1. Entrepreneurial Perspectives

7/27/2019 1. Entrepreneurial Perspectives

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Entrepreneurship Management

-Prof. Rosie Murray


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(Syllabus)

(A)Entrepreneurial Perspective:

Concept of entrepreneur, entrepreneuship

and enterprise, advantages, entrepreneur,

entrepreneurship.

1. Nature and Development of

entrepreneurship; gender issues in

entrepreneurship.

2. The dynamic role of small business/

industry in economic development.


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(Syllabus Contd)

3. Personality of an entrepreneur

4. Innovation and entrepreneurship

The Entrepreneurial Environment:1. Policy perspectives in India to promote

entrepreneurship

2. Analysis of business opportunities indifferent sectors of economy at National

and Global levels.


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(Syllabus contd)The Enterprise launching:

1. Product/ Project identification

2. Developing a project report/ businessplan

3. Business financing including venture

capital finance4. Managing early growth of a business

incubation program

5. New venture expansion- strategies and


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Enrepreneurship Management

Text/ Reference books:

1. Entrepreneurship- Robert D. Hisrich/

Michael Peters

2. Beyond Entrepreneurship- James C.

Collins/ William Lazier

3. Entrepreneurship Management- P. N.Singh/ J. C. Saboo

4. Dynamics of Entrepreneurial- Vasant

Desai


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What do you mean by

Entrepreneur(oxford dictionary): Person who undertakes anenterprise with chances of profit or loss.

Enterprise (oxford dictionary): BoldUndertaking

Entrepreneur-New Encyclopedia Britannica:An individual who bears the risk of operatingbusiness in the face of uncertainty about the

future conditions.Common Meaning: one who starts his own, newand small business


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Entrepreneurship: It is a philosophy or

process through which an entrepreneur

seeks innovation and employment.

Entrepreneur Entrepreneurship Enterprise

Person Process or Philosophy Object

Entreenter Prebefore NeurNerve Centre

Entrepreneurship can be described as a creative

and innovative response to the environment.


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Entrepreneurship Theories

1600:French verb- Entreprendreto undertake

1700: Person bearing Risks of Profit in a fixedprice contract (Risk)

1725: Richard Cantillon Person bearing risksis different from Capital Supplier (Risk)

1803:J. B. SayShifts economic resources outof an area of lower into an area of higher

productivity & greater yields (Value Addition)1934: Joseph Schumpeter Innovator anddevelops untried technology (Productivity &Innovation)


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n repreneurs p eor es1934:Joseph Schumpeter

contd)Joseph A. Schumpeter thus writes, Theentrepreneur in an advanced economy is

an individual who introduces something

new in the economy- a method ofproduction not yet tested by experience in

the branch of manufacture concerned, a

product with which consumers are not yetfamiliar, a new source of raw material or of

new markets and the like.


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1934:Joseph Schumpeter

contd)In other words, he states, an

entrepreneurs function is to, inform or

revolutionise the pattern of production by

exploiting an invention or more generally,an untried technological, possibility for

producing a new community..


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Entrepreneurship Theories

1961:David McClellandhighly motivated, energetic,moderate risk taker (Need for achievement)

1964:Peter DruckerSearches for change, respondsto it & exploits as opportunity (Opportunity Focused)

1980: Karl Vesper Behaviour Perceptions-Economists, Psychologists, Businessmen, Politicians(Environment)

1983:Gifford Pinchot- Intrapreneur

1985:Robert Hisrich- Creating something different withvalue, devoting time & effort, assuming risks (FPS);results-rewards and satisfaction (Leadership & Vision)

How do you define an entrepreneur in the 21st

Century?


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n repreneurs p eor esAccording to Peter Drucker..

Three conditions have to be fulfilled to be

an entrepreneur, namely:

1.Innovation at work. It requires knowledge

and ingenuity. It makes great demands on

diligence, persistence and commitment.

2.To succeed, innovation must build on the

strength.

3.Innovation always has to be close to the

market focused on the market, indeed

market-driven.


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Entrepreneurship TheoriesAccording to Peter Drucker(contd)

Accordingly the four source areas where

efforts made:-

1.The unexpected= unexpected success

failure event.( Eg. Issac Newton- event).

2.The incongruity: i.e difference between

reality and reality as it is assumed to be.

3.Innovation opportunities in three

enterprises, namely:

Demographics


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Entrepreneurship

Is the process of creating something

different with value by devoting the

necessary time and effort, assuming theaccompanying financial, psychic, social

risks and receiving the resulting

rewards of monetary and personalsatisfaction and independence


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The Nature and Development of

EntrepreneurshipEntrepreneur stems from

French Verb Entreprendre

means betweentaker or go between

New Definition involves four aspects:

The creation process

The devotion of time and effortsThe assumption of risks

Rewards of independence, satisfaction, money.


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To an Individual

Self Employment

Employment for near & dear

Prolonged career for next generations

Freedom to use own ideas - Innovationand creativity

Unlimited income / higher retained income

Independence

Satisfaction


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To the Nation

Provides larger employment

Results in wider distribution of wealth

Mobilizes local resources, skills andsavings

Accelerates the pace of economic

developmentStimulates innovation & efficiency


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Factors favouring

EntrepreneurshipGrowth of education- science, technology

& management

Developed infrastructure facilities

Financial assistance

Training facilities

Protective and promotional policiesGlobalization

Think of numerous other factors?


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What makes a Successful

Entrepreneur?The urge for achievement

Determination to win

Win-Win PersonalityWillingness to take moderate risks

Ability to identify & explore

opportunitiesAnalytical ability to take strategic

decisions


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Perseverance

Flexibility

Capacity to plan and organize

Preparedness to undergo physical andemotional stress

Positive self concept

Future orientation: Vision

Ethics and Values :M ission


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Who can be an Entrepreneur?

Who can take moderate risks

Who has ability to work hard

Who can capitalize on opportunities

Who has some financial strength

Who feels the need for achievement

Who has desire for responsibility

Who has perception of probability of success

Who gets stimulation by feedback

Who possess skills in organizing

Who can be male or female

Who may not have previous experience


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Characteristics of an

EntrepreneurMental ability

Clear objectives

Business secrecy

H.R. abilityCommunication ability

Technical knowledge

Achievement-oriented

Perseverance

Ethical

Motivator

Self-confident

Long term

involvementHigh energy level

Problem solver

Initiator

Goal setter

Risk taker


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Key elements of entrepreneur

Innovation

Vision

Ethics & ValuesOrganizing Skills

Risk taking

Need for Achievement

Study the Prof i le of a Successfu l Entrepreneur and

ident i fy s ix key elements in o rder of p r ior i ty


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Entrepreneurs Background and

CharacteristicsFamily environment

Education

Age

Physical attributesMarital status

Working history

Family contacts

Professional contactsPersonal values

Lifestyle


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Analyze your Personality

Feelings about Control

Feelings about Independence

Willingness to take Risks


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What is a job competency?

It is knowledge, skills and attitudeKnowledgecollection and retention of

information.

Skills are ability to do something well(hard and soft skills)

Motives are reasons for doing something

(need)

Traitscharacteristics way in, which a person

responds.

Attitude reflects the way of thinking and acting

(Self and others determine the attitude)


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Performance emerges from the

combination of knowledge, skills and

attitude


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Initiative Taking actions that go beyond job requirements or

demands of the situation.

Doing things on own before being asked for or beingforced by the events.

Taking actions to start the business and expand into newareas, products and services.

Seeing & acting on opportunities Looking for and taking actions to seize opportunities

Seeing and acting on opportunities for business

development or for personal growth. Seeing unusual opportunities

Seizing opportunities, need, procuring and mobilizingnecessary resources.


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Persistence Taking repeated actions to overcome obstacles that

get in the way of achieving goals

Taking actions in the face of obstacles.

Ensuring all efforts to solve a problem or barrier.Information seeking Taking action s on own to help reach objectives.

Personally undertaking a research or analysis to findout answers to some problem.

Seeking information to clarify what is needed.

Using networks to obtain information.


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Concern for high quality of work

Doing things that meet or beat existing

standard of excellence.

Stating a desire to produce work of highquality

Comparing work favorably to that of others.

Making all out efforts to ensure the quality ofproduct or services.


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Work commitment to contract

Placing highest priority for getting a job

completed.

Taking all the effort to complete a job.

Accepting responsibilities for failures.

Expressing utmost concern for the customers

Readiness to work at any level to get workdone.


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Efficiency Orientation Constantly looking for ways to do things faster or with

fewer resources or at a lesser cost.

Using business tools to increase personal or

professional efficiency. Expressing concern for assessing cost versus rewardof some improvements, changes or action.

Systematic Planning Developing and using logical steps to reach goals.

Breaking a large task into several sub tasks. Developing plans after duly anticipating obstacles.

Evaluating alternatives on merits and demerits.


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Problem Solving Identifying and applying new ideas to reach the goals.

Identifying the root cause of the problem.

Developing strategies in the light of objectives,

resources, and constraints. Generating new ideas or innovative solutions.

Self Confidence Having a strong belief in own abilities.

Sticking with own judgment in the face of oppositionor early lack of success.

Doing something for which chances of success arenot very fair.


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Persuasion Persuading others successfully

Selling someone an idea, product or service.

Making someone agree to provide resources

Convincing with confidence, competence and respect.

Use of Influence Strategies Using a variety of strategies to influence others

successfully

Developing professional and business contacts.

Using influential people to get own things done. Carefully limiting the information to be given to others

Using others authority and resources, but remainingethical


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Assertiveness Confronting problems and issues with other directly

Speaking politely but firmly.

Telling others clearly what they have to do

Reprimanding those who fail to perform as expectedhowever close they may be.

Monitoring Ensuring smooth progress of project or work.

Personally supervising all aspects of the work to itscompletion.

Developing a system of supervision and monitoring.


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Concern for others welfare

Having a concern and taking actions to

improve others welfare.

Responding positively to employees specificneeds.

Having a concern for the welfare of

employees, their families and society at large.

General Aspect Business Environment


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Entrepreneurship

Elements

Promoters /shareholders values

Mission / objectives

Management Structure

Internal Powerrelationship

Physical assets &

facilities

Co. image/ brand equity

Human resources

Financial capabilities

Technological

capabilities

Marketing capabilities

p

Political

Socio-cultural

Technological

Legal

Economic

Competitive

Aspect

Potential New

Entrant

Buyers BargainingPower

Suppliers

Bargaining Power

Substitute

Products

Business Environment

&

Entrepreneurship


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Environment

Political:System, Stability, Leadership

Socio-cultural:Culture, Community, Values,Ethics, Attitude

Technological:Education, Absorption,Competition, Innovation

Legal:Regulatory framework, Consumerprotection, Concern for environment, Labourlaws

Economic:GDP, GNP, Resources, Fiscal, Non-fiscal policies, Incentives and Subsidies


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Dimensions of Environment

SPECTACLES Social, Political,

Economic, Cultural, Technological,

Aesthetic, Customer, Legal, Environmental

and Sectoral

PEETS Political, Economic, Ecological,

Technological and Socio-demographical

SLEPT Social, Legal, Economical,Political and Technological

F I fl i


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Factors Influencing

EntrepreneurshipIndividual

Economic

Environment

Socio-cultural

factors

Support

Systems

PoliticalEnvironment

Legal

Environment

Technological

Environment


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Porters Model in the

Competitive Environment

BCG Matrix


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BCG Matrix


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Political & Governmental

Environment

Global

Trade Barriers

Trade Agreements

Tariffs & DutiesPolitical Risks

National

Taxation

Regulations

Protections (Patents)Govt. spending

State Govt.

Taxation

State Laws

Licensing /Approvals

Incentives

Local Issues

Taxations

Zoning

Cost of Living

Lifestyle


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Environmental Analysis

Scanning to detect change (identify key

elements and their characteristics)

Monitoring to track development (that affect the

survival and profitability of the new business)Forecasting to project the future (such as level of

prices, inflation, interest rates, availability of

funds, market share, market growth, etc.

Assessing to interpret data (what does it all

mean to the entrepreneur?)

E t hi d E i


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Entrepreneurship and Economic

DevelopmentEntrepreneurs set up Enterprises

Entrepreneurs combines resources, put their time andefforts and produce goods or services

What they contributeproductivity, output, value

addition, income and employmentEntrepreneurship is a Low Cost Strategy.Entrepreneurs perform the crucial role themselves

The spirit of EntrepreneurshipDrive, achieving highergoals, creativity, innovative attitude.

A dynamic society emerges and the spirit spreads like achain reaction.


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The Invention Process

Market Need

Technology

observation

Need

Analysis

Parameter

Identification

Creative

Synthesis

Realization

Invention,

which

meets the

need


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Product Evolution ProcessFundamentals

of Science

Recognized

Social Need

Beginning of Technological

Innovation

Invention / Innovation

Planning

Financing

Manufacturing

Marketing

Concept Testing

Development

Phase

Commercial

PhaseTechnology

Modeling

Product Testing


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The Evolution Process

Intersection of Knowledge and a

recognized social need

Initiation of technological innovation

Iterative Synthesis

Development Phase

Industrial Phase

Th P d t Pl i d


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The Product Planning and

Development ProcessIdea StageIdeaEvaluate

Concept StageLab DevelopmentEvaluate

Product Development Stage- Pilot Production

EvaluationTest Marketing Stage-Semi CommercialProduction Evaluation

Commercial StageIntroduction

GrowthMaturity

Decline


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Commercialization

Role of Government

Role of CorporateIntrapreneurship

Role of IndividualsEntrepreneurship


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Development of Technology

Utilization of materials Exploitation & transformation of energy

Understanding and application of Scientific

PrinciplesThe Role of Government

Promotional

Neutral Regulatory


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The Role of Smaller firm

T- High, M-HighLarge skilled resources,financial backing. Act as a Supplier or SubContractor

T- High, M-Low- Specialist firm, access to low costresearch

T-Low, M-HighLinkage with well-establishedchannels

T-Low, M- LowWell Suited to small firm

Low Tech High Volume Financial Ability

High Tech Low Volume Strategic Ability

Emerging OptionsFranchisee; Sub-contractor

E t hi d M t St d t


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Entrepreneurship and Management Students

Enterprises in protected economy can be mismanaged.

Enterprises in competitive environment are essentiallyto be managed.

A Management Graduate is a person trained tomanage an enterprise. Naturally, he will deliver the best

results.A Management Graduate should not be just a JobSeeker. He can and should take the role of JobProvider.

Experience even from HBS confirm that moreManagement Graduates take Entrepreneurial Role(after some experience) and their income is higher thantheir colleagues who are in job.An Entrepreneur has to be a Manager

But a Manager need not be an Entrepreneur


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Entrepreneurial Decision Process

Pull Factors Perception of

Advantages

Spotting an Opportunity

Government Policies

Motivation fromBiographies or SuccessStories

Influenced by Culture,Community, FamilyBackground, Teachers,Peers, etc.

Push Factors Job

Dissatisfaction

Relocation

Lay-off

Retirement

Boredom

Comparison of Entrepreneurs,


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p p ,Intrapreneurs and Traditional Managers

Traditional

Managers

Entrepreneurs Intrapreneurs

Primary motives Perks and

promotion

Self-employment,

satisfaction and

money

Creative freedom

and recognition

Time Orientation Short-termmeeting quotas and

budgets; weekly,

monthly, quarterly

and the annual

planning horizon

Short-termbusiness

establishment;

Long-term

growth of

business

Tend to follow themiddle path

Traditional Entrepreneurs Intrapreneurs


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Traditional

Managers


Activity Delegates and

supervises

Direct involvement Direct

involvement , notmerely delegation

Risk Careful Moderate risk

taker

Moderate risk

taker

Monetary Risk Nil High Nil

Status Concerned about

status

unconcern about

status

unconcerned

about traditional

status

Failure and

mistakes

Tries to avoid

mistakes and

surprises

Deals with

mistakes and

failures

Attempts to hide

risky projects

from view until

ready


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Traditional

Managers


Decisions Like to take their

own but unable to

disagree with top

Follows dream

with decisions

Able to get others

to agree to help

achieve their

dreams

Who serves Others Self and

customers

Self, customers,

and sponsorsFamily history Family members

worked for large

organizations

Entrepreneurial

small-business,

professional

Entrepreneurial

small-business,

professional

Relationship

with others

Hierarchy as basic

relationship

Transactions and

deal-making as

basic relationship

Transactions

within hierarchy

Documents

1. Entrepreneurial Perspectives