1. Is increasing the entrepreneurial orientation of a firm always a good thing.

Or are there circumstances or environments in which the further pursuit

of opportunities can diminish firm performance?

The five components of EO in this stream of research are:

1. Risk-taking was historically a key characteristic associated with entrepreneurship. It
originally referred to the risks individuals take by working for themselves rather than
being employed, but has since been widely applied to companies, for example, when
managers make decisions that commit large amounts of resources to projects with
uncertain outcomes.
2. Proactiveness describes the characteristic of entrepreneurial actions to anticipate
future opportunities, both in terms of products or technologies and in terms of markets
and consumer demand. This characteristic was at the centre of early economic
thinking in this field: the entrepreneur was thought of as someone who identifies
opportunities in the marketplace and proactively pursues them (Lumpkin and Dess,
1996). Translated to the level of the firm, proactive companies are leaders in the
market, rather than followers.
3. Innovativeness relates to the types of products and services a company has
introduced to the market. For some theorists, innovativeness is intrinsically linked to
entrepreneurship in that entrepreneurs create new combinations of resources by the
very fact of their entry into the market. In the context of EO, innovativeness is defined
more narrowly, emphasizing the importance of technological leadership to the
company, as well as changes in its product lines.
4. Competitive aggressiveness refers to the company’s way of engaging with its
competitors, distinguishing between companies that shy away from direct competition
with other companies and those that aggressively pursue their competitors’ target
markets.
5. Autonomy “refers to the independent action of an individual or a team in bringing
forth an idea or a vision and carrying it through to completion” (Lumpkin and Dess,
1996) without being held back by overly stringent organizational constraints. 
Although this component seems to primarily have “face validity” in the context of
large organizations, many researchers have applied it to the context of small
companies and obtained statistically significant findings.

Always being entrepreneurial is not necessarily a good thing.

The dance between Structure (Managerial) and Strategy (Entrepreneurial) plays an

important role in an organization's long-term success.

At the startup stage, the structure is loose, and everybody pitches in to do whatever is
needed. The key is to find a business model and strategy that begins to take hold in the
market place. The structure follows the chosen strategy. This is the entrepreneurial
stage of effectiveness.

As the company grows, the strategy becomes somewhat fixed, based upon what
works, and the structure has to be devised to deliver that strategy more effectively.
This is the Managerial stage of efficiency. Continuing the constant change of strategy
(entrepreneurial) is a distraction and hurts success metrics.

Soon the structure of the organization begins to restrict the strategy that a company
can deliver. Even though the world around may be changing due to technology,
consumer preference, etc., business delivery is restricted to the rigid structure that is in
place.

This is time, once again, to light up the entrepreneurial fires!

So the circular dance continues till, due to sheer exhaustion, the company fails to
dance this circular dance.

2. Why do role models have an impact on a person’s decision to become an

entrepreneur? Do you think that a person whose parent was an
entrepreneur of a failed business is more or less likely to start his or her
own business than a person whose parents were managers of large
established companies?

When we talk about entrepreneurs, we often think of people who have followed a
dream to create a business. They are a group set apart because of their bias towards
action — getting their hands dirty and building a company, and because of that, many
are role models to the millions of other aspiring founders across the world. We are not
talking about the basic desire to imitate a businessperson because of their wealth and
success, but rather about being a role model, which entails a degree of awe and respect
for a person’s methods and strategies for building successful and impactful businesses.
They do things that others feel are impossible. The world’s best entrepreneurs are not
looked up to because of their salaries, but because they do three key things: they solve
big global problems, they survive risky situations, and they create with limited
resources.

Solving big problems: Entrepreneurs dream big, and the role models of the business
world rarely start by trying to solve a small problem. They create a product that solves
an unserved, acute pain point in the formal economy, and where there are existing
informal, unlicensed, or unofficial alternatives, they bring legitimacy and formality to
the industry. Role models offer solutions for the mass market, not just the elite, and
they focus on game-changing innovations that fundamentally rethink a market and a
sector.

None of this is easy. People aspire to be these great business leaders because they are
tackling difficult, complex problems that many people before them have tried to solve
and either failed or achieved only limited success. Sure, good, healthy businesses can
be built to produce the next photo-sharing app, but the entrepreneurs that get talked
about again and again and are used as exemplars for the business world are the ones
that take on sizeable global issues in arenas like healthcare, education, energy,
transportation, or financial services.

I teach an MBA class on emerging-market entrepreneurship. My students often ask for

my feedback on the direction of their business ideas. I am asked questions like, “Will
this even be possible?” “Am I making things too hard on myself by trying to build this
new idea that has never been done?” I ask them, “Why are you doing this?” Almost
exclusively, they tell me they want to make the world a better place. The reality is that
building a startup, any startup, is extremely hard and takes a long time. If you’re going
to work that hard for a large portion of your life, you might as well build something
meaningful. And if you succeed, you will be a beacon for others to follow, inspiring
the next generation of founders.

Taking risks and surviving

Entrepreneurs will inevitably go through difficult times when money gets tight or the
product seems less viable under new market conditions. But the best entrepreneurs
take the right risks at the right times. The cost of failure and the perception of risk that
founders have is real, particularly in emerging innovation ecosystems outside Silicon
Valley — most are able to push through the alarm bells that go off in your head when
situations become difficult. By being able to showcase this fortitude, entrepreneurs
win where others fold.

This does not mean that they are foolhardy individuals. Some are, yes, but the role
models of the group are ones that take calculated risks. Those that are too nonchalant
about debt or a difficult market will eventually fail if given enough time. The top tier
of founders find the right times to expand their business and ingest capital for that
propose; they are honest with themselves about when they are right and can succeed
versus when they are just being stubborn, trying to fit a round peg in a square hole.
Everyone has met a leader that is overly confident to the point of voluntary blindness
of the situation around them, but the best entrepreneurs are the ones that put time and
effort into building a product for a market to solve a real problem and then are
relentless in their pursuit of solving that problem. They are able to take more risks
because they have built trust in their product. And once they come out on the other
side with a successful business, people take note and try to emulate that same self-
assurance.

Turning nothing into something

Entrepreneurs often start with nothing more than an idea. But that idea generates leads
on capital, and then the real fun begins.

Everyone loves a good underdog story because they make helpless situations seem
more hopeful. Founders are in many ways the underdogs of the business world, and
people look up to them because of that story arc. Companies begin as a David against
many Goliaths, but they find their small advantages and exploit them. Sometimes that
means going after a niche market, sometimes it means using the company’s
nimbleness and flexibility to out-flank a big competitor on a sale or partnership.
Whatever it may be, the best entrepreneurs find ways to turn a small amount of capital
into great returns.

Companies outside of the funding factory of Silicon Valley are great examples of this.
Whereas Silicon Valley has nearly a thousand venture capital funds, Africa’s fifty-
four countries together account for fewer than ninety firms. Latin America has fewer
than 150 firms across the entire region. The founders of companies in these markets
make for great role models because they have no choice but to work with a smaller
pool of venture funding and are expected to survive in tougher business climates and
generate returns--but that’s exactly what they do. Against all odds, the best
entrepreneurs use what they have and grow slowly and strategically, conserving
resources while still achieving growth.

Supporting the ecosystem

All of the aforementioned traits of role model entrepreneurs are centered around the
idea that founders are valued as role models because of their ability to make the
impossible possible. They beat the odds, and they inspire others. But the best
entrepreneurs don’t just build successful companies. They create industries and
healthy business ecosystems. They are the giants upon whose shoulders their
successors stand.

These entrepreneurs become role models for the next generation, and their scaled
businesses train new generations of leaders. They become “older siblings” and often
take an active role in giving back, as investors, mentors, and supporters.
Take Hernan Kazah, the co-founder of MercadoLibre, one of the first Latin American
ecommerce companies. After its IPO in 2007, Hernan stepped aside and co-founded
Kaszek Ventures in order to give back to the startup community of which he was such
an integral part. Hernan wanted to provide these entrepreneurs with the mentorship,
network, support, encouragement, and, of course, capital that he had struggled to
access when he first began. Kaszek Ventures started out investing only its own
personal capital but subsequently accepted outside capital. Its most recent fund, its
fourth, was more than $600 million. The portfolio includes the companies of leading
regional startups such as Nubank, Guiabolso, and Dr. Consulta. Many of these
companies have a social lens, and they focus in part on giving back to the community
as a whole.

The real societal benefit of these entrepreneurial role models is the cycle of
sustainable growth and societal benefit that the best founders create in their spheres.
Entrepreneurs play a direct and active role in creating the building blocks of an
ecosystem. This includes laying the foundations of an entrepreneurial culture,
educating prospective entrepreneurs, providing skill training through innovative
programs, and creating ecosystem infrastructure through industry organizations. They
also bring up the next generation of entrepreneurs through informal schools of
entrepreneurship often in parallel with developing their own ventures.

The best entrepreneurs, then, aren’t just the ones that we aspire to be because of their
successes, but also because of what they give back to their communities and the
world.

3. What excited you about being an entrepreneur? What are your major concerns?
Reasons

1. You are your own boss

Being the one to call the shots definitely has its perks. You get to decide what you
want to do, how you want to do it, and who you want to do it with. Whether or not
you’ve enjoyed working for other people in the past, there’s something amazing about
being able to say you work for yourself.

2. Make your own schedule

Prefer to work late into the evenings? Or bright and early at 5am? When you’re your
own boss you get to decide when you want to work. While there’s many other factors
to consider like availability for your customers, the ultimate decision about your
availability is yours.

3.  Set your own rules

Didn’t like the way things were done at your previous job? Do it your way with your
own company. You decide what processes to put in place, what dress code to
implement, and what culture you want to build. Being an entrepreneur means you can
decide whether you want to follow the norm or go off the beaten path.

4. Pick your clients and projects

Choosing the type of clients you want is completely in your own hands–so long as
you’re not pressured into taking any and every client for financial reasons. Once
you’ve established your own company, you can turn down clients and projects that
don’t feel like the right fit for you and focus on ones that excite you.5

5. Pick your own team

We’ve all worked with people we disliked at some point or another during our careers.
Whether it’s hiring staff or choosing which other companies you want to work with,
as captain of your own ship you decide who to bring aboard. You get to set your own
guidelines for what it takes to be part of your dream team.

6. Take control over your future

Making decisions for your company can be a lot of weight on one person’s shoulders,
but it’s also great to have the power to change course at anytime. Don’t like the
direction your company is going in? Want to change industries or change your brand?
You make the call for what happens next. Your destiny is within your own hands.
7. Everyday is different

There’s nothing stagnant about being an entrepreneur. There’s always new business
opportunities to explore, new ideas to think up, and new people to meet. Life as an
entrepreneur is a constant rollercoaster and if you love what you do, it’s a really fun
ride full of new adventures everyday.

8. Learn new things

Being an entrepreneur means wearing many hats. This often means learning new skills
and continuing to learn and improve upon these skills. Whether you take on new roles
yourself or hire people to do what you don’t know, there’s always some level of
learning involved to make sure you’re making the right decision for your business.
Learning new things is part of what’s so fun and exciting about being an entrepreneur.

9. Help shape the world

There’s something really amazing about spotting a missing gap in the world and
working to create your own solution. Great entrepreneurs are problems solvers that fill
a need whether globally or within a small niche. Every little contribution helps spark
change and shape the world we live in.

10. Do what you love

Saving the best for last, the best part of being an entrepreneur is doing what you love.
When you’re working with people you want to be working with and doing things that
motivate you, waking up in the morning with a smile on your face and an enthusiasm
towards the day is what makes all the stress and craziness worth while.

4. What makes an excellent Business Plan?

A business plan is a blueprint of how a company will be run. A company often needs
a business plan before it can borrow money from a bank. Good plans are usually
highly detailed and include information on all aspects of the business, including the
industry, marketing, finance, personnel and various operating procedures. They are
specific, communicate to all company employees and require commitment from
everyone.

Significance

Good business plans should include all financial information. Write up details about
all loans and when they will be paid off. Moreover, summarize details about capital
equipment that will be used and how it will be depreciated. Conduct a break-even
analysis that estimates when your company will likely turn a profit. Base your break-
even analysis on a three-year forecast of sales and profits. Project your sales and
profits each month the first year and every quarter for years two and three, according
to the Small Business Administration. Including all financial details in your business
plan will enable you to pinpoint how much capital you will need for continued
growth.

Identification

State the industry in which you will be operating in your business plan. For example,
if you are in the RV (recreational vehicle) industry, define which types of vehicles
you offer and their prices. Indicate whether you will offer premium-priced vehicles
or discounted and slightly used vehicles. Clearly outline who the major competitors
are in your industry by market. Competitors will likely vary if you serve multiple
cities or states. Compare your strengths and weaknesses to these competitors.
Identify the advantages you have over each competitor and plan how you will
exploit those advantages. For example, you may have a much more qualified service
repair department than most competitors.

Features

Highlight details about your executive and management team in your business plan.
Determine in which functional areas you have the most experience. A good business
plan fairly identifies employee strengths and weaknesses. For example, your
management team may be heavily engineer-oriented but lack marketing experience.
Pinpoint specific hiring needs. Determine when you will need to add personnel.
Define what qualifications you will be seeking in all new employees.

Function

A good or effective company business plan must include all sales and marketing
plans. Knowing how you will market your business will get your business up and
running much more quickly. Explain whether you will primarily be using outside or
inside sales reps and in which regions you will base your sales managers. Also,
include detailed information about your advertising plans, such as magazine or
newspaper ads, direct mail campaigns, Internet marketing or radio and television
advertising.

Considerations

A good business plan will also include details about a company's operations. Your
business will operate much more efficiently if you know how various departments
and production will be run. One way to ensure a more efficient operation is deciding
on the right organizational structure. For example, if you decide that a functional
organizational structure works best for your organization, include it in your business
plan. Companies with such structures organize departments by functional area, such
as marketing, finance, accounting and research and development.