Entrepreneurship Concept

FACULTY OF BUSINESS
Nurturing professionals with high moral and ethical values
ENTREPRENEURSHIP CONCEPT
Assoc. Prof. Dr. Mohd Fuad Mohd Salleh July 2012 KLIA College
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Concept of entrepreneurship
Can be conceptualized as the discovery of opportunities and the subsequent creation of new economic activity, often via the creation of a new organization.
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Entrepreneurship
Entrepreneurship is the process of doing something new and something different for the purpose of creating wealth for the individual and adding value to society.
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Creativity and Innovation
People tend to confuse creativity with innovation. 1) Creativity is the getting of ideas. 2) Innovation is the implementation.
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The Role of Ideation and Creativity

Ideation - Creative Thinking Skills Thinking "out of the box" is all about generating the opportunity to have lots of good ideas to choose from. Truly new ideas often come from the "accidental" crossing of paradigms, mixing new ideas that just don't logically belong together. Creativity is about turning good ideas into profitability.
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Component of Creativity
The components are grouped into two main areas of human activity: 1) Cognitive or knowledge and thinking Components. 2) Personality or motivational and emotional components.
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Cognitive or knowledge and thinking components
Personality or motivational and emotional components
Having a high level knowledge Having high level focusing and and skills of a specific topic task commitment. area. Being able to think divergently Having high intrinsic about the topic. motivation and motives. Having a well developed Being open about the topic general knowledge and and prepared to tolerate ambiguity in the area. thinking base.
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Factors Influencing Innovation

Desire For Growth Availability Of New Technology Competition Suppliers The Company Leadership Customers
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ENTERPRISING ATTRIBUTES
Self-initiative, hard working Strong persuasive powers Moderate (not high) risk taking Flexibility Creativity, imagination Independence/autonomy Problem-solving ability Need achievement High internal locus of control Leadership
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THE DARK SIDE OF ENTREPRENEURSHIP

Confrontation with risk -Financial, career, family, social and physic risk Dealing with stress -Isolation, business pressures, people problems and achievement Entrepreneurial Ego -need for control, distrust of others, desire to succeed and unrealistoc optimism. Entrepreneurial motivation -Barriers and Triggers to new venture formation.
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SOCIAL ENTREPRENEURSHIP
Social Entrepreneurship refers to:
Someone who recognizes a social problem and uses Entrepreneurial principles to organize, create, and manage a venture to make social change. Whereas a business entrepreneur typically measures performance in profit and return, a social entrepreneur assesses success in terms of the impact she or he has on society.
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FEASIBILITY STUDIES OF A NEW BUSINESS START-UP

Issues to consider: Financial feasibility Time to breakeven and positive cash flow Capital requirement (start-up capital available?) Return for effort (profit, ROI) Marketing feasibility Viable demand for products and/or service Is the industry sector likely to grow or decline in future?
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FEASIBILITY STUDIES OF A NEW BUSINESS START-UP

Operational feasibility Access all resources (premises, staff, raw materials, distributors, external advisers, licenses, laws) required? Personal feasibility Physically and mentally fit? Strong entrepreneurial drives? Family support?
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PRACTICAL STEPS TO DEVELOP CREATIVITY

Recognize complementary (appositional) relationships Eliminate mental road blocks: Either/or thinking Avoidance of failure Stereotyping Playing probabilities Scan for ideas: Brainstorming Quality Circles Focus Groups Networking Benchmarking
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HOW CAN ONE GENERATE IDEAS???

o o
Carry a notebook Think opportunistically
Pay attention to everything and dont stop questioning

Talk to new people
Network
o o o
Be a novelty addict Think in opposites Challenge the dogmas
What are the things you would never hear a customer say about our company? e.g Going to the dentist is fun Think of ways to spice up old products or ideas Experience something new
Reinvent the wheel
Challenge your ruts
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PROCESSES ASSOCIATED WITH THE TWO BRAIN HEMISPHERES

Left Hemisphere
Verbal Analytical Abstract Rational Logical Linear
Right Hemisphere
Nonverbal Synthesizing Seeing analogies Non-rational Spatial Intuitive Imaginative
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WAYS TO DEVELOP LEFT-HEMISPHERE AND RIGHTHEMISPHERE SKILLS Left-hemisphere skills

*Step-by-step planning *Reading academic works legal cases and books on logic *Establishing timetable for your activities *Using and working with a computer program
Right-hemisphere skills
*Using metaphors & analogies to describe things and people in your conversations & writing *Suspend your initial judgment of everything *Rely on your hunches ,feelings and intuitions *Fantasizing and visualizing *Take up drawing
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SO! HOW CREATIVE ARE YOU?

Join the dots with 4 consecutive straight lines and you are not allowed to lift off the paper or repeat a line.
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WHAT IS INNOVATION?
A specific function of entrepreneurship. Means by which one either creates new wealth-producing resources or endows existing resources with enchanced potential for creating wealth (Drucker, 1985). Process by which entrepreneurs convent opportunities into marketable ideas. A combination of:

Newness and Market Value Create the need for new ideas Trawl the market for solutions Maximize their peoples skills
Innovative firms:

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4 TYPES OF INNOVATION
Invention : create a totally new product/service/process (i.e Thomas Edison: light bulb ) Extension : use existing product/service in new way (i.e McDonalds) Duplication : make a better version of an existing product/service (i.e Pizza Hut; delivery) Synthesis : combine existing products into a new product/service (i.e line of credit home loans)
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CATEGORIES OF INNOVATION: INCREMENTAL VS. RADICAL

RADICAL INNOVATION Disruptive Need to be nurtured for long periods Worse initial performance Capture new markets Can create new standards Incremental Innovation Steady improvements Sustaining technologies Can be rapidly implemented Immediate gains Develop customer loyalty May hinder radical change
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IMPORTANT ISSUES IN SUCCESSFUL INNOVATION

Simple & understandable Meet market needs Start small, then grow Continuous improvement Use timelines
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MANAGING THE CREATIVE AND INNOVATIVE PROCESS AT ORGANIZATIONAL LEVEL 1. Encourage risk by increasing reward or have the guts to fall. 2. Facilitate creative types. 3. Focus the firms investment policy on innovation. 4. Understand the creative process 5. Promote interaction among departments.
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COMMON MISCONCEPTIONS
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Is always planned & predictable - Best left to the R&D dept Has thorough technical details - Flexibility is important and not all details will be known Relies on dreams or blue-sky ideas - Generated by practical people for practical outcomes Big projects most important - Incremental innovation more useful than radical change Technology in main cause of success - Ideas from customers are often the key source of innovation.
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THREE ASPECTS OF ENTREPRENEURSHIP

1. The identification/recognition of market opportunity and the generation of a business idea (product or service) to address the opportunity
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2. The marshalling and commitment of resources in the face of risk to pursue the opportunity
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3. The creation of an operating business organization to implement the opportunity-motivated business idea
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SUCCESSFUL ENTREPRENEURS
According to the Small Business Administration, successful entrepreneurs have five characteristics: Drive, which is defined as the most important attribute. Entrepreneurs can expect long hours, high stress and endless problems, as they launch a new business.
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According to the Small Business Administration, successful entrepreneurs have five characteristics: Thinking Ability, or the characteristic that encompasses creativity, critical thinking, analytical abilities and originality.
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According to the Small Business Administration, successful entrepreneurs have five characteristics: Aptitude for Human Relations. This characteristic recognizes the importance of the ability to motivate employees, sell customers, negotiate with suppliers and convince lenders. Personality plays a big part in succes in this area..
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According to the Small Business Administration, successful entrepreneurs have five characteristics: Communication Skills, or the ability to make yourself understood.
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According to the Small Business Administration, successful entrepreneurs have five characteristics: Technical Ability speaks to the need of the entrepreneur to know their product and their market. They must consider the long-and short-term implications of their decisions, their strengths and weaknesses, and their competition. In short, they need strategic management skills.
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Thank You
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FACULTY OF BUSINESS

Nurturing professionals with high moral and ethical values

Creativity and Innovation

The Role of Ideation and Creativity

Cognitive or knowledge and thinking components

Personality or motivational and emotional components

Factors Influencing Innovation

THE DARK SIDE OF ENTREPRENEURSHIP

FEASIBILITY STUDIES OF A NEW BUSINESS START-UP

FEASIBILITY STUDIES OF A NEW BUSINESS START-UP

PRACTICAL STEPS TO DEVELOP CREATIVITY

HOW CAN ONE GENERATE IDEAS???

Carry a notebook Think opportunistically

Pay attention to everything and dont stop questioning

Be a novelty addict Think in opposites Challenge the dogmas

Reinvent the wheel

Challenge your ruts

PROCESSES ASSOCIATED WITH THE TWO BRAIN HEMISPHERES

WAYS TO DEVELOP LEFT-HEMISPHERE AND RIGHTHEMISPHERE SKILLS Left-hemisphere skills

SO! HOW CREATIVE ARE YOU?

SO! HOW CREATIVE ARE YOU?

SO! HOW CREATIVE ARE YOU?

SO! HOW CREATIVE ARE YOU?

SO! HOW CREATIVE ARE YOU?

SO! HOW CREATIVE ARE YOU?

SO! HOW CREATIVE ARE YOU?

CATEGORIES OF INNOVATION: INCREMENTAL VS. RADICAL

IMPORTANT ISSUES IN SUCCESSFUL INNOVATION

THREE ASPECTS OF ENTREPRENEURSHIP

THREE ASPECTS OF ENTREPRENEURSHIP

THREE ASPECTS OF ENTREPRENEURSHIP

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