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Understanding the Role of the Entrepreneur

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Presentation on theme: "Understanding the Role of the Entrepreneur"— Presentation transcript:

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

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

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

4 Entrepreneurs are at the Centre
Production Marketing Sales and Finance Banking Audit 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.

6 Entrepreneurial Process

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

8 Types of Entrepreneurs
1) Quickie 2) Wonderful Wacky MBA 3) Send Money 4) Dreamers 5) One Stripe Zebra 6) Technoid 7) Guts and Brains (the dream team) Extracted from: 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
Personal characteristics and traits Antecedent influences Culture of society Situational factors

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 culture Law and politics Aesthetics CULTURE

18 Mental Models Western Thinking Eastern Thinking Individualism
Relationships Differentiation Integration

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

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

21 Managerial v Entrepreneurial Mindset

22 The Power of Consequences Farrell (2001) The Entrepreneurial Age
Positive/Negative Consequences Entrepreneur Performance Job/Business Farrell (2001) The Entrepreneurial Age

23 Tendencies towards non-entrepreneurial or entrepreneurial activity
Copycat Entrepreneur Opportunistic Entrepreneur Venture Capitalist Innovative Entrepreneur Inventrepreneur Professional Manager Labourer Bureaucrat Lender 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 Tendency calibrator Source: Adapted from Entrepreneurship, John G Burch

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

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

26 Characteristics of Successful Entrepreneurs
Four Primary Characteristics of Successful Entrepreneurs

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

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