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 • Tenacity Pros 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