kuratko_12

Chapter 12The Future

Growing Ventures

12-1© 2009 by Prentice Hall

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”

12-2© 2009 by Prentice Hall

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

12-3© 2009 by Prentice Hall

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. Assessment2. Prioritization3. Creation of procedures4. Delegation

12-4© 2009 by Prentice Hall

Community obligations◦ The community presents unique challenges to

smaller ventures in three ways 1. Participation2. Leadership3. 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

12-5© 2009 by Prentice Hall

Control Responsibility Effective delegation

◦ The process entails three steps1. Assigning specific duties2. Granting authority to carry out these duties3. Creating the obligation of responsibility for

necessary action

12-6© 2009 by Prentice Hall

Tolerance of failure◦ Moral failure◦ Personal failure◦ Uncontrollable failure

Change Flexibility

12-7© 2009 by Prentice Hall

1. Finding new customers2. Obtaining financing3. Recruiting and hiring new employees4. Recruiting and hiring new managers5. Dealing with current employee problems

12-8© 2009 by Prentice Hall

The Most Critical Problems Firms Encounter in Their Formative Years

Balancing the focus (entrepreneur and manager)

Administrative point of view◦ What sources do I control?◦ What structure determines our organization’s

relationship to its market?◦ How can I minimize the impact of others on my

ability to perform?◦ What opportunity is appropriate?

12-9© 2009 by Prentice Hall

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?

12-10© 2009 by Prentice Hall

Outside managerial assistance◦ “Quasi-boards” are composed of volunteers who

serve in an advisory capacity to the owner

12-11© 2009 by Prentice Hall

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

12-12© 2009 by Prentice Hall

A code of conduct within a business is a statement of ethical practices or guidelines to which an enterprise adheres

12-13© 2009 by Prentice Hall

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

12-14© 2009 by Prentice Hall

1. Have you defined the problem accurately?2. How would you define the problem if you stood

on the other side of the fence?3. How did this situation occur in the first place?4. To whom and to what do you give your loyalty

as a person and as a member of the corporation?

5. What is your intention in making this decision?6. How does this intention compare with the

probable results?

12-15© 2009 by Prentice Hall

7. Who could your decision or action injure?8. Can you discuss the problem with the affected

parties before you make your decision?9. Are you confident that your position will be as

valid over a long period of time as it seems now?

10. 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?

11. What is the symbolic potential of your action if understood? If misunderstood?

12. Under what conditions would you allow exceptions to your stand?

© 2009 by Prentice Hall 12-16

The quality movement refers to an all-encompassing, quality-focused approach to managing a firm’s 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

12-17© 2009 by Prentice Hall

Involve top management◦ Focus on customer needs◦ Train employees◦ Empower employees—generate new ideas◦ Recognize employees◦ Conquer fear◦ The continuous-improvement challenge◦ Teamwork

12-18© 2009 by Prentice Hall

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

12-19© 2009 by Prentice Hall

Proactive Reasons Reactive Reasons

Increased profitUnique goods or

servicesTechnological

advantageExclusive market

information

Competitive pressuresDeclining domestic

demandOvercapacityProximity to customers

12-20© 2009 by Prentice Hall

I. Government regulationsII. Political climateIII. InfrastructureIV. Distribution channelsV. CompetitionVI. Market sizeVII. Local customs and culture

12-21© 2009 by Prentice Hall

The good must be adapted for different local markets

12-22© 2009 by Prentice Hall

Ignorance and uncertainty Lack of experience Lack of information Restrictions Political risks Economic risks Financial risks

12-23© 2009 by Prentice Hall