Samenvatting Enterprise and small business : Principles, practice and policy.

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ISBN-10 027370267X ISBN-13 9780273702672
239 Flashcards en notities
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Dit is de samenvatting van het boek "Enterprise and small business : Principles, practice and policy.". De auteur(s) van het boek is/zijn Sara Carter. Het ISBN van dit boek is 9780273702672 of 027370267X. Deze samenvatting is geschreven door studenten die effectief studeren met de studietool van Study Smart With Chris.

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Samenvatting - Enterprise and small business : Principles, practice and policy.

  • 1 Defining and measuring the small business

  • The Enterprise Churn
    • Because there are fewer burdens to start a business, entry barriers are lower, so greater number of new enterprises.
    • This stimulates efficiency, which means that inefficient organizations will exit the sector.
  • Trends in SE statistics
    • Fast increase of SE in 80s, gentle increase since 1995.
    • U shaped pattern of ownership rates: 30s high, 60s low, 80s high.
  • Labour Force Surveys
    • Used to estimate number of self employed individuals and uncorporated businesses.
    • Data is coming from a survey.
  • 'N shaped business ownership' puzzle of the US. Two explanations:
    • Static explanation: there is an equilibrium rate between economic development and business ownership.
    • Dynamic explanation: rate of entry & exit. The enterprise churn.
  • Explanations for changes in business ownership
    • Cost disadvantages: BO went down. Because before 80s, era of mass production, this means the minimum efficient scale (ME) was important. This promoted concentration of ownership and drove SE away.
    • Technological changes: in 80s more PC, so BO went up. Lead to less economies of scale, smaller MES, more flexibility and new industries.
    • Innovation: SE have advantages, less bureaucratic and more flexible.
    • LE fragmentation: LE transfers risk by franchising. Leads to rise of BO.
    • Development of service sector: more tailor made goals, rise of BO.
    • Changes in Labour Market: unemployment pushed to selfemployment. BO rises.
  • Bolton's Quantitative approach of SE
    • There is no single measure (asset, turnover) likely to fully account for size of an enterprise.
    • So there's a variety of measures.
  • EU definition of SE
    • Micro: <10 employees, 2 miln turnover, 2 mln balance sheet
    • Small: <50 employees, 10 mln turnover, 10 mln balance sheet
    • Medium <250 employees, 50 mln turnover, 43 mln balance sheet
  • Storey criticised Boltons qualitative approach
    - LE may run in highly personalized manner
    - Independent is relative concept (SE may be legally independent, but still rely on LE)
    - SE may perform in niche, and therefor have large market share
  • Problems with Bolton's quantitative definition
    • Quantitative criteria are arbitrary and country/industry specific
    • measures are eroded over time (inflation)
    • no uniform definition
    • How to measure informal/illegal/homeworking/network marketing?
  • Bolton's qualitative approach of smaller enterprise
    • Independent (not part of LE)
    • managed in a personalized matter
    • relatively small share of market
    • greater uncertainty
  • 2 Government and Small Business

  • Implications for government action
    • SE wants to maintain and develop product markets themselves.
    • SE wants government to maintain strong economic environment.
    • No demand for government to do things for specific firms.
  • Government action is good for 3 reasons
    • Market failure: SE have lack of control and suffer specific barriers or unequal treatment, government should help this remove. (Training example)
    • Create Jobs: SE can encourage economic growth.
    • Develop a vision: strategic vision for the whole economy. Government should try to boost this.
  • LE dominance has long been encouraged by government
    • Planning of supply during wars led to consolidations.
    • Until 60s government encouraged price cartels.
    • Growth of socialism led to nationalism & big subsiding.
  • The existence of a market failure does not justify government action. There are other alternatives. The limitations in government action are
    • Lack of information
    • Lack of business skills
    • Difficulty in admitting mistakes are made
    • Conflicting targets
    • Difficulty in providing help that adds to total net ouput.
  • A Niche for government action:
    • No generalized market failures
    • Stabilize the economy
    • Improve the regulatory regime
    • Specific support should be channeled through B2B interfaces
  • Peacock identified 4 more weaknesses of government action
    • Aims are vertroebeld by keeping everybody happy.
    • policies are slow.
    • Cost & Benefits are rarely assessed.
    • No real costs for policy makers themselves, when things go wrong.
  • Government can focus targetting on
    • stages of busines development (idea formation, startup, growth etc)
    • Types of businesses
    • factor inputs (land, capital, personel)
    • general business climate (culture, ethics)
  • Government can take 3 roles in SE
    • As regulator: determine rules of game and institutions.
    • As economic agent: taxes, etc. Has effect on business finance and risk taking.
    • As strategic planner: education, research, industrial policy.
  • Methods of government support
    • Finance
    • Provide information
    • Help with training & personal development
    • Provide specialist advice
  • There are three ways in which government can help SE
    • Aims
    • Methods
    • Targeting
  • The means of targeting policy is to target those businesses which either
    • Will benefit the greatest from assistance.
    • Will yield the greatest policy benefits.
    • Avoid displacement.
  • dangers of targetting
    • starting point of any change in business activity must be a managerial appraisal, not government
    • Target groups are not stable
  • Aims of government support
    • cost reduction (subsidies, loans)
    • risk reduction (stabilize economy)
    • increase information flow (make it available)
  • Benefits of targeting policy
    • reduce range of expenditure
    • focus resources where they are needed
    • easier to market
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Laatst toegevoegde flashcards

How can a typical entrepreneur (DIFFERENT THEN LE) carry out his marketing process (4I + 4I)
  • Innovation: adapt, instead of a radical new idea
  • Identification: target markets
  • Interactive Marketing Methods: Influence of word of mouth, Image building, Involvement, Incentives
  • Information gathering through networking
Barriers to SE co-operation
  • Wish to remain independent
  • Lack of info with who to co-operate
  • Don't want to share sensitive info
  • Risks involved
  • Legal restrictions
  • Language barriers
Small Business Owner vs. Entrepreneur
Small Business Owner
  • Establish business for personal goals
  • Business is primary source of income and time
  • Owner perceives business as an extension of his own personality
Entrepreneur
  • Establish business for profit & growth
  • Characterized by innovative behaviour
Small Business vs. Entrepreneurial Venture
Small Business
  • Any business that is independently owned
  • Not dominant in field
  • Doesn't engage any new marketing activities
Entrepreneurial Venture
  • Goals are profit & growth
  • Characterized by innovative strategy
SE's owner-size related constraints to growth
  • Organizational culture: personality & aspirations of owner, which shape constraining forces affecting a firm
  • Finance: ignorance of sources of risk capital may be constraining growth
  • Attracting quality people: SE cannot offer same salary and carreer path as LE.
  • Marketing problem: SE rely on informal marketing, constrain when growing oversea
Characteristics of the firm Lewis' life-cycle model, 5 stages
Its not to explain what is happening, but to create guidance to entrepreneur who face problems in their effort to grow
  • Start-up (org. form: owner is business. Challenges: identity market & attract customers)
  • Survival/development (org. form: simple structure. Challenges: consolidate customer base & establish financial foundations)
  • growth (org. form: more formal. Challenges: managers willingness to lose control & attract good quality staff)
  • maturity (org. form: lines of authority consolidated. Challenges: invest in marketing & control costs)
  • decline (org. form: replacement of staff. Challenges: shrinkage operational activities)
Innovation ouput measures:
Innovation count (objective)
  • adv: historical perspective available
  • disadv: favor product over process innovation, favor radical above incremental innovation, and it excludes unsuccesful innovation
Firm-based survey (subjective)
  • adv: differentiates among different kinds of innovation
  • disadv: subjective, representativeness of results depends on answer rates
Innovation intermediat output measure:
  • adv: publicly available and comparable across countries & times
  • disadv: measures inventions ipv innovations, and not all innovations are pattented
Innovation input measure:
  • Adv: available from statistics & comparable across countries/times
  • Disadv: not all innovation comes from R&D, tendency to favour LE above SE
Innovator can have 4 important roles
  • Economy: driver for growth (economic wealth
  • Society: provides advanced science
  • Company: survival, creates a comp. adv.
  • Everyone: better goods at cheaper prices