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1 INTRO TO ENTREPRE Chapter 01

The document defines entrepreneurship and discusses key concepts like opportunity recognition, risk-taking, and innovation. It outlines traits of successful entrepreneurs like creativity, strong management skills, and positioning in new markets. The document also covers types of entrepreneurs, importance of entrepreneurship through innovation and job creation, and historical perspectives on the topic.

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John Msengi
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42 views30 pages

1 INTRO TO ENTREPRE Chapter 01

The document defines entrepreneurship and discusses key concepts like opportunity recognition, risk-taking, and innovation. It outlines traits of successful entrepreneurs like creativity, strong management skills, and positioning in new markets. The document also covers types of entrepreneurs, importance of entrepreneurship through innovation and job creation, and historical perspectives on the topic.

Uploaded by

John Msengi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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LECTURE 1

ENTREPRENEURSHIP 1
THEORY AND SME
MANAGEMENT
BUS 226
BBA II&BAF II
“A pessimist sees the
difficulty in every
opportunity; an optimist
sees the opportunity in
every difficulty.”
(Sir Winston Churchill)
Entrepreneurship Defined as…..an

 Intersection of opportunities generated by


changing
 economic,
 technological,
 social and
 political conditions where by enterprising people
are capable of distinguishing potentially valuable
opportunities from less valuable ones and of
actively exploiting them.
Entrepreneurship

Entrepreneur
 A person who recognizes a business opportunity
and organizes, manages, and assumes the risks
of a business enterprise with the intent of
increasing the market value of the business.
 Take-charge, self-directed people
 Risk taker
INTRAPRENEURS
 Persons who create something new inside
an existing company
 They adapt to changing conditions in the
business environment. (Keil)
 Develop a corporate culture receptive to
new ideas and provide concrete rewards for
innovation.(Koen & Baron)
Entrepreneur

 Every year thousands of entrepreneurs start


businesses
 Many are successful but remain small
 Many of these businesses will fail within a
few years
 Others will go on to become large
corporations
1-2
Why People Become
Entrepreneurs
 A person who becomes an entrepreneur as
a result of some severe hardship.
 A person who becomes an entrepreneur to
escape an undesirable situation.
KEY ACTIVITIES

 Identifying an opportunity
 Exploiting or developing this opportunity
 Launching and Running a new
venture /business successfully
A CONFLUENCE OF FACTORS
Social
Social
Change
Change

New
New Economic
Economic
Markets/
Markets/ Opportunity
Opportunity Change
Change
Channels
Channels

Technology
Technology
“There are three principal means of acquiring
knowledge in Entrepreneurship :
 Observation- collects facts;

 Reflection- combines them and

 Experimentation- verifies the result of that

combination.
(Diderot)
SYSTEMATIC OBSERVATION
 Observe aspects of the world
systematically
 Generate and test hypothesis
 Use this information as a basis for
conclusions
EXPERIMENTATION
 Determines Causation
 Systematically changes one
variable in order to see if
changes affect one or more
other variables
 Involves active intervention
 Difficult to use in the study of
entrepreneurship
REFLECTION
 Combining facts in a careful and
systematic way to reach conclusions
 Central to case method and other
qualitative methods of research
 Qualitative Method
Entrepreneurs’ Traits

 Common traits
 Common traits
 Original thinkers
 Self employed
 Risk takers parents
 Take responsibility for
 Firstborns
own actions  Well educated – 80%
 Feel competent and have college degree
capable and 1/3 have a
 Set high goals and graduate level
enjoy working toward degree
them
Successful and Unsuccessful
Entrepreneurs
 Successful  Unsuccessful
 Creative and Innovative  Poor Managers
 Position themselves in  Low work ethic
shifting or new markets  Inefficient
 Create new products
 Failure to plan and
 Create new processes
prepare
 Create new delivery
 Self-confident and
 Poor money managers
optimistic
 Able to take calculated risk
 Respond positively to
challenges
 Flexible and able to adapt
 Knowledgeable of markets
 Able to get along well with others
 Independent minded
 Dynamic leader
 Responsive to suggestions
 Take initiatives
 Resourceful and persevering
 Perceptive with foresight
 Responsive to criticism
Historical Perspectives on
Entrepreneurship
Characteristics of
Entrepreneurs
Key Personal
Attributes

Strong Managerial Successful


Competencies Entrepreneurs

Good Technical Skills


Key Personal Attributes

 Entrepreneurs are Made, Not Born!


 Many of these key attributes are developed early in life,
with the family environment playing an important role
 Entrepreneurs tend to have had self employed parents
who tend to support and encourage
 independence,

 achievement, and

 responsibility

 Firstborns tend to have more entrepreneurial attributes


because they receive more attention, have to forge their
own way, thus creating higher self-confidence
Key Personal Attributes (cont.)
 Entrepreneurial Careers
 The idea that entrepreneurial success leads to
more entrepreneurial activity may explain why
many entrepreneurs start multiple companies
over the course of their career
 Corridor Principle- Using one business to start
or acquire others and then repeating the
process
 Serial Entrepreneurs- A person who founds
and operates multiple companies during one
career
Key Personal Attributes (cont.)
 Need for Achievement
 A person’s desire either for excellence or to
succeed in competitive situations
 High achievers take responsibility for
attaining their goals, set moderately difficult
goals, and want immediate feedback on their
performance
 Success is measured in terms of what those
efforts have accomplished
Key Personal Attributes (cont.)
 Desire for Independence
 Entrepreneurs often seek independence from
others
 As a result, they generally aren’t motivated
to perform well in large, bureaucratic
organizations
 Entrepreneurs have internal drive, are
confident in their own abilities, and possess a
great deal of self-respect
Key Personal Attributes (cont.)
 Self-Confidence
 Because of the high risks involved in running an
entrepreneurial organization, having an “upbeat”
and self-confident attitude is essential
 A successful track record leads to improved self-
confidence and self-esteem
 Self-confidence enables that person to be
optimistic in representing the firm to employees
and customers alike
Key Personal Attributes (cont.)
 Self-Sacrifice
 Essential
 Nothing worth having is free
 Success has a high price, and
entrepreneurs have to be willing to
sacrifice certain things
Technical Proficiency
 Many entrepreneurs demonstrate strong
technical skills, typically bringing some related
experience to their business ventures
 For example, successful car dealers usually
have lots of technical knowledge about selling
and servicing automobiles before opening
their dealerships
 Especially important in the computer industry
Types of Entrepreneurs
 Novice Entrepreneur
 Has no prior business ownership experiences as a
business founder, inheritor, or purchaser
 Habitual Entrepreneur
 Has prior business ownership experience
 Nascent Entrepreneur
 In the process of starting a new business
 Can be either a novice or a habitual entrepreneur
Types of Entrepreneurs
(cont’d)
 Serial Entrepreneur
 Has sold or closed an original business and
establishes another new business
 Continues the cycle of selling/closing and
establishing
 Portfolio Entrepreneur
 Retains an original business and builds a
portfolio of additional businesses
 Through inheriting, establishing, and purchasing the
businesses
Varieties of Entrepreneurship
 Founder (“Pure” Entrepreneur)
 A person who brings a new firm into existence.
 Administrative Entrepreneur
 An entrepreneur who overseas the operations of a ongoing
business.
 Franchisee
 An entrepreneur whose power is limited by the contractual
relationship with a franchising organization.
 Entrepreneurial Team
 Two or more people who work together as entrepreneurs.
Importance of Entrepreneurship
 Three areas of importance
1. Innovation
 Process of creating, changing, experimenting,
transforming, and revolutionizing
2. Number of New Start-ups
 Important because new firms contribute to
economic development through benefits such
as product-process innovation
3. Job Creation
 Vital to the overall long-term economic health
of communities, regions, and nations

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