MGT 4550 - Family Business Management Chapter 2 The Founder - The Entrepreneur Family Business Management, Concepts and Practice by A. Bakr Ibrahim & Willard H. Ellis Instructor: Dr. Irene Duhaime

Mgt 4550 - Family Business Dr. Irene Duhaime Page Wk 2 Class Schedule - Week 2 THE FOUNDER-ENTREPRENEUR Reading: Chapter 2 Case: The Steinberg Family, p.57 Project Teams Assigned Mgt 4550 - Family Business Dr. Irene Duhaime Page

Mgt 4550 - Family Business Dr. Irene Duhaime Page Wk 2 Content Defining the Entrepreneur Roles of the Entrepreneur The Entrepreneurial Process - The Making of an Entrepreneur The Successful Entrepreneur Management Skills and Competence Prediction and Development Mgt 4550 - Family Business Dr. Irene Duhaime Page

Defining the Entrepreneur Wk 2 Defining the Entrepreneur Definition Individual who sees an opportunity that others do not, and marshals the resources to exploit it Characteristics Creative, innovative high need for achievement & autonomy higher than average anxiety developed aesthetic sense lower than average interpersonal skills risk-takin K. De Vries Mgt 4550 - Family Business Dr. Irene Duhaime Page

Roles of the Entrepreneur Wk 2 Roles of the Entrepreneur Innovator / Risk-taker Creativity Purpose driven Use of untried and unconventional methods Manager / Coordinator Marshall & control resources Formulate organizational strategy Select management structure Select management processes Mgt 4550 - Family Business Dr. Irene Duhaime Page

The Successful Entrepreneur The Entrepreneurial Factor Wk 2 The Successful Entrepreneur The Entrepreneurial Factor Proactive Traits address problems before they occur and take action. Achievement orientation work is of highest quality use of feedback for quality improvements seize opportunity when & where found. Commitment to others concerned about customer needs and wants Mgt 4550 - Family Business Dr. Irene Duhaime Page

Management Skills and Competence Wk 2 Management Skills and Competence Mgt 4550 - Family Business Dr. Irene Duhaime Page

Mgt 4550 - Family Business Dr. Irene Duhaime Page entrepreneurs part adventurer ---------------part misfit part benefactor ------------part exploiter part genius ---------------------part fool (Gersick) Mgt 4550 - Family Business Dr. Irene Duhaime Page

Mgt 4550 - Family Business Dr. Irene Duhaime Page founders lasting influence on firm’s . values . ethical standards . decision rules of thumb . business choices (what in and not in) . Culture (Gersick) Mgt 4550 - Family Business Dr. Irene Duhaime Page

“Myths” about founders . stories about how business started . overcame obstacles . survived despite the odds (Gersick) Mgt 4550 - Family Business Dr. Irene Duhaime Page

Founder as entrepreneur . risk taker . creative idea . lone ranger . escape other firm, reporting to others (Gersick) Mgt 4550 - Family Business Dr. Irene Duhaime Page

Founders’ motivations negative . leave other jobs . frustration with bosses . lack of career progress (Gersick) Mgt 4550 - Family Business Dr. Irene Duhaime Page

Mgt 4550 - Family Business Dr. Irene Duhaime Page Negative motivations impact on companies they found? . culture tolerant of individualists . resist authority hierarchies . informal org’l structures, don’t want to formalize . few/no formal job descriptions (Gersick) Mgt 4550 - Family Business Dr. Irene Duhaime Page

Founders’ motivations positive . exploit opportunity . seek challenge, excitement . imitate other inspiring founders (Gersick) Mgt 4550 - Family Business Dr. Irene Duhaime Page

Mgt 4550 - Family Business Dr. Irene Duhaime Page Positive motivations impact on companies they found? . tendency to opportunism . choices explained as taking advantage of good deals (Gersick) Mgt 4550 - Family Business Dr. Irene Duhaime Page

Traits of entrepreneurs high need for achievement risk taking propensity tolerance for ambiguity creativity intuition flexibility self-confidence (Gersick) Mgt 4550 - Family Business Dr. Irene Duhaime Page

Mgt 4550 - Family Business Dr. Irene Duhaime Page Traits - continued High need for independence & autonomy internal locus of control adapt readily to change dominance low need for conformity (Gersick) Mgt 4550 - Family Business Dr. Irene Duhaime Page

Mgt 4550 - Family Business Dr. Irene Duhaime Page Shareholders 2 Ownership 5 4 7 1 3 Family Business 6 Family Members Employees Family Business System Figure (Gersick) Mgt 4550 - Family Business Dr. Irene Duhaime Page