Small Business Management Chapter 3

Ethics

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

components of the entrepreneurial ecosystem

Mentors, Government agencies, Universities

Mutuality

the action of each person helping another

Organizational culture

Compared to larger businesses, it is easier for small businesses to manage organizational culture; organizational culture is a key element of a firm's organizational identity.

Which statement regarding how to handle a crisis are correct?

Deal with the crisis quickly; get to the scene as soon as possible; have one person as the firm's spokesperson

Which of the following is the most sought after form of assistance by entrepreneurs from their social network?

Information or advice

utilitarianism

It has a strong community focus; the focus is on the communities' best interest in the future; basically, it's about actions resulting in the greatest good for the greatest number

caveat emptor

It means let the buyer beware; rip-off artists, frauds, and producers of shoddy merchandise often use it; it has been routinely discredited by courts

which of the following are government-recommended steps for preparing for disasters?

Plan to stay in business; protect the business's investment.

PROFIT resources

Property, Relational, O, Financial, I, T

ISO 2200

food safety certification

Sociocultural environment

includes cultures often based on factors such as nationality or religion, and subcultures that are based on groups formed around shared interests within a larger culture

ISO 9000

quality certification

ISO 26000

social responsibility certification

Leadership in Energy and Environmental Design certification

It is a certification standard from the U.S. Green Building Council; it is a new source of sales and profits for construction companies.

Which of the following statements about the costs of ethical failures are correct?

Managers tend to focus on government fines and penalties; customer defections, loss of reputation, and lower morale are often more damaging to businesses; level two costs include corrective actions and remedial education

Which of the following statements about the six types of resources are true

Start-ups need some of all six. Studying competitors can help decide which resources your business will need. The acronym PROFIT stands for the six types of resources needed.

Environment

The sum of all the forces outside the firm or entrepreneur

Social networking

They can produce results from unexpected sources; successful online networking requires consistent involvement; be sure to help others build their social network.

LEED certification

a building is environmentally friendly

economic sector of the general environment

includes the trends and current conditions of the overall market for goods and services, the availability of equity and credit, and employment

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

Entrepreneurial ecosystem

the specific configuration of the environment that reflects the components that are most central to developing a strong and active community of start-up businesses

Networking

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

Trade magazines

publications that target specific industries and professions

Technological environment

sector of the general environment that includes innovation, invention, and modernization

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

Economic environment

sector of the general environment that includes the trends and current conditions of the overall market for goods and services, the availability of equity and credit, and employment

External environment

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

ecosystem/infrastructure

reflects the physical world in which we live including natural components like raw materials, weather, and ecological forces and created components such as cities and roads

Political-legal environment

sector of the general environment that reflects the broad trends affecting law and government

"Real options" approach

suggests thinking of entrepreneurial opportunities 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 It involves establishing benchmarks to achieve and timetables for those achievements; it reflects a choice firms face to do or not do something

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 most important factor is knowing the product

ISO 14001

a certification awarded to businesses for creating an environmental management system that meets the requirement of the International Standards Organization (environmental certification)

Task environment

made up of those components that a firm deals with directly such as customers, suppliers, consultants, media, and interest groups

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

sustainable entrepreneurship

an approach to the operation of a firm, the line of business of a firm, or both, 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, or any combination of these outcomes Nearly half of small businesses recycle paper and cans; it exploits opportunities to make a profit in a manner that minimizes the depletion of natural resources; it maximizes the use of recycled material, improves the environment, or both

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

Internal environment

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