Exam 1 Flashcards
Describe the evolution of the terms entrepreneur and entrepreneurship.
Derived from French entreprendre (to undertake)
Name and explain the ten major myths of entrepreneurs.
1: Entrepreneurs are doers, not thinkers.
2: Entrepreneurs are born, not made.
3: Entrepreneurs are always inventors.
4: Entrepreneurs are academic and social misfits.
5: Entrepreneurs must fit the profile.
6: All entrepreneurs need is money.
7: All entrepreneurs need is luck.
8: Entrepreneurship is unstructured and chaotic.
9: Most entrepreneurial initiatives fail.
10: Entrepreneurs are extreme risk takers.
Gazelle
A business establishment with at least 20% sales growth in each year for five years, starting with a base of at least $100,000 in annual sales; produce twice as many innovations per employee
Trends in entrepreneurship research
Venture financing, corporate entrepreneurship, social entrepreneurship, entrepreneurial cognition, women and minority entrepreneurs, the global entrepreneurial movement, family businesses, and entrepreneurial education
Characteristics of the entrepreneurial mindset (5)
Determination and perseverance, drive to achieve, opportunity orientation, initiative and responsibility, persistent problem solving, seeking feedback, passion, vision
Describe four specific areas of risk faced by entrepreneurs.
Financial risk, career risk, family and social risk, and psychic risk
Code of conduct
A statement of ethical practices or guidelines to which an enterprise adheres
Corporate entrepreneurship
A process whereby an individual or a group of individuals, in association with an existing organization, creates a new organization or instigates renewal or innovation within the organization
Describe the specific elements of a corporate entrepreneurship strategy.
An entrepreneurial strategic vision, a pro-entrepreneurship organizational structure, entrepreneurial processes and behavior as exhibited throughout the organization
Types of innovation
Radical innovation and incremental innovation
Radical innovation
The launching of inaugural breakthroughs
Incremental innovation
The systematic evolution of a product or service into newer or larger markets
Social entrepreneurship
Entrepreneurship applied to social problem solving in addition to the traditional focus of innovation, risk-taking, and large scale transformation
Ecovision
A leadership style that encourages open and flexible structures that encompass the employees, the organization, and the environment, with attention to evolving social demands
What are the major sources of innovative ideas?
Unexpected occurrences, incongruities, process needs, industry and market changes, demographic changes, perceptual changes, and knowledge-based concepts
Example of an unexpected occurrence
Apple Computer
Example of an incongruity
Overnight package delivery
Example of process needs
Sugar-free products, caffeine-free coffee
Example of industry and market changes
Health care industry
Example of demographic changes
Rest communities for older people
Example of perceptual changes
Exercise and growing concern for fitness
Example of knowledge-based concepts
Mobile technology
Creativity
The generation of ideas that result in the improved efficiency or effectiveness of a system
Two aspects of creativity
Process (goal-oriented) and people (the resources)
List and briefly explain the components of the creative process.
Background or knowledge accumulation, the incubation process, the idea experience, and evaluation and implementation
How can creativity be developed?
Recognize relationships; develop a functional perspective; use your brains
Innovation
The process by which entrepreneurs convert opportunities into marketable solutions
Invention
Totally new product, service, or process
Example of invention
Airplane
Extension
New use or different application of an already existing product, service, or process
Example of extension
McDonald’s
Duplication
Creative replication of an existing concept
Example of duplication
Walmart from department stores
Synthesis
Combination of existing concepts and factors into a new formulation or use
Example of synthesis
Starbucks
What are the advantages of buying an on-going business?
Less fear about successful future operation, reduced time and effort, purchasing at a good price
Franchise
Any arrangement in which the owner of a trademark, trade name, or copyright has licensed others to use it in selling goods or services
What are the advantages of buying a franchise?
Training and guidance, brand-name appeal, a proven track record, financial assistance
What are the process approaches to entrepreneurship that examine the activities involved in entrepreneurship?
The integrative approach and the dynamic states approach
Integrative approach
Built around inputs and outcomes of entrepreneurial process; focuses on five key elements to the process
Dynamic states approach
Stresses the dependency of the venture on the environment and interaction of various elements
How dominant have new and small ventures been in the economy?
Small firms supply 49.6% of private sector jobs, make up 99.7% of employing firms; 600,000 to 800,000 new businesses created annually; integral part of process that defines market economies
What are some of the recent trends that are changing the nature of entrepreneurs?
Venture financing, corporate entrepreneurship, social entrepreneurship, entrepreneurial cognition, women and minority entrepreneurs, the global entrepreneurial movement, family businesses, and entrepreneurial education
Three major sources of information that supply data related to the entrepreneurial mindset
Research and popular publications; direct observation; speeches, seminars, and presentations
Four distinct roles that managers may take in rationalizing morally questionable acts “against the firm” or “on behalf of the firm”
Nonrole, role failure, role distortion, role assertion
Nonrole
Against the firm; ex. embezzlement
Role failure
Against the firm; ex. not confronting expense account cheating
Role distortion
For the firm; ex. bribery
Role assertion
For the firm; ex. investing in unethically governed countries
Ethics
Provides the basic rules or parameters for conducting any activity in an “acceptable” manner; represents a set of principles prescribing a behavioral code of what is good and right or bad and wrong
Conflicts over the ethical nature of decisions
Pressure from inside and outside interests; changes in societal norms
What steps can entrepreneurs take to establish a position of ethical leadership in business?
Code of ethics that encompass ethical consciousness, ethical process and structure, and institutionalization
