Principles of Management

Entrepreneurial Truths(1)

(1)Entrepreneurship is not reserved for startups

Entrepreneurial Truths(2)

(2)Entrepreneurs are not limited to a specific set of personality traits

Entrepreneurial Truths(3)

(3)Entrepreneurship can be taught

Entrepreneurial Truths(4)

(4)Entrepreneurs are not extreme risk takers

Entrepreneurial Truths(5)

(5)Entrepreneurs collaborate more than they compete

Entrepreneurial Truths(6)

(6)Entrepreneurs act more than they plan

Entrepreneurial Truths(7)

(7) Entrepreneurship is a life skill

Financing a new business

-personal resources -strategic alliance -lenders -venture capital companies -small business investment companies (SBIC) -SBA financial programs

Small business

A business that is privately owned by one individual or a small group of individuals; it has sales and assets that are not large enough to influence its environment.

Venture capital companies

Groups of small investors who provide capital funds to small high-growth potential start-up firms in exchange for an equity position (stock) in the firms.

8 entrepreneurial personality traits

Internal Locus of Control, High Energy Level, Self-Confidence, Tolerance for Ambiguity, Self-reliance and desire for independence, high need for achievement, flexibility, passion and action orientation

Reasons for failure with a business

Managerial incompetence, insufficient funds, weak control system, growing to fast, lack of commitment, ethical failure

Starting from scratch disadvantages

More business risk and uncertainty

Buying an existing business disadvantage

New owners inherit any existing problems

Lenders

Obtaining funding from traditional lenders (e.g., banks, independent investors, and government loans).

Affirmative Action

an effort to give a preference in employment to women and minority group members who have traditionally been underrepresented

Sole Proprietorship

an individual pursuing business for a profit

initial public offering (ipo)

an initial selling of shares of stock to the public at large

human resource planning

analyses staffing needs and identifies actions to fill those needs

behavioral interviews

ask job applicants about past behaviors

Buying an existing business advantages

business has a proven ability to draw customers and make a profit Networks are already established

selection

choosing individuals to hire from a pool of qualified job applicants

first-mover advantage

comes from being first to exploit a niche or enter a market

Limited Partnership

consists of a general partner and one or more limited partners who do not participate in day-today business management

succession plan

describes how the leadership transition and related financial matters will be handled

business plan

describes the direction for a new business and the financing needed to operate it

job description

details the duties and responsibilities of a job holder

Bona Fide Occupational Qualifications

employment criteria justified by capacity to perform a job

High Energy Level

entrepreneurs are persistent, hardworking, and willing to exert extraordinary efforts to succeed

Self-Confidence

entrepreneurs feel competent, believe in themselves, and are willing to make decisions

crowdfunding

entrepreneurs starting new ventures go online to get startup financing from crowds of investors

Passion and Action orientation

entrepreneurs try to act ahead of problems; they want to get things done and not waste valuable time

traditional recruitment

focuses on selling the job and organization to applicants

Small Business Development Centers (SBDCs)

founded with support from the U.S. Small Business Administration provide advice to new and existing small businesses

Reasons for success with a business

hard work, careful analysis of market conditions, managerial competence, luck can contribute to success

Small business

has fewer than 500 employees, is independently owned and operated, and does not dominate its industry

social enterprises

have a social mission to help make lives better for underserved populations

independent contractors

hired as needed and are not part of the organization's permanent workforce

comparable worth

holds that persons performing jobs of similar importance should be paid at comparable levels

debt financing

involves borrowing money that must be repaid over time, with interest

equity financing

involves exchanging ownership shares for outside investment monies

social entrepreneurship

is a unique form of ethical entrepreneurship that seeks novel ways to solve pressing social problems

equal employment oppurtunity

is the requirement that employment decisions be made without regard to sex, race, color, ethnicity, national origin, able-bodiedness, or religion

job specifications

list the qualifications required of a job holder

venture capitalists

make large investments in new ventures in return for an equity stake in the business

reliability

means that a selection device repeatedly gives consistent results

validity

means that scores on a selection device have a demonstrated correlation with job performance

strategic human resource management

mobilizes human capital to implement organizational strategies

family business feud

occurs when family members have major disagreements over how the business should be run

job discrimination

occurs when someone is denied a job or work assignment for reasons that are not job relevant

business incubators

offer space, shared services, and advice to help get small businesses started

family business

owned and controlled by members of a family

employee value propositions

packages of opportunities and rewards that make diverse and talented people want to belong to and work hard for the organization

realistic job previews

provide job candidates with all pertinent information about a job and organization, both positive and negative

Mompreneurs

pursue business opportunities they spot as mothers

Entrepreneurship

risk-taking behavior that results in new opportunities

internal recruitment

seeks job applicants from inside the organization

external recruitment

seeks job applicants from outside the organization

Forms of ownership

sole proprietorship, partnership, corporation, benefit corporation, limited liability corporation

Classic Entrepreneurship

someone willing to pursue opportunities in situations others view as problems or threats

Serial Entrepreneur

starts and runs businesses and nonprofits over and over again, moving from one interest and opportunity to the next

job analysis

studies exactly what is done in a job and why

Necessity-based entrepreneurship

takes place because other employment options don't exist

partnership

when two or more people agree to contribute resources to start and operate a business together

social recruiting

where employers browse social media sites looking for prospective job candidates

permatemps

workers that are employed in a temporary statis for an extended period of time

Why has Entrepreneurship Increased in Popularity?

1. downsizing of large corporations 2. crossovers to small businesses by former large business employees 3. increased options in franchising 4. the emergence of E-commerce 5. increased entrepreneurial opportunities for minorities and women 6. better survival rates for small businesses 7. technological advances

What percentage of businesses fail in their first five years of operation

60 to 80%

Entrepreneurial personality

8 personality traits that distinguish entrepreneurs from non-entrepreneurs

Internal Locus of Control

Entrepreneurs believe they are in control of their own destiny; they are self directing

Self-reliance and desire for independence

Entrepreneurs want independence; they are self-reliant; they want to be their own bosses, not work for others

7 Types of Entrepreneurship

1. Corporate entrepreneurship(intrapreneurship) 2. Entrepreneurship inside 3. Franchising 4. Buying a small business 5. Social entrepreneurship 6. Family entrepreneurship 7. Serial entrepreneurship

Starting from scratch advantages

Avoids problems associated with previous owners Freedom to choose suppliers, equipment, location, and workers

role of entrepreneurship in society

Employ some 52 percent of private workers Provide 51 percent of private-sector output Receive 35 percent of federal government contract dollars Provide as many as 7 out of every 10 new jobs in the economy

High need for achievement

Entrepreneurs are motivated to accomplish challenging goals; they thrive on performance feedback

Tolerance for Ambiguity

Entrepreneurs are risk takers; they tolerate situations with high degrees of uncertainty

Flexibility

Entrepreneurs are willing to admit problems and errors, and are willing to change a course of action when plans aren't working

Writing the business plan

Part 1: Description of the Business Part 2: Marketing Plan Part 3: Production/operations plan Part 4: Management Plan Part 5: Financial Plan

Strategic Alliances

Partnering with established firms such as suppliers in a mutually beneficial relationship

General Partnership

Partners share management responsibilities

Services

The fastest growing segment of small-business enterprise

benefit corporation (B corp)

a corporate form for businesses whose stated goals are to combine making a profit with benefiting society and the environment

limited liability corporation

a hybrid business form combining the advantages of the sole proprietorship, partnership, and corporation

corporation

a legal entity that exists separately from its owners

startup

a new and temporary venture that is trying to discover a profitable business model for future success

business model

a plan for making a profit by generating revenues that are greater than costs

Human Resource Management

a process of attracting, developing, and maintaining a talented workforce

recruitment

a set of activities designed to attract a talented pool of job applicants

angel investor

a wealthy individual willing to invest in a new venture in return for an equity stake

Human capital

the economic value of people with job-relevant abilities, knowledge, ideas, energies, and commitments

person-job fit

the extent to which an individual's knowledge, skills, experiences and personal characteristics are consistent with the requirements of their work

person-organization fit

the extent to which an individual's values, interests, and behavior are consistent with the culture of the organization

unstructued interviews

the interviewer does not work from a formal and pre-established list of questions that is asked for all interviewees

succession problem

the issue of who will run the business when the current head leaves

Entrepreneurship

the process of starting a new venture, organizing and managing, and assuming the risks

workplace privacy

the right to privacy while at work

lean startup

use resources like open-source software, while containing costs, staying small, and keeping operations as simple as possible

Personal Resources

using your own money and money borrowed from friends and relatives to finance the business

franchise

when one business owner sells to another the right to operate the same business in another location