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Review Definitions Approaches to studying entrepreneurs Entrepreneurial Mindset v Mangerial Understanding the Role of the Entrepreneur.

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Presentation on theme: "Review Definitions Approaches to studying entrepreneurs Entrepreneurial Mindset v Mangerial Understanding the Role of the Entrepreneur."— Presentation transcript:

1 Review Definitions Approaches to studying entrepreneurs Entrepreneurial Mindset v Mangerial Understanding the Role of the Entrepreneur

2 Who or what is an entrepreneur? What are the essential skills?What are the essential skills? How do they work?How do they work? Can anyone be one?Can anyone be one? Can entrepreneurial behaviour be learnt?Can entrepreneurial behaviour be learnt? What do you think?What do you think? What do entrepreneurs do?

3 Lifestyle Business Wheeler Dealer Tycoon Entrepreneur Glossary of Terms Source: Hall D (2000) In the Company of Heroes – An Insiders Guide to Entrepreneurs at Work – Kogan Page

4 Entrepreneurs are at the Centre Entrepreneur ProductionMarketing Sales and Finance BankingAudit Legal Technology transfer Suppliers Inventors Transportation Advertising Market Research

5 Definitions An entrepreneur is someone who perceives an opportunity and creates an organisation to pursue it. Bygrave (1997:2) A person who habitually creates and innovates to build something of recognised value around perceived opportunities. Bolton & Thompson (2003) The Entrepreneurial Process involves all the functions and actions associated with perceiving opportunities and creating organisations to pursue them. Bygrave (1997:2)

6 Entrepreneurial Process

7 THE GROWTH ENTREPRENEUR - creates a sustained high growth business THE ENTREPRENEUR - creates a significant business THE ENTERPRISING PERSON - creates a small or micro business Business Entrepreneur Bolton & Thompson (2003)

8 1) Quickie 2) Wonderful Wacky MBA 3) Send Money 4) Dreamers 5) One Stripe Zebra 6) Technoid 7) Guts and Brains (the dream team) Types of Entrepreneurs Extracted from: Entrepreneur America, Lessons from Inside Rob Ryan's High Tech Start-up Boot Camp" Entrepreneur America, Lessons from Inside Rob Ryan's High Tech Start-up Boot Camp"Entrepreneur America, Lessons from Inside Rob Ryan's High Tech Start-up Boot Camp"

9 Approaches to studying Entrepreneurs Economic theories - Role of the entrepreneur in economic development. Psychological trait approach - Personality characteristics of the entrepreneur. Social behaviour approach - Influence of the social environment.

10 Historical Perspective 1730 Cantillon - A self employed person with uncertain returns 1803 Say - A co-ordinator of production with managerial talent 1910 Schumpeter - A Creative Innovator 1921 Knight - manager responsible for direction & control, bears uncertainty 1960 Stepanek - moderate risk taker 1961 McLelland - Need for achievement 1971 Hornaday - Need for achievement; autonomy, aggression; power; recognition; innovative/independent 1973 Winter - Need for power 1974 Borland - Internal locus of control 1979 Kirzner - An arbitrageur - ability to spot opportunities

11 Locus of Control Internal locus of control - Individuals who believe themselves to be in control of their own destiny External locus of control - People who believe that their lives are dominated by chance events outside their own control or powerful people i.e. “fate” controls their destiny.

12 Influences on owner-managers and entrepreneurs Antecedent influences Personal characteristics and traits Situational factors Culture of society

13 Psychological trait approach Identifies personality characteristics or traits. Entrepreneurs have innate abilities not possessed by others. Suggests that the supply of potential entrepreneurs is limited, thus there is little to be gained from direct intervention to encourage entrepreneurship.

14 Core and Desirable Attributes CORE ATTRIBUTES Commitment & Determination Leadership Opportunity Obsession Tolerance of Risk Ambiguity & Uncertainty Creativity, Self-Reliance and Adaptability Motivation to Excel DESIRABLE ATTRIBUTES Energy, Health, and Emotional Stability Values Capacity to Inspire Creativity & Innovativeness Intelligence THE NON-ENTREPRENEURIAL ATTRIBUTES Being Macho Perfectionist Impulsiveness Being anti- authoritarian Counter/dependency Knows it all Outer Control Invulnerability Timmons (2003:251)

15 Critiques of the trait approach Chell, Delmar Criticisms: Inappropriate to search for a significant single trait. Ignores environmental factors. Static analysis approach (entrepreneurship is a dynamic process). Ignores the role of learning, preparation and serendipity.

16 Definitions of Culture Culture is the sum total of knowledge, beliefs, art, morals, laws, customs and any other capabilities and habits acquired by humans as members of society. Culture is everything that people have, think and do as members of their society. Ferraro (1994) Culture is the collective programming of the mind that distinguishes the members of one category of people from those of another. Hofstede (1988)

17 Elements of Culture Language Religion Values and attitudes Education Social organisation Material cultureLaw and politics Aesthetics CULTURE

18 Mental Models Western ThinkingEastern Thinking Individualism Differentiation Relationships Integration

19 InnovationTriggering EventImplementationGrowth Personal Achievement Locus of Control Ambiguity Tolerance Risk Taking Personal Values Education Experience Personal Risk Taking Job Dissatisfaction Job Loss Education Age Commitment Personal Entrepreneur Leader Manager Commitment Vision Sociological Networks Teams Parents Family Role Models Organisational Team Strategy Structure Culture Products Environment Opportunities Role Models Creativity Environment Competition Resources Incubator Government Policy Environment Competitors Customers Suppliers Investors, Bankers, Lawyers Resources Government Policy Entrepreneurial Process Bygrave & Zacharakis (2004)

20 HIGH LOW 1 Conception/ Existence 2 Survival 3 Growth/ Success 4 Expansion/ Takeoff 5 Maturity Owner’s ability to do People, planning and systems Owner’s ability to delegate (Adapted from: Churchill and Lewis, 1983) Criticality to Company Growth Changing Role of Entrepreneur

21 Managerial v Entrepreneurial Mindset

22 Farrell (2001) The Entrepreneurial Age Positive/Negative Consequences EntrepreneurPerformanceJob/Business The Power of Consequences

23 Dependence-seeking Subsistence seeking Averse to opportunity Non-innovative Averse to Venture Averse to risk Analytic Independence- seeking Wealth-seeking Opportunity-seeking Innovative Venture-seeking Risk-seeking Intuitive Source: Adapted from Entrepreneurship, John G Burch Tendency calibrator Labourer Bureaucrat Lender Professional Manager Copycat Entrepreneur Opportunistic Entrepreneur Venture Capitalist Innovative Entrepreneur Inventrepreneur Tendencies towards non-entrepreneurial or entrepreneurial activity

24 What makes entrepreneurs entrepreneurial? Saras D. Sarasvathy Causal v Effectual Marketing Process

25 Comparison of Causal & Effectual Model Effectual Reasoning: The Process Who they are – their traits, tastes and abilitiesWho they are – their traits, tastes and abilities What they know – their education, training, expertise and experienceWhat they know – their education, training, expertise and experience Whom they know – their social and professional networksWhom they know – their social and professional networks

26 Characteristics of Successful Entrepreneurs Four Primary Characteristics of Successful Entrepreneurs

27 Do not go where the path may lead, go instead where there is no path and leave a trail. — Ralph Waldo Emerson Extreme Entrepreneurship Free Download ebook chapter 1

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