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103 Cards in this Set
- Front
- Back
The mission and plan together are known as the
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overall strategy
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Strategic Management
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overall, long-run management including planning, organizing, leading, and controlling effectively and efficiently over the long-run
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Strategic Planning
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the process of making plans and decisions that are focused on long-run performance
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Strategic Plan
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the resulting comprehensive plan that provides an overall direction for the organization
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The strategic management process is divided into how many stages?
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4
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The feedback lines in the strategic management process suggest that the process is ___ and ___, continually evolving as changes in the environment or in the organization create a need for revised strategic plans.
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interactive and self-renewing
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What are the four phases of the strategic management process?
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Analysis (current position of the org), formulation (estalish strategy tactics), implementation (carry out day-to-day operations), and evaluation/control (assess operations and make sure that the mission will be achieved)
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Strategic management focuses not on what business to be in, but
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how to operate a specific business
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Strategic analysis includes what three primary activities?
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1- assessing the mission of the organization
2- conducting an external environmental analysis 3- conducting an internal environmental analysis |
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What does SWOT analysis stand for?
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Strengths, weaknesses, opportunities and threats
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What 3 primary aspects of the organization must a mission statement describe?
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1- its target markets (who)
2- its primary products and services (what) 3- an outline of the overall strategy for delivering these products and services to customers in the target markets (how) |
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What does a SWOT analysis do?
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Helps managers to identify the strategic alternatives that are appropriate for an organization's internal and external environment
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Strategic direction
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direction of the organization toward the success in the long run
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Vision
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the ability to predict opps and threats in the future
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Opportunities
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environmental trends that an org can capitalize on
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Threat
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a condition in the environment that may cause trouble for an org
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General environment
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those environmental forces outisde the org over which the org may have no control
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What is the purpose of an external environment?
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to identify those aspects of the environment that represent either and opp or a threat
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Task environment
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those environmental forces that are within the firm's operating environment and over which the org may have some degree of control
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Economic environment
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the economic components of the general environment
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Sociocultural environment
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the attitudes, behavior patterns, and lifestyles of individuals who purchase products and services of organizations
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Sociocultural components and trends include (5)
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1- Changes in age groups
2- Increase of the niche markets 3- Household competition 4- Increasing diversity 5- Environmental awareness |
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Technological environment
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changes in technology in the external environment
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B2B
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an initialism representing business-to-business transactions
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B2C
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an initialism representing business-to-consumer interactions
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Political-legal environment
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the part of the external environment that includes political and legal issues that affect organizations
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The task environment = ____ + _____
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customer + competitive structure
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What is the 5 forces model?
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a model developed by Michael Porter that uses 5 forces to assess the competitive structure of an industry
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What are Micheal Porter's 5 forces that are used to analyze the competitive structure of an industry
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1) Bargaining power of customers
2) Threat of substitute products or service 3) Bargaining power of suppliers 4) Threats of new entrants 5) Rivalry among competitors |
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Competitive Advantage
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providing greater value for customers than competitors can
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Sustainable Competitive Advantage
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when other companies have tried to duplicate the value the company is providing to customers but have failed
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To have a sustainable competitive advantage, a company must have all of the 4 following components:
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1) Valuable Resources
2) Imperfectly Imitable Resources 3) Rare resources 4) Non-subsitutable resources |
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Competitive inertia
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a reluctance to change strategies or competitive practices that have been successful in the past
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Strategic dissonance
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a discrepancy between a company's intended strategy and the strategic actions managers take when actually implementing the strategy
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While strategic dissonance can indicate that managers are not doing what they should to carry out company strategy, it can also mean
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that the intended strategy is out of date and needs to be changed
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Core capabiltiies
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less visible, internal decision making routines, problem-solving processes, and organizational cultures that determine how efficiently inputs can be turned into outputs
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Strategic group
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a group of other companies within an industry that top managers choose for comparing, evaluating, and benchmarking their company's strategic threats and opportunities
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What is the difference between core, secondary, and transient firms?
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Core firms are the central companies in a strategic group, secondary companies are firms that use strategies related to but somewhat different from those number of core firms, and transient firms are companies whose strategies are changing from one strategic position to another
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Because transient firms are changing, what is the effect the change has on managers who are analyzing them?
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Managers may not know what to think about these firms; consequently, managers may overlook or be wrong about the potential threats and opportunities posed by transient firms
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Shadow-strategy task force
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actively seeks out its own company's weaknesses, and then, thinking like a competitor, determines how other companies could exploit them for competitive advantage.
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What are the 2 parts of situational anaylsis
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1- examine internal strengths and weaknesses by focusing on distinctive competencies and core capabilities
2- examine external opportunities and threats by focusing on environmental scanning, strategic groups, and shadow-strategy task forces |
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strategic reference points
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the targets that managers use to measure whether their firm has developed the core competencies that it needs to achieve a sustainable competitive advantage;
not deterministic |
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What are the trends affecting organizations in a global economy? (6)
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1) Foreign exchange rates
2) importance of exports and imports 3) Expanding nature of trade 4) Worldwide communication 5) Borderless organizations 6) Worldwide labor pool |
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Trade is so important in the united States that now 1 in __ jobs depends on it
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6
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What does transparency refer to?
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the idea that companies need to be more forthright with the way they conduct business
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What are the 5 aspects of culture that have direct implications for international management>?
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1) Cultural Distance (how different separate cultures are)
2) Social Change (differing views of social change) 3) Time orientation (different countries have different ideas on the notion of time) 4) Language (and gestures and mannerisms and customs) 5) Value Systems (5 value dimension) |
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What are the 5 value systems dimensions?
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1- Power distance
2- Uncertainty Avoidance 3- Individualism 4- Gender Role Orientation 5- Long-term orientation |
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What are the 5 principal categories political risk is grouped into?
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1- Domestic instability
2- Foreign Conflict 3- Political climate 4- Economic climate 5- Corruption |
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What are the 2 significant types of international political mechanisms?
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Protectionism and Bribery/Extortion
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WTO represents...
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a series of negotiated understandings regarding trade and related issues among the participating countries
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What are the 3 fundamental principles of the WTO?
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1- the most favored nation principle means that when country A grants a tariff concession to country B, the same concession automatically applies to all other countries that are of the WTO
2- The reciprocity principle means that each member country will not be forced to reduce tariffs unilaterally. A tariff concession is made only in return for comparable concessions from the other countries 3- The transparency principle means that the tariffs are to be readily visible to all countries |
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What does NAFTA do?
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Essentially creates a giant free-trade zone among the US, Canada, and Mexico by removing and reducing barriers to trade, such as tariffs, quotas, and licenses.
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What is the EU?
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An organization with the goals of creating a single market among member countries through the removal of trade barriers (eg tariffs) and establishing the free movement of goods, people, services, and capital.
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No other topic in management has undergone as much change in the past few years as that of
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organizing and organizational structure
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What is organizational structure?
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the formal arrangement of jobs within an organization. When managers develop or change the structure, they are engaged in organizational design
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What are the 7 purposes of organizing?
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1- Divides work to be done into specific jobs and departments
2- assigns tasks and responsibilities associated with individual jobs 3- coordinates divers organizational tasks 4- clusters jobs into units 5- Establishes relationships among individuals, groups, and departments 6- Establishes formal lines of authority 7- Allocates and deploys organizational resources |
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The trend in recent years has been towards ___ spans of control because organizations are investing heavily in ____
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larger; employee training
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Centralization?
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degree to which decision making is concentrated at upper levels of the organization
An organization is never completely centralized or decentralized |
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There has been a distinct trend towards (centralizing/decentralizing) in decision making?
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decentralizing
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Formalization?
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refers to how standardized an organization's jobs are and the extent to which employee behavior is guided by rules and procedures
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What are the 4 contingency factors for determining a company's appropriate organizational design structure?
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1- Strategy/structure
2- Size/structure 3- Technology/structure 4- Environmental Uncertainty/structure |
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Unit production
____ vertical differentiation ____ horizontal differentiation ____ formalization Most effective structure: ____ |
low
low low organic |
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Mass production (batch)
____ vertical differentiation ____ horizontal differentiation ____ formalization Most effective structure: ____ |
moderate
high high mechanistic |
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Process (continuous) production:
____ vertical differentiation ____ horizontal differentiation ____ formalization Most effective structure: ____ |
high
low low organic |
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The greater the uncertainty, the more an organization need to have a ____ organizational design.
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organic
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An organization's ____ guides the behavior and actions of all employees inside the organization
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culture
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The culture of an organization needs to be in line with the ___ and the ___.
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mission and strategy
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Organizational culture?
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the shared beliefs, values, and norms that bind people together and help them make sense of the systems within an organization; tells us "what is to be done" and "how it is to be done"
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Whatever else the culture may value, it prizes _____ most of all
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survival
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What are the 2 components of organizational culture?
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1)Substance (shared systems of beliefs, values, expectations, and norms)
2) Form (observable ways that members of a culture express ideas) |
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What are artifacts?
Why are they tricky? |
Cultural routines
because they are hard to interpret |
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Why are the components of organizational culture referred to as iceberg elements?
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Because the visible artifacts can be seen from the top (form) but those behaviors are sustained by values deep within the organization
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What are stories and sagas?
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narratives based on true events, frequently embellished
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How can culture be a double-edged sword?
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if it reinforces a singular view of the organization and its environment but when dramatic changes are needed, the organization has a hard time changing unless the culture is also transformed
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What are the 2 issues embedded in an organization's culture?
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Ethics and diversity
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To be successful, change must be consistent with ____________________________.
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important values in the culture and emerge from participants within the organization
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Entrepreneurship
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dynamic, risk-taking, creative, growth-oriented behavior
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The entrepreneur is willing to
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pursue opportunities in situations others view as problems or threats
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What are the 8 characteristics of entrepreneurs?
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1- Internal locus of control
2- High energy level 3- High need for achievement 4- Tolerance for ambiguity 5- Self-Confidence 6- Passion and action orientation 7- Self-reliance and desire for independence 8- Flexibility |
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____ experiences and ____ environment seem to make a difference to entrepreneurs.
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childhood
family |
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Because of their ____ or _____, entrepreneurs who try one venture often go on to others
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career or work history
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Entrepreneurs tend to emerge during
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certain windows of opportunity
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Small business?
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has fewer than 500 employees, is independently owned and operated, and does not dominate its industry
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What are the 3 reasons for why someone would want to launch their own business?
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#1 wanting to be your own boss and control your future
#2 going to work for a family-owned business #3 seeking to fulfill a dream |
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What are the most common ways to get involved in running your own small business?
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#1 start one
#2 buy and existing one #3 buy and run a franchise |
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A growing area for internet entrepreneurship is
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B2B, specialized business to business websites that link buyers and sellers
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What is the family business feud?
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members of the controlling family get into disagreements about work responsibilities
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What is the succession problem?
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the issue of who will run the business when the current head leaves (family businesses)
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What is a succession plan?
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Describes how the leadership transition and related financial matters will be handled when the current head of the family business leaves
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What are the 7 reasons that new businesses fail?
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1) Lack of experience
2) Lack of expertise 3) Lack of strategy/strategic leadership 4) Poor financial control 5) Growing too fast 6) Insufficient commitment 7) Ethical failure |
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First-mover advantage?
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comes from being the first to exploit a niche or enter a market
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What are the 3 stages in the life cycle of an entrepreneurial firm?
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1- Birth stage
2- Breakthrough stage 3- Maturity Stage |
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Business plan?
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describes the direction for a new business and the financing needed to operate it
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A. Sole proprietorship?
B. Parternship? C. Corporation? D. Limited Liability Corporation? |
A. an individual pursuing business for a profit
B. when 2 or more people agree to contribute resources to start and operate a business together C. a legal entity that exists separately from its owners D. a hybrid business form combining advantages of the sole proprietorship, partnership, and corporation |
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Venture capitalists?
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Make large investments in new ventures in return for an equity stake in the business
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Angel investor?
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A wealthy individual willing to invest in return for equity in a new venture
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Intrapreneurship?
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Entrepreneurial behavior by people and subunits operating within large organizations
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Skunkworks?
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teams allowed to work creatively together, free of constraints from the larger organization
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Business incubators?
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Special facilities that offer space, shared services, and advice to help small businesses get started
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Small business development centers
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offer guidance and support to small business owners in how to set up and run a business operation
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in the context of managing the environment, the actions of an organization to enter the industry/market with limited competition and ample suppliers and customers is referred to as
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domain selection
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The process of "absorbing elements" to avoid threats
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cooptation
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in the context of managing the environment, the actions of an organization to improve the relations with competitors is referred to as
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competitive pacification
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