissimilar and where elements change frequently and unpredictably

Complex-Stable environments

Environments that have a large number of external elements, and elements are dissimilar and where elements remain the same or change slowly.

Simple-Unstable environments

Environments that have a small number of external elements, and elements are similar and where elements change frequently and unpredictably.

Simple-Stable environments

Environments that have a small number of external elements, and elements are similar, and the elements remain the same or change slowly.

Porter's Five Forces

Evaluates the interconnected relationships between various actors in an industry, including competing firms, their suppliers, and their customers, by examining five forces: industry rivalry, threat of new entrants, threat of substitutes, supplier power, and buyer power.

Natural disaster and human induced environmental problems

Events such as high-impact hurricanes, extreme temperatures and the rise in CO2 emissions as well as 'man-made' environmental disasters such as water and food crises; biodiversity loss and ecosystem collapse; large-scale involuntary migration are a force that affects organizations.

Lack of experience

inadequate business knowledge, management experience, and technical expertise

Financial causes

inadequate capital, low cash balances, and high expenses

The SBA, state and local agencies, and business incubators all offer...

information, resources, and access to financing.

*seed capital*

initial funding needed to launch a new venture

entrepreneur

initiate projects that lead to improvements; delegate idea-generation responsibilities to others and identify best ideas to act on

Open system

interacts with the environment to gain resources.

Enterprise zones encourage...

investment, often in distressed areas, by offering tax advantages and incentives to businesses.

liaison

maintain and manage information links inside and outside the organization

tactical planning

mid-level strategic planning consisting of broad ideas of what a company should do to pursue its mission.

leader

motivate, train, counsel, communicate, and direct subordinates

Compromise

neither side gets what it wants. The best each side could get is what each can agree too.

Tolerance for failure

not easily discouraged

Industrial Revolution

occurred between roughly 1760 and 1900 and saw the emergence of the modern factory.

Dominance

one dictates the terms of the arrangement.

Self-confidence

optimism and fearlessness

Creativity

overcoming difficult problems and situations

disseminator

pass information on to others in the organization through memos, emails, phone calls

figurehead

perform formal duties like greeting visitors and signing contracts and other legal documents

*classic entrepreneur*

person who identifies a business opportunity and allocates (distributes) available resources to tap that market

*social entrepreneur*

person who recognizes societal problems and uses business principles to develop innovative solutions

*entrepreneur*

person who seeks a profitable opportunity and takes the necessary risks to set up and operate a business

*lifestyle entrepreneur*

person who starts a business to reduce work hours and create a more relaxed lifestyle

*serial entrepreneur*

person who starts one business, runs it, and then starts and runs additional businesses in succession

*intrapreneurship*

process of promoting innovation within the structure of an existing organization

*skunkworks*

project initiated by a company employee, who conceives the idea, convinces top management of its potential, and then creates human and other resources from within the firm to turn it into a commercial project

Adam Smith

proposed the ideas of division of labor, specialization, and coordination within a corporation.

Executive summary

provides an overview of the total business plan. Written

Appendix of supporting documents provides

provides materials supplementary to the plan.

Lewin's change model

Explains a very basic process that accompanies most organizational changes.

Tariffs

Extra charges that are added to the price of international products in the form of additional taxes or higher prices as a way to give domestic companies a price advantage while also protecting these companies from foreign competition.

competitive environment

Factors and situations both inside the firm and outside the firm that have the potential to impact its operations and success.

hygienes

Factors in the work environment that are based on the basic human need to "avoid pain."

Christianity

Faith based on the life, teachings, death, and resurrection of Jesus.

negotiator

represent team or department's interests; represent department during negotiation of budgets, union contracts, purchases

Part of the planning effort includes...

research needed to create a business plan, or a road map of sorts.

Classic entrepreneurs

risk-takers who start their own companies based on innovative ideas.

monitor

seek and receive information from a variety of sources

emotional intelligence

self awareness, self regulation, empathy, social skills

Marketing plan

shows who the firm's customers will be and what type of competition it will face; outlines the marketing strategy and specifies the firm's competitive edge; and describes the strengths, weaknesses, opportunities, and threats of the business.

Entrepreneurs typically...

solve problems as they arise, and change course as necessary.

If you're seeking funds from outside sources...

some planning is necessary then.

goal

something that a firm is trying to accomplish; can also be called an objective.

Financial plan

specifies financial needs and contemplated sources of financing, as well as presents projections of revenues, costs, and profits.

Established businesses are less risky than...

starting a new one

While creating a business plan, in the past, many entrepreneurs did not always create a business when...

starting a new venture

strategic focus

strategic, tactical, operational

internal factors in a business are

strengths & weaknesses

Unity of command

stresses that each worker should have only one supervisor.

disturbance handler

take corrective action during conflicts or crises; resolve disputes among subordinates

strategic objectives

the big-picture goals for the company: what the company will do to try to fulfill its mission.

corporate strategy

the broadest level of strategy, concerned with decisions about growing, maintaining, or shrinking very large companies.

performance measurement

the evaluation of firm activities to determine the success of that activity in helping the firm reach its strategic objectives.

implementation

the execution of a strategy by planning and assigning actions to employees to carry out in order to accomplish the company's strategic objectives.

time-bound

the goal must have a time limit so there is a sense of urgency to accomplish it

achievable

the goal should be achievable and reasonable, not impossible

measurable

the goal should be measurable so you can tell if you are achieving it

relevant

the goal should be relevant to your overall objective and help you advance towards it

specific

the goal should be specific and understandable

international strategy

the level of strategy concerned with the large-scale actions involved in entering a brand-new geographic market.

Personal reasons

the owners may decide to sell the business or move on to other opportunities

strategic management process

the set of activities that firm managers undertake in order to try to put their firms in the best possible position to compete successfully in the marketplace.

strategic analysis

the systematic examination of a firm's internal and external situation that informs managerial decision-making.

dog

these business units are doing poorly in a low-growth market and should be divested

question mark

these business units are not doing well in a high-growth market and the ceo will decide to invest or scrap the business

star

these business units have a high market share in a high-growth market. They are generating revenue, but the ceo should invest to keep growing market share

cash cow

these business units have high market share in a market that isnt growing. ceos should use the money they earn to invest in stars

spokesperson

transmit information to people outside the organizations through speeches, interviews, and written communication

Tolerance for ambiguity

uncertainties taken in stride

Motion studies

Film studies of work.

venture capital

Financing obtained from venture capitalists, investment firms that specialize in financing small, high-growth companies and receive an ownership interest and a voice in management in return for their money.

primary activities

Firm activities on the value chain that are directly responsible for creating, selling, or servicing a product or service, such as manufacturing and marketing.

strategic positioning

Firm's decisions on how to organize its actions and operate to effectively serve customers and compete against rivals.

horizontal organizational structure

Flat organizational structure in which many individuals across the whole system are empowered to make organizational decisions.

Market culture

Focuses on delivering value, competing, delivering shareholder value, goal achievement, driving and delivering results, speedy decisions, hard driving through barriers, directive, commanding, competing and getting things done.

individual-level change

Focuses on how to help employees to improve some active aspect of their performance or the knowledge they need to continue to contribute to the organization in an effective manner.

Clan culture

Focuses on relationships, team building, commitment, empowering human development, engagement, mentoring, and coaching.

Expatriate

Foreign employee who moves and works in another country for an extended period of time.

executive managers

Generally, a team of individuals at the highest level of management of an organization.

Characteristics of Entrepreneurs

vision, high energy level, need to achieve, self-confidence, tolerance for failure, tolerance for ambiguity, internal locus of control, and creativity

growth-oriented entrepreneurs

want their business to grow into a major corporation.

Hammurabi

was a listing of 282 laws that regulated conduct on a wide variety of behaviors, including business dealings, personnel behavior, interpersonal relations, punishments and a wide variety of other outcomes.

Italian Renaissance

was a major leap of knowledge and learning that had economic and business implications.

business-level strategy

ways that single-product firms organize their activities to succeed against rivals; at this level, include cost leadership and differentiation.

*angel investors*

wealthy individuals, who invest directly in a new venture in exchange for an equity stake

Internal dimensions of organizations

How an organization's culture affects and influences its strategy.

managed change

How leaders in an organization intentionally shape shifts that occur in the organization when market conditions shift, supply sources change, or adaptations are introduced in the processes for accomplishing work over time.

technological change

Implementation of new technologies often forces organizations to change.

legal factors

In PESTEL, the laws impacting business, such as those governing contracts and intellectual property rights and illegal activities, such as online piracy.

buyer power

In the relationship between a firm and its customers, buyers with high power can negotiate product price or features, while buyers with low power cannot.

Socio-cultural environment forces

Include different generations' values, beliefs, attitudes and habits, customs and traditions, habits and lifestyles.

participatory management

Includes employees in deliberations about key business decisions.

DHL Global Connected Index

Index tracking the flow of capital, information, trade, and human resources and representing the degree of globalization.

angel investors

Individual investors or groups of experienced investors who provide financing for start-up businesses by investing their own funds.

Stakeholders

Individuals or groups who are impacted by the organization. These include owners, employees, customers, suppliers, and members of the community in which the organization is located.

barriers to entry

Industry factors (such as high start-up costs) that can prevent new firms from successfully launching new operations in that industry.

Emerging market multinationals

Influential companies from emerging markets that are competing head-on with established multinationals and rewriting the rules of competition by using new business models.

internal environment

Innermost layer of a firm's competitive environment, including members of the firm itself (such as employees and managers), investors in the firm, and the resources and capabilities of a firm.

What type of economy is the United States?

Innovation-Driven Economy

Cultural paradox

Insights from an understanding of culture may not necessarily coincide with reality in that culture.

appreciative conversations

Intense, positively framed discussions that help people to develop common ground as they work together to cocreate a positive vision of an ideal future for their organization.

Exporting

International entry mode where a company sends a product to an international market and fills the order like a domestic order.

Foreign direct investment (FDI)

Involves a company investing in another country through the construction of facilities and buildings in another country.

culture change

Involves reshaping and reimagining the core identity of the organization.

Independence and a better lifestyle:

Large corporations no longer represent job security or offer the fast-track career opportunities they once did. Mid-career employees leave the corporate world—either voluntarily or as a result of downsizing—in search of the new opportunities that self-employment provides. Many new college and business school graduates shun the corporate world altogether to start their own companies or look for work in smaller firms.

abundance-based change

Leaders assume that employees will change if they can be inspired to aim for greater degrees of excellence in their work.

deficit-based change

Leaders assume that employees will change if they know they will otherwise face negative consequences.

conventional mindset

Leaders assume that most people are inclined to resist change and therefore need to be managed in a way that encourages them to accept change.

positive or appreciative mindset

Leaders assume that people are inclined to embrace change when they are respected as individuals with intrinsic worth, agency, and capability.

Predeparture cross-cultural training

Learning opportunities provided prior to departure.

While choosing a business idea consider the following:

List your interests and abilities, values, beliefs, goals, and dreams List the types of businesses which match your interests and abilities Read, Read, Read to identify trends and ideas of future needs for products Evaluate ways to improve existing goods and services Conduct market research to determine customer interest in your idea or venture Become an industry expert by reading about your industry

Supervision

Managers continually oversee the work of their subordinates.

Controlling

Managers evaluate and take corrective action concerning the allocation and use of human, financial, and material resources.

Monitoring products and services

Managers get involved in planning, scheduling, and monitoring the design, development, production, and delivery of the organization's products and services.

Environmental scanning

Managers must continually watch for changes in the business environment and monitor business indicators such as returns on equity or investment, economic indicators, business cycles, and so forth.

Long-range planning

Managers occupying executive positions are frequently involved in strategic planning and development.

Coordinating

Managers often must coordinate the work of others both inside the work unit and out.

Personal satisfaction from work:

Many small-business owners cite this as one of the primary reasons for starting their companies. They love what they do.

bureaucratic model

Max Weber's model that states that organizations will find efficiencies when they divide the duties of labor, allow people to specialize, and create structure for coordinating their differentiated efforts within a hierarchy of responsibility.

Heuristics

Mental shortcuts that allow a decision maker to reach a good decision quickly. They are strategies that develop based on prior experience.

High-rigor cross-cultural training

Methods of training where participants are much more actively engaged in the training process and can learn some tacit aspects of cross-cultural differences.

Uppsala model of internationalization

Model that argues that as firms learn more about a specific market, they become more committed by investing more resources into that market.

GLOBE project

More recent cultural project involving 170 researchers who collected data on 17,000 managers from 62 countries around the world.

Immigration

Movement of people from their home country to other countries; will continue to grow worldwide.

geographic structures

Occur when organizations are set up to deliver a range of products within a geographic area or region.

negative reinforcement

Occurs when a behavior causes something undesirable to be removed, increasing the likelihood of the behavior reoccurring.

reinforcement

Occurs when a consequence makes it more likely a behavior will be repeated in the future.

extinction

Occurs when a consequence or lack of a consequence makes it less likely that a behavior will be repeated in the future.

positive reinforcement

Occurs when a desirable consequence that satisfies an active need or removes a barrier to need satisfaction increases the likelihood of a behavior reoccurring.

extrinsic motivation

Occurs when a person performs a given behavior to acquire something that will satisfy a lower-order need.

Product structures

Occurs when businesses organize their employees according to product lines or lines of business.

nonreinforcement

Occurs when no consequence follows a worker's behavior.

Cultural stereotyping

Occurs when one assumes that all people within a culture act, think, and behave the same way.

avoidance learning

Occurs when people learn to behave in a certain way to avoid encountering an undesired or unpleasant consequence.

state of equity

Occurs when people perceive their outcome/input ratio to be equal to that of their referent other.

overreward inequity

Occurs when people perceive their outcome/input ratio to be greater than that of their referent other.

underreward inequity

Occurs when people perceive their outcome/input ratio to be less than that of their referent other.

new entrants

One of Porter's Five Forces, the threat of new entrants assesses the potential that a new firm will start operations in an industry.

supplier power

One of Porter's Five Forces; describes the balance of power in the relationship between firms in an industry and their suppliers.

substitutes

One of Porter's Five Forces; products or services outside a firm's industry that can satisfy the same customer needs as industry products or services can.

industry rivalry

One of Porter's Five Forces; refers to the intensity of competition between firms in an industry.

Decisional role

One of the three major roles that a manager assumes in the organization.

Informational role

One of the three major roles that a manager assumes in the organization.

Interpersonal role

One of the three major roles that a manager assumes in the organization.

What technology has helped businesses compete?

Online shopping, ordering, free shipment, and customization

vertical organizational structure

Organizational structures found in large mechanistic organizations; also called "tall" structures due to the presence of many levels of management.

emergent or bottom-up approach

Organizations exist as socially constructed systems in which people are constantly making sense of and enacting an organizational reality as they interact with others in a system.

instincts

Our natural, fundamental needs, basic to our survival.

environmental factors

PESTEL category that examines a firm's external situation with respect to the natural environment, including pollution, natural resource availability and preservation, and alternative energy.

sociocultural factors

PESTEL category that identifies trends, facts, and changes in society's composition, tastes, and behaviors, including demographics.

technological factors

PESTEL category that includes factors such as the Internet, social media, automation, and other innovations that impact how businesses compete or how they manufacture, market, or sell their goods or services.

economic factors

PESTEL category that includes facts (such as unemployment rates, interest rates, and commodity prices) about the state of the local, national, or global economy.

political factors

PESTEL factor that identifies political activities in the macro environment that may be relevant to a firm's operations.

demographics

Part of PESTEL that includes facts about the income, education, age, and ethnic and racial composition of a population.

switching costs

Penalty, financial or otherwise, that a consumer bears when giving up the use of a product currently being used to select a competing product or service.

change agents

People in the organization who view themselves as agents who have discretion to act.

entrepreneurs

People with vision, drive, and creativity who are willing to take the risk of starting and managing a business to make a profit, or greatly changing the scope and direction of an existing firm.

Trade agreements

Popular policy instruments that countries agree on to eliminate cross-border barriers to trade and to promote global integration.

operant conditioning theory

Posits that people learn to behave in a particular fashion as a result of the consequences that followed their past behaviors.

expectancy theory

Posits that people will exert high effort levels to perform at high levels so that they can obtain valued outcomes.

Small Business Investment Company (SBIC)

Privately owned and managed investment companies that are licensed by the Small Business Administration and provide long-term financing for small businesses.

strategy

Process of planning and implementing actions that will lead to success in competition.

strategic analysis

Process that firms use to study and understand their competitive environment.

Hofstede model of national culture

Project involving survey of over 88,000 employees in IBM subsidiaries from 72 countries.

Uncertainty avoidance

Refers to the degree to which people in a society are comfortable with uncertainty and unpredictable situations.

Power distance

Refers to the degree to which societies accept power differences and authority in society.

Cultural intelligence

Refers to the individuals' capabilities to function and manage effectively in culturally diverse settings.

performance environment

Refers to those factors that impact employees' performance but are essentially out of their control.

motivators

Relate to the jobs that people perform and people's ability to feel a sense of achievement as a result of performing them.

top-down change

Relies on mechanistic assumptions about the nature of an organization.

Islam

Religion whose essence is described in the Qur'an as the submission to the will of Allah (God).

Hinduism

Represented by all those who honor the ancient scriptures called the Vedas.

Clusters

Representing countries that share similar cultural characteristics.

strengths

Resources and capabilities of a firm; what it is good at.

self-determination theory (SDT)

Seeks to explain not only what causes motivation, but also the effects of extrinsic rewards on intrinsic motivation.

value chain

Sequence of activities that firms perform to turn inputs (parts or supplies) into outputs (goods or services).

Religion

Shared set of beliefs, activities, and institutions based on faith in supernatural forces.

transformational change

Significant shifts in an organizational system that may cause significant disruption to some underlying aspect of the organization, its processes, or its structures.

incremental change

Small refinements in current organizational practices or routines that do not challenge, but rather build on or improve, existing aspects and practices within the organization.

Education

Socializing experiences that prepare individuals to act in society.

Internal consulting

Some managers make use of their technical expertise to solve internal problems, acting as inside consultants for organizational change and development.

OD consultant

Someone who has expertise in change management processes.

organizational development (OD)

Specialized field that focuses on how to design and manage change.

equity theory

States that human motivation is affected by the outcomes people receive for their inputs, compared to the outcomes and inputs of other people.

goal theory

States that people will perform better if they have difficult, specific, accepted performance goals or objectives.

SWOT

Strategic analysis tool used to examine a firm's situation by looking at its strengths, weaknesses, opportunities, and threats.

Reflective system

System of decision-making in the brain that is logical, analytical, and methodical.

Reactive system

System of decision-making in the brain that is quick and intuitive.

Frederick Winslow Taylor

Taylor is known as the father of scientific management.

organization development (OD)

Techniques and methods that managers can use to increase the adaptability of their organization.

Rapidly changing technology:

Technology advances and decreased costs provide individuals and small companies with the power to compete in industries that were formerly closed to them.

formal leader

That individual who is recognized by those outside the group as the official leader of the group.

informal leader

That individual whom members of the group acknowledge as their leader.

Emotional intelligence

The ability to understand and manage emotions in oneself and in others.

Decision-making

The action or process of thinking through possible options and selecting one.

work motivation

The amount of effort a person exerts to achieve a level of job performance

external environment

The aspects of the world at large and of a firm's industry that can impact its operations.

great man theory of leadership

The belief that some people are born to be leaders and others are not.

level of organization

The breadth of the systems that need to be changed within an organization.

centralization

The concentration of control of an activity or organization under a single authority.

Bounded rationality

The concept that when we make decisions, we cannot be fully rational because we don't have all the possible information or the cognitive processing ability to make fully informed, completely rational decisions.

informal organization

The connecting social structure in organizations that denotes the evolving network of interactions among its employees, unrelated to the firm's formal authority structure.

valences

The degree to which a person perceives an outcome as being desirable, neutral, or undesirable.

specialization

The degree to which people are organized into subunits according to their expertise—for example, human resources, finance, marketing, or manufacturing.

goal commitment

The degree to which people dedicate themselves to achieving a goal.

intentionality

The degree to which the change is intentionally designed or purposefully implemented.

scope of change

The degree to which the required change will disrupt current patterns and routines.

Functional structure

The earliest and most used organizational designs.

schedules of reinforcement

The frequency at which effective employee behaviors are reinforced.

Creativity

The generation of new or original ideas.

Government and political environment forces

The global economy and changing political actions increase uncertainty for businesses, while creating opportunities for some industries and instability in others.

ability

The knowledge, skills, and receptiveness to learning that an individual brings to a task or job.

first-line management

The level of management directly managing nonmanagerial employees.

middle management

The managers in an organization at a level just below that of senior executives.

micro environment

The middle layer of elements in a firm's external environment, primarily concerned with a firm's industry situation.

Organizational change

The movement that organizations take as they move from one state to a future state.

need for power (nPow)

The need to control things, especially other people; reflects a motivation to influence and be responsible for other people.

need for affiliation (nAff)

The need to establish and maintain warm and friendly relationships with other people.

need for achievement (nAch)

The need to excel at tasks, especially tasks that are difficult.

Organic organizational structures

The opposite of a functional organizational form that works best in unstable, complex changing environments.

macro environment

The outermost layer of elements in a firm's external environment that can impact a business but are generally beyond the firm's direct control, such as the economy and political activity.

designated leader

The person placed in the leadership position by forces outside the group.

emergent leader

The person who becomes a group's leader by virtue of processes and dynamics internal to the group.

Least-preferred coworker (LPC)

The person with whom the leader least likes to work.

organizational design

The process by which managers define organizational structure and culture so that the organization can achieve its goals.

change management

The process of designing and implementing change.

entrepreneurship

The process of designing, launching, and running a new business.

formalization

The process of making a status formal for the practice of formal acceptance.

differentiation

The process of organizing employees into groups that focus on specific functions in the organization.

Domain

The purpose of the organization from which its strategies, organizational capabilities, resources, and management systems are mobilized to support the enterprise's purpose.

span of control

The scope of the work that any one person in the organization will be accountable for.

role perceptions

The set of behaviors employees think they are expected to perform as members of an organization.

organizational structure

The system of task and reporting relationships that control and motivate colleagues to achieve organizational goals.

environmental scanning

The systematic and intentional analysis of a firm's internal state and its external environment.

Groupthink

The tendency of a group to reach agreement very quickly and without substantive discussion.

Escalation of commitment

The tendency of decision makers to remain committed to poor decision, even when doing so leads to increasingly negative outcomes.

Confirmation bias

The tendency to pay attention to information that confirms our existing beliefs and to ignore or discount information that conflicts with our existing beliefs.

command-and-control

The way in which people report to one another or connect to coordinate their efforts in accomplishing the work of the organization.

Frank and Lillian Gilbreth

Their major contribution was motion studies.

process motivation theories

Theories that focus on the how and why of motivation.

content motivation theories

Theories that focus on what motivates people.

Major corporate restructuring and downsizing:

These force many employees to look for other jobs or careers. They may also provide the opportunity to buy a business unit that a company no longer wants.

Small businesses are resilient:

They are able to respond fairly quickly to changing economic conditions by refocusing their operations.

What do firms in franchises show?

They show growth that includes those targeting children and parents, such as photography, tutoring, and security.

resources

Things a firm has, such as cash and skilled employees, that it can use to create products or services.

external factors

Things in the world or industry environments that may impact a firm's operations or success, such as the economy, government actions, or supplier power. Strategic decisions can be made in response to these things but normally cannot directly influence or change them.

weaknesses

Things that a firm does not have good capabilities to perform or gaps in firm resources.

Emerging markets

Those markets in countries that present tremendous potential for multinationals.

Postarrival cross-cultural training

Training provided after the expatriate has arrived to the intended destination.

Low-rigor cross-cultural training

Training where individuals are exposed to critical information to help them understand the realities of a different culture but are not actively engaged in their learning.

International strategic alliances

Two or more companies from different countries enter into an agreement to conduct joint business activities.

What countries are innovation-driven economies?

USA, Canada, Singapore, and Israel

organic bureaucratic structure

Used in organizations that face unstable and dynamic environments and need to quickly adapt to change.

support activities

Value chain activities that a firm performs to sustain itself; do not directly create a product or service but are necessary to support the firm's existence, such as accounting and human resources.

direction

What a person is motivated to achieve.

competitive advantage

When a firm successfully attracts more customers, earns more profit, or returns more value to its shareholders than rival firms do.

Suppression of dissent

When a group member exerts his or her power to prevent others from voicing their thoughts or opinions.

International franchising

Where a company will license the complete business model.

Global strategy

Where all operations and activities are managed fairly similarly worldwide.

Regional strategy

Where the multinational adapts activities and operations to regional requirements.

referent others

Workers that a person uses to compare inputs and outcomes, and who perform jobs similar in difficulty and complexity to the employee making an equity determination.

Zone of indifference

Workers would comply with orders if they were indifferent to them. This does not mean they have to agree with the orders. Rather the zone of indifference suggests that workers need merely to be indifferent to an order to follow it.

Globalization

Worldwide phenomenon whereby the countries of the world are becoming more interconnected and where trade barriers are disappearing.

What countries are factor driven economies?

Zambia, Nigeria, Malawi

vision statement

a broad expression of what a business's founders want that business to accomplish.

plan

a decision to carry out a particular action in order to achieve a specific goal, including decisions about when and how the action should be accomplished and what resources will be required to carry out the action.

mission statement

a general description of how the firm will try to accomplish the firm's vision.

stability strategy

a grand strategy for a company that wants maintain its current income, market share, or geographic reach.

defensive strategy

a grand strategy pursued by companies facing challenges.

growth strategy

a grand strategy to increase the size of the firm in terms of revenue, market share, geographic reach, or a combination of these elements.

benchmarking

a performance evaluation technique where the standard for a firm's performance is based on another firm's superior performance.

BCG matrix

a tool used to evaluate the various business units in a corporation.

High energy level

a willingness to work long and hard

Very few startups are financed through...

bank loans (they are difficult to secure in today's environment).

A franchise usually means...

better brand recognition

*debt financing*

borrowed funds that entrepreneurs must repay

Integration

both parties state their preferences and attempt to reach an agreement.

Economic factors

business downturns and high interest rates

*venture capitalists*

business firms or groups of individuals that invest in new and growing firms in exchange for an ownership share

What is a less risky way to begin a new business than establishing an entirely new one?

buying a franchise

Entrepreneurs fall into several categories:

classic entrepreneurs, multipreneurs, and intrapreneurs.

intensity

(1) The degree to which people try to achieve their targets; (2) the forcefulness that enhances the likelihood that a stimulus will be selected for perceptual processing.

Carl G. Barth

(1860-1939), mathematician, developed a slide rule for calculating how much steel to cut.

Henry Gantt

(1861-1919) developed the Gantt chart, which allowed for the process of control to occur.

Mary Parker Follett

(1868-1933) found a way to utilize the tenets of the human relations movement to solve some of the issues with scientific management.

Elton Mayo

(1880-1949) researched, theorized, and developed human relations theory based on an experiment at the Hawthorne plant on how to manage workers and to improve production.

Chester Barnard

(1886-1961) argued that the executive purpose was to gain resources from members within the organization by ensuring that they perform their jobs and that cooperation exists between various groups within the organization.

Nebuchadnezzar

(605 BC-c. 562 BC) was a pioneer in the development of incentives in that he gave greater rewards to workers who were productive.

Demographic and Economic Trends

- Aging of U.S. population - Increasingly diverse ethnic groups - Growth of two-income families

Why do people choose entrepreneurship?

- Dissatisfaction with traditional work - To fill a gap in goods or services they could use themselves - Financial necessity - Heightened publicly surrounding celebrity (celebrity status)

What do you have to consider while choosing an idea for your business?

- Find something you love to do and are good at doing - Determine whether your ideas can satisfy a need in the marketplace - Do what makes you happy and be true to yourself

Why do people become entrepreneurs?

- Freedom to make decisions and self-management. - Being first to bring an idea for a superior product to market can translate to financial gains as creators of wealth - Working for a large company does not guarantee job security - Freedom to decide when, where, and how to work.

short-term strategic plan

company actions to achieve an objective in a time frame of a year or less.

Information Technology

- Technology has provided entrepreneurs tools to compete - Entrepreneurs have used it to revolutionize industries

Education

- U.S. colleges and universities: entrepreneurship majors - Universities are helping students launch businesses - Teaching entrepreneurship to young people

long-term strategic plan

company actions to achieve an objective that will take a year or longer to accomplish.

Need to achieve

competitive drive and desire to excel

Vision and mission statement

concisely describe the intended strategy and business philosophy for making the vision happen.

low involvement decisions

-items purchased more frequently like a pack of gum or ordering office supplies -less complex decisions -less costly decisions -less time invested in making decisions

high involvement decisions

-rare purchases such as a house or who to hire for a center position -more complex decisions -more costly decisions -more time invested in making a decision

strategic planning

connects the company's actions back to its vision and mission statements.

Internal locus of control

control of their own destiny

Are franchise fees costly or inexpensive?

costly

Which of these is an advantage of buying an existing business? a. Get financing easier. b. Employees are already in place. c. Permits and licenses are already obtained. d. All of the above.

d. All of the above.

The Decision-Making Process

1. Recognize that a decision needs to be made. 2. Generate multiple alternatives. 3. Analyze the alternatives. 4. Select an alternative. 5. Implement the selected alternative. 6. Evaluate its effectiveness.

What makes an entrepreneur different than a small business owner? a. Drive b. Levels of creative energy c. Desire to succeed d. Desire for business growth

d. Desire for business growth

How are entrepreneurs different from managers? a. Entrepreneurs are more risk-averse than managers. b. Managers are more likely than entrepreneurs to use the resources of an organization to accomplish their personal goals. c. Managers are typically more independent than entrepreneurs. d. Entrepreneurs are more likely than managers to combine their ideas with resources for an organization to create a business.

d. Entrepreneurs are more likely than managers to combine their ideas with resources for an organization to create a business.

What are the percent of entrepreneurs that use bank loans for start-ups?

18%

What are the percent of entrepreneurs that use lines of credit for start-ups?

18%

What are the percent of entrepreneurs that use loans from family, friends, or business associates for start-ups?

22%

How many large firms allocate funds towards intrapreneurship?

30%

What are the percent of entrepreneurs that use SBA or other government funds for start-ups?

4%

In a recent year, how many new businesses were created in the United States?

505,473 new businesses

What are the percent of entrepreneurs that use venture capital for start-ups?

8%

What are the percent of entrepreneurs that use self-financing for start-ups?

82%

Horizontal organizational structures

A "flatter" organizational structure often found in matrix organizations where individuals relish the breath and development that their team offers.

consideration

A "relationship-oriented" leader behavior that is supportive, friendly, and focused on personal needs and interpersonal relationships.

initiating structure

A "task-oriented" leader behavior that is focused on goal attainment, organizing and scheduling work, solving problems, and maintaining work processes.

Joan Woodward

A British scholar who did her work in the 1950s and 1960s. She argued that contingencies, such as technology, play a role in how much training workers should receive.

self-efficacy

A belief about the probability that one can successfully execute some future action or task, or achieve some result.

Organizational structures

A broad term that covers both mechanistic and organic organizational structures.

small business

A business with under 500 employees that is independently managed, is owned by an individual or a small group of investors, is based locally, and is not a dominant company in its industry.

organization-level change

A change that affects an entire organizational system or several of its units.

strategic change

A change, either incremental or transformational, that helps align an organization's operations with its strategic mission and objectives.

Critical thinking

A disciplined process of evaluating the quality of information, especially by identifying logical fallacies in arguments.

capabilities

A firm's skill at coordinating and leveraging resources to create value.

formal organization

A fixed set of rules of organizational procedures and structures.

motivation

A force within or outside of the body that energizes, directs, and sustains human behavior. Within the body, examples might be needs, personal values, and goals, while an incentive might be seen as a force outside of the body. The word stems from its Latin root movere, which means "to move."

debt

A form of business financing consisting of borrowed funds that must be repaid with interest over a stated time period.

equity

A form of business financing consisting of funds raised through the sale of stock (i.e., ownership) in a business.

Networked-team structure

A form of the horizontal organization.

business plan

A formal written statement that describes in detail the idea for a new business and how it will be carried out; includes a general description of the company, the qualifications of the owner(s), a description of the product or service, an analysis of the market, and a financial plan.

focus strategy

A generic business-level competitive strategy that firms use in combination with either a cost-leadership or differentiation strategy in order to target a smaller demographic or geographic market with specialized products or services.

cost-leadership strategy

A generic business-level strategy in which a firm tightly controls costs throughout its value chain activities in order to offer customers low-priced goods and services at a profit.

differentiation strategy

A generic business-level strategy in which firms add value to their products and services in order to attract customers who are willing to pay a higher price.

Small Business Administration (SBA)

A government agency that speaks on behalf of small business; specifically it helps people start and manage small businesses, advises them in the areas of finance and management, and helps them win federal contracts.

Devil's advocate

A group member who intentionally takes on the role of being critical of the group's ideas in order to discourage groupthink and encourage deep thought and discussion about issues prior to making decisions.

industry

A group of firms all offering products or services in a single category, for example restaurants or athletic equipment.

flat organization

A horizontal organizational structure in which many individuals across the whole system are empowered to make organizational decisions.

need

A human condition that becomes energized when people feel deficient in some respect.

visionary leader

A leader who influences others through an emotional and/or intellectual attraction to the leader's dreams of what "can be."

transformational leader

A leader who moves and changes things "in a big way" by inspiring others to perform the extraordinary.

operant conditioning

A learning process based on the results produced by a person "operating on" the environment.

Appreciative Inquiry model

A model specifically designed as an abundance-based, bottom-up, positive approach.

Complex Adaptive Systems (CAS)

A model that views organizations as constantly developing and adapting to their environment, much like a living organism.

charismatic leader

A person who possesses legitimate power that arises from "exceptional sanctity, heroism, or exemplary character."

McKinsey 7-S model

A popular depiction of internal organizational dimensions.

Evidence-based decision-making

A process of collecting the best available evidence prior to making a decision.

Brainstorming

A process of generating as many ideas or alternatives as possible, often in groups.

Virtual structure

A recent organizational structure that has emerged in the 1990's and early 2000's as a response to requiring more flexibility, solution based tasks on demand, less geographical constraints, and accessibility to dispersed expertise.

opportunity

A situation that a firm has the resources and capabilities to take advantage of.

leadership

A social (interpersonal) influence relationship between two or more persons who depend on each other to attain certain mutual goals in a group situation.

motive

A source of motivation; the need that a person is attempting to satisfy.

charisma

A special personal magnetic charm or appeal that arouses loyalty and enthusiasm in a leader-follower relationship.

PESTEL

A strategic analysis tool that examines several distinct categories in the macro environment: political, economic, sociocultural, technological, environmental, and legal.

contingency theory of leadership

A theory advanced by Dr. Fred E. Fiedler that suggests that different leadership styles are effective as a function of the favorableness of the leadership situation least preferred.

path-goal theory of leadership

A theory that posits that leadership is path- and goal-oriented, suggesting that different leadership styles are effective as a function of the task confronting the group.

What are business plan resources?

AllBusiness.com, Inc., MoreBusiness.com, and Small Business Administration

Geographic structure

An Organizational option aimed at moving from a mechanistic to more organic design to serve customers faster and with relevant products and services; as such, this structure is organized by locations of customers that a company serves.

punishment

An aversive consequence that follows a behavior and makes it less likely to reoccur.

planned change

An intentional activity or set of intentional activities that are designed to create movement toward a specific goal or end.

Divisional structure

An organizational structure characterized by functional departments grouped under a division head.

Matrix structure

An organizational structure close in approach to organic systems that attempt to respond to environmental uncertainty, complexity, and instability.

matrix structure

An organizational structure that groups people by function and by product team simultaneously.

Kotter's change model

An overall framework for designing a long-term change process.

unplanned change

An unintentional activity that is usually the result of informal organizing.

input

Any personal qualities that a person views as having value and that are relevant to the organization.

outcome

Anything a person perceives as getting back from an organization in exchange for the person's inputs.

threat

Anything in the competitive environment that would make it harder for a firm to be successful.

extrinsic outcomes

Are awarded or given by other people (like a supervisor).

intrinsic outcomes

Are awarded or given by people to themselves (such as a sense of achievement).

primary needs

Are instinctual in nature and include physiological needs for food, water, and sex (procreation).

secondary needs

Are learned throughout one's life span and are psychological in nature.

manifest needs

Are needs motivating a person at a given time.

intrinsic motivation

Arises out of performing a behavior in and of itself, because it is interesting or "fun" to do.

Outsourcing:

As a result of downsizing, corporations may contract with outside firms for services they used to provide in-house. Outsourcing creates opportunities for smaller companies that offer these specialized goods and services.

manifest needs theory

Assumes that human behavior is driven by the desire to satisfy needs.

hedonism

Assumes that people are motivated to satisfy mainly their own needs (seek pleasure, avoid pain).

generic business-level strategies

Basic methods of organizing firm value chain activities to compete in a product market that can be used by any sized firm in any industry.

Entrepreneurs borrow from banks, finance companies, credit card companies, money from families and friends that must be repaid...

debt financing

What financing is used when money is borrowed and needs to be repaid?

debt financing

resource allocator

decide who gets resources; schedule, budget, set priorities

Mechanistic organizational structures

Best suited for environments that range from stable and simple to low-moderate uncertainty and have a formal "pyramid' structure.

Product and/or service plan

describes the product and/or service and points out any unique features, as well as explains why people will buy the product or service.

competition

Business actions a firm undertakes to attract customers to its products and away from competitors' products.

Best route to success:

Business ownership provides greater advancement opportunities for women and minorities, as we will discuss later in this chapter. It also offers small-business owners the potential for profit.

strategic group

Businesses offering similar products or services and following the same generic competitive strategy.

E-commerce

Buying and selling of products using the Internet.

disturbances

Can cause tension amongst employees, but can also be positive and a catalyst for change.

latent needs

Cannot be inferred from a person's behavior at a given time, yet the person may still possess those needs.

group-level change

Centers on the relationships between people and focuses on helping people to work more effectively together.

Customer relations and marketing

Certain managers are involved in direct contact with customers and potential customers.

structural change

Changes in the overall formal relationships, or the architecture of relationships, within an organization.

internal factors

Characteristics of a firm itself, such as resources and capabilities, that the firm can use to successfully compete against its rivals.

Satisficing

Choosing the first acceptable solution to minimize time spent on a decision.

Born globals

Companies that operate internationally from the day that they are created.

VRIO

analytical tool that evaluates a firm's resources and capabilities to determine whether or not it can support an advantage for the firm in the competitive environment: value, rarity, imitation, and organization.

Henri Fayol

administrative theory was the first general statement on management theory.

SMART framework

an acronym for the characteristics of good goals: specific, measurable, achievable, relevant, and time-bound.