entrepreneureship

8/2/2019 entrepreneureship

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n repreneur an

intrapreneure

MIND( lesson 4)

BY

SAJID MAHSUD

IMRAN KHAN

SHEHROZE MALIK

ABDUL AZIZ


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ENTREPR E NEURIALPROCESS The entrepreneurial process involves finding, evaluating, and

developing an opportunity by overcoming the strong forces thatresist the creation of something new.

four phases of Entrepreneurial process

1. Phase 1: Identifying and Evaluating the Opportunity

2. Phase 2: Develop a Business Plan

3. Phase 3: Determine the Resources Required.

4. Phase 4: Manage the Enterprise.


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Phase 1: Identifying andEvaluating the Opportunity

Most good business opportunities result from an entrepreneur beingalert to possibilities.

Technically-oriented individuals often identify business opportunitieswhen working on other projects.

Each opportunity must be carefully screened and evaluated-this is

the most critical element of the entrepreneurial process.

The evaluation process involves looking at

The creation and length of the opportunity

Its real and perceived value

Its risks and return.

Its fit with the skills and goals of the entrepreneur

Its differential advantage in its competitive environment


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Phase 1 Contd.. It is important to understand the cause of the opportunity, as the

resulting opportunity may have a different market size and timedimension.

The market size and the length of the window of opportunity are theprimarily bases for determining risks and rewards.

The opportunity must fit the personal skills and goals of the

entrepreneur. One must believe in the opportunity enough to make the necessary

sacrifices.

Opportunity analysis, or an opportunity assessment plan,should focus on the opportunity and provide the basis to

make the decision, including:a. A description of the product or service

b. An assessment of the opportunity

c. Assessment of the entrepreneur and the team

d. Specifications of all the activities and resources needed e.

The source of capital to finance the initial venture


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Phase 2: Develop a BusinessPlan

A good business plan must be developed in orderto exploit the opportunity defined. A good business

plan is important in developing the opportunityand in determining the resources required,obtaining those resources and successfullymanaging the venture.


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Phase 3: Determine theResources Required. Assessing the resources needed starts with an appraisal of the

entrepreneurs present resources.

Any resources that are critical must be distinguished from those thatare just helpful.

The entrepreneur should try to maintain as large an ownershipposition as possible, particularly in the start-up stage. As thebusiness develops, more funds will probably be needed,requiring more ownership be relinquished.

Alternative resource suppliers should be identified, along with theirneeds and desires, in order to structure a deal with the lowest costand loss of control.


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Phase 4: Manage theEnterprise.

The entrepreneur must employ theseresources through implementation ofthe business plan. This involves

implementing a managementstructure, as well as identifying acontrol system.


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SAJID MAHSUD


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Entrepreneur and intrapreneureMIND( lesson 5)

MANAGERIAL VERSUS ENTREPRENEURIAL DECISIONMAKING

The difference between the entrepreneurial and managerial

styles involves five business dimensions.

1. Strategic Orientation

2. Commitment to Opportunity

3. Commitment of Resources

4. Control of Resources

5. Managerial Structure


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Strategic Orientation

The entrepreneurs strategic orientation depends on his or

her perception of the opportunity.

This orientation is most important when other opportunitieshave diminishing returns accompanied by rapid changes intechnology, consumer economies, social values or politicalrules.


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Commitment to Opportunity

The entrepreneurial domain is pressured by the need foraction and has a short time span in terms of opportunitycommitment.

The administrative domain (the ways mangers make

decisions) is not only slow to act on an opportunity, but thecommitment is usually for a longer time span.


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Commitment of Resources

An entrepreneur is used to having resources committed atperiodic intervals, often based on certain tasks or objectivesbeing reached. In acquiring these resources the entrepreneur

is forced to achieve significant milestones using very fewresources.

In the administrative domain, the commitment of resources is

for the total amount needed. Administrative-orientedindividuals receive personal rewards by effectivelyadministering the resources under their control.


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Control of Resources

The administrator is rewarded by effective resource

administration and has a drive to own or accumulate as manyresources as possible.

The entrepreneur, under pressure of limited resources, strivesto rent resources on an as-needed basis.


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Managerial Structure

In the administrative domain, the organizationalstructure is formalized and hierarchical in nature.

The entrepreneur employs a flat organizational structure withinformal networks.

CAUSES FOR RECENT INTEREST IN


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CAUSES FOR RECENT INTEREST ININTRAPRENEURSHIP

Interest in intrapreneurship has resulted from events occurring on social,cultural, and business levels.

Individuals frequently desire to create something of their own. They wantresponsibility and want more freedom in their organizations.

When meaning is not provided within the organization, individuals often searchfor an institution, such as entrepreneurship, that will provide it.

It is important to instill the intrapreneurial spirit in an organization in order toinnovate and grow.

Entrepreneurial endeavors consist of four key elements.

1. New business venturing refers to the creation of new business within anexisting organization.

2. Organizational innovativeness refers to product and service innovation withan emphasis on development and innovation in technology.

3. Self-renewal reflects the transformation of organizations through the renewalof the key ideas on which they are built.

4. Proactiveness includes initiative and risk taking, as well as competitiveaggressiveness


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ABDUL AZIZ


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CORPORATE VERSUS INTRAPRENEURIAL CULTURE Smaller, aggressive, entrepreneurial firms are developing more new

products and becoming dominant in certain markets.

The typical corporate culture has a climate and reward system that favorsconservative decision making.

Risky decisions are often postponed until hard facts are gathered or aconsultant is hired.

Often there are so many approvals required that no individual feelspersonally responsible for the project.


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The guiding principles in a traditional corporate culture are:

1. Follow instructions given2. Do not make mistakes

3. Do not fail

4. Do not take initiative

5. Stay within your turf and protect your backside

6. This restrictive environment is not conducive to creativity, flexibility,and risk taking


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The guiding principles ofintrapreneurs

Aspects of an Entrepreneurial culture are

quite different:

1. Develop visions, goals, and action plans2. Be rewarded for actions taken

3. Suggest, try, and experiment

4. Create and develop

5. Take responsibility and ownership


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There are differences in the norms of the twocultures.

The traditional culture is hierarchical in nature, with establishedprocedures, lines of authority, and control mechanisms. Thesesupport the present corporate culture, and do not encourage newventure creation.

The culture of an intrapreneurial firm has a flat organizationalstructure with networking, teamwork, sponsors, and mentors. Close

working relationships help establish an atmosphere or trust thatfacilitates accomplishment of visions.

The two cultures produce different types of individuals andmanagement styles.


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Motivation

Traditional managers are motivated primarily by promotionand typical corporate rewards.

Entrepreneurs and intrapreneurs thrive on independence andthe ability to create. Intrapreneurs expect their performance to

be suitably rewarded.

There are also time orientation differences. Managersemphasize the short run, entrepreneurs the long run, andintrapreneurs somewhere in between.

CLIMATE FOR


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CLIMATE FORINTRAPRENEURSHIP

In establishing an Intrapreneurial environment, certainfactors and leadership characteristics need to be present

1. organization operates on the frontiers of technology. Since researchand development are key sources for new product ideas, the firmmust operate on the cutting edge of technology and encourage and

supporting new ideas instead of discouraging them.2. Second is experimentation, or trial and error, is encouraged.

Successful new products usually do not appear fullydeveloped; instead they evolve. A company wanting toestablish an intrapreneurial spirit has to establish an

environment that allows mistakes and failures. Without theopportunity to fail, few corporate intrapreneurial ventures willbe developed.

CLIMATE FOR INTRAPRENEURSHIP


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CLIMATE FOR INTRAPRENEURSHIPcontd

3. an organization should make sure that there are no initial opportunityparameters, such as turf protection, inhibiting creativity in new product

development.

4. the resources of the firm need to be available and easily accessible. Often,insufficient funds are allocated not to creating something new but instead tosolving a problem that have an immediate effect on the bottom line. Some

companies, such as Xerox, 3M, and AT&T have established separate venturecapital areas for funding new internal ventures.

5. a multidisciplinary team approach needs to be encouraged. One key toIntrapreneurial success is the existence of "skunkworks" involving key people.

Developing the needed team work for a new venture is further complicated bythe fact that a team members promotion within the corporation is related toperformance in the current position, not in the new venture. The corporateenvironment must establish a long time horizon for evaluating the success of theoverall program.


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CLIMATE FOR INTRAPRENEURSHIP

contd6. the spirit of intrapreneurship cannot be forced on individuals; it must

be voluntary. Most managers in a corporation are not capable of beingsuccessful intrapreneurs. Those who do emerge from this self selectionprocess must be allowed the latitude to carry a project through tocompletion. An intrapreneur falls in love with the new venture and will doalmost anything to ensure its success.

7. The intrapreneur needs to be appropriately rewarded for the energy andeffort expended on the new venture. An equity position in the new venture isone of the best motivational methods.

8. a corporate environment favorable for intrapreneurship has sponsorsand champions throughout the organization that supports the creative

activity and resulting failures.9. the intrapreneurial activity must be whole-heartedly supported by top

management.


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SHAHROZE MALIK


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INTRAPRENEURIAL LEADERSHIP CHARACTERISTICS

There are certain individual characteristics needed for a person tobe successful Entrepreneurs, including:

1. Understanding the environment

2. Being visionary and flexible

3. Creating management options

4. Encourage teamwork while employing a multi-disciplinedapproach

5. Encouraging open discussion

6. Building a coalition of supporters, and persisting


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ESTABLISHING INTRAPRENEURSHIP IN THE

ORGANIZATION

There are nine steps for establishing intrapreneurship inthe organization

1. The first step is to secure a commitment to intrapreneurship in theorganization by top, upper, and middle management. Without topmanagement commitment, the organization will never be able to

make the necessary changes. Once top management hascommitted to intrapreneurship for a sufficient length of time, theconcept is introduced throughout the organization. This iseffectively accomplished through seminars. General guidelines needto be established for intrapreneurial venture development. Next,intrapreneurial leaders need to be identified, selected, and trained

2. Ideas and general interest areas should be identified, along withthe amount of risk money that is available. The overall expectationsand target results should be established, specifying time frame,profitability requirements, and impact of the organization. Amentor/sponsor system needs to be established.


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3. A company needs to use technology to make itself faster and more flexible.Technology has allowed small companies to act like they are big ones. Largecompanies can use technology to make them responsive and flexible.

4. The organization can use a group of managers to train and share their experiences

with other members. These sessions should be conducted one day per month for aspecified period of time. Information about intrapreneurship and about the companysspecific activities should be well publicized.

5. The organization needs to develop ways to get closer to its customers by tapping the

data base, hiring from smaller rivals, and helping the retailer.

6. An organization must learn to be more productive with fewer resources. With middlemanagement cutbacks, more control has been given to lower levels of theorganization. The span of control should be increased.


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7. The organization needs to establish a strong support structure.

Because they do not immediately affect the bottom line, intrapreneurialactivities can be overlooked and receive little funding. These venturesrequire flexible, innovative behavior, with the intrapreneurs having totalauthority over expenditures and access to funds.

8. The support must involve trying the rewards to the performance of theintrapreneurial unit. This encourages team members to work harder and

compete more effectively. The equity portion of the compensation isparticularly difficult to handle.

9. The organization needs to implement an evaluation system that allowssuccessful units to expand and unsuccessful ones to be eliminated.


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PROBLEMS AND SUCCESSFUL EFFORTS

Intrapreneurship, also called corporate venturing, is not withoutproblems.

One study found that new ventures started within a corporationperformed worse than those started independently.

There are many examples of companies that have successfullyimplemented intrapreneurship. 3M allows employees to devote 15percent of their time to independent projects.


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