Entrepreneurship Test 1 (chapters 1-5)
external environment
everything outside the firm's boundary
certification
examination based acknowledgement that the firm is owned and operated as specified
professionalization
extent to which a firm meets or exceeds the standard business practices for its industry
handling a crisis (6 steps)
1. Admit you're in trouble - QUICKLY 2. Get to the scene ASAP 3. Communicate facts that 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. Take steps to solve the problem.
ways to build legitimacy (3)
1. Employees should be dependable organizational citizens 2. Do not do anything that will harm the organization 3. Be good to customers
dynamic capitalism typology
a model of an economy categorizing businesses based on their innovativeness and growth rate
Social network
entrepreneur's relationships and contacts with others
self employed
working for yourself
part time self employment
working for yourself for 35 or fewer hours a week
full time self employment
working for yourself for over 35 hours a week
BATNA
Best Alternative to a Negotiated Settlement
caveat emptor
Latin for "Let the buyer beware"
PICS model of entrepreneurship
Public Independent Corporate Social
heir
a person who becomes an owner through inheriting or being given a stake in a family business
Mutuality
action of each person helping the other
bootstrapping
asking to borrow, rent or trade for resources to start a business
novelty
characterized as being different or new
consumer
private individual or household that is the end-user of a product or service
volatility
the frequency of business starts and stops
role conflict
when people take more than one role and the responsibilities of those roles make different demands on the people
legitimacy
when people think the firm is worthy of consideration or doing business with because of the impressions or opinions of customers, suppliers, investors, or competitors
ways to scan the environment (3)
1. Look for trends and future-looking articles in the professional press 2. Keeping notes on things that bother you about the way work is done now 3. Subscribing to a couple of magazines/newsletters outside your area of business
3 steps to making ethical decisions
1. define the moral problem 2. generate alternatives that could meet the ethical, legal, and economic goals every business must balance 3. pick the best alternative you and your business can live with and implement it
BRIE assessment
Boundary Resources Intention Exchange
industry-specific knowledge
activities, knowledge, and skills specific to business in a particular industry
environment
all of the forces outside the firm
imitative
characterized by being like or copying something
ambitious sector
characterized by high growth rate and low innovation
Incubator
facility which offers subsidized space and business advice to companies in their earliest stages of operation
glamorous sector
firms with high growth rate and high innovation (fortune 500)
resource constrained sector
firms with high innovation and low growth rate
career
lifelong series of jobs or occupations
occupational structure
sequence or organization of jobs and careers in the economy
flexibility rewards
ability of business owners to structure life in the way that suits their needs best
resource competencies
ability or skill of the entrepreneur at finding expendable components necessary to the operation of the business such as time, information, location, financing, raw materials, expertise
key business functions
activities common to all businesses such as sales, operations, accounting, finance, and human resources
growth entrepreneurs
also lifetime owners, their goal is major success and if they top out with one business they'll start another
spiral, or helical entrepreneurs
alternate periods of growth and stability which are determined by personal or family needs
factor-driven economies
antion where the major forces for jobs, revenues, and taxes come from farming or extractive industries like forestry, mining, or oil production
Sustainable entrepreneurship
approach to the operations of a firm which identifies or creates then exploits opportunities to make a profit that minimizes the depletion of natural resources
networking
building and keeping up relationships with people in your social network
standard business practice
business action that has been widely adopted within an industry or occupation
independent small business
business owned by an individual or small group
social capital
characteristics of a business (trust, consistency, networks) that help make the business operations smooth and efficient
economic core sector
characterized by low growth rate and low innovation (most common)
internal environment
consists of those people inside the boundary (owner, employees, stakeholders)
mindshare
degree of attention your target market pays to your idea or organization
efficiency
entrepreneurial focus on doing the most work with the fewest resorces
customer focus
entrepreneurial focus which refers to being in tune with one's market
social entrepreneurship
entrepreneurship in which the creation of self-sustaining charitable and civic organizations, or for-profit organizations which invest significant profits in charitable activities
public entrepreneurship
entrepreneurship that involves revitalizing government agencies
corporate entrepreneurship
entrepreneurship that takes place in existing businesses around new products, services, markets
independent entrepreneurship
form of entrepreneurship in which a person or group own their own for-profit business
sponsored link
form of paid advertising that gets your company's web site at the top of a search list.
competencies
forms of business-related expertise
informal capital
funding invested for a share of a firm or given as loans or credit from family, friends, and other businesses used to help start or grow a firm
set-asides
government contracting funds which are earmarked for particular kinds of firms, such as small businesses, minority-owned firms, women-owned firms and the like
zoning laws
government specifications for acceptable use of land and buildings in particular areas
RSS feed
internet messaging service that sends whatever web material you specify to subscribers to that feed
license
legal agreement granting you rights to use a particular piece of intellectual property
covenants
limitations imposed on your property by your neighborhood group
reciprocal links
live connection to a different web site, which in turn displays a similar link to the first website
general environment
major forces of the lives of people and institutions like businesses and even nations
conversion rate
measure of how many visitors to your web site actually make a purchase from you
income rewards
money made by owning one's own business
Efficiency-driven economy
nation where industrialization is becoming the major force providing jobs, revenues, and taxes and where minimizing costs while maximizing productivity
Innovation-driven economy
nation where the major forces for jobs, revenues, and taxes come from high-value added production based on new ideas and technology.
ethical dilemma
occurs when a person's values are in conflict
time management
organizing process to help make the most efficient use of the day
imitative strategy
overall strategic approach in which the entrepreneur does more or less what others are already doing
pilot test
preliminary run of a business, sales effort, program, or web site with the goal of assessing how well the overall approach works and what problems it might have
franchise
prepackaged business bought, rented, or leased from a company called a franchisor
virtual instant global entrepreneurship
process that uses the internet to quickly create businesses with a worldwide reach
potential for growth
refers to the potential market size
radical innovation strategy
rejecting existing ideas, and presenting a way to do things differently
organizational culture
set of shared believes or basic assumptions that demonstrate how things get done
expert business professionalization
situation that occurs when all the major functions of a firm are conducted according to the standard business practices of its industry
specialized business professionalization
situation that occurs when businesses have founders or owners who are passionate about one or two of the key business functions, such as sales, operations, accounting, finance, or human resources
minimalized business professionalization
situation that occurs when the entrepreneur does nearly everything in the simplest way possible
determination competencies
skills identified with the energy and focus needed to bring a business into existence
opportunity competencies
skills necessary to identify and exploit elements of the business environment that can lead to a profitable and sustainable business
entrepreneurial alertness
special set of skills that help entrepreneurs identify good opportunities, ability to notice things that have been overlooked
incremental strategy
taking an idea and offering a way to do something slightly better than it is done presently
permanence
the impression of long-term continuity a business gives others
licensee
the person or firm which is obtaining the rights
creative destruction
the way that newly created goods, services, or firms can hurt existing goods, services, or firms
multichannel marketing
use of several different channels to reach your customers, for example, a web site, direct mail, and traditional retailing
identity
what a firm does and where it does it
habitual entrepreneurs
owners for a lifetime, sometimes in one business, sometimes across many
Harvest entrepreneurs
owners with an exit plan. work first in order to play later, they build companies, harvest the money, then make another company
Small business administration
part of US government which provides support and advocacy for small businesses
task environment
parts of the environment that directly and consistently touch on the firm
royalty
payment to a licensor based on the number or value of licensed items sold
late career entrepreneurs
people who begin their business after having retired or resigned from work in corporations at age 50 or later
founders
people who create or start new businesses
occasional entrepreneurs
people who generally have another job that is their primary one. pursue entrepreneurship periodically
variance
permission from a government organization to act differently that the laws state
licensor
person or firm which is offering the rights
5 skills for managing relations with the environment
1. building legitimacy 2. developing a social network 3. handling a crisis 4. Achieving sustainability 5. Making ethical decisions
feasibility
extent to which an idea is viable and realistic