Companies operate in a competitive environment where the search for ways to increase efficiency and effectiveness often determines their very survival. This chapter discussed how entrepreneurs, managers, and employees, using their ingenuity and enterprise, each contribute to this effort. Harmonizing the interests of these groups so they work together toward that goal is crucial to a business's success. This chapter made the following major points:

1. An entrepreneur is the person who supplies the mixture of energy, boldness, courage, spirit, expertise, insight, and often ruthlessness necessary to create or develop new or improved products.
2. Entrepreneurship is the process of acquiring and combining productive resources to create goods and services customers want to buy and that create profit.
3. Opportunities for entrepreneurs arise as business commerce, occupations, and organizations change.
4. The reason entrepreneurs are willing to risk their capital to pursue new ventures is that the potential profits are enormous. Many entrepreneurs do make mistakes, however. Three common ones are overestimating the value of a new product to potential customers, failing to realize the difficulty of reaching these customers, and underestimating the amount of cash needed to sustain a business until it is profitable.
5. The widespread changes brought about by increasing global competition and advancing technology is known as the process of "creative destruction." This process leads old, inefficient companies, and even entire industries, to be driven out of business by new, more efficient ones.
6. It is one thing to have a good business idea; it is quite another to get a business off the ground. For a business to prosper and grow, its founder needs to recruit managers to oversee the functions needed to get the product to the customer.
7. The agency problem—the misalignment of the interests of managers and owners—occurs whenever there is a separation of a business's control and ownership. The agency problem can be solved by creating a motivating reward structure for managers and developing a hierarchy of authority that allows stockholders to scrutinize managers' business decisions.
8. Managers are the employees to whom a company's owners delegate the responsibility of using its resources to create profitable goods and services. Managers are responsible for developing the company's business model and controlling its operations and functions (manufacturing, marketing, accounting, and so on).
9. There are three main levels of managers: top managers, middle managers, and first-line managers. Managers typically are also members of a business function who possess a certain type of occupational or job-specific skill.
10. Managers measure companies in terms of their efficiency and effectiveness. Efficiency is a measure of how well or how productively a company's resources are used to produce goods and services. Effectiveness is a measure of the competitiveness of the business model that managers have selected for the organization to pursue. Profitable organizations are simultaneously efficient and effective.
11. Four essential managerial functions are planning, organizing, leading, and controlling a company's productive resources. How well managers perform these functions determines the profitability of a company's business model.
12. Employees have some freedom to decide how to perform their company roles. They can perform at some "minimum" level—do just what is required of them and no more—or they can perform in an enterprising way that improves the company's efficiency and effectiveness as well as their own success.
13. People experience several different stages in their careers. The stages are as follows: the preparing-for-work and entering-the-workforce stages, and the early-career, midcareer, and late-career stages. How well people manage the challenges involved at each stage determines their long-term prosperity and well-being.