Entrepreneurship Chapter 3

ethical dilemma

A situation that occurs when a person's values are in conflict, making it unclear whether a particular decision is the right thing to do.

Mutuality

the action of each person helping another

caveat emptor

A Latin expression that means "let the buyer beware," which has been made into a philosophy sometimes used by businesses to put the burden for consumer protection onto the customer.

Universalism

An ethical model that suggests that there is a code of right and wrong that everyone can see and follow.

Networking

Interacting with others in order to build relationships useful to a business.

External Environment

The forces, institutions, and people (i.e., the rest of the world) outside the boundary of the firm.

Baldridge Award

The Malcolm Baldrige National Quality Award is given by the U.S. government to businesses and nonprofit organizations that have been judged outstanding in seven measures of quality leadership; strategic planning; customer and market focus; measurement, analysis, and knowledge management; human resource focus; process management; and results (see www.quality.nist.gov).

Legitimacy

The belief that a firm is worthy of consideration or doing business with because of the impressions or opinions of customers, suppliers, investors, or competitors.

External Relations

The general description for the processes and skills used in the management of a firm's interactions with people, organizations, and institutions outside of its boundary.

Trade Magazines

The magazines that target specific industries and professions.

ISO 14001 certification

A certification awarded to organizations for creating and implementing an environmental management system that meets the requirement of the International Organization for Standardization.

Board of Directors

A formal group within a company that is legally responsible for the decisions and actions of the company. The directors sit above the president or chief executive officer of the company.

Task Environment

A part of the external environment made up of those components that the firm deals with directly such as customers, suppliers, consultants, media, interest groups, and the like.

Organizational Culture

A set of shared beliefs, basic assumptions, or common, accepted ways of dealing with problems and challenges within a company that demonstrate how things get done.

Golden Rule

An ethical model that suggests you treat others in the manner you wish to be treated.

Organizational Identity

Part of the BRIE model; composed of the name, description, and distinctive elements of a firm, such as trademarks, uniforms, logos, characters, and stories.

ISO

Stands for the International Organization for Standardization, and refers to certification for having met a standard of quality that is consistently evaluated around the world (see www.iso.org).

Internal Environment

The people and groups within the boundary of a firm, including the owners, managers, employees, and board members of the firm.

Customer Relationship management (CRM)

The process of tracking the customer's different contacts with the firm, and using these data to help improve sales as well as the customer's experience.

Environment

The sum of all the forces outside the firm or entrepreneur.

BATNA

An acronym for Best Alternative to a Negotiated Agreement in which the second-best outcome is identified by the parties in a negotiation to help clarify the value of achieving a successful negotiation.

General Environment

A part of the external environment made up of sectors of major forces that shape the people and institutions of the task and internal environments, such as the economic sector or the demographic sector.

Entrepreneurial Ecosystem

A specific configuration of the environment that reflects the components that are most central to developing a strong and active community of start-up businesses. The components are entrepreneurs, government, universities, investors, service people, mentors, and large organizations.

Billboard Principle

An ethical model that asks whether someone would be comfortable having his or her decision and name advertised on a billboard for the public to see.

Utilitarianism

An ethical model that supports seeking the greatest good for the greatest number of people.

"real options" approach

An idea in entrepreneurship popularized by Rita Gunther McGrath and Ian Macmillan that suggests thinking of entrepreneurial opportunities (like start-ups) in terms similar to buying a stock option, putting a small amount of money down now to let you invest more at favorable rates later. This approach minimizes the amount you can lose and gives you a chance to make a decision later, based on the start-up's track record and prospects.

Social Capital

Characteristics of a business, such as trust, consistency, and networks, that represent potential social obligations that are assets of the firm or entrepreneur.