1.3.1 Characteristics of a Successful Enterpreneur

7/30/2019 1.3.1 Characteristics of a Successful Enterpreneur

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1.3.1

6/23/2009 1CHSE BUSINESS DEPARTMENT


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Mind map

Entrepreneur

Characteristics

Motives

Leadershipstyles

Mc Gregorstheory

Successfulentrepreneurs

Definitions



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JEFF BEZOS

Founded Amazon.com

Chief Executive of Amazon.com

He is the co-founder, Chairman, and CEO of

Apple Inc.

Steven Paul Jobs III



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Duncan BannatyneDirector of Bannatyne Enterprises

RICHARD BRANSON

Founder of VIRGIN brand and ownerof over 360 companies

http://images.google.mv/imgres?imgurl=http://i31.photobucket.com/albums/c355/mattsontherise/Richard-Branson-2.jpg&imgrefurl=http://profile.myspace.com/index.cfm?fuseaction=user.viewprofile&friendid=144130715&h=500&w=433&sz=32&hl=en&start=60&tbnid=6yCzLuXiv_IDHM:&tbnh=130&tbnw=113&prev=/images?q=richard+branson&start=54&gbv=2&ndsp=18&hl=en&sa=N


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6/23/2009 CHSE BUSINESS DEPARTMENT 5


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DefinitionsMeaning of enterprise:An enterprise

is the business organization that is

formed and which provides goods andservices, creates jobs, contributes tonational income, exports and overall

economic development. Factors of anenterprise are land, labor, capital andentrepreneur.



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DefinitionsMeaning of entrepreneur:An entrepreneur is the

person who bears risk, unites various factors ofproduction to exploit the perceived opportunities in

order to evoke demand, create wealth andemployment.

The word derived from the French entre (to enter)and predndre(to take). It was first defined by theIrish economist Richard Cantillon.

A female entrepreneur sometimes known as anentrepreneuse.



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DefinitionsMeaning of intrapreneur: Is an individual who

acts like an entrepreneur but from inside the

confines of a large organization or corporation.These people within the organization work hardand bring the innovative thought into practice.

Meaning of entrepreneurship: Entrepreneurship

can be described as a process of action anentrepreneur undertakes to establish his enterprise.



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Characteristics of an entrepreneur Initiative: showing the spark to seize the

opportunities, without being intimidated by

the thought why is no one else doing thisalready; this requires self confidence andthe ability to cope with.

Planner: entrepreneur frames realisticbusiness plans and follows them rigorouslyto achieve the objectives in a stipulated time

limit.6/23/2009 9CHSE BUSINESS DEPARTMENT


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Resilience and determination: to see throughif the going gets tough, backed by simple hardwork. Readily recovering form shock or distress.

Innovation/Creative: Innovation is the specific

tool of entrepreneurs, the means by which theyexploit change as an opportunity for a differentbusiness or a different service. It is capable ofbeing practiced.Entrepreneur thoughts and way

of doing things will be different than others. Forexample innocent drinks, Richard Branson, BillGates etc.,



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Risk bearer: entrepreneur accepts risk they select amoderate risk situation and they understand andmanage risk. He has to guarantee wages toemployees, interest on capital, rent to the landlord

without any guarantee of returns. High degree ofvision, foresight, and imagination are required tohandle risks. Take calculated risks, weighing up thepotential risks and rewards.

Opportunity explorer: entrepreneur identifiesopportunities. The seize opportunity and convertthem into realistic achievable goals.



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Self confidence: entrepreneurdirects his abilities towards theaccomplishment of goals with the

help of his strengths and weaknesses.Motivator: entrepreneur influence

and initiate people and make themthink in his way and act accordingly.



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What motivates entrepreneurs?Entrepreneur is motivated by three

motives (motives means which are

attracts and stimulate the person (i.e.entrepreneur) to do the business)

Profit motive

Non profit motive (Socialresponsibility)

Ethical Stance.6/23/2009 13CHSE BUSINESS DEPARTMENT


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Ethical uniforms at Tesco. Smart kidscan be stylish and ethical by choosingTesco's recycled, organic or Fair trade

cotton ranges.

Tesco wins green awardBusiness in the Community has recognizedus as the green leader with a prestigiousenvironmental award!

The big tick award6/23/2009 14CHSE BUSINESS DEPARTMENT
http://www.tesco.com/greenerliving/what_we_are_doing/environmental_awards.page?http://www.tesco.com/greenerliving/what_we_are_doing/ethical_clothing.page?


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Tesco is the first supermarket to trial labelsshowing the carbon footprint of theproducts you're buying.

http://www.tesco.com/greenerliving/what_we_are_doing/green_clubcard_points/default.page?http://www.tesco.com/greenerliving/what_we_are_doing/carbon_labelling.page?


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LeadershipLeadership is the process of influencinggroup activities towards the accomplishment

of goals in a given situation.Leadership depends on three things such as

the individual, the follower and the

condition.Management is doing things right,

leadership is doing the right things (Peter

Ducker)6/23/2009 16CHSE BUSINESS DEPARTMENT


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What leader does?Leader develops teamwork

Leader represents his/her subordinators

Leader uses power properly

Leader manages the time well

Leader strives for effectiveness

Leader counsels appropriately

Leader sets realistic goals.



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IMPORTANCE OF LEADERSHIPAid to authority

Motive power to GroupEfforts

Basis for cooperation

Integration of formal andinformal organization



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FACTORS AFFECTING LEADERSHIP

STYLES AND APPROACHESThe task

The tradition of the organization

The type of labor force

The group size

The leaders personality

Group personality

Time



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Types of leadership stylesAutocratic Style

Democratic Style Paternalistic Style

Free Rein or Laissez Faire leadership



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Autocratic styleLeader makes decisions without reference

to anyone else, quick and decisive.

High degree of dependency on the leaderCan create de motivation and alienation

of staff

May be valuable in some types of businesswhere decision need to be made



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Evaluation Advantages It permits quick decisions

as a single person takesdecisions

It provides strongmotivation and satisfactionto the leader.

It can be successful wheresubordinates are reluctantto take initiative

Decisions and direction ofbusiness will be consistent.

Disadvantages It leads to frustration, low

morale and conflict whichaffect organizational

efficiency Subordinates highly

dependent upon leaders. Supervision needed which

increases supervision cost.

Insecure and afraid of leaderspower There is resistance to change

as workers feel harassed anddisturbed.



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Democratic style Decentralize power and authority Encourages decision making from different perspectives

leadership may be

Emphasized throughout the organization. May helpmotivation and involvement Consultative: Process of consultation before decisions are

taken Persuasive: leader takes decision and seeks to persuade

others that the decision is correct. Workers feel ownership of the firm and its ideas improves

the sharing of ideas and experiences within the business. Itwill delay decision making.



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EvaluationAdvantages It reduces resistance to

change and increasesacceptance of new ideas.

It improves the attitudes ofemployees towards their jobsand the organization

It increases cooperation

between management andworkers

It improves employee moraleand reduces complaints or

grievances

Disadvantages

It may delay in decisions

It may be used covertly to

manipulate employees. Participation will not be

meaningful unless thesubordinates understandthoroughly the complex

problems of the organization. It may not be liked by people

who want minimuminteraction with superiors andcolleagues.



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PaternalisticLeader acts as a father

figurePaternalistic leader makesdecision but may consult

Believes in the need tosupport staff



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EvaluationAdvantages can get loyalty low labor turnover

it emphasis on social needs It guides, helps and protect

the followers. Good working conditions Fringe benefits

Welfare facilities andservices.

Disadvantages Employees may resent the

leaders gratitude in industrialorganizations.

Little opportunity to exerciseinitiative to grow and realizetheir full potential.

Groups will becomedependent.

They may become dissatisfiedwith leader. It is similar to autocratic It will not allow subordinate

to take decisions.



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Free Rein or Laissez - Faire This is also called free rein style of leadership It avoid power and responsibility Group members train themselves and provide their own

motivation Leader plays only a minor role Let it be the leadership responsibilities are shared by all Can be very useful in business where creative ideas are important Can be highly motivational, as people have control over their

working life. Can make coordination and decision making, time consuming

and lacking in overall direction Relies on good team work Relies on good interpersonal relations.



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EvaluationAdvantages complete freedom to

subordinates improves theirmotivation and morale

There is maximumopportunity for thedevelopment of subordinates.

May bring best out of highlyprofessional or creativegroups.

Disadvantages

There is abdication of formalleadership role; informal leadersemerge to fill the void.

The group does not get thebenefit of leaders inspiredmotivation, guidance and socio emotional support.

It can succeed only when the

followers are highly mature, ableand self motivated.

It ignores the managerscontribution just as autocraticleadership ignores the

contribution of the group.6/23/2009 28CHSE BUSINESS DEPARTMENT


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Evaluation continued.. All persons are given the

chance to express themselvesand to function relativelyindependently.

No supervision, it reducessupervision expenses

No bossism

Flexibility in doing work

May not be deliberate, but badmanagement

Staff lack focus and sense ofdirection, Muchdissatisfaction

Lack of group cohesion andunity toward organizationalobjectives.

Without leader, the groupmay have little direction and alack of control.

The result can be inefficiencyor, even worse, chaos.



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Douglas McGregor Theory X and Theory Y

It was an attempt to apply implications of

Maslow, Taylor and Mayo It is not dividing the employees into two

categories but it is the manager perspectiveabout employees

It assumes theory X employees are lazy theory Ypeople are active/motivated



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Theory X is based on the following

assumptionsPeople in general have an inherent

dislike for work and avoid it if they

can. They are basically lazy and liketo work as little as possible.

Most people have lack of ambitionWorkers are motivated by money



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Assumptions continued ..Workers are selfish, ignore the

needs of organizations avoidresponsibility and lack ambition

They are by nature resistant to

change. They lack creativity andprefer to maintain status quo.



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Theory Y is based on the following

assumptionsManager assumes that employees are motivated.

Workers have many different needs which

motivates them Workers can enjoy work

If motivated, workers can organize themselves andtake responsibility

Management should create a situation whereworkers can show creativity and apply their jobknowledge.



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The concept of McGregor to

motivate X employeesAutocratic leadership is required

because workers need more control

Decision making can be centralized

Apply scientific management (i.e.

money is motivating factor)Pay and punish.



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The concept of McGregor to

motivate theory Y employeesA democratic or even free rein style

of leadership is required

Decentralization of decisionmaking

Encouraging the employees to domore work.



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EvaluationAdvantagesManagers can take the

decisions according to

X and Y Competition between X

and Y employeesincreases efficiency

Management controlcan be possible

DisadvantagesEmployees dislike

the discriminationConflicts between

Y and X employees

Managementbiased to Yemployees.



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Criticism The main contribution of McGregor is that he helped to

crystallize and set in right perspective the findings of theHawthorne Experiments. One might get the impression

that Theory X is bad and Theory Y is good. This is nottrue as in practice people do not belong to either of thetwo extremes. An enterprise man shares the traits of boththe theories and the emphasis shifts with changes in

environment and motives. Therefore, it is a combinationof both. Theory X and Theory Y will be more effective thaneither of the two alone.

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1.3.1 Characteristics of a Successful Enterpreneur