BAEB501 : ENTREPRENEURSHIPCHAPTER 10:Issues in Entrepreneurship

© 2010 Cosmopoint

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Chapter 10: Issues in Entrepreneurship

© 2010 Cosmopoint

Topic Outlines

10.1 Characteristics of a Corporate Entrepreneur10.2 Development of corporate Entrepreneurship in Organization10.3 Other issues10.4 Franchising and Entrepreneurship10.5 Some of the strategies adopted by the government10.6 Responsibilities of Franchisor10.7 Responsibilities of Franchisee10.8 Advantages and disadvantages of Franchising

© 2010 Cosmopoint

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Chapter 10: Issues in Entrepreneurship

© 2010 Cosmopoint

Learning Outcomes

After completing this chapter, student should be able to: Identify the issues in Entrepreneurship Understand franchising concepts Apply the concepts learnt

Topics© 2010 Cosmopoint

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Chapter 10: Issues in Entrepreneurship

© 2010 Cosmopoint

10.1 Characteristics of a Corporate Entrepreneur

Topics

There are eight characteristics of corporate entrepreneurship:Proactive

Innovative

Propensity to take moderate and calculated risks

Inspiration to do more than current capacity

Team Work

Creative problem solving

Listening to feedback

Need for achievement

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Chapter 10: Issues in Entrepreneurship

© 2010 Cosmopoint

10.2 Development of corporate Entrepreneurship in Organization

Topics

A corporation may venture into a new business through any of the following:

• Venture Capital

• New venture incubator

• Idea generation and transfer programmes

• Intrapreneurhsip development programmes

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Chapter 10: Issues in Entrepreneurship

© 2010 Cosmopoint

10.3 Other issues

Topics

There are several issues occurred in entrepreneurship. Some of them are the following:

• Capital (source to start business)

• Risks (2 types of risks)

• Challenges (role conflict, culture, religion restriction, type of business, distinct or mainstream)

• Gender (female vs male)

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Chapter 10: Issues in Entrepreneurship

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10.4 Franchising and Entrepreneurship

Topics

What is franchising? It is a form of business involving a

franchisor granting franchisees the right to run similar business in certain areas.

Who is franchisor? A franchisor has proven business

that has been systematized. In other words, all operations are put in system and are documented.

Who is franchisee? Franchisees are those who are given

the right to run business in areas agreeable to both the franchisor and the franchisees.

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Chapter 10: Issues in Entrepreneurship

© 2010 Cosmopoint

10.5 Some of the strategies adopted by the government

Topics

To develop homegrown franchise products and systems

To convert existing viable business info franchise systems

To identify foreign franchises that can be bought or brought

To educate the masses about franchising To identify different target groups as potential

franchisors and franchisees To increase the number of franchise

consultants To emphasize R&D activities To encourage and assists homegrown to

venture internationally To offer comprehensive and attractive financial

schemes To promote Malaysian franchises abroad To coordinate and cooperate with other

governmental and non governmental bodies.

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Chapter 10: Issues in Entrepreneurship

© 2010 Cosmopoint

10.6 Responsibilities of Franchisor

Topics

Franchisor: Ensuring the continuity and stability of the

business Offering rights to franchisees to the

business name, trademark, logo, overall image, and business concept.

Imparting systems and knowledge pertaining to the business

Conducting pre and post operation training covering both knowledge and skills

Offering pre and pos operation support and guidance

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Chapter 10: Issues in Entrepreneurship

© 2010 Cosmopoint

10.7 Responsibilities of Franchisee

Topics

Franchisee: Compensating the franchisor for the

award of the right (usually in the form of franchise fee and royalty)

Working closely with the franchisor by conforming to standards and having regular communication

Ensuring unwavering commitment to the business under the guidance of the franchisor

Like other ventures based on partnership, misunderstandings are quite common but the synergies and dynamics are there to be exploited.

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Chapter 10: Issues in Entrepreneurship

© 2010 Cosmopoint

10.8 Advantages and disadvantages of Franchising

Topics

To franchisor, the advantages: Faster pace of expansion Risks are shared Lighten the burden of

managing a network of outlets.

But the disadvantages are:• Equity ownership seems

diluted• Challenges in dealing with

independent owners compared to own staff

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Chapter 10: Issues in Entrepreneurship

© 2010 Cosmopoint

10.8 Advantages and disadvantages of Franchising

Topics

To franchisee, the advantages: Relatively easier to start a business Lesser risk due to proven business Relatively easier to manage with franchisor’s

guidance and support

But the disadvantages: The feeling that one is not an owner in control Limited creativity and flexibility