The Intention to Act

Entrepreneurially
 Entrepreneurial intentions - Motivational
factors that influence individuals to pursue
entrepreneurial outcomes.
 Intention is stronger when an action is
perceived to be feasible and desirable.
 Entrepreneurial self-efficacy - Conviction that
Chapter 2 one can successfully execute the entrepreneurial
Entrepreneurial Intentions process.
and  Perceived desirability - The degree to which an
Corporate individual has a favorable or unfavorable
Hisrich
Entrepreneurship evaluation of the potential outcomes.
Peters

McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. Shepherd 2-2

Entrepreneur Background and Entrepreneur Background and

Characteristics Characteristics (cont.)
 Education  Age
 Provides a background about starting a  Most entrepreneurs initiate their entrepreneurial
business. careers between the ages of 22 and 45.
 Helps in the development of communication  Individuals are more inclined to start an
skills and problem-solving skills. entrepreneurial career at milestone ages every
 Provides individuals with a larger opportunity five years (25, 30, 35, 40, and 45).
set.  Male entrepreneurs tend to start their ventures
 Does not determine whether an entrepreneur in their early 30s, while women entrepreneurs
will create a new business to exploit the do so in their middle 30s.
discovered opportunity.

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Entrepreneur Background and

Role Models and Support Systems
Characteristics (cont.)
 Work History  Role models - Individuals influencing an
 The decision to launch a new venture can be entrepreneur’s career choice and style
influenced by:  Can be parents, family members, or other
 Dissatisfaction with one’s job. entrepreneurs.
 Previous technical and industry experience.  Successful entrepreneurs are viewed as
 Managerial skills and entrepreneurial catalysts by potential entrepreneurs.
experiences are also important once the venture  Role models can serve in a supportive capacity
starts growing. as mentors by providing information, advice and
 Previous start-up experience is a relatively good guidance.
predictor of starting subsequent businesses.  Entrepreneurs need to establish connections and
networks in the venture formation process.
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1
Role Models and Support System Role Models and Support System
(cont.) (cont.)

 Moral-Support Network  Professional-Support Network

 It is important for entrepreneurs to have a
cheering squad—individuals who provide
psychological support.
 Friends can provide honest advice,
encouragement, understanding, and assistance.
 Relatives can be strong sources of moral
support, particularly if they are also
entrepreneurs.
 Entrepreneurs need advice and counsel
throughout the establishment of the new
venture which can be obtained from:
 Mentors.
 Business associates.
 Suppliers.
 Trade associations.
 Personal affiliations.
 Entrepreneurial activity is embedded in
networks of interpersonal relationships.

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Entrepreneurial Intentions Within

Minority Entrepreneurs
Existing Organizations
 There has been significant growth in:  Top management must create an
 Female self-employment, with women starting environment that encourages employees to
new ventures at a higher rate than men. think and act entrepreneurially.
 The number of Asian, African American,  Employees will realize that entrepreneurial
Hispanic, and Native American majority owned
action within the firm is both personally
firms.
desirable and feasible.
 This growth is likely to be spurred by:
 Encouragement of entrepreneurship among
minority groups.
 Increase in the number of role models.

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Managerial Versus Entrepreneurial Table 2.1 – Distinguishing Entrepreneurially

Decision Making from Traditionally Managed Firms

 Entrepreneurial management is distinct

from traditional management in terms of:
 Strategic orientation.
 Commitment to opportunity.
 Commitment of resources.
 Control of resources.
 Management structure.
 Reward philosophy.
 Growth orientation.
 Entrepreneurial culture.

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2
Managerial Versus Entrepreneurial
Decision Making (cont.)
 Causes for Interest in Corporate
Entrepreneurship
 Increasing interest in “doing your own thing”
and doing it on one’s terms.
 New search for meaning and impatience has
caused more discontent in structured
organizations.
 Organizations are encouraging corporate
entrepreneurship i.e. stimulating, and
capitalizing on, employees who think that
something can be done differently and better.
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Table 2.3 - Characteristics of an
Entrepreneurial Environment
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Establishing Corporate
Entrepreneurship in the Organization
 Step one:
 Secure a commitment to corporate
entrepreneurship in the organization by top,
upper, and middle management levels.
 Establish initial framework and embrace the
concept.
 Identify, select, and train corporate
entrepreneurs.
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Managerial Versus Entrepreneurial
Decision Making (cont.)
 Corporate entrepreneurship is most strongly
reflected in the following endeavors:
 New business venturing (corporate venturing) - The
creation of a new business within an existing
organization.
 Innovativeness - Product and service innovation, with
emphasis on development and innovation in
technology.
 Self-renewal - Transformation through renewal of the
key ideas on which an organization is built.
 Proactiveness - Includes initiative, risk taking,
competitive aggressiveness, and boldness.
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Table 2.4 - Leadership Characteristics
of a Corporate Entrepreneur
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Establishing Corporate Entrepreneurship in
the Organization (cont.)
 Step two:
 Identify ideas and areas that top management is
interested in supporting.
 Identify amount of risk money available to
develop the concept.
 Establish overall program expectations and
target results of each corporate venture.
 Establish mentor/sponsor system.
 Step three:
 Use of technology to ensure organizational
flexibility.
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3
Establishing Corporate Entrepreneurship in Establishing Corporate Entrepreneurship in
the Organization (cont.) the Organization (cont.)

 Step four:  Step seven:

 Identify interested managers to train employees  Establish a strong support structure for
and share their experiences. corporate entrepreneurship.
 Step five:  Step eight:
 Develop ways for the organization to get closer  Tie rewards to the performance of the
to its customers. entrepreneurial unit.
 Step six:  Finally:
 Learn to be more productive with fewer  Implement an evaluation system that allows
resources. successful entrepreneurial units to expand and
unsuccessful ones to be eliminated.

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Establishing Corporate Entrepreneurship in Establishing Corporate Entrepreneurship in

the Organization (cont.) the Organization (cont.)

 Problems and Successful Efforts  Companies that have adopted their own version
 A study found that new ventures started within of the implementation process to launch new
a corporation performed worse than those ventures successfully:
started independently by entrepreneurs.  Minnesota Mining and Manufacturing (3M).
 Hewlett-Packard (HP).
 Reasons cited:
 IBM.
 Corporation’s difficulty in maintaining a long-term
commitment.
 A lack of freedom to make autonomous decisions.
 A constrained environment.
 On average, independent start-ups become:
 Profitable twice as fast.
 End up twice as profitable.
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