MGT492: Managing People & Organizations Lecture 6:Chapter 3: The Global Environment and Entrepreneurship (contd.) Instructor: Dr. Aisha Azhar COMSATS Virtual Campus

Last lecture overview The Global Borderless Environment Trading Blocs Global Trade Agreements, Trade Alliances Global Sourcing, import/export Licensing, franchising, contracting

Entrepreneurship New Venture Creation Entrepreneur Intrapreneur The process of starting and operating a new business or new line of business. Entrepreneur One who starts a new small business. Intrapreneur One who starts a new line of business within a large organization.

Entrepreneurship (cont’d) Small Business Defined A business that is independently owned and operated, is not dominant in its field, and has annual receipts not in excess of $500,000. Of the 600 million businesses in the U.S., 99% are small businesses and 80% are family businesses.

Contributions of Entrepreneurs Innovation Job Creation and Economic Growth Society Support of Large Businesses

Selecting the New Venture Factors in Selecting a New Venture Good growth potential and profit opportunities Previous work experience Observing others’ mistakes and successes Finding an overlooked market segment or niche Systematic search or hobby Competitive Advantage Specifies how the organization offers unique customer value. First-mover advantage involves offering a unique customer value before competitors do.

Selecting the New Venture Five Most Commonly Used Entrepreneurial Strategies Create a competitive advantage. Maintain innovation. Lower the costs of developing/maintaining one’s venture. Defend product/service as it is now. Create a first-mover advantage.

The Business Plan The well prepared business plan answers the following questions:

Sections In a Business Plan Exhibit 3–3a

Sections In a Business Plan (cont’d) Exhibit 3–3b

Sections In a Business Plan (cont’d) Exhibit –3c

Practices of Global Companies Exhibit 3–4

Global Diversities Exhibit 3–5

Global Diversity Diversity in Work-Related Values Geert Hofstede’s Dimensions of National Value Systems Individualism and Collectivism High and Low Power Distance High and Low Uncertainty Avoidance Quantity and Quality of Life

Global Diversity Diversity in Management Functions Management practices that work well in one country may not work in another country. Managers must base their actions on the characteristics and work-related values of the country in which they are operating. The Global Learning Organizations Successful multinational organizations value sharing knowledge to adapt to their diverse and changing environments.