Entrepreneurship
Entrepreneurship is a purposeful activity
of an individual or a group of associated
individuals, undertaken to initiate,
maintain or aggrandise profit by
production or distribution of economic
goods.
Entrepreneurial Individual Has concept, vision, dream Adapts concept to reflect realities in environment,
scans environment Assesses risks versus rewards Mobilizes resources Able to convert dream into products and people within
an organizational context Able to champion the concept to a wide range of
publics and partners Persevere in overcoming obstacles Optimizes profits
An Integrative Model of Entrepreneurial Inputs and Outcomes
Inputs Outcomes
Environmental Opportunities
Entrepreneurial individuals
An organizational context
Unique business concepts
Resources
The entrepreneurial Process
• Identify opportunity
• Assess and acquire necessary resources
• Implementation
• A going venture
• Value
• New products, services
• Processes
• Profits and/or personal benefit
• Technologies
• Employment, asset, and revenue growth
Entrepreneurial creation Intensity (EI)
Number of events (and) degree of entrepreneurship
Innovation Risk taking
Proactive ness
Source: Michael H. Morris, P. Lewis, and Donald L. Sexton, “Reconceptualizing Entrepreneurship: An Input-Output Perspective,”, SAM advanced Management Journal 59, no.1 (Winter 1994): 21-31
Entrepreneurial Personality- Psychological
1. Motivation – driven by range of factors
Necessity (survival)
Opportunity (proactivity)
Dissatisfaction (can’t stand job)
Curiosity (What if…?)
Material gain (We could make a killing…)
Achievement oriented more than anything else
Driven by the task, challenge, opportunity
Money as a by-product, but scorecard
2. Strong belief in themselves- believe they can change their environments
…Personality
3. Calculated risk-takers (financial, career, family & social, psychic)
Attempt to estimate likelihood and magnitude of key risk factors and manage or mitigate them through good planning or decisions
4. High tolerance of ambiguity
Process can be loose, messy, shift directions
Prize their independence – self-motivated, self-reliant, prefer autonomy, have perseverance
Situation-based Characteristics
Willingness and ability to assume and manage risks
More critical with new-to-the-world products
Political skills important in large corporate settings
Adaptability and tenacity are bigger factors in turbulent environments
Dark Side Traits
Excessive need for control
Tendency to micromanage
Suspicion – others will steal my idea
Impatience
Need for applause
Defensive attitude
Entrepreneurial Risks Sinking the Boat Risk Missing the Boat Risk
TR=f (SBR, MBR)
Missing the boat risk curve
Total Risk
Planning Time
Sinking the boat risk curve
Risks at Startup
Risk in Opportunity Identification
Risk in Commercial Viability
Risk in Investment
Risk in Financing
Rewards of Entrepreneurship Financial
A successful business has the potential to make good profits and provide substantial wealth for the entrepreneur.
Social and Emotional
There is seldom a higher reward than making a positive difference to another person's life.
The successful business provides jobs, pride and financial security for its employees.
Independence Financial success increases the independence and potential of
Growth Rewards.
CONSTRAINTS TO EMERGENCE OF
INDIGENOUS ENTREPRENEURS
o Socio-cultural factors – job orientation?
o Low motivation and confidence
o Inadequate information on procedures,
fundraising
o Inadequate knowledge on:
- Market Assessment
- Enterprise Management
ENTREPRENEURSHIP DEVELOPMENT PROCESS
• Identify, select, train, counsel and support potential entrepreneurs for creating new enterprises
• Facilitate growth of existing entrepreneurs and groom
successors
• Contribute towards developing entrepreneurial
culture
• Facilitate creation of a conducive environment for
emergence and growth of enterprises
• Intervene for developing enterprises- technology and
management (market, quality, finance, human
resources)
(1) Early socialization
Creating literature Short duration vacation camps Visits to industries Interactions with entrepreneurs/
achievers from different fields Competitions, debates Success stories, Projection of
Business Role Models
(2) Emergence (Start-up)
Entrepreneurship education Entrepreneurship training Business Plan teaching/ training Entrepreneurship orientation Technical Training Management Skills Development Technology Demonstrations Trade Fairs Incubation
(3) Survival
Accounting systems Marketing and product promotion Managing Human resources Seminars and workshops on
technology, quality, operations, machine safety
Systems development ICT and MIS
(4) Growth
Export marketing R&D, Innovation, Value Addition Diversification Cluster development Finance- IPO Corporatization Internationalization Brand building Succession planning