Entrepreneurship Test 1 Ch 1-6

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Standard business practice

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

Independent small businesses

A business owned by an individual or small group.

Owner-managed firms

A business run by the individual who owns it.

Traditional small business

A firm intended to provide a living income 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 a 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 costs while maximizing productivity is a major goal; Russia, Brazil, and China

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; Pakistan, Jamaica, and Venezuela

Innovation-driven economy

A nation 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; Germany, the Republic of Korea, and the United States

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

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

heir

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

Self-efficacy

A person's belief in his or her ability to achieve a goal.

Main street businesses

A popular term for small businesses reflecting the idea that these are the kinds of firms you would expect to find on the main street of a typical American city, and are the opposite of big businesses or "Wall Street" businesses.

Franchise

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

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.

Expert business professionalization

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

Specialized business professionalization

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

Minimalized business professionalization

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

Effectuation

An approach used to create alternatives in uncertain environments.

Promotion focus

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

Prevention focus

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

Passion

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

Firm

An organization that sells to or trades with others.

Novelty

Characterized by being different or new.

imitative

Characterized by being like or copying something that already exists.

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.

Comprehensive planners

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

Critical-point planners

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

Habit-driven planners

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

Opportunistic planners

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

Reactive planners

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

Passion Perseverance Promotion/Prevention focus Planning style Professionalization

Five Ps of Entrepreneurial Behavior

set asides

Government contracting funds which are earmarked for particular kinds of firms, such as small businesses, minority-owned firms, and women-owned firms

Networking

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

22

Minority-owned businesses represent ___% of all United States businesses.

Overall growth strategy

One of four general ways to position a business based on the rate and level of growth entrepreneurs anticipate for their firm.

Founder

People who create or start new businesses

Serial entrepreneurs

People who open multiple businesses throughout their career.

Buyers

People who purchase an existing business.

Recognition, admiration, power, family tradition

Rarely mentioned rewards of entrepreneurship

False

T/F Ninety percent of all new businesses fail within two years

Crowdsourcing

Techniques often based on Internet-based services to get opinions or ideas through the collective involvement of others.

Mutuality

The action of each person helping another

External Environment

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

Permanence

The impression of long-term continuity a business gives others.

Internal environment

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

Environment

The sum total of forces outside of the entrepreneur and the firm.

Goods or Services

The tangible things or intangible commodities created for sale.

Creative destruction

The way that newly created goods, services, or firms can hurt existing goods, services, or firms.

Bootstrapping

Using low-cost or free techniques to minimize your cost of doing business.

Substitutes, Combine, Adapt, Magnify, Put to other uses, Eliminate, Rearrange

What does SCAMPER stand for?

SCAMPER

a creativity tool that provides cues to trigger breakthrough thinking

Entrepreneur

a person who owns or starts an organization, such as a business

Bird in the hand

a proverb meaning that it is better to have something that is certain than things that are not

Ethical Dilemma

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

Entrepreneurial alertness

a special set of observational and thinking skills that help entrepreneurs identify good opportunities

Ethics

a system of values that people consider in determining whether actions are right or wrong

Flexibility rewards

ability of business owners to structure life in the way that suits their needs; most rapidly growing type of reward

Industry-specific knowledge

activities, skills, and knowledge, specific to businesses in an industry

Certification

an examination base acknowledgement that the firm is owned and operated as specified

Imitative strategy

an overall strategic approach in which the entrepreneur does more or less what others are already doing

Serendipity

being in the right place at the right time (luck)

Social capital

characteristics of a business, like trust, consistency, and networks, that represent potential social obligations which are an asset of the firm or entrepreneur

Organizational identity

composed of the name, description, and distinctive elements of a firm, such as trademarks, uniforms, logos, characters and stories

Mindshare

degree of attention to which your target market pays to your idea or organization

Innovation

focus which looks at a new thing or a new way of doing things

Creation

focus which looks at the making of new entities

Customer-focus

focus which refers to being in tune with one's market

Efficiency

focus which refers to doing the most work with the fewest resources

Competencies

forms of business-related expertise

virtual instant global entrepreneurship

process that uses the Internet to quickly create businesses with a worldwide reach; using websites like ebay or elance to quickly establish a global presence

ISO (International Standards Organization)

refers to certification for having met a standard of quality that is consistently evaluated around the world

Innovativeness

refers to how important a role new ideas, products, services, processes, or markets play in an organization

Opportunity recognition

searching and capturing new ideas that lead to business opportunities; involves creative thinking that leads to discovery of new and useful ideas

Determination competencies

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

Idea sites

websites where people post ideas they have and products and services they would like to see

Growth rewards

what people get from facing and beating challenges

Lifestyle or part-time firm

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.

boundary, resources, intention, and exchange

Four Elements Needed to Get Your Business Started

Crowdfunding

Funding a business online through the collective involvement of others who provide donations, loans, or investments.

Independent entrepreneurship

form of entrepreneurship in which a person or group own their own for-profit business

Volatility

frequency of business starts and stops

Sustainable entrepreneurship

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, or any combination of these outcomes

Small Business

involves 1-50 people and has its owner managing the business on a day-to-day basis

License

legal agreement ranting you rights to use a particular piece of intellectual property

Income rewards

money made by owning one's own business

Royalty

payment based on the number or value of licensed items sold

Resource competencies

the ability or skill of the entrepreneur at finding expendable components necessary to the operation of the business

Social entrepreneurship

form of entrepreneurship involving the creation of self-sustaining charitable and civic organizations, or for-profit organizations which invest significant profits in charitable activities

corporate entrepreneurship

form of entrepreneurship which takes place in existing businesses around new products, services or markets

Opportunity competencies

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

Golden Rule

suggests you treat others in the manner you wish to be treated

Utilitarianism

supports seeking the greatest good for the greatest number of people

Incremental strategy

taking an idea and offering a way to do something better than it is done presently

Perseverance

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

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

Social network

the entrepreneur's set of relationships and contacts with individuals and institutions; way to work trust, reciprocity, and long-term relationships into your day-to-day business operations.

Feasibility

the extent to which an idea is viable and realistic and the extent to which you are aware of internal and external forces that could affect your business


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