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