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Starting up a business in a new country Entrepreneurial Traits and Skills.

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Presentation on theme: "Starting up a business in a new country Entrepreneurial Traits and Skills."— Presentation transcript:

1 Starting up a business in a new country Entrepreneurial Traits and Skills

2 Are you familiar with other cultures? (Cross-cultural skills) How to develop my entrepreneurial skills? (Entrepreneurial skills and traits) How to communicate in a new culture? (Ccommunications skills) How to build networks? (Networking skills) How to expand your business to a foreign country? How to start up a business in a new country?

3 What are the traits, beliefs, and skills needed for entrepreneurship? Attitudes towards business venturing Risk-taking and opportunity-seeking skills Entrepreneurial self- efficacy (ESE) Creativity, motivation, and openness Entrepreneurship, and more especially business start-ups in a foreign country, is better understood as a planned process, where individuals have to carefully plan their steps and follow as specific, premeditated, course of action. In other words, international entrepreneurship is an intentional behaviour and results from careful planning and consideration of the ensued costs and benefits. There are several beliefs, skills, and traits that enhance entrepreneurial intentions.

4 Attitudes towards business venturing

5 Entrepreneurship is a very important aspect of economic growth, and has also been suggested as an effective way to counter unemployment or job loss/termination. Nevertheless, researchers have yet to understand the processes underlying entrepreneurial behavior, and the reasons why some people decide to start up their own business venture. A general consensus, however, is that there are no magic formulas that can easily turn someone into a successful entrepreneur. Rather, systematic research, training, and consultation with both university students and professionals have pointed to a set of core beliefs, skills, and traits that encourage entrepreneurship. This section presents those skills and discusses in approaches and methods to enhance them. Are there magic formulas for international entrepreneurship?

6 Attitudes represent core evaluative beliefs about the gains and losses of entrepreneurship and directly influence entrepreneurial intentions. Someone believing that starting-up a business is too risky and difficult, is actually holding negative attitudes towards entrepreneurship. On the other hand, believing that entrepreneurship is beneficial, and worthy reflects positive attitudes. Attitudes are important drivers of intentions and behaviour. So, the first step towards promoting international entrepreneurship is to bolster positive entrepreneurial attitudes. Attitudes towards international entrepreneurship

7 The role of education is very important and provides a formal way to enhance entrepreneurial skills and develop positive attitudes. Through education (e.g., reading about other entrepreneurs success and failure stories, learning about the practical aspects of entrepreneurship) we can develop more positive attitudes towards entrepreneurship. Developing positive attitudes towards entrepreneurship through education

8 Many thanks for using our service! These materials were produced by ELIE partnership Please, visit us on: WE B

9 Entrepreneurial Self-Efficacy (ESE)

10 ESE is perhaps the most important skill for entrepreneurship. Simply, high ESE reflects an I can do it belief, whereas low ESE reflects lower levels of self-confidence and efficacy to achieve goals. Too much of ESE, however, can be a problem because it may reflect false beliefs of control and lead to risky or faulty decision-making. Keeping ESE at appropriate levels is beneficial and promotes entrepreneurial activity. Entrepreneurial Self-Efficacy (ESE)

11 There are two main aspects of managing entrepreneurial self-efficacy (ESE): Developing ESE: this is suitable for those who have lower scores in ESE, and are believe they cannot effectively start up a business. Managing ESE: this aspect is relevant to everyone engaged in entrepreneurial activity as it can prevent unnecessary risk-taking and promote carefully planned and strategic decision-making. Aspects of Entrepreneurial Self-Efficacy

12 Self-efficacy is predictive if it is tailored to [the] domain(s) of functioning being analyzed and reflect the various task demands within that domain (Pajares, 1997, p. 8). In simple words, self-efficacy will bring benefits only if it is developed according to the demands and complexity of tasks involved in business venturing. Entrepreneurship education and training are major components of ESE development because they build the skills and capacities needed for starting up a business effectively and efficiently. Developing Entrepreneurial Self-Efficacy

13 Managing ESE is vital for the successful planning, operation, and decision making in business ventures. Too high levels of ESE can be catastrophic if they are based on illusory control beliefs. Managing ESE involves communicating important decisions and plans to trusted others. Employees, stakeholders, and other agents with a vested interest in the business venture can help entrepreneurs managing their levels of ESE by providing proper feedback and consultation. Managing Entrepreneurial Self-Efficacy

14 Empirical research has shown that strategic decision making plays a significant role in managing ESE (Forbes, 2005) Entrepreneurs have higher ESE levels when their business ventures employ strategic decision making, such as involving employees in the decision process, are comprehensive, and incorporate updated information Strategic Decision Making and Self-Efficacy

15 Many thanks for using our service! These materials were produced by ELIE partnership Please, visit us on: WE B

16 Risk-taking and Opportunity-seeking Skills

17 Myth: Entrepreneurship is synonymous to risk taking Reality: Entrepreneurs take risks on the premises of strategic decision-making (i.e., calculated risks) Entrepreneurs are not more risky than managers, and tend to avoid and optimize risks Risk-taking and business venturing Risk-taking involves starting-up a business, but is also relevant to expanding existing business ventures by introducing new products in the market, establishing new partnerships, and developing across national borders (i.e., international entrepreneurship)

18 Know the business Risks may vary by business type and status – technological innovation businesses take more risks than family firms Understand the risks Risks can be industry-related reflecting technological, economic, and social issues, or firm- related reflecting the idiosyncratic features of a firms composition and managerial processes Accept failure as an option Having the courage to accept failure is important aspect of decision-making Engage in strategic decision making vs. dice-throwing methods Accountability and transparency in decision-making External monitoring and formal control systems Employee participation in decision-making processes Enhancing risk-taking skills

19 Strategic entrepreneurship (SE) results from the integration of strategic management and entrepreneurship knowledge (Ireland et al. 2009). SE helps understanding the relationship between risk-taking, opportunity seeking and exploitation, and entrepreneurship success. SE involves taking entrepreneurial actions with strategic perspective: being able to identify opportunities AND exploiting them by mobilizing resources and getting competitive advantage. – This is achieved when opportunity-seeking (entrepreneurship) is integrated with advantage seeking (strategic management) Strategic entrepreneurship, risks, and opportunities

20 Many thanks for using our service! These materials were produced by ELIE partnership Please, visit us on: WE B

21 Creativity, motivation, and openness

22 Systematic research has shown that entrepreneurship intentions and actual business venturing relate significantly to motivation, openness to experience, and creativity. Motivation is relevant to having a clear vision about business venturing, and display persistence and exert effort towards realizing this vision. Openess to experience is a cardinal personality trait that reflects openess to new ideas and experiences, and innovation sympathy. Creativity reflects the capacity to come up with innovative ideas and products, and is highly relevant to both individual business ventures and larger organizations promoting entrepreneuship education. Creativity, motivation, and openness to experience Creativity Openess to Experience Motivation

23 Openness to experience relates to stronger entrepreneurial intentions How open to experiences are you? Openness includes traits like: Openness to experience Adventu- rousness Liberalism Emotion- ality Intellect Imagination Artistic interests

24 Creativity results from an interplay between personal (e.g., past knowledge and experience, traits like openness to experience) and social factors (e.g., cultural context, market needs) Entrepreneurs should come up with novel and appropriate ideas, and transform these ideas into a new business venture (Amabile, 1996) Promoting creativity involves: Conceptual combination: Janusian thinking = integrating or entertaining two opposing ideas, merging concepts, ideas, and forms Analogies: Transfer a paradigm or an idea from one context to another Problem construction, definition, and discovery (Ward, 2003) Creativity

25 In the mid-70s Sony missed the opportunity to develop music CDs They thought that a CD with 18 hours of music will not be of commercial value Why 18 hours of music? Sony staff used the size of LPs as a standard for CDs, and accordingly estimated the amount of music time included in such a large CD Creative solution: Having used a different standard (i.e., smaller CD size) could have led to CD expansion in the 70s! (Barker, 1993; Ward, 2004) Creativity and CDs

26 Ciavarella, M. A., Buchholtz, A. K., Riordan, C. M., Gatewood, R. D., & Stokes, G. S. (2004). The Big Five and venture survival: Is there a linkage? Journal of Business Venturing, 19, Ireland, D. R., Hitt, M. A., & Sirmon, D. G. (2003). A model of strategic entrepreneurship: The construct and its dimensions. Journal of Management, 29, Koellinger, P., Minniti, M., & Schade, C. (2007). I think I can, I think I can: Overconfidence and entrepreneurial behaviour. Journal of Economic Psychology, 28, McGee, J. E., Peterson, M., Mueller, S. L., & Sequeira, J. M. (2009). Entrepreneurial self-efficacy: Refining the measure. Entrepreneurship Theory and Practice, 33, Ward, T. (2004). Cognition, creativity, and entrepreneurship. Journal of Business Venturing, 19, Wilson, F., Kickul, J., & Marlino, D. (2007). Gender, entrepreneurial self-efficacy, and entrepreneurial career intentions: Implications for entrepreneurship education. Entrepreneurship Theory and Practice, 31, Learning materials

27 Many thanks for using our service! These materials were produced by ELIE partnership Please, visit us on: WE B

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