Module 2: THE ENTREPRENEURIAL MINDSET IN INDIVIDUALS

• Entrepreneurial Mindset => describes the most common characteristics associated with successful entrepreneurs as well as the elements associated with the “dark side” of entrepreneurship.
• Entrepreneurs

  • Independent individuals, intensely committed and determined to persevere, who work very hard.
  • They are confident optimists who strive for integrity.
  • They burn with the competitive desire to excel and use failure as a learning tool.
• Cognition => the mental functions, processes (thoughts), and states of intelligent humans - attention, remembering, producing, and understanding language, solving problems, and making decisions.
• Social Cognition Theory => posits that knowledge (mental models of cognition) can be ordered to optimize personal effectiveness within given situations.
• Entrepreneurial Cognition => the knowledge structures that people use to make assessments, judgements, or decisions involving opportunity evaluation, venture creation, and growth.
• Cognitive Adaptability => the ability to be dynamic, flexible, and self-regulating in one’s cognitions given dynamic and uncertain task environments.
• Metacognitive Model => describes the higher-order cognitive process that results in the entrepreneur framing a task effectually, and thus why and how a particular strategy was included in a set of alternative responses to the decision task (metacognition).
• Sources of Research on Entrepreneurs:

  1. Research and Popular Publications
  2. Direct Observation
  3. Speeches, Seminars, and Presentations
• Publications consists of:

  • Technical and professional journals
  • Textbooks on entrepreneurship
  • Books about entrepreneurship
  • Biographies or autobiographies of entrepreneurs
  • Compendiums about entrepreneurs
  • News periodicals
  • Venture periodicals
  • Newsletters
  • Proceedings
• Direct Observation of Practicing Entrepreneurs consists of:

  • Interviews
  • Surveys
  • Case studies
• Outline of Entrepreneurial Organization:

  • Imagination
  • Flexibility
  • Willingness to accept risks
• Characteristics of the Entrepreneurial Mindset:

  • Determination and perseverance
  • Drive to achieve
  • Opportunity orientation
  • Initiative and responsibility
  • Persistent problem solving
  • Seeking feedback
  • Internal locus of control
  • Tolerance for ambiguity
  • Calculated risk taking
  • High energy level
  • Creativity and innovativeness
  • Vision
  • Passion
  • Independence
  • Team building
• Loss Orientation => involves focusing on the particular loss to construct an account that explains why the loss occurred.
• Restoration Orientation => involves both distracting oneself from thinking about the failure event and being proactive towards secondary causes of stress.
• Entrepreneurs create ventures much as an artist creates a painting. They're formed by the lived experience of venture creation.
• Experiential Nature of Creating a Sustainable Enterprise:

  • Emergence of the opportunity
  • Emergence of the venture
  • Emergence of the entrepreneur
• THE ENTREPRENEUR’S CONFRONTATION WITH RISK:

  • Financial Risk
  • Career Risk
  • Family and Social Risk
  • Psychic Risk
• Financial Risk versus profit (return) motive varies in entrepreneurs’ desire for wealth.
• Career Risk — loss of employment security
• Family and Social Risk — competing commitments of work and family
• Psychic Risk — psychological impact of failure on the well-being of entrepreneurs.
• Entrepreneurial Stress => the extent to which entrepreneurs’ work demands and expectations exceed their abilities to perform as venture initiators, they are likely to experience stress.
• Sources of Entrepreneurial Stress:

  • Loneliness
  • Immersion in business
  • People problems
  • Need to achieve
• Dealing with Stress:

  • Networking
  • Getting away from it all
  • Communicating with employees
  • Finding satisfaction outside the company
  • Delegating
  • Exercising rigorously
• Self-Destructive Characteristics in an Entrepreneurial Ego:

  • Overbearing need for control
  • Sense of distrust
  • Overriding desire for success
  • Unrealistic externalized optimism
• Ethics

  • Provides the basic rules or parameters for conducting any activity in an "acceptable" manner.
  • Represents a set of principles prescribing a behavioral code of what is good and right or bad and wrong.
  • Define's "situational" moral duty and obligations.
• Sources of Ethical Dilemmas:

  • Pressure from inside and outside interests
  • Changes in societal values, morals, and norms
• Ethical Code of Conduct

  • A statement of ethical practices or guidelines to which an enterprise adheres.
  • Becoming more prevalent in industry
  • Proving to be more meaningful in terms of external legal and social development
  • More comprehensive in terms of their coverage
  • Easier to implement in terms of the administrative procedures used to enforce them
• Ethical Responsibility

  • Establishing strategy for ethical responsibility is not an easy task for entrepreneurs.
• The value system of an owner/entrepreneur is the key to establishing an ethical organization.
• A code of ethics provides a clear understanding of the need for:

  • Ethical administrative decision-making
  • Ethical behavior of employees
  • Explicit rewards and punishments based on ethical behavior
• Entrepreneurial Motivation

  • The quest for new-venture creation as well as the willingness to sustain that venture.
  • Personal characteristics, personal environment, business environment, personal goal set (expectations), and the existence of a viable business idea.
• Entrepreneurial Persistence

  • An entrepreneur's choice to continue with an entrepreneurial opportunity regardless of counterinfluences or other enticing alternatives.