Module 1: The Foundation of Entrepreneurial Management

• Entrepreneurial Management

  • It is the practice of taking entrepreneurial knowledge and utilizing it for increasing the effectiveness of new business venturing as well as small- and medium-sized businesses.
• Entrepreneurship

  • The process of designing, launching and running a new business, which is often initially a small business.
  • An integrated concept that permeates an individual’s business in an innovative manner.
  • It is the dynamic process of creating incremental wealth and stimulating the surrounding environment. The wealth is created by individuals who assume the major risks in terms of equity, time, and career commitment by providing value for a product or service.
• Entrepreneurs

  • A person who run / own a business.
  • Recognize opportunities where others see chaos or confusion
  • Are aggressive catalysts for change within the marketplace
  • Challenge the unknown and continuously create the future
• Entrepreneurship is more than the mere creation of business:

  • Seeking opportunities
  • Taking risks beyond security
  • Having the tenacity to push an idea through to reality
• Small Business Owners manage their businesses by expecting stable sales, profits, and growth
• Entrepreneurs focus their efforts on innovation, profitability and sustainable growth.
• Marco Polo

  • He attempted to establish trade routes to the Far East.
  • He was a merchant to Far East
• In Middle Ages, the term entrepreneur was used to describe both an actor and a person who managed large production projects.
• In the 17th century, an entrepreneur was a person who entered into a contractual arrangement with the government to perform a service or to supply stipulated products.
• In the 18th century, the entrepreneur was distinguished from the capital provider. Many of the inventions developed during this time were reactions to the needs of the changing world, as was the case with the inventions of Eli Whitney (cotton gin) and Thomas Edison (light bulb).
• In the late 19th and early 20th centuries, entrepreneurs were frequently not distinguished from managers and were viewed mostly from an economic perspective. Some believed that the key factor in distinguishing a manager from an entrepreneur was the bearing of risk.
• The concept of entrepreneurship from a personal perspective is reflected in three behavioral attributes of an entrepreneur:

  (1) initiative taking

  (2) organizing and reorganizing of social and economic mechanisms to turn resources and situations to practical account

  (3) acceptance of risk or failure
• TYPES OF ENTREPRENEURSHIP:

  • Corporate Entrepreneurship
  • Public Sector Entrepreneurship (Government)
  • Social Entrepreneurship
• Corporate Entrepreneurship

  • It is referred to as intrapreneurship or corporate venturing
  • It is the process by which individuals inside organizations pursue opportunities independent of the resources they currently control.
  • This involves doing new things and pursuing new opportunities.
• Public Sector Entrepreneurship (Government)

  • It is an individual or group of individuals undertaking activities to initiate change by adapting, innovating and assuming risk, and recognizing that personal goals and objectives are less important than generating results for the organization.
• Social Entrepreneurship

  • It is innovative activity with a social objective in the for-profit sector, such as social commercial ventures; nonprofit sector; public sector; or even across sectors in terms of hybrid organizations that combine for-profit and nonprofit approaches.
• The Role of Entrepreneur is interlinked with the roles of both an entrepreneur and a manager.
• The roles of an Entrepreneur:

  • Discover
  • Visionary
  • Innovative
  • Creative
  • Calculated risk taker
  • Opportunity seeker
  • Resource leverage
  • Self-confident
  • Drive and intrinsic motivation
• The roles of a Manager:

  • Forecaster
  • Planner
  • Organizer
  • Coordinator
  • Communicator
  • Facilitator
  • Motivator
  • Leader
  • Controller
• The Entrepreneurial Process:

  1. Identify and evaluate the opportunity
  2. Develop the business plan
  3. Resources required
  4. Launch and manage the enterprise
• Identify and evaluate the opportunity:

  1. Opportunity assessment
  2. Creation and length of opportunity
  3. Real and perceived value of opportunity
  4. Risk and returns of opportunity
  5. Opportunity versus personal skills and goals
  6. Competitive environment
  7. Creating opportunity assessment plan
• The development of business plan consists of three sections.
• Business Plan Section 1:

  • Title Page
  • Table of Contents
  • Executive Summary
• Business Plan Section 2:

  • Description of Business
  • Description of Industry
  • Technology Plan
  • Marketing Plan
  • Financial Plan
  • Production Plan
  • Organizational Plan
  • Operational Plan
  • Summary
• Business Plan Section 3:

  • Appendixes (Exhibits)
• Resources Required:

  1. Determine resources needed
  2. Determine existing resources
  3. Identify resource gaps and available suppliers
  4. Develop access to needed resource suppliers
• Launch and Manage the Enterprise:

  1. Develop launch plan
  2. Establish culture
  3. Understand key variables for success
  4. Identify problems and potential problems
  5. Implement control systems
  6. Develop management style
  7. Develop growth strategy
• Types of Entrepreneurial Schools-of Thought Approach

  • Macro View
  • Micro View
• Forms of Macro View: External Locus of Control

  • Environmental School of Thought
  • Financial/Capital School of Thought
  • Displacement School of Thought
• Forms of Micro View: Internal Locus of Control

  • Entrepreneurial Trait School of Thought
  • Venture Opportunity School of Thought
  • Strategic Formation School of Thought
• Environmental School of Thought

  • This school of thought is related with the external factors that affect a probable entrepreneur's standards of living. These can be either positive or negative forces in the molding of entrepreneurial requirements.
• Financial/Capital School of Thought

  • Based on the capital-seeking process—the search for seed and growth capital
  • This school of though is based on the asset search procedure. The hunt for seed and growth funds is the entire focus of this entrepreneurial value
• Displacement School of Thought

  • This school of thought focuses on group phenomena. Individuals will not follow a business enterprise unless they are prohibited or displaced from doing other activities.
• The Displacement School of Thought has alienation that drives entrepreneurial pursuits:

  • Political Displacement (laws, policies, and regulations)
  • Cultural Displacement (preclusion of social groups)
  • Economic Displacement (economic variations)
• Entrepreneurial Trait School of Thought

  • Focuses on identifying traits common to successful entrepreneurs. creativity, achievement, determination, and technical knowledge (CADT)
  • Many researchers and writers have been interested in recognizing the traits that are common to victorious entrepreneurs.
• Venture Opportunity School of Thought

  • Focuses on the opportunity aspect of venture development—the search for idea sources, the development of concepts, and the implementation of venture opportunities.
  • The quest for idea sources, the development of concepts, and the accomplishment of venture opportunities are the important areas of concentration related to this school.
  • Corridor principle: New pathways or opportunities will arise that lead entrepreneurs in different directions.
  • Creativity and market awareness are essentials.
• Strategic Formulation School of Thought

  • Strategic planning is inextricably intertwined into the entire fabric of management
  • It is not something disconnected and separate from the procedure of organization.
  • Emphasizes the planning process in successful venture development (George Steiner).
• Strategic formulation is a leveraging of unique elements:

  • Unique Markets — mountain gap strategies
  • Unique People — great chef strategies
  • Unique Products — better widget strategies
  • Unique Resources — water well strategies
• 21st Century Trends in Entrepreneurship

  • Venture Financing
  • Social Entrepreneurship
  • Women and Minority Entrepreneurs
  • Entrepreneurial Education
  • Family Businesses
  • Global Entrepreneurial Movement
  • Entrepreneurial Cognition
  • Corporate Entrepreneurship
• Venture Financing: venture capital and angel capital financing and other financing techniques strengthened in the 1990s.