Entrepreneurship

Course Instructor

Engr. Asnaf Aziz

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How Entrepreneurs think?
(Contd)
Effectuate
⚫ Effectuation is the process in which the entrepreneur does not start
thinking with the problem and its single solution.

⚫ In Effectuation an entrepreneur comes with the number of possible

outcomes for a single problem solution

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How Entrepreneurs think?
Cognitively adapt
⚫ Dynamic, flexible, self regulating and engaged in the process of
generating multiple decision frameworks focused on sensing and
processing changes in their environment (market) and acting on them

⚫ It is basically controlling own thinking and emotions towards tangible,

and intangible resources and external interactions.

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 Entrepreneurial background and
characteristics
 Education
 Age
 Work History

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Role Models and Support Systems
 One of the most important factors influencing entrepreneurs in
their career path is their choice of a role model.
 Role models can be parents, brothers or sisters, other relatives,
or other entrepreneurs.

 Successful entrepreneurs frequently are viewed as catalysts by

potential entrepreneurs.

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Role Models and Support Systems

 Role models can also serve in a supportive capacity as mentors during

and after the launch of a new venture.

 An entrepreneur needs a strong support and advisory system in every

phase of the new venture.

 This support system is perhaps most crucial during the start-up

phase, as it provides information, advice, and guidance on such
matters as organizational structure, obtaining needed financial
resources, and marketing.

 Moral Support System

 Professional Support system
• Mentors.
• Business associates.
• Suppliers.
• Trade associations. 1-6
Sustainable Entrepreneurship
 Sustainable entrepreneurships looking forward for improvements in nature,
environment and community matter through its business, product and
process

 Think of entrepreneurial action as a tool (e.g., a hammer) that can be used for
good (e.g., to build a community center) or for bad (e.g., as a weapon for
harming others).

 Indeed, in a study of 83 entrepreneurs, the researchers found that while most

entrepreneurs had positive attitudes toward the natural environment, under
some conditions, they disengaged these values to decide to exploit an
opportunity that caused harm to the natural environment

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Role of Entrepreneurship in Economic
Growth
 Entrepreneurs play a key role in any economy, using the skills and
initiative necessary to anticipate needs and bring good new ideas to
market.

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Corporate Entrepreneurship
Learning Objectives:
1. To understand the causes of interest in corporate
entrepreneurship.
2. To introduce the “entrepreneurial” mode of managing firms
and distinguish it from the traditional mode.
3. To provide a scale for capturing the extent to which
management adopts entrepreneurial or traditional
behaviors.
4. To discuss how established firms can develop an
entrepreneurial culture and the challenges of doing so.
5. To acknowledge that projects fail and people feel bad
about it, and to introduce the dual process model for
maximizing learning from failure experiences.
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 Corporate entrepreneurship
 Corporate Entrepreneurship is a process used to develop new
businesses, products, services or processes inside of an
existing organization

 To create value and generate new revenue growth through

entrepreneurial thought and action

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 Corporate entrepreneurship
 Entrepreneurial actions within an established organization

 Less flexibility and not meeting the employees suggestions on

improvements leads to dissatisfaction

 It may lead loss of best employees

 e.g. Steve jobs (Apple Macintosh – Next)
 Dennis Stemmle (Idea of battery operated, plain paper copier) of
Xerox

Therefore large scale companies allow their employees to start

joint venture within employer organization

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 Corporate entrepreneurship
 Developing a spirit of entrepreneurship within the existing
organization by overcoming the resistance against flexibility,
growth, and change

 An increase in corporate entrepreneurship culture reflects an

increase in social, cultural, and business pressures toward
entrepreneurial action.

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 CE Intentions Within Existing
Organizations

 Top management must create an environment that encourages

employees to think and act entrepreneurially

 Employees will realize that entrepreneurial action within the

firm is both personally desirable and feasible

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 Corporate entrepreneurship
 Intrapreneurship / corporate entrepreneurship consist of
creating something new by redefining

 the company’s current products or services,

 developing new markets,
 or forming more formally autonomous or semiautonomous
units or firms.

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 Corporate entrepreneurship
 Formations of new corporate ventures are the most salient
manifestations of corporate entrepreneurship.

 Organizational innovativeness refers to product and service

innovation, with an emphasis on development and innovation in
technology.

 It includes new product development, product improvements,

and new production methods and procedures.

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 Objectives of Corporate
Entrepreneurship
 Cultivate innovation and creativity within enterprise

 Creating an entrepreneurial organization

 Organizing around teams

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 Need for Corporate
Entrepreneurship
 Rapid growth in the number of new and sophisticated
competitors

 The failure rate for entirely new business initiatives remains high
for new products and services, more than ninety percent for
transformational efforts.

 Departure of some of the best and brightest people from

corporations to become small business entrepreneurs

 Three out of five organizations say they are weak when it comes
to execution and they see corporate entrepreneurship as a way
to close the gap between idea generation and execution.
 An overall desire to improve efficiency and productivity
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 Corporate Entrepreneurship
Influencing Factors
 Compensation and Incentive System

 Organization Culture

 Top Management Support

 Resource Availability

 Organization Policies

 Risk Taking and Failure Tolerance

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Entrepreneurial Focus
Presence or Generation of
opportunity for new entry and
less concern about
resources(secondary step)
Revolutionary with short
duration
Many stages with minimal
exposure (step by step)
Rent of required resources
Less bureaucratic
Informal communication
channels
Compensates employees
based on their contribution
toward the discovery/
generation and exploitation of
opportunity
Rapid growth top priority, risk
accepted to achieve growth
Search for new opportunities
Conceptual Dimension Administrative Focus
Strategic Orientation Opportunities using existing
resources are considered for
future
Action on potential Long duration considerable
opportunities emphasis on information
Commitment of resources A single stage with complete
commitment
Control/Use of resources Ownership of resources
Management structure Hierarchy
clear
roles and responsibilities,
highly routinized work,
Reward Philosophy Based on responsibility and
seniority
Growth Orientation Safe, slow and steady
Entrepreneurial Culture Opportunity search restricted
by controlled resources;
failure punished
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