EM midterm

Social Networking

-a way to work trust, reciprocity, and long-term relationships into your day-to-day business operations. it's a way to build your company's expertise

1. Building Legitimacy 2. Developing Social network 3. Handling a Crisis 4. Achieving Sustainability 5. Making Ethical decisions

5 Skills for MANAGING RELATIONS TO THE ENVIRONMENT

Traditional Small Business

A firm intended to provide a living to the owner and operating in a manner and on a schedule consistent with other firms in the industry and market.

High-performing Small Business

A firm intended to provide the owner with high income through sales or profits superior to those of the traditional small business.

High-growth Venture

A firm started with the intent of eventually going public, following the pattern of growth and operations of a big business.

Efficiency-driven Economy

A nation where industrialization is becoming the major force providing jobs, revenues, and taxes, and where minimizing cost while maximizing productivity (i.e., efficiency) is a major goal.

Factor-driven Economy

A nation where the major forces for jobs, revenues, and taxes come from farming or extractive industries like forestry, mining, or oil production.

Heir

A person who become an owner through inheriting or being given a stake in a family business.

Franchise

A prepacked business bought, rented, or leased from a company called a franchisor.

Lifestyle or part-time firms

A small business primarily intended to provide partial or subsistence financial support for the existing lifestyle of the owner, most often through operations that fit the owner's schedule and way of working.

Entrepreneurial Management

According to the Global Entrepreneurship Institute, they define it as the practice of taking entrepreneurial knowledge and utilizing it for increasing the effectiveness of new business venturing as well as small- and medium-sized businesses.

Industry-Specific Knowledge

Activities, knowledge, and skills specific to businesses in a particular industry.

Innovation-driven Economy.

An economy where the major forces for jobs, revenues, and taxes come from high-value-added production based on new ideas and technologies and from professional services based on higher education.

•Factor-driven Economy •Efficiency-driven Economy •Innovation-driven Economy •Opportunity-driven Entrepreneurship. •Necessity-driven Entrepreneurship.

Aspects of Global Entrepreneurship

•Founders •Franchise •Buyers •Heir

Business Owners and Entrepreneurs

Necessity-driven Entrepreneurship

Creating a firm as an alternative to unemployment.

Opportunity-driven Entrepreneurship

Creating a firm to improve one's income or a product or service.

1.Lifestyle or part-time firms 2.Traditional Small Business 3.High-performing Small Business 4.High-growth Venture

ENTREPRENEURS AND FIRM GROWTH STRATEGIES

1.Looking for trends and future-looking articles in the trade and professional press. 2.Asking your customers, suppliers, banker, attorney, and accountants what they see on the horizon for business in general. 3.Keeping notes on the things that bother you about the way work is done now. 4.Subscribing to a couple of magazines or newsletters.

ENVIRONMENTAL SCANNING FOR SMALL BUSINESSES - There are several low-cost and relatively fast ways to monitor the environment.

1. Key Business Functions Activities 2. Industry-Specific Knowledge 3. Resource Competencies 4. Determination Competencies 5. Opportunity Competencies

Entrepreneurial Operational Competencies

•Boundary •Resources •Intention •Exchange

GETTING STARTED NOW: ENTRY COMPETENCIES

Resources

Include the product or service to be offered, informational resources on markets and running a business, financial resources, and human resources.

crisis

It is a situation that poses a major problem for the business or its people, in which the survival of the business is at stake, and immediate action is necessary.

Resource Maturity Stage (Business Life Cycle)

It is characterized by relatively stable or slowly rising sales and profit several day.

Joseph Schumpeter-creative destruction.

It refers to the way that newly created goods, services, or firms can hurt existing goods, services, or firms.

•There's not enough financing. •You can't start businesses during a recession. •To make profits, you need to make something. •If you fail, you can never try again. •Students (or moms or some other group) don't have the skills to start a business.

MYTHS ABOUT SMALL BUSINESS

•Wealth •Product

Occasionally Mentioned Rewards

Founders

People who create or start new business.

Buyers

People who purchase an existing business

Promotion

Prevention Focus: Most of us have some mix of two internal focuses (also called our regulatory focus), a promotion focus intent on maximizing gains, which gives us a bias toward pursuing opportunities likely to lead to those gains, and a prevention focus intent on minimizing losses, with a bias toward inaction or protective action. Being a successful entrepreneur involves balancing the two focuses

1. Universally Mentioned Rewards. 2. Occasionally Mentioned Rewards. 3. Rarely Mentioned Rewards.

REWARDS IN STARTING A SMALL BUSINESS

•Recognition •Admiration •Power •Family

Rarely Mentioned Rewards

New Jobs Innovations New Opportunities

SMALL BUSINESS AND THE ECONOMY

•Believe that you can do. •Planning + Action = Success. •Help Helps. •Do well. Do Good.

STARTING AND ENTREPRENEURIAL SMALL BUSINESS: FOUR KEY IDEAS

Determination Competencies

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

Opportunity Competencies

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

Boundary

Something that sets it up as a firm and sets it off from the buying or selling or bartering we all do occasionally.

1. Internal Environment 2. External Environment

THE ELEMENTS OF THE SMALL BUSINESS ENVIRONMENT

1. emergence 2. existence 3. success 4. resource maturity 5. take off

The Entrepreneurial Life Cycle

1.Passion 2.Perseverance 3.Promotion 4. Planning - Style 5. Professionalization

The Five Ps of Entrepreneurial Behavior

Intention

The desire to start a business and is the most frequently occurring element of the BRIE Model.

Entrepreneurial Teams

The majority of new businesses have a team of two or more co-owners, and the trend is toward even more businesses being developed by teams of entrepreneurs.

Comprehensive planners Critical-point planners Opportunistic planner Reactive planners Habit-based planners

There are five ways to plan

BRIE model

These can include information on how to do the business or whom to sell to, funding to run the business, space for the business, and raw materials for the business to use to make goods or deliver services.

Exchange

This refers to moving resources, goods, or services to others in exchange for money or their resources.

•Role conflict •Succession

Two challenges typical to family businesses:

•Flexibility •Income •Growth

Universally Mentioned Rewards

Second Career Entrepreneurs

a special group of entrepreneurs who begin their businesses after having left, retired, or resigned from work.

emergence

a stage of small business cycle where the entrepreneur moves from thinking of starting to actually starting aa business.

Passion

an intense positive feeling the entrepreneur has toward the business or even the idea behind the business. It comes from being actively involved in moving the business forward.

1.Define: Define the moral problem. 2.Generate: alternatives that could meet the ethical, legal, and economic goals every business must balance. 3.Implement: Pick the best alternative you and your business can live with and implement it.

approach30 to small business, making ethical decisions involves three steps:

•Passion for the Mission •Passion for the Team •Passion for the Customer •Passion for Innovation •Passion for Fairness

approaches to thinking about the specifics, there are five key elements:

Reactive planners

are completely passive, waiting for cues from the environment to determine what actions to take. Their focus is entirely short term, and there is little in the way of goals driving their efforts

Family businesses

are firm in which one family owns a majority stake and is involved in the daily management of the business.

Boostrapping

as entrepreneurs face resource constraints, they often learn to get by with less, or substitute a more readily obtained resource, or ask to borrow, rent, or trade for the resource, techniques and a part of the culture of most successful start-up.

competencies

business-related expertise that appear repeatedly in successful entrepreneurs around the world.

Key Business Functions Activities

common to al business such as sales, operation ( also call production), accounting, finance and human resources.

Ethics

comprise a system of values people use to determine whether actions are right or wrong.

External Environment

consists of everything outside the firm's boundary.

Internal Environment

consists of those people inside the boundary

role conflict

describes the kind of problem that arises when people have multiple responsibilities, such as parent and boss, and each makes different demands on them.

Habit-based planners

do not really plan at all because their actions are dictated by their routines. They do today what they did yesterday. They don't plan, and they don't even tend to react to changes in their environments

Opportunistic planners

generally start with a goal and look for opportunities to achieve it. Once they find a good opportunity, even if it isn't the one related to their original goal, they act on it, so it is very short term in orientation

promotion focus

intent on maximizing gains, which gives us a bias toward pursuing opportunities likely to lead to those gains.

prevention focus

intent on minimizing losses, with a bias toward inaction or protective action.

Small business

is a key element of every nation's economy because it offers a very special environment in which the new can come into being.

Sustainable Entrepreneurship

is an approach to the operation of the firm, which identifies or creates and then exploits opportunities to make a profit in a manner that minimizes the depletion of natural resources, maximizes the use of recycled material, improves the environment.

Entrepreneur

is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards. Also define as commonly seen as an innovator, a source of new ideas, goods, services, and business/or procedures.

Perseverance

is best thought of as a type of learned optimism, 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.

Entrepreneurship

is the ability and readiness to develop, organize and run a business enterprise, along with any of its uncertainties in order to make a profit.

social network

is the entrepreneur's relationships and contacts with others.

Environment

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

Crowdsourcing

is the techniques often based on internet to get opinions or ideas through the collective involvement of others.

ethical dilemma

it occurs when a person's values are in conflict, making it unclear whether a decision we're thinking about making is right or not.

PROFIT 1.Property/Physical: Buildings, land, equipment, raw materials 2.Relational: Customers, networks, distributors, social capital 3.Organizational: Systems, structures, operational procedures 4.Financial: Money, lines of credit, crowdfunding, bartering 5.Intellectual: Employees, contractors, and the skills the business need. 6.Technological: Patents, trademarks, ideas, copyrights.

key to identifying resources

Networking

means small business owners interacting with others in order to build relationships useful to the business.

LEGITIMACY

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

Takeoff

occurs after success stage for a small percentage of businesses. It is characterized by rapid growth (5- 10 percent a month or more). When this growth levels off, the firm enters the resource maturity stage.

entrepreneurial culture

organizational culture for start-ups

General Environment

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.

Task Environment

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.

Critical-point planners

plan around the most important aspect of the business first, act on it, and then consider if additional plans are needed. It is not a very long-term approach to planning

Green Entrepreneurship

refers to a special subset of entrepreneurship that aims at creating and implementing solutions to environmental problems and to promote social change so that the environment is not harmed.

1.Admit you're in trouble—quickly. 2.Get to the scene as soon as possible. 3.Communicate facts you know (and those you don't). 4.Have one person serve as the firm's spokesperson. 5.Separate crisis management from the everyday management of the firm. 6.Deal with the crisis quickly.

six steps to follow can be readily adapted when handling a crisis.

success

stage of business life cycle marked by firm being established in its market, operation, and finance. slack resources.

existence

stage of the business life cycle marked by the business being in operation but not yet stable in terms of markets, operations, or finances. The problems of mastering these three areas form what are called the liabilities of newness for small businesses in this stage.

Comprehensive planners

take a long-term view, develop long-range plans for all aspects of the business, are comfortable with planning, and act based on the plans they've developed

1.List 2.123 Prioritize 3.Delegate 4.Repeat 5.Strategize

techniques for time management, which can help meet the challenges of schedule overload.

Resource Competencies

the ability or skill of a entrepreneur at finding expendable components necessary to the operation of the business such as time, information, location, finance, raw materials and expertise.

Caveat emptor is Latin for "Let the buyer beware"

the contract law principle that controls the sale of real property after the date of closing, but may also apply to sales of other goods.

Mutuality

the idea and action of each person helping the other

•expert business professionalization •specialized business professionalization •minimalized business professionalization

there are three levels of professionalization

1. Based on your people 2. Based on your product 3. Based on your organization

three general forms of legitimacy that you can develop

promotion focus prevention focus

two internal focuses (also called our regulatory focus)

LaRue Hosmer

was initially a professor of entrepreneurship who came from a family logging business. He later turned his eye toward the challenge of making ethical decisions in business.

Expert business professionalization

when most aspects of the business meet or exceed the industry's standards

Minimalized business professionalization

when none of the aspects of the business achieve the industry standard.

specialized business professionalization

when one or two aspects of the business are at this level

•Succession

when the current owners are ready to think about what follows them, the process of intergenerational transfer of a business

1.If you don't succeed the first time, try, try, again. 2.Scale back 3.Bird in the hand 4.Pivot 5.Take it on the road 6.Ask for help 7.Plan to earn

•strategies that are used again and again. These strategies are the following: