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Entrepreneurs Challenging The Unknown Zelimir William Todorovic Ph.D. Doermer School of Business and management Studies Indiana University – Purdue University,

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Presentation on theme: "Entrepreneurs Challenging The Unknown Zelimir William Todorovic Ph.D. Doermer School of Business and management Studies Indiana University – Purdue University,"— Presentation transcript:

1 Entrepreneurs Challenging The Unknown Zelimir William Todorovic Ph.D. Doermer School of Business and management Studies Indiana University – Purdue University, Fort Wayne

2 Entrepreneurship - The Introduction 2 Entrepreneur Is it all a Myth

3 Entrepreneurship - The Introduction 3 Etrepreneurship in the Past “ If you are a small businessman, you may be as extinct as the village blacksmith”“ If you are a small businessman, you may be as extinct as the village blacksmith” “Small business is as dead as the dodo”“Small business is as dead as the dodo”

4 Entrepreneurship - The Introduction 4 Entrepreneurship Today 70% of economic activity70% of economic activity Between 60% and 80% of new jobsBetween 60% and 80% of new jobs Driven by passion and purposeDriven by passion and purpose U.S. standard of living (4 times better than former USSR) ascribed to entrepreneurshipU.S. standard of living (4 times better than former USSR) ascribed to entrepreneurship

5 Entrepreneurship - The Introduction 5

6 6

7 The Evolution of Entrepreneurship Entrepreneur is derived from the French entreprendre, meaning “to undertake”.Entrepreneur is derived from the French entreprendre, meaning “to undertake”. No single definition of entrepreneur :No single definition of entrepreneur : 1.Small Business 2.Leadership Style

8 Who Are Entrepreneurs? Entrepreneurs, driven by an intense commitment and determined perseverance, work very hard. They are optimists who see the cup as half full rather than half empty. They strive for integrity. They burn with the competitive desire to excel.

9 Common Characteristics Associated with Entrepreneurs Commitment, Determination, and PerseveranceCommitment, Determination, and Perseverance Drive to AchieveDrive to Achieve Opportunity OrientationOpportunity Orientation Initiative and ResponsibilityInitiative and Responsibility Persistent Problem SolvingPersistent Problem Solving Seeking FeedbackSeeking Feedback Internal Locus of ControlInternal Locus of Control Tolerance for Ambiguity Calculated Risk Taking Integrity and Reliability Tolerance for Failure High Energy Level Creativity and Innovativeness Self-confidence and Optimism Independence Team Building

10 Defining The Concept Recent research has defined corporate entrepreneurship as a process whereby an individual or a group of individuals, in association with an existing organization, creates a new organization or instigates renewal or innovation within the organization.

11 Entrepreneurial Orientation Autonomy Innovativeness Proactiveness Competitive aggressiveness Risk-Taking

12 Entrepreneurial Orientation DimensionDefinition AutonomyIndependent action by an individual or team aimed at bringing forth a business concept or vision and carrying it through to completion. Innovativeness A willingness to introduce novelty through experimentation and creative processes aimed at developing new products and services as well as new processes. ProactivenessA forward-looking perspective characteristic of a marketplace leader that has the foresight to seize opportunities in anticipation of future demand. Source: J. G. Covin and D. P. Sleving, “A conceptual Model of Entrepreneurship As Firm Behavior,” Entrepreneurship Theory & Practice, Fall 1991, pp. 7-25; G. T. Lumpkin and G. G. Dess, “Clarifying the Entrepreneurial Orientation Construct and Linking It to Performance,” Academy of Management Review 21, no. 1 (1996), pp. 135-72; D. Miller, “The Correlates of Entrepreneurship in Three Types of Firms,” Management Science 29 (1983), pp. 770-91. Adapted from Exhibit 12.3 Dimensions of Entrepreneurial Orientation

13 Entrepreneurial Orientation DimensionDefinition Source: J. G. Covin and D. P. Sleving, “A conceptual Model of Entrepreneurship As Firm Behavior,” Entrepreneurship Theory & Practice, Fall 1991, pp. 7-25; G. T. Lumpkin and G. G. Dess, “Clarifying the Entrepreneurial Orientation Construct and Linking It to Performance,” Academy of Management Review 21, no. 1 (1996), pp. 135-72; D. Miller, “The Correlates of Entrepreneurship in Three Types of Firms,” Management Science 29 (1983), pp. 770-91. Adapted from Exhibit 12.3 Dimensions of Entrepreneurial Orientation CompetitiveAn intense effort to outperform industry rivals. It is characterized by a combative posture or an aggressive response aimed at improving position or overcoming a threat in a competitive marketplace. aggressiveness Risk takingMaking decisions and taking action without certain knowledge of probable outcomes; some undertakings may also involve making substantial resource commitments in the process of venturing forward.

14 Entrepreneurial Orientation Innovation Risk Taking Pro- activeness

15 Managing Innovation Innovation: using new knowledge to transform organizational processes or create commercially viable products and servicesInnovation: using new knowledge to transform organizational processes or create commercially viable products and services Some Companies, such as Apple, are always innovating popular products, while others are constantly struggling for their one great idea.Some Companies, such as Apple, are always innovating popular products, while others are constantly struggling for their one great idea.

16 Continuum of Radical and Incremental Innovations Exhibit 12.1 Continuum of Radical and Incremental Innovations

17 Innovation Challenges Seeds versus WeedsSeeds versus Weeds Experience versus initiativeExperience versus initiative Internal versus external staffingInternal versus external staffing Building capabilities versus collaboratingBuilding capabilities versus collaborating Incremental versus preemptive launchIncremental versus preemptive launch

18 Managing Innovation Firms need to regulate the pace of innovationFirms need to regulate the pace of innovation –Incremental innovation (six months to two years) –Radical innovation (Typically 10 years or more) Innovation often requires collaborating with others who possess complementary knowledge and skillsInnovation often requires collaborating with others who possess complementary knowledge and skills Innovation requires the knowledge of the marketInnovation requires the knowledge of the market

19 Market Knowledge needed for Innovation ConsumersConsumers CompetitorsCompetitors

20 Market Knowledge needed for Innovation ConsumersConsumers –Decide on your target consumers –Understand your target consumers –Common mistakes: Knowing the size of the market does not mean you know your target consumersKnowing the size of the market does not mean you know your target consumers Selecting a specific target segment does not mean you are going to reject consumers from other segments. On the other hand, providing services and products to consumers from different segments does not mean you are targeting on everybody.Selecting a specific target segment does not mean you are going to reject consumers from other segments. On the other hand, providing services and products to consumers from different segments does not mean you are targeting on everybody.

21 Competitors The size of industryThe size of industry The number of competitors/substitutesThe number of competitors/substitutes The competitive advantage for each competitorsThe competitive advantage for each competitors What is your niche market?What is your niche market?

22 The Age of Gazelles A “gazelle” is a business establishment with at least 20% sales growth every year (for five years), starting with a base of at least $100,000.A “gazelle” is a business establishment with at least 20% sales growth every year (for five years), starting with a base of at least $100,000.

23 Gazelles - Innovation Gazelles are leaders in innovation.Gazelles are leaders in innovation. Gazelles produce twice as many product innovations per employee as do larger firms.Gazelles produce twice as many product innovations per employee as do larger firms.

24 Entrepreneurial Assessment Approach Type of Venture Type of Entrepreneur Type of Environment Qualitative, Quantitative, Strategic, and Ethical ASSESSMENTS Do the Results of the Assessments Make Sense Given: Prior Experience and Education Early Career Mid Career Late Career Stage of Entrepreneurial Career

25 3M’s Innovation Rules Don’t kill a projectDon’t kill a project Tolerate failureTolerate failure Keep divisions smallKeep divisions small Motivate the championsMotivate the champions Stay close to the customerStay close to the customer Share the wealthShare the wealth

26 “Corporate Entrepreneurship Assessment Instrument (measured key entrepreneurial climate factors) Management SupportManagement Support Autonomy/Work DiscretionAutonomy/Work Discretion Rewards/ReinforcementRewards/Reinforcement Time AvailabilityTime Availability Organizational BoundaryOrganizational Boundary

27 The Entrepreneurial Perspective Although certainly not an exact science, this perspective provides an interesting look at the entrepreneurial potential within every individual.

28 Figure 2 Interrelationship of Entrepreneurs and Managers - Modified ENTREPRENEURENTREPRENEUR MANAGERMANAGER Entrepreneurial Skills Required Managerial Skills Required Entrepreneurial and Managerial Skills Required Open Systems Model Rational Goal Model Internal Process Model Human Relations Model Approximate AGT need Approximate Entrepreneur’s capability A B C D

29 Business Incubators Business incubators are designed to “hatch” new businessesBusiness incubators are designed to “hatch” new businesses Incubators provide some a number of resources to a new ventureIncubators provide some a number of resources to a new venture

30 Business Networking Time (Months) EMPHASISEMPHASIS Growt h Cost Minimization Infrastructure Fortifying Coaching/ Business Support

31 Dominant Progression Time (Months) Growth Cost Minimization Infrastructure Fortifying Coaching/Busines s Support Incubator as a Growth Tool Incubator as a Subsidy Tool


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