Management-Chapter 6 Flashcards
Entrepreneurship
The process of initiating a business, organizing the necessary resources, and assuming the associated risks and rewards.
Entrepreneur
Recognizes a viable idea for a business product or service and combines the necessary resources to carry it out by finding and assembling the necessary resources.
Idealists
Rewarded by chance to work on something new and creative.
Optimizers
Get personal satisfaction from being business owners.
Hard Workers
Thrive on the challenge of building a larger, more profitable business.
Jugglers
High-energy people who enjoy handling every detail of their own businesses.
Sustainers
Enjoy chance to balance work and personal life.
Small Business (SBA)
One that is independently owned and operated and which is not dominant in its field of operation.
Internal Locus of Control
A belief by individuals that their future is within their control and that external forces have little influence.
External locus of Control
A belief by individuals that their future is not within their control but rather influenced by external forces.
Need to Achieve
A human quality linked to entrepreneurship in which people are motivated to excel and pick situations in which success is likely.
Tolerance for Ambiguity
The psychological characteristic that allows a person to be untroubled by disorder and uncertainty.
Social Entrepreneur
An entrepreneurial leader who is committed to both good business and changing the world for the better.
Business Plan
Prior to opening a business, an entrepreneur should prepare a document specifying the details of the business.
Sole Proprietorship
An unincorporated for-profit business owned by an individual.
Partnership
Is formed when two or more people choose to own an unincorporated business.
Corporation
An artificial entity created by the state and existing apart from its owners.
Debt Financing
Involves borrowing money, such as from friends, family or a bank, that has to be repaid at a later date in order to start a business.
Angel Financing
Occurs when a wealthy individual who believes in the idea for a start-up provides personal funds and advice to help the business get started.
Equity Financing
Consists of funds that are invested in exchange for ownership in the company.
Venture Capital Firms
A group of companies or individuals that invests money in new or expanding businesses for ownership and potential profits.
Franchising
An arrangement by which the owner of a product or service allows others to purchase the right to distribute the product or service with help from the owner.
Business Incubators
Help start-up companies by connecting them with a range of experts and mentors who nurture them, thus increasing their likelihood of success.
- Start-up
Stage of growth. Main problems are producing the product or service and obtaining customers.
- Survival
The business demonstrates that it is a workable business entity.
- Success
The company is solidly based and profitable.
- Takeoff
Here the key problem is how to grow rapidly and finance that growth.
- Resource Maturity
At this stage, the company’s substantial financial gains may come at the cost of losing its advantages of small size, including flexibility and entrepreneurship.
