Chapter 3 - Small Business Environment - Managing External Relations

Handling a Crisis

1. Admit you're in trouble - quickly 2. Get to the scene as soon as possible 3. Communicate facts you know 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

Caveat Emptor

A Latin expression which means "let the buyer beware" which has been made into a philosophy sometimes used by businesses to put the burden for consumer protection onto the customer

ISO 14001 certification

A certification awarded to organizations for creating and implementing an environmental management system that meets the requirement of the International Standards Organization.

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

Elements of the Small Business Environment- 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.

Entrepreneurial Ecosystem

A specific configuration of the environment that reflects the components that are most central to developing a strong and active community of start-up businesses. The components are entrepreneurs, government, universities, investors, service people, mentors, and large organizations.

BATNA

An acronym for "Best Alternative to a Negotiated Settlement" in which the second-best outcome is identified by the parties in a negotiation to help clarify the value of achieving a successful negotiation.

Billboard principle

Asks whether someone would be comfortable having his decision and name advertised on a billboard for the public to see.

Five approaches to managing relations with the environment

Building legitimacy Developing a social network Handling a crisis Achieving sustainability Making ethical decisions

Social capital

Characteristics of a business, such as trust, consistency, and networks, that represent potential social obligations that are assets of the firm or entrepreneur.

Achieving Sustainability - 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 Green entrepreneurship

Networking

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

Networking Skills

Know who you are Know whom you want and why Buddy up Bone up on the small talk Do not forget why you're here Make the connection Follow up

Environmental Scanning for Small Business

Look for trends in the trade press of your industry Ask your customers and suppliers what they see on the horizon Keep notes on the things that bother you about the way work is done now and on how work has changed Subscribe to blogs outside your area of business

Developing a Social Network

Make it easy for people to contact you Take the initiative to ask others on the network to link with you Find and link up with network mavens Keep at it—successful online networking requires consistent involvement

ISO (International Standards Organization)

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

Asking for Help

Request from people you trust Ask for specific behavior Do not be defensive Do not overreact or under-react Summarize what was said to ensure understanding Explain what you are going to do about feedback Thank the person for the input Follow through

Universalism

Suggests that there is a code of right and wrong that everyone can see and follow.

Golden Rule

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

Developing a Social Network - Mutuality

The action of each person helping another.

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 Based on people, product, or organization

Developing a 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.

External environment

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

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.

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.

Bootstrapping

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

Making Ethical Decisions - 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

Making Ethical Decisions - Ethics

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

Organizational identity

composed of the name, description, and distinctive elements of a firm, such as trademarks, uniforms, logos, characters and stories part of the BRIE model : Boundary, Resources, Intention and Exchange

Baldrige Award

given by the U.S. government to businesses and nonprofit organizations that have been judged outstanding in seven measures of quality leadership; strategic planning; customer and market focus; measurement, analysis, and knowledge management; human resource focus; process management; and results

Utilitarianism

supports seeking the greatest good for the greatest number of people