Mgmt 3850 Midterm Study Guide | Verified Guide

MGMT 3850 MIDTERM STUDY GUIDE | VERIFIED GUIDE CH. 1 The world of Entrepreneur • • • • Every year U.S. entrepreneurs launch more than 6.6 million new businesses Entrepreneurial spirit - the most significant economic development in recent history. Globally, nearly one in eight adults is actively engaged in launching a business Global Entrepreneurship Monitor (GEM) study: 12.6% of the U.S. population aged 18 to 64 is engaged in entrepreneurial activity 68% of working adults around the world perceive entrepreneurs as having high status. What is an Entrepreneur? • • • One who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to capitalize on them. Diversity Anyone – regardless of age, race, gender, color, national origin, or any other characteristic – can become an entrepreneur (although not everyone should). Characteristics of Entrepreneurs • • • • • • • • • • Desire for responsibility Preference for moderate levels of risk: risk eliminators Self-reliance Confidence in their ability to succeed Determination Desire for immediate feedback High level of energy Future orientation Opportunity Entrepreneur Necessity Entrepreneurs Serial Entrepreneur Skilled at organizing Value achievement over money Entrepreneurs tend to exhibit: • • • • • • • A high degree of commitment Tolerance for ambiguity Creativity Flexibility Resourcefulness A willingness to work hard TenacityPros Vs Cons PROS • • • • • • Create your own destiny. Make a difference. Reach your full potential. Reap impressive profits. Contribute to society and to be recognized for your efforts. Do what you enjoy and to have fun at it. CONS • • • • • • • Uncertainty of income Risk of losing your entire investment Long hours and hard work Lower quality of life until the business gets established High levels of stress Complete responsibility Discouragement Sources of Stress What’s Feeding the Entrepreneurial Fire • • • • • • • • Entrepreneurs as heroes Entrepreneurial education Demographic and economic factors Shift to a service economy Technology advancements Independent lifestyle Outsourcing The Internet, cloud computing, and mobile marketing• International opportunities – micromultinationals: small companies that operate globally from their inception Cultural Diversity of Entrepreneurship • • • • • • • • • • • Young entrepreneurs Women entrepreneurs Minority-owned enterprises Immigrant entrepreneurs Part-time entrepreneurs Home-based businesses Family businesses Family-owned business: includes 2 or more members of a family that have financial control Copreneurs: couples who work together as co-owners Corporate castoffs Encore entrepreneurs: people who drop out of the corporate world Retiring baby boomers Power of Small Business • • • • Small Businesses: Make up 99.7% of the 28.8 million businesses in the United States Employ 48% of the nation’s private sector workforce Create more jobs than big businesses ▪ Created 63% of net new jobs over the last decade ▪ 5% of small companies create 67% of net new jobs in the economy Produce 48.5% of the nation’s private GDP. Account for 47% of business sales. Create 16 times more patents per employees than large companies Putting Failure into Perspective • • • Entrepreneurs are not paralyzed by the prospect of failure. Failure: a natural part of the creative process. Successful entrepreneurs learn to fail intelligently. Avoiding the Pitfalls of small business failure • • • • • • • • Know your business in depth Build a viable business model – and test it Use lean start-up principles Know when to pivot Develop a solid business plan Understand financial statements Manage financial resources Learn to manage people effectively• • Set your business apart from the competition Maintain a positive attitude Developing Career Skills • • • • • • Critical thinking and problem solving Written and oral communication Teamwork and collaboration Leadership Creativity Ethics and social responsibility What factors drive business ethics 1. Corporate scandals 2. Marketplace competition 3. Demands by investors 4. Pressure from customers 5. Globalization Ch 2 • • • Ethics - a branch of philosophy that studies and creates theories about the basic nature of right and wrong, duty, obligation, and virtue. Social Responsibility - how an organization responds to the needs of the many elements in society Business ethics - the fundamental moral values and behavioral standards that form the foundation for the people of an organization as they make decisions and interact with stakeholders. Benefits of Ethics &Moral Management • • • • • • Reputation Attracting and retaining quality workers Positive impact on bottom line Ability to provide value for its customers Customers’ trust and loyalty Investors’ confidence Establishing an Ethical Framework • • • • • Step 1: Identify the personal moral and ethical principles that shape all business decisions. Step 2: Recognize the ethical dimensions involved in the dilemma or decision. Step 3: Identify the key stakeholders involved and determine how the decision will affect them. Step 4: Generate alternative choices and distinguish between ethical and unethical responses. Step 5: Choose the “best” ethical response and implement it. Triple Bottom Line (3BL) is measuring business performance using: profitability, commitment to ethics and social responsibility, and its impact on the environment Establishing and Maintaining Ethical Standards Ethical tests for judging behavior • • • • • • The utilitarian principle Kant’s categorical imperative The professional ethic The Golden Rule The television test The family test Social Entrepreneur: • • • Seek solutions for social problems that are met by neither the market nor the government. Focus on creating social benefit rather than commercial success. Tackle social problems by taking full advantage of natural market forces. Social Responsibility: • • • How an organization responds to the needs of the many elements in society. Actions that appear to further some social good, beyond the interests of the firm and that which is required by law (McWilliams and Siegel, 2001). Companies going beyond “doing well” – simply earning a profit – to “doing good” – living up to their social responsibility. Why be Socially Responsible? • • 75% of consumers say social responsibility is important in their purchasing decisions. There is a positive correlation between ethical, socially responsible behavior and profitability. Responsibilities to the Environment 1. Reduce the amount of energy and materials used in your company. 2. Reuse whatever you can. 3. Recycle the materials you must dispose of. Responsibilities to Employees • • • Recognize the value of employees Diversity in the workplace Privacy• Sexual harassment Sexual Harassment • • - any unwelcome sexual advance, request for sexual favors