2. CONTENTS OF THE LECTURE DEFINITIONS THE WORLD OF THE ENTREPRENEUR CLASSIFYING ENTREPRENEUR SERIAL ENTREPRENEURS INTRAPRENURSHIP

3. Entrepreneur Its origin lies in 17 th France – as an individual commissioned to undertake a particular commercial project by someone with money to invest – The “Undertaker” In its earlier stages this usually meant an overseas trading project Such projects were risky, both for the investor (who could lose money) and for the entrepreneur (who could lose a lot more) Definitions

4. Entrepreneur Although the term was used before Cantillon, it is clear that Cantillon was the first to offer a clear conception of the entrepreneurial function as a whole (in 1755). He defined “Entrepreneur” as a person who took an active risk-bearing role in pursuing opportunity What about Jean-Baptiste Say? What about Schumpeter? For Next Week Tutorial What is “Creative Destruction”? Definitions (continuous)

5. The World of the Entrepreneur The Economist such as Cantillon (1755), Say (1803) and Schumpeter (1954): - looked more into economic development - creating wealth - innovation Behaviourists such as Max Weber (1930) and David C. McClelland (1961): –tried to understand entrepreneur as a person –concentrated on creativity –intuitive characteristics of entrepreneurs

6. Entrepreneurship  is what the entrepreneur does Entrepreneurial  an adjective describing how the entrepreneur undertakes what he or she does Entrepreneurial Venture  the means which new value is created as a result of the project A number of concepts have been derived from the idea of the entrepreneur such as entrepreneurship, entrepreneurial and entrepreneurial venture

7. A manager undertaking an activity – i.e. in terms of the particular tasks they perform and the way they undertake them An agent of economic change – i.e. in terms of the effects they have on economic systems and the changes they drive An individual – i.e. in terms of their psychology, personality and personal characteristics. Entrepreneurs not are characterised by every action they take, but by a particular set of actions aimed at the creation of new wealth with their ventures The Entrepreneur can be considered as:

8. Classification is a tool to aid understanding, not a rigid category that entrepreneurs must be shoehorned into. It provides the starting point for gaining an insight into how different types of entrepreneurial ventures work and the disparate factors underlying their success Classifying Entrepreneurs

9. Classical Approach Craftsmen – attempt to make a living by privately selling their trade or the product they produce - income oriented: just to secure steady income - expansion oriented: want more than just steady income Opportunist Entrepreneurs – interested in maximising their return from short-term deals - growth-oriented: pursue opportunities to maximise the potential of the ventures - independence-oriented: main ambition was to work for themselves – preferred stability to growth

10. Webster’s Approach The Cantillon Entrepreneur (classic type)  brings people, money and materials together to create an entirely new organisation The Industry Maker  goes beyond merely creating a new firm; their innovation is such important that a whole industry is created on the back of it Administrative Entrepreneur (Intrapreneur)  a manager who operates within an established firm but does so in an entrepreneurial manner The Small Business Owner  an entrepreneur who takes responsibility for owning and running their own venture.

11. Landau’s Approach Innovativeness Consolidator Dreamer GamblerTrue Entrepreneur Low High Low Risk Bearing High

12. Serial Entrepreneur Serial Entrepreneurs may be sub-divided into: Sequential Entrepreneurs: those who started the business in sequence, only run one at a time. - Example: James Dyson who started the ball-wheel-barrow business before moving on to cyclone vacuum cleaner business Portfolio Entrepreneurs: those who run several business simultaneously - Example: Sir Richard Branson who diversified his Virgin group into a number of different areas Serial Entrepreneurs  Entrepreneurs or a group of entrepreneurs who, having led one business success, move on to start another

13. The Entrepreneur Three meta-definitions: As a performer of managerial tasks An agent of economic change, and As an individual with a particular personality All three complement each other Specify entrepreneurs by the task that they perform.

14. Entrepreneurial organisation accepts (even a need for) change exploits opportunity Established organisation ability to consolidate around success manages risk control of resource flows Intrapreneurism The intrapreneur achieves the synthesis between “established-entrepreneurial”.

15. ……an entrepreneur who works within the confines of an established organisation. Intrapreneur

16. Four levels of intrapreneurial activity Within : Outside These differ on the impact on: The organisation and its surroundings Venture’s stakeholders Resources required Level of risk 1.Management of specific projects 2.Setting up of new business units 3.Reinvigorating the whole organisation 4.Reinventing the business’s industry

17. The Management of Specific Projects Typically, New Product Development Exploitation of new market opportunity Integration of new technology New funding for maintaining competitive edge How is it done: Managed intrapreneurially, cutting across conventional boundaries Perhaps, may be made responsibility of a cross disciplinary team operating with entrepreneurial flair

18. The Setting up of new Business Units Structure External strategic issues Resources (including HR) Relationship with parent business Best to have members of the entrepreneurial team manage these projects, as they may have a future role

19. Reinvigorating the whole organisation Flexibility and responsiveness to new and unmet customer demands Reintroduce inventive spirit back – it is a radical process! An intrapreneur must lead with entrepreneurial vision, leadership and motivation, and overcome resistance to change. Loss of flexibility as the organisation grows!!! Internal concerns

20. Reinventing the Business’s Industry Entrepreneurs reinvent the industries they operate in by introducing: New technology Delivering new products New processes Businesses can win by playing or changing the rules: Either requires strategic thinking, vision, risk taking and leadership. Here, intrapreneurship = entrepreneurship

21. Limitations to intrapreneurship Entrepreneurs comfort: Entrepreneurs who have created the company must let go so that intrapreneurs can operate. (It is about breaking rules which entrepreneurs have created (Young, 1999) Decision-making control: Balance needed between freedom for the intrapreneur and maintaining the business on a constant strategic path.

22. Limitations to intrapreneurship Internal politics: Intrapreneurs must be able to predict and understand internal resistance to change. “Thrive on chaos” (Tom Peters, 1989) Rewards: Can the organisation offer the same rewards as those expected by entrepreneurs? (economic, social and developmental). Moves to start own venture?