Week 3
Entrepreneurial Intentions and Corporate Entrepreneurship
The Goal to Act Entrepreneurially
Entrepreneurial Goals: motivational factors that
influence individuals to practice entrepreneurial outcomes.
Perception (View) of feasibility leads to an entrepreneurs
self evaluation. Entrepreneurial self evaluation :conviction that one can successfully execute the entrepreneurial process. Perceived outcomes: degree to which an individual has a favorable or unfavorable evaluation of the potential entrepreneurial outcomes
Entrepreneur Background and Characteristics: Education
Research findings indicate that education is
important in the upbringing of an entrepreneur. This is reflected in:
Level of education. Role it plays in helping entrepreneurs handle with
the problems they face. Ability to communicate clearly is important
Education does not determine whether an
entrepreneur will create a new business to make use of the discovered opportunity.
Entrepreneur Background and Characteristics: Personal Values
Entrepreneurs differ significantly from the
bureaucratic organization in:
Nature of the enterprise. Opportunity. The institution. Individuality.
Entrepreneur Background and Characteristics: Age
Most entrepreneurs initiate their entrepreneurial
careers between the ages of 22 and 45.
Other factors needed to launch and manage a
new business enterprise successfully:
Experience. Financial support. High energy level.
Entrepreneur Background and Characteristics: Work Experience
Dissatisfaction with aspects on ones job often
motivates launch of a new venture.
Previous technical and industry experience is
important once decision to launch is made. Experience in the following areas is important:
Financing. Product or service development Manufacturing Development of distribution channels Preparation of a marketing plan.
Previous start-up experience is a relatively good
judge of starting later businesses.
Role Models and Support System
Role models can be parents, family members, or
other entrepreneurs.
Successful entrepreneurs are viewed as catalysts
by potential entrepreneurs.
Role models serve in a supportive capacity as
adviser during and after launch of a new venture.
Entrepreneurs need to establish connections and
eventually networks early in the new business enterprise formation process. Strength of the ties between the entrepreneur and any individual in the network is dependent upon the frequency, level, and reciprocity of the
Moral-Support Network
Individuals who give psychological support to an
entrepreneur. Entrepreneurs need to establish a moral-support network of family and friends.
Friends can provide: Advice. Encouragement. Understanding. Assistance. Relatives can be strong sources of moral support,
particularly if they are also entrepreneurs.
Professional-Support Network
Entrepreneurs need advice and counsel
throughout the establishment of the new venture which can be obtained from:
Mentors Business associates Trade associations Personal affiliations
Entrepreneurial activity is embedded in networks
of interpersonal relationships.
Minority Entrepreneurship
Research on minority entrepreneurship has been
irregular. Problem is in understanding differences in:
Behavior of various ethnic groups in the context of
the environment. Economic opportunities (or lack thereof) available in the societal context.
Future research needs to focus on the overall
process used by racial entrepreneurs in developing and maintaining an enterprise.
Entrepreneurial Intentions within Existing Organizations
assumption
Acting entrepreneurially is something people
choose to do. Top management of an organization can influence that choice by the corporate environment that it creates.
nurturing environment
Enhances organizational members perceptions of
entrepreneurial action as both feasible and desirable.
Causes for Interest in Corporate Entrepreneurship
Interest in entrepreneurship within established
businesses has increased due to events occurring on:
Social. Cultural. Business levels.
Social reasons:
Increasing interest in doing your own thing and
doing it on ones terms. New search for meaning and impatience involved, causes more discontent in structured organizations.
Corporate Entrepreneurship
Resistance against flexibility, growth, and
(1of 2)
diversification can, in part, be overcome by developing a spirit of entrepreneurship within the existing organization.
A method of motivating individuals in an
organization who think that something can be done differently and better.
Example: Xerox
Corporate Entrepreneurship
(2 of 2)
Increase in corporate entrepreneurship reflects
an increase in social, cultural, and business pressures.
Competition has forced companies to have an
increased interest in certain areas:
New product development. Diversification ( Producing new products in other
industries). Increased productivity. Decreasing costs by methods such as reducing the companys labor force.
Entrepreneurial Endeavors
Consist of the following four key elements:
New business : refers to creation of a new business
within an existing organization. Innovativeness: refers to product and service innovation, with emphasis on development and innovation in technology. Self-renewal: transformation of an organization through renewal of the key ideas on which it is built. Proactiveness: competitive aggressiveness and boldness particularly reflected activities of top management.
Climate for Corporate Entrepreneurship
Organization operates on frontiers of technology. New ideas encouraged. Trial and error encouraged. Failures allowed. No opportunity parameters. Resources available and accessible. Multidiscipline teamwork approach. Long time horizon. Volunteer program. Appropriate reward system. Sponsors and champions available. Support of top management.
Leadership Characteristics of Corporate Entrepreneurs
Understands the environment.
Reflected in individuals level of creativity.
Visionary and flexible. Creates management options. Encourages teamwork. Encourages open discussion. Builds a coalition of supporters. strength of mind.
Entrepreneurship in the Organization (1of 4)
Step One:
Secure a commitment to corporate
entrepreneurship in the organization by top, upper, and middle management levels. Establish initial framework and embrace the concept. Identify, select, and train corporate entrepreneurs.
Establishing Corporate Entrepreneurship in the Organization (2 of 4)
Step Two:
Identify ideas and areas that top management is
interested in supporting. Identify amount of risk money available to develop the concept. Establish overall program expectations and target results of each corporate venture. Establish mentor/sponsor system.
Step Three: use of technology to ensure
organizational flexibility. Step Four: managers who will train employees as well as share their experiences.
Entrepreneurship in the Organization (3 of 4)
Step Five:
Develop ways for organization to get closer to its
customers.
Step Six:
Learn to be more productive with fewer resources.
Entrepreneurship in the Organization (4 of 4)
Step Seven:
Establish a strong support structure for corporate
entrepreneurship.
Step Eight:
Involve tying rewards to the performance of the
entrepreneurial unit.
Finally:
Implement an evaluation system that allows
successful entrepreneurial units to expand and unsuccessful ones to be eliminated.
Problems and Successful Efforts
(2 of 2)
Examples of companies that have adopted their
own version of the implementation process to launch new ventures successfully:
Minnesota Mining and Manufacturing (3M). Hewlett-Packard (HP). IBM.
