1. 11-1 International Business: Opportunities and Challenges in a Flattening World, 1e By Mason Carpenter and Sanjyot P. Dunung © Mason Carpenter 2011, published by Flat World Knowledge

2. 11-2 This work is licensed under the Creative Commons Attribution-Noncommercial-Share Alike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-nc-sa/3.0/or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA © Mason Carpenter 2011, published by Flat World Knowledge

3. 11-3 Chapter 11 Global Entrepreneurship and Intrapreneurship © Mason Carpenter 2011, published by Flat World Knowledge

4. 11-4 Learning Objectives Identify what entrepreneurship is Understand who an entrepreneur is Recognize some of the myths of entrepreneurship Understand the different contexts in which entrepreneurship takes place Know the three facets of the entrepreneurial process Be able to apply the levers of opportunity identification © Mason Carpenter 2011, published by Flat World Knowledge

5. 11-5 Learning Objectives Understand why entrepreneurship can vary across borders Recognize how entrepreneurship differs from country to country Access and utilize the Doing Business and Global Entrepreneurship Monitor resources Understand the nature of born-global firms (or global start-ups) See why global start-ups are challenging to manage and yet increasing in prevalence Know the two phases of global start-up assessment © Mason Carpenter 2011, published by Flat World Knowledge

6. 11-6 Learning Objectives Understand the background of intrapreneurship Recognize the difference and relationship between entrepreneurship and intrapreneurship Know the inputs and challenges to the intrapreneurial organization © Mason Carpenter 2011, published by Flat World Knowledge

7. 11-7 Entrepreneurship and Entrepreneurs Entrepreneurship: The recognition of opportunities (needs, wants, problems, and challenges) and the use or creation of resources to implement innovative ideas for new, thoughtfully planned ventures Entrepreneur: A person who engages in entrepreneurship © Mason Carpenter 2011, published by Flat World Knowledge

8. Truths about Entrepreneurs Entrepreneurs: – Work hard and are driven by an intense commitment and determined perseverance – See the cup half full, rather than half empty – Strive for integrity – Burn with the competitive desire to excel and win – Are dissatisfied with the status quo and seek opportunities to improve almost any situation they encounter 11-8 © Mason Carpenter 2011, published by Flat World Knowledge

9. Truths about Entrepreneurs – Use failure as a tool for learning and eschew perfection in favor of effectiveness – Believe they can personally make an enormous difference in the final outcome of their ventures and their lives 11-9 © Mason Carpenter 2011, published by Flat World Knowledge

10. Myths about Entrepreneurs Entrepreneurs are born, not made Entrepreneurs make more money Being original is essential It takes a lot of money to start a business Entrepreneurs must be risk takers 11-10 © Mason Carpenter 2011, published by Flat World Knowledge

11. Should You Become an Entrepreneur? Understand your personal motivations and be clear about them Seek out others who have tried entrepreneurship—both those who have been successful and those who have not Assess whether entrepreneurship will provide you with the ability to support and sustain yourself and your family Take a look at your professional and personal support systems Attitude and confidence – Key factors Assess how you handle stress 11-11 © Mason Carpenter 2011, published by Flat World Knowledge

12. Entrepreneurship and the Changing Nature of “Corporate” Life As corporate life continues to offer less and less security, more people are considering entrepreneurship Some entrepreneurs discover their vision and opportunity through a former employer The leap from corporate life to entrepreneurship involves major changes – Entrepreneurs don’t have a buffer between a mistake and total failure Many large companies attempt to create the spirit of entrepreneurship inside their organizations – These internal groups (intrapreneurs) may spur more innovation, but this intrapreneurship is a far cry from the realities of entrepreneurship 11-12 © Mason Carpenter 2011, published by Flat World Knowledge

13. What Do Entrepreneurs Do? Entrepreneurs build for-profit and nonprofit ventures – Social entrepreneur: A person who founds an organization (either for-profit or nonprofit) whose focus is to implement innovative solutions to societal problems They aim to create large-scale social change through the ventures they create Entrepreneurial ventures can operate at any level: local, national, or international 11-13 © Mason Carpenter 2011, published by Flat World Knowledge

14. What Is the Entrepreneurial Process? Entrepreneurial process: Consists of – Identifying entrepreneurial opportunities – Planning and preparing the venture – Resourcing the venture and taking action 11-14 © Mason Carpenter 2011, published by Flat World Knowledge

15. Figure 11.1 - The Entrepreneurial Process 11-15 © Mason Carpenter 2011, published by Flat World Knowledge

16. Figure 11.2 - Levers That Lead to Opportunity Identification 11-16 © Mason Carpenter 2011, published by Flat World Knowledge

17. How Do People Find Opportunities? Disruptive technology: A technology that can make prior technologies obsolete Low-end disruption: A disruptive technology that appears at the low end of an industry offering and usually does not lure customers away until it improves and becomes better than the incumbent offering New-market disruption: A new-market disruption targets noncustomers rather than low-end customers, thus creating a new market that was previously ignored by the dominant players of the existing market hybrid-disruption strategies: A combination of new-market and low-end disruption strategies 11-17 © Mason Carpenter 2011, published by Flat World Knowledge

18. The Business Plan A formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals It may also contain background information about the organization or team attempting to reach those goals Contents of a typical business plan – Executive summary – Company description – Products and services – Market analysis – Proprietary position 11-18 © Mason Carpenter 2011, published by Flat World Knowledge

19. The Business Plan – Marketing and sales plan – Management team – Operations plan – Finances 11-19 © Mason Carpenter 2011, published by Flat World Knowledge

20. Resourcing the New Venture Plan with People, Money, and Action People Money – Bootstrapping: Exploiting a new business opportunity with limited funds – Different types of bootstrapping: Owner financing Sweat equity Minimization of the accounts receivable Joint utilization Delaying payment Minimizing inventory Subsidy finance Personal debt 11-20 © Mason Carpenter 2011, published by Flat World Knowledge

21. Resourcing the New Venture Plan with People, Money, and Action People – Angel investor: An affluent individual who provides capital for a business start- up – Venture capitalist: A person or investment firm that makes venture investments and brings managerial and technical expertise as well as capital to their investments Action – Bias for action: The propensity to act or decide without customary analysis or sufficient information 11-21 © Mason Carpenter 2011, published by Flat World Knowledge

22. Business Entrepreneurship Across Borders Entrepreneurship differs in various countries It is easier to do business in some countries than others, and this would likely have an impact on the level of entrepreneurship in each country Citizens of different countries vary in terms of their attitudes toward entrepreneurs and entrepreneurship – A country where people viewed entrepreneurs as positive role models and entrepreneurship as a viable career alternative might encourage others to become entrepreneurs A country’s stage of development influences its nature of entrepreneurial activity 11-22 © Mason Carpenter 2011, published by Flat World Knowledge

23. Business Entrepreneurship Across Borders Global Entrepreneurship Monitor (GEM): An annual assessment of the national level of entrepreneurial activity across countries, started as a partnership between London Business School and Babson College Global Competitiveness Index (GCI): System that ranks nations quantitatively according to a weighted index of twelve assessed pillars: – Institutions – Infrastructure, – Macroeconomic stability, – health and primary – Education 11-23 © Mason Carpenter 2011, published by Flat World Knowledge

24. Business Entrepreneurship Across Borders – Higher education and training – Goods-market efficiency – Labor-market efficiency – Financial-market – Sophistication – Technological readiness – Market size – Business sophistication – Innovation 11-24 © Mason Carpenter 2011, published by Flat World Knowledge

25. Business Entrepreneurship Across Borders Factor-driven economies: Economies that are highly sensitive to world economic cycles, commodity price trends, and exchange ratefluctuations; typical in countries that compete on the basis of unskilled labor and natural resources Efficiency-driven economies: Economies that are typical in countries that compete on the basis of production processes and increased product quality Innovation-driven economies: Economies that are typical in countries that compete on business sophistication and innovation 11-25 © Mason Carpenter 2011, published by Flat World Knowledge

26. Global Start-ups and Born-Global Firms Born-global firm: Also commonly called a global start-up, a business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries Global start-up: A business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries 11-26 © Mason Carpenter 2011, published by Flat World Knowledge

27. Two Phases of Global Start-up Assessment Phase 1: Deciding if a firm should become a global start-up Phase 2: Deciding what the firm needs to do to make that happen 11-27 © Mason Carpenter 2011, published by Flat World Knowledge

28. Intrapreneurship and Its Roots Intrapreneurship: A form of entrepreneurship that takes place in a business that is already in existence Intrapreneur: A person within an established business who takes direct responsibility for turning an idea into a profitable finished product through assertive risk taking and innovation 11-28 © Mason Carpenter 2011, published by Flat World Knowledge

29. Differences between Entrepreneurs and Intrapreneurs The primary difference between the two types of innovators is their context – The intrapreneur acts within the confines of an existing organization – The intrapreneur is typically the intraorganizational revolutionary – An intrapreneur is someone who operates like an entrepreneur but has the backing of an organization 11-29 © Mason Carpenter 2011, published by Flat World Knowledge

30. The Intrapreneurial Organization One that seeks to systematically promote the spirit of intrapreneurship in targeted parts of the organization Methods that have been used by businesses to foster intrapreneurship: – Intrapreneurial employees are able to participate in the rewards of what they create – The firm treats intrapreneurial teams as a profit center, rather than as a cost center – Team members can choose the projects on which they work or the alliances they join – Employees have access to training to help them learn new skills 11-30 © Mason Carpenter 2011, published by Flat World Knowledge

31. The Intrapreneurial Organization – Internal enterprises are recognized within the organization and have official standing – The organization defines and supports a system of contractual agreements between internal enterprises – The intrapreneurship plan includes a method for settling disputes that may arise around the internal enterprise and employees The intrapreneurial organization can take on one or a combination of two forms: – Coexistence – Structural-separation 11-31 © Mason Carpenter 2011, published by Flat World Knowledge