ENTREPRENEURSHIP

The Entrepreneurial Mindset

Managerial Vs Entrepreneurial Decision Making

Dimensions of change1. Strategic Orientation2. Commitment of resources3. Control of resources4. Management Structure5. Reward Philosophy6. Growth Orientation7. Entrepreneurial Culture

Distinguishing Traditionally from Entrepreneurially Managed Firms

Entrepreneurial Focus Conceptual Dimension

Administrative Focus

Driven by perception of opportunity

Strategic Orientation

Driven by controlled resources

Many stages with minimal exposure

Commitment of resources

A single stage with complete commitment out of decision

Episodic use or rent of required resources

Control of Resources

Ownership or employment of required resources

Flat with multiple informal networks

Management structure

Hierarchy

Based on value creation Reward philosophy Based on responsibility and seniority

Rapid growth is top priority; risk accepted to achieve growth

Growth orientation Safe, slow and steady

Promoting broad search for opportunities

Entrepreneurial Culture

Opportunity search restricted by controlled resources, failure punished.

Entrepreneurial Intentions

“ The motivational factors that influence individuals to pursue entrepreneurial outcomes.”

- Individuals have stronger intentions to act when taking action is perceived to be feasible. Entrepreneurs self efficacy, defined as, the conviction that one can successfully execute the entrepreneurial process, determines this perception of feasibility.

- Perceived desirability, defined as, the degree to which an individual has a favorable or unfavorable evaluation of the potential entrepreneurial outcome, is another factor that determines entrepreneurship spirit.

Entrepreneur Background & Characteristics

1. Education- Formal education is not necessary for starting a new business. - Research shows education provides a good background, although majority of successful venture owners like Henry Ford, Bill Gates were college dropouts.- Only a few have relevant degrees in engineering, science or math.

2. Personal Values- Research shows that entrepreneurs have different set of attitudes in the field of management process.- Five core characteristics are superior product quality, quality service to customers, flexibility & ability to adapt to changes in the market, high caliber management, honest & ethics in business.

3. Age- Most entrepreneurs initiate their entrepreneurial careers between the chronological ages of 22 and 45.- Generally, Male entrepreneurs start their first venture in their early 30’s whereas women do so in their middle 30’s.

4. Work History- Dissatisfaction with various aspects of one’s job such as lack of challenge, or promotional opportunities, frustration, boredom etc motivates the launching of new venture.

Entrepreneur Background & Characteristics

Role Models & Support Systems

Moral Support Network: Individuals who give psychological support, advice to the entrepreneur like friends, relatives etc.

Professional Support Network: includes mentor, business associates, suppliers, trade associations, or personal affiliations who give advice and counseling to the entrepreneur.

Comparison of Male & Female Entrepreneurs

Characteristic Male Entrepreneurs Female Entrepreneurs

Motivation Achievement-strive to make things happen, Personal independence, Job satisfaction arises from the desire to be in control

Achievement- Accomplishment of a goal, independence-to do it alone

Departure point

Dissatisfaction with present job, sideline in college, present job, or outgrowth of present job, discharge or layoff, opportunity for acquisition

Job frustration, interest in and recognition of opportunity in the area, change in personal circumstances, personal assets & savings, personal loans

Sources of funds

Personal assets & savings, bank financing, investors, loans from friends and family

Personal assets & savings, personal loans

Occupational background

Experience in line of work, Recognized specialist or achiever, competent in variety of business functions

Experience in area of business, Middle management or administrative level experience in the field, service related occupational background.

Comparison of Male & Female Entrepreneurs

Characteristic Male Entrepreneurs Female Entrepreneurs

Personality characteristics

Opinionated & persuasive, Goal oriented, innovative & idealistic, High level of self confidence, Enthusiastic & energetic, Must be own boss

Flexible & tolerant, goal oriented, Creative & realistic, medium level of self confidence, enthusiastic & energetic, ability to deal with the social & economic environment.

Background Age= 25-35, father was self-employed, college educated (degree in business or technical area), first born child

Age= 35-45, father was self employed, college educated (degree in liberal arts), firstborn child

Support groups

Friends, professional acquaintances(lawyers, accountants), business associates, spouse

Close friends, spouse, family, women’s professional groups, trade associations

Type of business started

Manufacturing or construction

Service related- educational services, consulting or public relations

Characteristics of an Entrepreneurial Environment

Organization operates on frontiers of technology

New ideas encouraged

Trial & error encouraged

Failures allowed

No opportunity parameters

Resources available & accessible

Multidiscipline teamwork approach

Long time horizon

Volunteer program

Appropriate reward system

Sponsors & champions available

Support of top management

Presentation Tomorrow !!

Presentations on famous entrepreneurs and successful businesses

Group Strength: 4 students

Time: 5 mins per group

Dress Code: Formal

Marks: 2.5 absolute