MGT 492

Steps of a corporate entrepreneurial strategy

1. Developing the vision 2. Encouraging innovation 3. Structuring for an intrpreneurial climate 4. Developing individual managers for corporate entrepreneurship 5. Developing venture teams

Critical Factors: 4. Product Availability

Availability of a salable good or service at the time the venture opens its doors Sometimes there is a problem because the product or service is still in development and needs further modification or testing Ex. "bugs" in software firms

Critical Factors: 2. Investment

Capital investment to start a new venture can vary from some industries less than $100,000 to other industries requiring millions of dollars

Which of the following is not considered in the Framework of Framework Approach? A. Integrative B. Collaborative C. Process D. Life Cycle

Collaborative

Phases of New Venture: 2. Start-up

Commences with the initiation of sales activity and the delivery of products and services, and ends when the business is firmly established and beyond short-term threats to survival

Mind-Set: Characteristics

Describes the most common characteristics associated with successful entrepreneurs as well as the elements associated with the "dark side" of entrepreneurship

Common Pitfalls

Lack of objective evaluation No real insight into the market Inadequate understanding of technical requirements Poor financial understanding Lack of venture uniqueness Ignorance of legal issues

Phases of New Venture: 3. Poststart-up

Lasts until the venture is terminated or the surviving organizational entity is no longer controlled by an entrepreneur

During the past ten years, new business incorporations averaged nearly 400,000 per year.

True

Gazelles

a business establishment with at least 20% sales growth in each year for five years, starting with a base of at least $100,000 in annual sales

The "dark side" of entrepreneurship refers to

a destructive focus within the energetic drive of entrepreneurs.

In an innovative climate, failure is viewed as

a leanring experience

Corporate Entrepreneurship

a process whereby an individual or a group of individuals, in association with an existing organization, creates a new organization or instigates renewal or innovation within the organization

Corporate Social Responsibility

actions that appear to further some social good, beyond the interests of the firm and that which is required by law and often denotes societal engagement of organizations

Triple Bottom Line (TBL)

an accounting framework that goes beyond the traditional measures for profit, return on investment, and shareholder value to include environmental and social dimensions

Franchising

any arrangement in which the owner of a trademark, trade name, or copyright has licensed others to use it in selling goods or services

Middle-level: Managers

endorse, refine, and guide entrepreneurial opportunities, and identify, acquire, and deploy resources needed to pursue opportunities

A common pitfall in selecting a new venture is

poor financial understanding

Predominace of New Ventures

-Entrepreneurs create over 400,000 new businesses each year. -28.2 million small firms provide 49.6 % of private-sector jobs and make up 99.7 % of employing firms. -Over the past five years, the number of minority-owned firms increased 45.6% while women-owned businesses increased 20.1%. -1 of every 150 adults participates in the founding of a new firm each year

Darkside: The Entrepreneur's Confrontation with Risk

-Financial risk versus profit (return) motive varies in entrepreneurs' desire for wealth. -Career risk—loss of employment security -Family and social risk—competing commitments of work and family -Psychic risk—psychological impact of failure on the well-being of entrepreneurs

Unethical Behavior

-Greed -A reliance on other social institutions to convey and reinforce ethics -Distinctions between activities at work and activities at home -Survival (bottom-line thinking) -Lack of a foundation in ethics

Entrepreneurial Ego: Self-Destructive Characteristics

-Overbearing need for control -Sense of distrust -Overriding desire for success -Unrealistic externalized optimism

Impact on Economy

1. They are an integral part of the renewal process that pervades and defines market economies 2. They are the essential mechanism by which millions enter the economic and social mainstream of society

Characteristics of a Creative Climate

1.A trustful management that does not over control employees 2.Open channels of communication among all business members 3.Considerable contact and communication with outsiders 4.A large variety of personality types 5.A willingness to accept change 6.An enjoyment in experimenting with new ideas 7.Little fear of negative consequences for making a mistake 8.The selection and promotion of employees on the basis of merit 9.The use of techniques that encourage ideas, including suggestion systems and brainstorming 10.Sufficient financial, managerial, human, and time resources for accomplishing goals

Critical Factors: 5. Customer Availability

A critical consideration is how long it will take to determine who the customers are, as well as their buying habits

Entrepreneurship Definition

A dynamic process of vision, change, and creation. Requires an application of energy and passion towards the creation and implementation of new ideas and creative solutions

Minimum Viable Product (MVP)

Actionable Accessible Auditable

Phases of New Venture: 1. Prestart-up

Begins with an idea for the venture and ends when the doors are opened for business

Macro View

Environmental School of Thought-considers the external factors that affect a potential entrepreneurs's lifestyle Financial/Capital School of Thought-based on the capital-seeking process- the search for seed and growth capital Displacement School of Thought-political, cultural and economic displacement

Ray Kroe's development of McDonald's would be a good illustration of which form of innovation?

Extension

Which of the following is not a source of stress according to researches Boyd and Gumpert? A. loneliness B. people problems C. immersion in business D. family requirements

Family requirements

Disadvantages of franchising

Franchise fees Franchisor control Unfulfilled promises of franchisor

Myths of Innovations

Innovation is planned and predictable Technical specifications must be throughly prepared Innovation relies on dreams and blue-sky ideas Big projects will develop better innovations than smaller ones Technology is driving force of innovation success

Types of Innovation

Invention-new product, service or process Extension- new, use or different application of an existing product, service or process Duplication- creative replication of existing concept Synthesis- combination of existing concepts and factors into a new formulation or use

Critical Factors: 3. Growth of sales

Lifestyle ventures Small profitable ventures High-growth ventures

Which of the following statements is false? A. Entrepreneurs want the authority to make important decisions B. Management skills are not important characteristics for entrepreneurs to possess. C. Successful entrepreneurs strive to build a successful team around them D. An entrepreneur can develop the vision of the company over time

Management skills are not important characteristics for entrepreneurs to possess.

Entrepreneurship Myths

Myth 1:Entrepreneurs Are Doers, Not Thinkers Myth 2:Entrepreneurs Are Born, Not Made Myth 3:Entrepreneurs Are Always Inventors Myth 4:Entrepreneurs Are Academic and Social Misfits Myth 5:Entrepreneurs Must Fit the Profile Myth 6:All Entrepreneurs Need Is Money Myth 7:All Entrepreneurs Need Is Luck Myth 8:Entrepreneurship Is Unstructured and Chaotic Myth 9:Most Entrepreneurial Initiatives Fail Myth 10:Entrepreneurs Are Extreme Risk Takers

Right Brain

Nonverbal, Synthesizing, Seeing analogies, Non-rational, Spatial, Intuitive, Imaginative

Reasons for starting new venture

Personal Characteristics The Environment The Venture

Critical Factors: 1. Uniqueness

Range can be considerable, extending from fairly routine to highly nonroutine

Mind-set

Seeking opportunities Taking risks beyond security Having the tenacity to push an idea through to reality

Which of the following statements about social entrepreneurship is not true?

Social entrepreneurship is limited to the world of not-for-profit corporations.

Entrepreneurial Cognition

The knowledge structures that people use to make assessments, judgements, or decisions involving opportunity evaluation, venture creation, and growth

Cognition

The mental functions, processes (thoughts), and states of intelligent humans-attention, remembering, producing and understanding language, solving problems, and making decisions

Entrepreneurs are aggressive catalysts for change within the marketplace.

True

Gazelles do not always get venture capital funding.

True

Stress on the entrepreneur can be caused both internally and by other people.

True

Left Brain

Verbal, Abstract, Rational, Logical, Linear

The first of five steps for entering the international marketplace is

conducting research

Market

determination of market opportunities and risks

The major thrust of corporate entrepreneurship is to

encourage innovation

First-level: Managers

experiment with change, promote adjustment to change, and foster conformity in the development of competencies needed to execute the strategy

Technical

feasibility analysis or product or service

Entrepreneurs

focus their efforts on innovation, profitability and sustainable growth

Senior-level: Managers

have ratifying, recognizing, and directing roles that in turn are associated with particular managerial actions

Which of the following are keys to understanding opportunity and its development for entrepreneurs?

innovation and creativity

Intrapreneurship

is the act of behaving like an entrepreneur while working within a large organization

Business Owners

manage their businesses by expecting stable sales, profits and growth

Franchisee

purchaser of a franchise

Rewards should be based upon ____ to encourage the desired behavior

results

Franchisor

seller of the franchise

Bootstrapping

to finance your company's startup and growth with the assistance of or input from others

Micro View

unique markets, people, products and resources

Advantages of franchising

Training and guidance Brand-name appeal A proven track record Financial assistance

Franchise Disclosure Document (FDD)

Divided into 23 categories that provide different segments of information for prospective franchisees Developed to provide guidance in complying with the Franchise Disclosure Rule that requires franchisors to make full presale disclosure about their franchises

Traits: Entrepreneurs Theory

Entrepreneurship is characterized as the interaction of skills related to inner control, planning and goal setting, risk taking, innovation, reality perception, use of feedback, decision-making, human relations, and independence

Ethics

-Provides the basic rules or parameters for conducting any activity in an "acceptable" manner. -Represents a set of principles prescribing a behavioral code of what is good and right or bad and wrong -Defines "situational" moral duty and obligations.

Phases of creative process

1. Background or knowledge accumulation 2. The incubation process 3. The idea experience 4. Evaluation and implementation