BUAD Quiz 2
Pros of franchising
- Reduced financial risk of new business success through experience provided by franchiser - Training, financial, and management support by franchiser
Cons of franchising
- Start up fees to purchase franchise - Limitations of franchise (market area, product, customers) - Loss of independence due to imposed operational controls of franchiser
focus strategy
A strategy in which an organization concentrates on a specific regional market, product line, or group of buyers
Related diversification
A strategy in which an organization operates in several businesses that are somehow linked with one another
Unrelated diversification
A strategy in which an organization operates multiple businesses that are not logically associated with one another
Differentiation
Extent to which the organization is broken down into subunits
Programmed decision
It is fairly structured and occurs frequently
Disadvantages of starting a business from scratch
More business risk, uncertainty
Strategic alliance
arrangement between 2 companies to undertake a mutually beneficial project while each retains its independence
SBA
autonomous US govt. agency to bolster and promote economic growth of small business
Joint venture
combination of 2+ parties that seek the development of a single enterprise or project for profit, as well as sharing the risk
Bounded rationality
concept suggesting that decision makers are limited by their values, and unconscious reflexes, skills and habits
Franchising agreement
contract between the entrepreneur (the franchisee) and a parent company (franchiser) . the entrepreneur pays the parent company for the use of its trademarks, products, formulas, and business plans
Cost Leadership
establishing a competitive advantage by having the lowest cost of operation in the industry
Delphi group
group decision making in which a group is used to achieve a consensus of expert opinion
Coalition
informal alliance of individuals. Or groups formed to achieve a common goal
flat organization
one with an organizational structure with few or no levels of middle management between top managers and those reporting to them
SBIC
privately owned and managed investment fund licensed and regulated by SBA
Entrepreneurship
process of planning, organizing, operating, and assuming the risk of a start-up or new venture
Angel investors
rich persons that invest their own money in companies
Group think
situation that occurs when a group's desire for consensus and cohesiveness overwhelms its desire to reach the best possible decision
Escalation of committment
staying with a decision even when it appears to be wrong
Satisficing
tendency to search for alternatives only until one is found that meets some minimum standard of sufficiency
tall organization
An organization in which the hierarchy has many levels relative to the size of the organization
Distinctive competence
An organizational strength possessed by only a small number of competing firms
Advantages of starting a business from scratch
Avoids problems associated with previous owners, allows freedom to choose suppliers, equipment, location, and workers
Non programmed decision
One that is relatively unstructured and occurs much less often
Decision making process
Recognize and define the situation, identify alternatives, choose the "best" alternative and put it into practice
Decision making
The act of choosing one alternative from a set of alternatives
Synergy
Two or more subsystems working together to produce more than the total of what they might produce working alone
Venture capitalists
Venture capitalists are employees of rich capital companies who manage the pooled money of others while investing in companies.
Evidence based management
a commitment to finding and using the best theory and data available at the time to make decisions. Face the hard facts. encourage people to tell the truth. This way you get the best evidence and use it to guide actions
cross-functional team
a team composed of employees from different functional areas of the organization
First mover advantage
advantage that comes to a firm because it exploits an opportunity before any other firm does.
