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Entrepreneurship

Entrepreneurship: What is It?


Who or what is entrepreneurial?
People? Businesses? Industries? Entire societies?

What makes it entrepreneurial?


Special traits? New/innovative ideas, products, & services? High growth activities? Exploitation of opportunity and/or people? Creation of new markets, new economic sectors?

What is Entrepreneurship?
Not Just Small Companies Not Just Start-Ups Not the Unscrupulous Promoters Not Just For-Profit Firms Not Just Non-Government Certainly not many dot.coms What is it to you as a student?

If Entrepreneurship is the Answer, Then what are other questions?


What it isnt? Why is it important? What role does it play in society? What is its role internationally? How is being an entrepreneur different from being a manager?

Entrepreneurship: Traditional Definitions


Risk Taker Founder Innovator Capitalist Scoundrel Born not Learned

Views of Entrepreneurship
Francis A. Walker (1876)
...the new captains of industry as the principals agents of production and industrial process.

Joseph Schumpter (1934)


...the entrepreneur is the man who gets new things done.

Another View
Peter F. Drucker (1964)
...maximization of opportunities is a meaningful, indeed a precise, definition of the entrepreneurial job. It implies that effectiveness rather than efficiency is essential in business. The pertinent question is not how to do things right but how to find the right things to do, and to concentrate resources and efforts on them.

More Views of Entrepreneurship


William Baumol (1968)
He is the individual who exercises what in the business literature is called leadership

Albert Shapero (1975)


...a kind of behavior that includes: 1) initiative taking, 2) the organizing or reorganizing of social / economic mechanisms to turn resources and situations to practical account, 3) the acceptance of risk of failure. A major resource utilized by the entrepreneur is himself.

Perhaps the Best Working Definition

The pursuit of opportunity beyond the resources you currently control

About Entrepreneurs
Innovative Creative Excellence Egos

The entrepreneurs personality:


Cooperative, a team player; Strong desire to work hard; High in desire to learn new & different things; Able to listen to others; competitive; risk taking.

The Personal Achiever


High in need to achieve Have tremendous energy Take initiative Strong commitment to their organization Believe they control their lives Wear many hats Try to be good at lots of things

The Real Manager


Like to take charge Are competitive Positively disposed to those with authority Enjoy power Usually come from larger firms to entrepreneurial firm effective marketers The use logic and persuasion to sell Strength is in managing the high growth firm

The Expert Idea Generator


Invents new products Find new niches Develop new processes Drawn to the world of ideas Take calculated risks Can be idealistic They think their way through situations.

Factors in entrepreneurial success:


Achievement Oriented Personality Entrepreneurial Attitudes Belief in Self and Ability Social Context Intention to Start a Venture Opportunity Recognition Controlling Resources Timing

Why Entrepreneurship Now?


Technological Change Economic Change Social Change Psychological Change

The Present Explosion


Need for Flexibility Creating Economic Value Key to Economic Development Matches Risks and Rewards Creation of Wealth Creation of Jobs

Two Types of Entrepreneurs

Necessity Opportunistic

Market Replication vs. Market Expansion


Market Replication
Customers know product or service well Lots of competition Using established technology or procedures

Market Expansion, Creation


Customers unfamiliar with product or service No competition New technology or procedures

How Entrepreneurs Make Decisions


Do things make basic sense? Follow your gut Getting Advice Other Choices Decision Aids
The things you learn in Graduate School

Know What Your Goals Are


Financial Social Personal Political Shift with Life Cycle
Of Firm Of Entrepreneur

Being an Entrepreneur Ugly Reality

Failure? Risk? Missing an opportunity? Not honoring your values and ethics? Not delivering value?

Being an Entrepreneur-The Good


What are the good parts?
In control of your own destiny Exciting to build a business Contributing to the economy Financial reward ... maybe
(Notice that this is the last)

Conceptual Model of Entrepreneurship


The person Entrepreneur

The organization

Entrepreneurship

The task

The Environment

Entrepreneurial process
1. Identify and evaluate the opportunity It is difficult and an important task Opportunity can be identified looking at the unsatisfied needs, asking customers, business associates such as channel members. Evaluation of opportunity a. Creation and length of opportunity b. Real and perceived value of opportunity c. Opportunity versus personal skills and goals

2. Develop a business plan An effective business plan is required to exploit business opportunity. It should cover various aspects like production, marketing, finance etc. 3. Resources required a. Existing resources b. Required resources c. Distinguish between critical resources and helpful ones.

4. Manage the enterprise Entrepreneur needs to employ resources through implementation of business plan. a. Management style b. Identification of problems and potential problems c. Implementation of control system.

A final set of questions:


Are there national differences in entrepreneurial activity? Is entrepreneurial activity related to national economic growth? Why are some countries more entrepreneurial than others? What can be done to enhance entrepreneurial activity?

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