ENTREPRENEURSHIP

MINDSET
REALYN M. AUSTRIA
ENTREPRENEURSHIP (GSBS007 – MBA 1)
DR. EMMANUEL SANTIAGUEL
JANUARY 20, 2024
 NATURE OF ENTREPRENEURSHIP

Entrepreneurship plays a vital role in the creation and growth of business.

Entrepreneurial action
There must be a presence of a lucrative opportunity and an enterprising individual.

Entrepreneurial opportunities
Represents something new. These are situations in which new goods, services, raw materials, and
organizing methods can be introduced and sold at greater than their cost of production.

Enterprising individual
Individuals who individuals to recognize, evaluate, and exploit these situations as possible
opportunities
 UNDERSTANDING ENTREPRENEURAL
ACTION
Entrepreneurs act on what they believe is an opportunity. Opportunities exist in high uncertainty. Doubts
undermine entrepreneurial action.

Key to Understanding Entrepreneural Action

1. Individual’s prior knowledge
He or she must be able to assess the amount
of uncertainty perceived to surround a
potential opportunity.
2. Motivation
The individual’s willingness to bear the
uncertainty
 UNDERSTANDING ENTREPRENEURAL
ACTION
The McMullen-Shepherd model explains how knowledge and motivation influence two stages of
entrepreneurial action

Stage 1 - Individual’s realization that an Stage 2 - The individual then needs to determine
opportunity exists for someone whether it represents an opportunity for him or
her

McMullen-Shepherd Model
 UNDERSTANDING ENTREPRENEURAL
ACTION
To be an entrepreneur is to act on the possibility that one has identified an opportunity worth pursuing

Entrepreneurial Thinking
1. Overcoming Ignorance
To decide whether a signal represents an
opportunity for someone
2. Reducing Doubt
To decide whether an opportunity for
someone is also an opportunity for them
3. Processing Feedback from action steps taken
 UNDERSTANDING ENTREPRENEURAL
ACTION
To be an entrepreneur is to act on the possibility that one has identified an opportunity worth pursuing

Forms of Entrepreneurial Thinking

1. Think structurally
2. Engage in bricolage
3. Effectuate
4. Cognitively adapt
 I. THINK STRUCTURALLY

Forming opportunity beliefs often requires creative mental leaps.

Creative Mental Leaps

• Knowledge about existing markets to a new
technology that could lead to products/services that
satisfy that market.
• Knowledge about a technology to a new market that
could benefit from its introduction.
Products Target
Superficial similarities
• Exist when the basic elements of the technology resemble the basic elements of the market

Structural similarities
• Exist when the underlying mechanisms of the technology resemble the underlying mechanisms of the
market.
 II. BRICOLAGE

Entrepreneurs often lacks resources thus some make “do by applying combinations
of the resources at hand to new problems and opportunities.

Bricolage
• Resourceful way of thinking and behaving that represents an
important sources of entrepreneurial opportunities.
• Involves taking existing resources and experimenting, tinkering,
repackaging, and/or reframing them so they can be used in a way
for which they were not originally designed or conceived.
• From this process of “making do”, entrepreneurs can create
opportunities.
 III. EFFECTUATION

Entrepreneurs do not always think through a problem in a way that starts with a
desired outcome and focuses on the means to generate that outcome.

Causal Process
• Process that starts with a desired outcome and focuses on the
means to generate that outcome.

Effectuation Process
• Process that starts with one has (who they are, what they know and
whom they know) and selects among possible outcomes.
• Drives the entrepreneur to think in a environment of high
uncertainty.
 SARASVATHY’S THOUGH EXPERIMENT 1:
CURRY IN A HURRY
An imaginary restaurant illustrated using the process of Causation and Effectuation
Process of Causation
• Assumption is that market exists
• Optimal Target Segment from a Predetermined
market.
• Applies the STP process
• Segmenting
• Targeting
• Positioning
• Requires resources both for research and for
implementing the marketing strategies
Process of Effectuation
• Starts by examining particular set of means available to the
entrepreneur.
• Does not require much resources can start with limited
resources like $20,000.
• Flexible strategies
• STP can also be used as form of marketing strategy
• The entrepreneur can build several different types of firms
in completely disparate industries.
• This means that the original idea (or set of causes) does
not imply any one single strategic universe for the firm (or
effect).
• Allows a decision maker to change his or her goals and
even to shape and construct them over time, making use of
contingencies as they arise
 ENTREPRENEURIAL MINDSET

Involves the ability to rapidly sense, act, and mobilize, even under uncertain
conditions.

How to develop entrepreneurial mindset

• Individuals must attempt to make sense of opportunities in the context
of changing goals
• Constantly questioning the “dominant logic” in the context of a
changing environment
• Revisiting “deceptively simple questions” about what is thought to be
true about markets and the firm

Example:
• Effective entrepreneurs are thought to continuously:
• Rethink current strategic actions, organization structure, communications
systems, corporate culture, asset deployment, investment strategies, in
short every aspect of a firm’s operation and long-term health.
 IV. COGNITIVE ADAPTABILITY

The ability to reflect upon, understand and control’s one thinking and learning.

• Extent to which entrepreneurs are dynamic, flexible, self-regulating

• Engaged in the process of generating multiple decision frameworks
focused on sensing
• Processing changes in their environments
• Then acting on them

Metacognition:
• A higher-order cognitive process that serves to organize what
individuals know and recognize about themselves, tasks, situations, and
their environments to promote effect and adaptable cognitive
functioning in the face of feedback from complex and dynamic
environments
 IV. COGNITIVE ADAPTABILITY

Comprehension questions
• Designed to increase entrepreneurs’ understanding of the nature of
the environment before they begin to address an entrepreneurial
challenge.
Connection Tasks
• Designed to stimulate entrepreneurs to think about the current
situation in terms of similarities to and differences from situations
previously faced and solved.
Strategic Tasks
• Designed to stimulate entrepreneurs to think about which strategies
are appropriate for solving the problem (and why) or pursuing the
opportunity (and how).
Reflection Tasks
• Designed to stimulate entrepreneurs to think about their
understanding and feelings as they progress through the
entrepreneurial process.
 IV. COGNITIVE ADAPTABILITY

Entrepreneurs who are able to increase cognitive

adaptability have an improved ability to:
1. Adapt to new situations
2. Be creative
3. Communicate one’s reasoning behind a particular
response
 ENTREPRENEURAL INTENTIONS

Individuals have stronger intentions to act when taking action is perceived to be

feasible and desirable. perception of feasibility.

Entrepreneur’s self-efficacy
• People who believe they have the capacity to perform (high
self-efficacy) tend to perform well.
• High self-efficacy leads to increased initiative and “The higher the perceived
persistence and thus improved performance. desirability and feasibility,
• People with high self-efficacy think differently and behave the stronger the intention
differently than people with low self-efficacy. to act entrepreneurially.”
Perceived desirability
• Individual’s attitude toward entrepreneurial action—the
degree to which he or she has a favorable or unfavorable
evaluation of the potential entrepreneurial outcomes.
• Creative actions are not likely to emerge unless they
produce personal rewards that are perceived as relatively
more desirable than more familiar behaviors.
 ENTREPRENEURAL BACKGROUND AND
CHARACTERISTICS
1. Education
• Important in the upbringing of the entrepreneur.
• Helps entrepreneurs cope with problems they confront
• Needed in the areas of finance, strategic planning, marketing and management
• The ability to communicate clearly with both written and spoken word is important in any entrepreneurial activity.
• Provide knowledge, skills and problem solving abilities.
2. Age
• Entrepreneurial experience is one of the best predictors of success
• Most initiate their entrepreneurial careers between ages 22-45.
• Generally, male entrepreneurs tend to start their first significant venture in their early 30s, while women entrepreneurs
tend to do so in their middle 30s.
3. Work History
• Can influence the decision to launch a new entrepreneurial venture
• Plays a role in the growth and eventual success of the new venture
 ENTREPRENEURAL BACKGROUND AND
CHARACTERISTICS

• Previous start-up experience can provide entrepreneurs with expertise in running an independent business as well as
benchmarks for judging the relevance of information, which can lead to an understanding of the “real” value of new
entry opportunities, speed up the business creation process, and enhance performance.
4. Role Models and Support System
• Most important factors influencing entrepreneurs
• Role models can be parents, brothers or sisters, other relatives, or other entrepreneurs.
• Serve in a supportive capacity as mentors during and after the launch of a new venture.
5. Moral – Support Network
• A cheering squad
• Plays a critical role during the many difficult and lonely times that occur throughout the entrepreneurial process.
• spouses are their biggest supporters and allow them to devote the excessive amounts of time necessary to the new
venture
• Friends also play key roles in a moral-support network
• Relatives (children, parents, grandparents, aunts, and uncles) also can be strong sources of moral support, particularly
if they are also entrepreneurs.
 ENTREPRENEURAL BACKGROUND AND
CHARACTERISTICS

4. Professional support network

• A mentor, business associates, trade associations, or personal affiliations from whom the entrepreneur gets advice and
counsel throughout the establishment of the new venture.
• Suppliers are another important component in a professional-support network
• trade associations can offer an excellent professional-support network.
• personal affiliations of the entrepreneur also can be a valuable part of a professional-support network.
End of Report