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Lecture 5

GMS 200 Lecture Notes - Lecture 5: Angel Investor, Initial Public Offering, Intrapreneurship


Department
Global Management Studies
Course Code
GMS 200
Professor
Franklin Gorospe
Lecture
5

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Chapter 5: Entrepreneurship and Small Business Management
Entrepreneurship: Creating new businesses by strategic thinking and taking
Entrepreneurs: Individuals who establish businesses on their own
Entrepreneurs are…
Founders of businesses that become large-scale enterprises.
People who:
oBuy a local franchise outlet
oOpen a small retail shop
oOperate a self-employed service business
oRemember that entrepreneurs usually begin with a great idea
Typical characteristics of entrepreneurs:
Internal locus of control – ability to control your own destiny
High need for achievement
Tolerance for ambiguity – willing to live with uncertainty
Self-confidence – believing in yourself
Passion and action-orientation
Entrepreneurs:
Respond quickly to changes
Are owned and run by the same person
Show greater flexibility
Agency theory states that individuals try to make as much money as possible. Using this theory,
entrepenurs try to cut costs wherever possible.
Entrepreneurs try to use economies of scale, but it’s difficult
What are economies of scale?
The cost advantage that arises with increased output of a product
Entrepreneurs have to remember that 50% of small businesses fail in first 4 years of operation
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