Course

Overview

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 COURSE OVERVIEW

INTRODUCTION
Is one of the courses offered by the School of Management, Asia e University (AeU). It is
designed to develop entrepreneurial values, attitude, motivation & innovative idea in
conducting business. Similar to other courses offered by the School of Management, this 3
credit hour course will be conducted over 15 weeks and is usually offered twice yearly in
February and September semesters.

course audience
This is a specialisation for students undergoing Master’s degree in Entrepreneurship. Thus,
students should be able to thoroughly read and discuss the chapters covered in this course
to enable them to understand the subject.

STUDY SCHEDULE
The AeU standard requires students to accumulate 40 study hours for every credit hour. This
course carries 3 credit hours, therefore, it requires an accumulation of 120 study hours.
Table 1 below gives you an approximation of how the 120 hours could be used.
A. Credit Hour: 3 hours (120 learning hours per semester).
Table 1: Approximate Study Time Allocation

Activity Hours
Understanding the course content and initial discussions 4
Reading 11 chapters 70
Attending tutorial sessions 10
Online discussions 5
Completing Assignment 15
Revision 16
Total 120

B. Teaching Method: Self Independent Study, Tutorial and On-line Participation.

C. Assessment Detail:
Table 2: Approximate Percentage of Assessment

Activity Percentage
On-line Participation 10%
Individual Assignment 10%
Case Study/Group Assignment 20%
Mid Term Exam 20%
Final Examination 40%

Module Chapters Schema

This course module comprises of 33 interesting chapters grouped according to 11 major

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COURSE OVERVIEW

chapters of focus. This student manual is the raw content for the online e-learning
facility under production by Asia e-University.

Course Objectives
At the conclusion of the course, students will be expected to:
• Demonstrate the role and contribution of entrepreneur in the economy.
• Acquire entrepreneurial value and skill necessary for new venture.
• Explain the importance of innovation and creativity in doing business to an entrepreneur.
• Discuss methods or ways entrepreneur can use to avoid the major pitfalls on running a
business.
• Understand the keys to make good business plan and seeking opportunity in running a
business.

Course Synopsis
This course will introduce students to frameworks for understanding entrepreneur
and other relevant areas of its concern. This course draws upon thought, research
from various areas. Chapters will be covered through lectures, exercises and discus-
sions. This course is not a comprehensive review of all concepts on entrepreneurship
and innovation. However, the student should gain a basic understanding of influential
views shaping entrepreneur and its surroundings. As such students are advised to read
beyond the text module.
Text Chapters
This course will go through 11 chapters which are as listed below:

Chapter 1 Developing Entrepreneurship Values, Motivation

This chapter introduces and defines entrepreneurship and discusses the characteristics
of successful entrepreneurship. This topic also explains the four steps in entrepreneurial
process as well as entrepreneurial motivation. Apart from that, entrepreneurial motivation
is also discussed to further enhance our knowledge and as a guidance to all entrepreneur.

Chapter 2 Developing Entrepreneurial Competence

This chapter discusses in detail on how to develop entrepreneurial competence. This topic
will explain the importance of strategic orientation as part of entrepreneur strategy and
also describes in detail about the business-level strategy and the importance of management
team in launching a new venture.

CHAPTER 3 Attitude and Behaviour

This chapter will highlights to student some entrepreneur’s common attitude and behaviour,
including a desire for responsibility, a preference for moderate risk, confidence in their
ability to succeed, desire for immediate feedback, leadership characteristics, motivation,
high energy level, a future-directed orientation, skill at organising, and a valuing of achieve-
ment over money.

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 COURSE OVERVIEW

CHAPTER 4 The Resouces

This chapter introduces the fundamentals or basic concepts of the resource-based theory
of entrepreneurship including the four attributes of resources necessary to achieve
sustainable competitive advantage. The resource-based theory is efficient and practical
because it focuses on the strenghts, assets, and capabilities of entrpreneurs and their
ventures. It incorporates market opportunity and competition into the model, but it
emphasises resources.

CHAPTER 5 The Opportunity

This chapter discusses about how most entrepreneurial firms start their venture
and creates an opportunity. Some firms decide to start a firm, searches for and
recognises an oppotunity then starts a business. While on the other hand, other
entrepreneur recognises a problem or an oppotunity gap and creates a business to
fill it.

CHAPTER 6 Evaluating Opportunity

For many entrepreneurs, the easiest part of lauching a business is coming up with
an idea for a new business concept or approach. As such this topic discusses in
details about the important to conduct a feasibility analysis in order to determine
whether an entrepreneur’s idea is a viable foundation for creating a successful business.

CHAPTER 7 Strategic Business Plan

This chapter exposed the learner to a business plan as it serves as a blueprint

and guide for a proposed business project that one intends to undertake. Business
planning is one of the management tools used to achieve business objectives.
Therefore, this topic will guide entreprenuer to preprare a convincing business plan.

CHAPTER 8 Creativity and Innovation

This chapter focuses on the importance of creativity in the process of invention and
innovation. Innovation is the key to the economic development of any company, region
of a country, or country itself. Whilst creativity is at the core of invention and
innovation, so too is the ability to spot market opportunities–and this is one very
important role of the entrepreneur.

CHAPTER 9 Business Financing

This chapter details the important of an entrepreneneur to know the available sources
of funding to help them to smoothen the flow of their business. These sources range from
debt financing (commercial banks, finance companies, so forth) to equity (angel investors,
venture capitalist).

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COURSE OVERVIEW

CHAPTER 10 Business Evaluation and Control Debt Capital

This chapter focuses on the important for to an entrepreneur in managing cost and
controlling debt. The business can making a profit and still run out the cash which
means that bills go unpaid. Overall this topic tell entrpeneneur the right way to
evaluate and control debt, making sure debtors pay as quickly as possible–choosing
credit customers carefully, invoicing promptly, setting credit limits and following
up promptly on late payment.

CHAPTER 11 Managing Growth

This chapter will explore about the important of managing and sustaining growth.
This chapter described several important areas affecting the business venture
right from managing employees in an organisation, managing international ventures
to the issues about product, branding and intellectual property. Understanding
each of these elements would helps entreprenuer to improve their position in the
competitive business environment.

Prior Knowledge
There is no requirement of previous communication subjects that the students are required
to take before pursuing this course. However, students would have an advantage if they
have undertaken some basic communication subjects.

Evaluation
Course evaluation consists of two components that are the ongoing evaluation and the final
examination. In order to obtain a good score and grade in this course, students need to
take each component of the course evaluation seriously.
Ongoing Evaluation
i. Test (2) : 25%
ii. Involvement in ongoing discussion : 05%
iii. Assignment (1) : 30%
Final Examination
i. Marks : 40%
ii. Total Marks : 100%
Note: In order to pass the course (minimum grade C) the students need to obtain 25 marks
from the final examination component (25%) (Requirements of the Malaysian Accreditation
Body, MAB).

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FOUNDATIONS OF ENTREPRENEURSHIP l CHAPTER 1

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 CHAPTER 1 l FOUNDATIONS OF ENTREPRENEURSHIP

CHAPTER
1 Foundations of
Entrepreneurship
What is Ethics
LE AR NI NG OUTCOMES
By the end of this chapter, you should be able to:

1. Describe who is an entrepreneur and his importance;

2. List the major characteristics of a successful entrepreneur;

3. Identify the four steps in entrepreneurial process; and

4. Discuss entrepreneurial motivation.

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 FOUNDATIONS OF ENTREPRENEURSHIP l CHAPTER 1

INTRODUCTION
This chapter introduces and defines entrepreneurship and discusses the characteristics
of successful entrepreneurship. As known to everybody, entrepreneurship is of tremendous
interest to most people. As such, understanding their personalities or characteristics
enables us to differentiate entrepreneur with normal people. This chapter also explains
the four steps in entrepreneurial process as well as entrepreneurial motivation.

Visit the link below to view a lecture of Dr. Steve Gedeon from Ryerson University, on
the characteristics of successful entrepreneurs.

Source: http://www.youtube.com/watch?v=a10Vg50Pzkk

1.1 Definition of an Entrepreneur

Most of what you hear about entrepreneurship, says America’s leading management
thinkers, is all wrong. It’s not mysterious; and it has nothing to do with genes.
It’s a discipline, it can be learnt.
Peter F. Drucker
Innovation and entrepreneurship

Entrepreneur according to Kuratko & Hodgetts (2004) is defined as one who under-
takes to organise, manage and assume the risks of a business. The entrepreneur
is also a catalyst for economic change who uses purposeful searching, careful
planning and sound judgement when carrying out the entrepreneurial process.

Entrepreneur as a person who creates a new business in the face of risk and un-
certainty for the purpose of achieving profit and growth by identifying signifi-
cant opportunities and assembling the necessary resources to capitalise on them.
Zimmerer and Scarborough (1998)

Although many people come up with great business ideas, most of them never act on their
ideas. Entrepreneurs do. The process of creative destruction, in which entrepreneurs
create new ideas and new businesses that make existing ones obsolete, is a sign of a
vibrant economy. Although this constant churn of business – some rising, others sinking,
and many failing – concerns some people, in reality it is an indication of a healthy, growing,
economic system that is creating new and better ways of serving people’s needs and
improving their quality of life and standard of living.

According to Bruce R. Barringer & R. Duance. Ireland, entrepreneurship is the

process by which individuals pursue opportunities without regard to the
resources they currently control.

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 CHAPTER 1 l FOUNDATIONS OF ENTREPRENEURSHIP

The essence of entrepreneurship behaviour is identifying opportunities and putting useful

ideas into practice.

According to Histrich and Peter (1998), entrepreneurship is the dynamic process of

creating incremental wealth. The wealth is created by individuals who assume the major
risks in terms of equity, time and/or career commitment or provide value for some
product or service as illustrated in Figure 1.1. The product or service may or may not be
new or unique, but value must somehow be infused by the entrepreneur by receiving and
locating the necessary skills and resources.

Figure 1.1: Ways of creating incremental wealth

This definition of Histrich and Peter (1998) stresses four basic aspects of entrepreneurship
as illustrated in Figure 1.2.

Figure 1.2: The four aspects of entrepreneurship

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 FOUNDATIONS OF ENTREPRENEURSHIP l CHAPTER 1

a. First, entrepreneurship involves the creation process–creating something new of value.

The creation has to have value to the entrepreneur and value to the audience who are
described in Figure 1.3, for which it is developed. This audience can be:

Figure 1.3: The audience to whom the creation process has value

b. Second, entrepreneurship requires the devotion of the necessary time and effort. Only
those going through the entrepreneurial process appreciate the significant amount of time
and effort it takes to create something new and make it operational.

c. Third, entrepreneurship is assuming necessary risks consisting of different forms.

d. Fourth, the last part of the definition involves the rewards of being an entrepreneur.
The most important of these rewards is independence, followed by personal satisfaction.
For profit entrepreneurs, the monetary reward also comes into play. For some profit
entrepreneurs, money becomes the indicator of the degree of success achieved.
Assuming the necessary risks is the fine aspect of entrepreneurship. Because action takes
place over time, and the future is unknowable, action is inherently uncertain. This
uncertainty is further enhanced by the novelty intrinsic to entrepreneurial actions, such
as the creation of new products, new services, new ventures and so on. Entrepreneurs must
decide to act even in the face of uncertainty over the outcome of that action. Therefore,
entrepreneurs respond to and create, change through their entrepreneurial actions, where
entrepreneurial action refers to behaviour in response to a judgmental decision under
uncertainty about a possible opportunity for profit.

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 CHAPTER 1 l FOUNDATIONS OF ENTREPRENEURSHIP

ACTIVITY

What do you think of the Peter F. Drucker’s statement?

SELF-CHECK

Who is an entrepreneur? Discuss with your friends.

1.2 Entrepreneurial Personalities

There are a few characteristics of the successful entrepreneurs illustrated in Figure 1.4.

Desire for responsibility or passion

Future orientation.
for the business.

Preference for moderate risk. Skill at organising.

Confident and optimistic in their

Value of achievement over money.
ability to succeed.

Ability to set vision. High degree of commitment.

Desire for immediate feedback. Tolerance for ambiguity.

Creative and innovative. Flexibility

High level of energy. Tenacity

Figure 1.4: Some of the characteristics of entrepreneurs

a. Desire for responsibility or passion for the business

Entrepreneurs feel a deep sense of personal responsibility for the outcome
of ventures they start. They prefer to be in control of their resources and they
use those resources to achieve self-determined goals. Furthermore, entrepreneurs
believe that business will positively influence other people’s lives.

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 FOUNDATIONS OF ENTREPRENEURSHIP l CHAPTER 1

b. Preference for moderate risk

Entrepreneurs are not high-risk takers but are instead calculative or moderate
risk takers. A study of the founders of the businesses listed as Inc. Magazine’s fastest-
growing companies found no correlation between risk tolerance and entrepreneurship.

Statistical ID systems can detect “0 day” (extremely new) attacks.

c. Confident and optimistic in their ability to succeed

Entrepreneurs typically have an abundance of confidence in their ability to succeed.
They need to be optimistic about their chances for success.

d. Ability to set vision

Setting a clear and achievable vision helps the entrepreneur of what they want to be
in the future.

e. Desire for immediate feedback

Entrepreneurs enjoy the challenge of running a business and they like to know how
they are doing and are constantly looking for feedback.

f. Creative and innovative

Creativity and innovative thoughts are essential for entrepreneurs to gain competi-
tive advantage in their business. Creativity helps entrepreneur to produce fresh ideas,
which in turn transform it into unique goods and services.

g. High level of energy

Entrepreneurs are more energetic than an average person is. That energy may be a
critical factor, given the incredible effort required to launch a start-up company.
Long hours and hard work are the rule rather than the exception and the pace can be gruel-
ling.

h. Future orientation
Entrepreneurs have a well-defined sense of searching for opportunities. They look ahead
and less concerned with what they did yesterday than with what they might do tomorrow.
Not satisfied to sit back and revel in their success, real entrepreneurs stay focused on
the future.

Entrepreneurs see potential where most people see only problems or nothing at all, a
characteristic that often makes them the objects of ridicule (at least until their
ideas become huge success). Whereas traditional managers are concerned with managing
available resources, entrepreneurs are more interested in spotting and capitalising on
opportunities.

Opportunity entrepreneurs, those who start businesses because they spot an opportunity in

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 CHAPTER 1 l FOUNDATIONS OF ENTREPRENEURSHIP

the marketplace, compared to necessity entrepreneurs, those who start businesses because
they cannot find work any other way. Serial entrepreneurs, those who repeatedly start
businesses and grow them to a sustainable size before striking out again, push this
characteristic to the maximum. The majority of serial entrepreneurs are leapfroggers,
people who start a company manage its growth until they get bored, and then sell it to
start another. A few are jugglers (or parallel entrepreneurs), people who start and manage
several companies at once. The above mentioned cases are illustrated in Figure 1.5.

Figure 1.5: The characteristics of different types of entrepreneurs

i. Skill at organising
Building a company “from scratch” is much like piecing together a giant jigsaw
puzzle. Entrepreneurs know how to put the right people together to accomplish a task.
Effectively combining people and jobs enables entrepreneurs to transform their visions
into reality.

j. Value of achievement over money

One of the most common misconceptions about entrepreneurs is that they are
driven wholly by the desire to make money. To the contrary, achievement seems to
be entrepreneurs’ primary motivating force; money is simply a way of “keeping
score” of accomplishments a symbol of achievement. One business researcher says,

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 FOUNDATIONS OF ENTREPRENEURSHIP l CHAPTER 1

“What keeps the entrepreneur moving forward is more complex and more profound than
mere cash. It’s about running your own show. It’s about doing what is virtually
impossible”.

k. High degree of commitment

Entrepreneurship is hard work and launching a company successfully requires
total commitment from an entrepreneur. Business founders often immerse themselves
completely in their companies. Most entrepreneurs have to overcome seemingly
insurmountable barriers to launch a company and to keep it growing which requires
commitment.

l. Tolerance for ambiguity

Entrepreneurs tend to have a high tolerance for ambiguous, ever-changing
situations, the environment in which they most often operate. This ability to
handle uncertainty is critical because these business builders constantly make
decisions using new, sometimes conflicting information gleaned from a variety of
unfamiliar sources. Entrepreneurs exhibit “a willingness to jump into things when
it’s hard to even imagine what the possible set of outcomes will be.”

m. Flexibility
One hallmark of true entrepreneurs is their ability to adapt to the changing
demands of their customers and their business. In this rapidly changing global
economy, rigidity often leads to failure. As our society, its people and their tastes
change, entrepreneurs also must be willing to adapt their business to meet those changes.
When their ideas fail to live up to their expectations, successful entrepreneurs change
them!

n. Tenacity
Obstacles, obstructions and defeat typically do not dissuade entrepreneurs from
doggedly pursuing their vision. They simply keep trying.
Some of the entrepreneurial values and characteristics described by different authors are
listed in Table 1.1.

Table 1.1: Some Entrepreneurial Values and Characteristics

Authors

Timmons, Smollen and

Mayers and Goldstein Welsh and White
Dingee

Values and Characteristics

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CHAPTER 1 l FOUNDATIONS OF ENTREPRENEURSHIP
Rationality.
Objectivity
Realistic expectation.
Ability to plan carefully.
Managerial competence.
Suitable personality.
Emotional stability.
ACTIVITY
Discuss the characteristics of today’s successful entrepreneur of your choice.
Drive and energy. Good health.
Self-confidence. Basic need to control
Long-term involvement. and direct.
Money as a measure. Self-confidence.
Persistent problem solving. Never ending sense of
Goal setting. urgency.
Moderate risk-taking. Comprehensive
awareness.
Dealing with failure.
Realistic.
Use of feedback.
Superior conceptual
Taking initiative.
ability.
Seeking personal
Low need for status.
responsibility.
Objective approach to
Use of resources.
interpersonal relation-
Competing against ships.
self-imposed standards.
Sufficient emotional
Internal locus of control. stability.
Tolerance of ambiguity Attraction to challenges
and uncertainty. not risks.
Role requirements
Accommodative to the
venture.
Total immersion and
commitment.
Creativity and innovation.
Knowledge of the business
to be launched.
People and team building.
Economic values.
Ethics.
Integrity.
Reliability.
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 FOUNDATIONS OF ENTREPRENEURSHIP l CHAPTER 1

SELF-CHECK
How would you define an entrepreneur? Use specific characteristics from the
chapter.

1.3 The Entrepreneurial Process

The process of pursuing a new venture is embodied in the entrepreneurial process, which
involves more than just problem solving. An entrepreneur must find, evaluate and develop
an opportunity by overcoming the forces that resist the creation of something new. The
process has four steps as given in Table 1.2 and they are:
a. Identification and evaluation of the opportunity.
b. Development of the business plan.
c. Determination of the required resources.
d. Management of the resulting enterprise.

Table 1.2: Steps in the Entrepreneurial Process

Identify and
Develop Business Resources Manage the
Evaluate
Plan Required Enterprise
the Opportunity
Opportunity Title page Determine Develop
assessment Table of contents resources management style
Executive
Creation and length summary Determine Understand key
of opportunity Major section existing resources variables for
1. Description of success
Real and perceived business Identify resource
value of opportunity gaps and available Identify problems
2. Description of
suppliers and potential
Risk and returns of industry problems
opportunity 3. Technology plan Develop access to
4. Marketing plan needed resources Implement control
Opportunity versus 5. Financial plan systems
personal skills and 6. Production plan
goals 7. OrganisationPlan Develop growth
strategy
8. Operational plan
Competitive
9. Summary
environment
Appendix
(Exhibits)

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 CHAPTER 1 l FOUNDATIONS OF ENTREPRENEURSHIP

Although these steps proceed progressively, no one stage is totally completed before work
on other phases occurs. For example, to successfully identify and evaluate an opportunity,
an entrepreneur must have in mind the type of business desired.

1.3.1 Identify and Evaluate the Opportunity

Opportunity identification and evaluation is a very difficult task. Most good business
opportunities do not suddenly appear, but rather result from an entrepreneur’s alertness to
possibilities or in some cases, the establishment of mechanisms that identify potential
opportunities. For example, one entrepreneur asks at every cocktail party whether anyone is
using a product that does not adequately fulfill its intended purpose. This person is
constantly looking for a need and an opportunity to create a better product.

Whether the opportunity is identified by using input from consumers, business associates,
channel members, or technical people, each opportunity must carefully be screened and
evaluated. This evaluation of the opportunity is perhaps the most critical element of the
entrepreneurial process, as it allows the entrepreneur to assess whether the specific product
or service has the returns needed compared to the resources required. As indicated in Table 1.2,
this evaluation process involves the elements steps illustrated in Figure 1.6.

Figure 1.6: Elements Steps involved in evaluation process

The opportunity must fit the personal skills and goals of the entrepreneur. It is particularly
important that the entrepreneur be able to put the necessary time and effort required to make
the venture succeed. Although many entrepreneurs feel that the desire can be developed along
with the venture, typically it does not materialise. An entrepreneur must believe in the
opportunity and manage the resulting organisation.

Opportunity analysis, or what is frequently called an opportunity assessment plan, is one

method for evaluating an opportunity. It is not a business plan. Compared to a business plan,

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 FOUNDATIONS OF ENTREPRENEURSHIP l CHAPTER 1

it should be shorter; focus on the opportunity, not the entire venture; and provide the basis
for making the decision of whether or not to act on the opportunity.

An opportunity assessment plan includes the following: a description of the product or

service, an assessment of the opportunity, an assessment of the entrepreneur and the team,
specifications of all the activities and resources needed to translate the opportunity
into a viable business venture, and the source of capital of finance the initial venture
as well as its growth.

The assessment of the opportunity requires answering the following questions:

• What market need does it fill?
• What personal observations have you experienced or recorded with regard to that market
need?
• What market research data can be marshalled to describe this market need?
• What patterns might be available to fulfill this need?
• What competition exists in this market? How would you describe the behaviour of this
competition?
• What does the international market look like?
• What does the international competition look like?
• Where is the money to be made in this activity?

1.3.2 Develop a Business Plan

A good business plan must be developed in order to exploit the defined opportunity.
This is a very time-consuming phase of the entrepreneurial process. An entrepreneur
usually has not prepared a business plan before and does not have the resources
available to do a good job. A good business plan is essential for developing the
opportunity and determining the resources required, obtaining those resources and
successfully managing the resulting venture.

1.3.3 Determine the Resources Required

The entrepreneur must determine the resources needed for addressing the opportunity.
This process starts with an appraisal of the entrepreneur’s present resources. Critical
resources need to be differentiated from those that are just helpful. Care must be taken
not to underestimate the amount and variety of resources needed. The entrepreneur should
also assess the downside risks associated with insufficient or inappropriate resources.

The next step in the entrepreneurial process is acquiring the needed resources in a timely
manner while giving up as little control as possible. An entrepreneur should strive to
maintain as large an ownership position as possible, particularly in the start-up stage. As

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 CHAPTER 1 l FOUNDATIONS OF ENTREPRENEURSHIP

the business develops, more funds will probably be needed to finance the growth of venture,
requiring more ownership to be relinquished. The entrepreneur also needs to identify
alternative suppliers of these resources. By understanding resources supplier needs, the
entrepreneur can structure a deal that enables the resources to be acquired at the lowest
possible cost and with the least loss of control. This concept is illustrated in Figure 1.7.

Figure 1.7: Six steps involved in the acquisition of resources

1.3.4 Manage the Enterprise/Firm

After the resources are acquired, the entrepreneur must use them to implement the business
plan. The operational problems of the growing enterprise must also be examined. This
involves implementing a management style and structure, as well as determining the key
variables for success. A control system must be established, so that any problem areas
can be quickly identified and resolved. Some entrepreneurs have difficulty managing and
growing the venture they created.

1.4 Entrepreneurial Motivation

Examining people who start new ventures may help to explain how the motivation that
entrepreneurs exhibit during start-up is linked to the sustaining behaviour exhibited later.

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 FOUNDATIONS OF ENTREPRENEURSHIP l CHAPTER 1

“Because motivation plays an important part in creation of new organisations,

theories of organisation creation that fail to address this notion are incomplete.”
Lanny Herron and Harry J.Sapenza

It is important to recognise the contribution of psychological factors to the entrepreneurial

process. In fact, the quest for new venture creation as well as the willingness to sustain
that venture are directly related to an entrepreneur’s motivation. Factors such as goals,
attitudes and backgrounds were all important determinants of an entrepreneur’s eventual
satisfaction. In that context, Figure 1.8 illustrates the key elements of an approach or
model that examines the motivational process an entrepreneur experiences.

Figure 1.8: A model of entrepreneurial motivation

Source:Douglas W. Naffziger, Jeffrey S. Hornsby, and Donald F. Kuratko, “A Proposed Research Model of
Entrepreneurial Motivation, “ Entrepreneurship Theory and Practice(Spring 1994); 33,

The decision to behave entrepreneurially is the result of the interaction of several factors.
One set of factors includes the individual’s personal characteristics, the individual’s
personal environment, the relevant business environment, the individual’s personal goal set,
and the existence of a viable business idea. In addition, the individual compares his or her
perception of the probable outcomes with the personal expectations he or she has in mind.

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 CHAPTER 1 l FOUNDATIONS OF ENTREPRENEURSHIP

Next, an individual looks at the relationship between the entrepreneurial behaviour he or

she would implement and expected outcomes.

According to the model, the entrepreneur’s expectations are finally compared with the
actual or perceived firm outcomes. Future entrepreneurial behaviour is based on the results
of all of these comparisons. When outcomes fail to meet expectations, the entrepreneur’s
motivation will be lower and will have a corresponding impact on the decision to continue
to act entrepreneurially. These perceptions also affect succeeding strategies, strategy
implementation and management of the firm.

Thus, we are experiencing a phenomenon of new venture creation throughout the world
today. It has energised economies around the globe and become the most important business
concept of the 21st century.

SUMMARY
1. Entrepreneur according to Kuratko & Hodgetts (2004) is defined as one who undertakes
to organise, manage and assume the risks of a business. The entrepreneur is also a
catalyst for economic change who uses purposeful searching, careful planning and sound
judgement when carrying out the entrepreneurial process.

2. Zimmerer and Scarborough (1998) define entrepreneur as a person who creates a new
business in the face of risk and uncertainty for the purpose of achieving profit and
growth by identifying significant opportunities and assembling the necessary
resources to capitalise on them.

3. According to Bruce R. Barringer & R Duance Ireland, entrepreneurship is the process

by which individuals pursue opportunities without regard to the resources they currently
control.

4. Entrepreneurship is the dynamic process of creating incremental wealth. The wealth is

created by individuals who assume the major risks in terms of equity, time and/or career
commitment.

5. Mayers and Goldstein : Rationality and objectivity, realistic expectation and ability to
plan carefully, managerial competence, suitable personality and emotional stability.

6. Timmons, Smollen and Dingee : Drive and energy, self-confidence, long-term involve-
ment, money as a measure, persistent problem solving, goal setting, moderate risk-
taking, dealing with failure, use of feedback, taking initiative and seeking personal
responsibility,etc.

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 FOUNDATIONS OF ENTREPRENEURSHIP l CHAPTER 1

7. Welsh and White: Good health, basic need to control and direct, self-confidence, never
ending sense of urgency, comprehensive awareness.

8. The entrepreneurial process has the following steps: Identify and Evaluate the Opport-
unity; develop business plan; resources required and manage the enterprise.

9. Examiningpeople who start new ventures mayelp to explain how the motivation that
entrepreneurs exhibit during start-up is linked to the sustaining behaviour exhibited
later. Lanny Herron and Harry J.Sapenza have stated.

10. Because motivation plays an important part in creation of new organisations,

theories of organisation creation that fail to address this notion are incomplete.

glossary

Churn - Attrition or turnover of customers of a business or

users of a service.

Insurmountable - A planning approach where user send their

barriers request when they need the system in order
to fulfil or help their daily job easily.

Monetary reward - Reward relating to money.

Mysterious - One that is not fully understood or that baffles or

eludes the understanding; an enigma.

Obsolete - No longer in use or valid.

Relinquish - To retire from; give up or abandon.

Tenacity - The quality of being tenacious; persistently deter-

mined and hard to change from a certain (often organi-
sational) point of view. Not giving up easily.

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CHAPTER 1 l FOUNDATIONS OF ENTREPRENEURSHIP

reference

Bruce, R. Barringer. & Duance, R. Ireland (2008). Entrepreneurship: Successfully launch-

ing New ventures. New Jersey: Pearson Prentice Hall.

Donald, F. Kuratko & Jeffrey S. Hornsby (2009). New Venture Management: The Entre-
preneur’s Roadmap.

New Jersey: Pearson Prentice Hall

Norman, M. Scarborough, & Thomas, W. Zimmerer (2003). Effective Small Business

Management: An Entrepreneurial Approach. Pearson Education.

Peter, F. Drucker. (1999). Innovation and Entrepreneurship: Practice and Principles.

Butterworth Heinemann.

Robert, D. Hisrich. , Michael, P. Peters. & Dean, A. Shepherd. (2008). Entrepreneurship.

(7thed). S’pore: Mc Graw-Hill.

Schermerhorn, J.R., Hunt, J.G. & Osborn, R.N. (2003). Organizational Behavior. (8thed).
US: John Wiley & Sons, Inc.

Thomas, W. Zimmerer, Norman, M. Scarborough, & Doug Wilson. (2008). Essentials

of Entrepreneurship and Small Business Management. (5thed). Pearson Prentice Hall.

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