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SOM497 – Business Policy & Strategy
CHAPTER 13CHAPTER 13: Strategic Issues in:
Entrepreneurial Ventures and Small Businesses
STRATEGIC MANAGEMENT & BUSINESS POLICY 10TH EDITIONTHOMAS L. WHEELEN & J. DAVID HUNGER
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Small Businesses versus Entrepreneurial Ventures
Definition of small business
Importance of small businesses: 99% of all businesses in US Over 25 million small businesses in US 60% -80% new jobs annually Produce 13 to 14 times more patents per employee than large patenting
firms Employers of 41% of high tech workers (such as scientists, engineers, and
computer workers) 66% of new employer establishments survive at least 2 years, and
44% survive at least 4 years
Definition of Entrepreneurial Venture
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Strategic Planning (in small business)
Strategic planning related to better performance BUT small business lack strategic planning because: Not enough time Unfamiliar with strategic planning Lack of skills Lack of trust and openness
Small firms with too much formalization in processes may reduce performance…why?
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Issues in Environmental Scanning & Strategy Formulation (in small business)
Less sophisticated in small than large firms Can’t afford to hire specialist
CEO of small firm tends to be owner and primary stakeholder
Small firms may end up with stability strategy
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Factors affecting new venture success
Structure of industry Success is greater for entrepreneurial ventures entering
rapidly changing industries OR early growth industries OR industries with different/heterogeneous products THAN stable industries and industries w/homogenous products
Business strategy of new venture Keys to success are to
Differentiate product from competitors Focus product on customer needs in a segment of the market
Behavioral characteristics of entrepreneur
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Issues in Small & Entrepreneurial Firms
Strategy Implementation issues Organizing & staffing growing firm
Transferring ownership of firm
Issues in Evaluation & Control Line between debt and equity blurred
Lifestyle part of financial statements
Standard financial formulas don’t apply
Personal preference determines financial policies
Banks combine personal and business wealth
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SOM497 – Business Policy & Strategy
CHAPTER 14CHAPTER 14: Strategic Issues in:
Not-for-Profit Organizations
STRATEGIC MANAGEMENT & BUSINESS POLICY 10TH EDITIONTHOMAS L. WHEELEN & J. DAVID HUNGER
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Non-For-Profits (NFP)
NFP – Private nonprofit corporations
Public governmental units/agencies
Importance of NFP Employ 1 in every 20 jobs in nations throughout world Employ 25% of U.S. workforce in U.S.
(study from 1986) Own approx. 15% of U.S. private wealth
(study from 1986)
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Why Not-for-Profit?
Public or collective goods Certain goods and services that profit-making
firms cannot or will not provide
Importance of revenue source Depends on:
dues assessments donations funding
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Not for Profit Strategies
Strategic piggybacking
Social entrepreneurship
Mergers
Strategic alliances
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SOM497 – Business Policy & Strategy
CHAPTER 3CHAPTER 3: Ethics & Social Responsibility
STRATEGIC MANAGEMENT & BUSINESS POLICY 10TH EDITIONTHOMAS L. WHEELEN & J. DAVID HUNGER
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Social Responsibilities
Social Responsibility
Milton Friedman use firm resources and engage in activities designed
to increase its profits
Carroll’s 4 Responsibilities
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Stakeholders
Corporate Stakeholders –Affect or are affected by the achievement of the corporation’s objectives
Stakeholder Analysis Primary stakeholder
Secondary stakeholder
Stakeholder Input
Business Ethics & Behavior
Types of corporate unethical practices
Reasons for unethical behavior
Guidelines for Ethical Conduct → “Code of Ethics”
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Next classes
No class on May 1st (Thurs) & May 6th (Tues) (use this time to work your exam )
Final exam is due on: May 8th (Thurs)
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