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Chapter 12

The Future
Growing Ventures

2009 by Prentice Hall

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Growth is seemingly what every


entrepreneur desires
However, the challenges that come with growth
can be overwhelming if the entrepreneur is not
prepared
Thus, the desire for growth can be far different
than the actual ability to manage growth

2009 by Prentice Hall

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The distinction of smaller size


The distinction of smallness gives newer ventures
and smaller firms certain disadvantages

Lack of financing
Lack of market knowledge
Lack of management expertise
Technology constraints

2009 by Prentice Hall

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The one-person-band syndrome


In effect, the business is the entrepreneur and the
entrepreneur is the business
The natural tendency to do everything

Time management
Four critical steps
1.
2.
3.
4.

Assessment
Prioritization
Creation of procedures
Delegation

2009 by Prentice Hall

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Community obligations
The community presents unique challenges to
smaller ventures in three ways
1. Participation
2. Leadership
3. Donations

Continuing management education


The ancient Greek philosopher Epictetus once
said, It is impossible for a man to learn what he
thinks he already knows.

Other issues in the formative years


2009 by Prentice Hall

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Control
Responsibility
Effective delegation

The process entails three steps


1. Assigning specific duties
2. Granting authority to carry out these duties
3. Creating the obligation of responsibility for
necessary action

2009 by Prentice Hall

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Tolerance of failure
Moral failure
Personal failure
Uncontrollable failure

Change
Flexibility

2009 by Prentice Hall

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The Most Critical Problems


Firms Encounter in Their
Formative
Years
1. Finding new customers
2.
3.
4.
5.

Obtaining financing
Recruiting and hiring new employees
Recruiting and hiring new managers
Dealing with current employee problems

2009 by Prentice Hall

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Balancing the focus (entrepreneur and


manager)
Administrative point of view

What sources do I control?


What structure determines our organizations
relationship to its market?
How can I minimize the impact of others on my
ability to perform?
What opportunity is appropriate?

2009 by Prentice Hall

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Balancing the focus (entrepreneur and


manager)
Entrepreneurial point of view

Where is the opportunity?


How do I capitalize on it?
What resources do I need?
How do I gain control over them?
What structure is best?

2009 by Prentice Hall

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Outside managerial assistance


Quasi-boards are composed of volunteers who
serve in an advisory capacity to the owner

2009 by Prentice Hall

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Ethical code
General public perception stereotypes
business ethics as a contradiction in terms
Unethical behavior does take place. Why?

Greed
An inability to distinguish between activities at
work and activities at home
A lack of foundation in the study of ethics
Survivalist (bottom-line) thinking
A reliance on other social institutions to convey
and reinforce ethics
2009 by Prentice Hall

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A code of conduct within a business is a


statement of ethical practices or guidelines
to which an enterprise adheres

2009 by Prentice Hall

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In smaller ventures, the ethical influence of


the owner is more powerful than in larger
corporations because his or her leadership
is not diffused through layers of
management
Owners are identified easily and are
observed constantly by employees in a
smaller venture

2009 by Prentice Hall

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1.
2.

3.
4.

5.
6.

Have you defined the problem accurately?


How would you define the problem if you stood
on the other side of the fence?
How did this situation occur in the first place?
To whom and to what do you give your loyalty
as a person and as a member of the
corporation?
What is your intention in making this decision?
How does this intention compare with the
probable results?

2009 by Prentice Hall

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7.
8.
9.
10.

11.
12.

Who could your decision or action injure?


Can you discuss the problem with the affected
parties before you make your decision?
Are you confident that your position will be as
valid over a long period of time as it seems now?
Could you disclose without qualm your decision
or action to your boss, your CEO, the board of
directors, your family, and society as a whole?
What is the symbolic potential of your action if
understood? If misunderstood?
Under what conditions would you allow
exceptions to your stand?

2009 by Prentice Hall

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The quality movement refers to an allencompassing, quality-focused approach to


managing a firms operations
A smaller venture that adopts a philosophy
of total quality management must be
dedicated to the pursuit of excellence in all
aspects of its activities
The Malcolm Baldrige National Quality
Award

2009 by Prentice Hall

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Involve top management

Focus on customer needs


Train employees
Empower employeesgenerate new ideas
Recognize employees
Conquer fear
The continuous-improvement challenge
Teamwork

2009 by Prentice Hall

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Prime targets included Japan, China, India,


and other parts of Asia, Latin America, and
eastern Europe
Why globalize for growth

Resource-rich countries
Market-rich countries

2009 by Prentice Hall

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Proactive Reasons

Reactive Reasons

Increased profit
Unique goods or
services
Technological
advantage
Exclusive market
information

Competitive pressures
Declining domestic
demand
Overcapacity
Proximity to customers

2009 by Prentice Hall

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I.
II.
III.
IV.
V.
VI.
VII.

Government regulations
Political climate
Infrastructure
Distribution channels
Competition
Market size
Local customs and culture

2009 by Prentice Hall

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The good must be adapted for different


local markets

2009 by Prentice Hall

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Ignorance and uncertainty


Lack of experience
Lack of information
Restrictions
Political risks
Economic risks
Financial risks

2009 by Prentice Hall

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