Chapter 3: Attitudes and

Behaviour
Prepared by:
Dr. Nazatul Shima Abdul Rani
School of Management
 Learning outcomes
• By the end of this chapter, you should be able to:
– Define opportunity;
– Explain the opportunity to start a business;
– Identify the leadership style, leadership characteristics
of an entrepreneur, and entrepreneurial leadership
skills;
– Explain self-reliance of entrepreneur; and
– Explain effectuation and its implications, cognitive
adaptability, learning from failure, grief recovery
process and a dual process for grief.
 INTRODUCTION
• Entrepreneurs have some common
attitude and behavior, including a
desire for responsibility.
• Driven by this personal attitudes,
entrepreneurs establish and manage
small businesses to gain control over
their lives, make a difference in the
world, become self-fulfilled, reap
unlimited profits, contribute to society,
and do what they enjoy doing.
 ENTREPRENEURS ARE OPPORTUNISTIC
• Opportunity is defined as a favorable set of circumstances that
creates the need for a new product, service or business idea.
• 2 ways to start entrepreneurial firm:
– Internally stimulated: when an entrepreneur decides to start a
firm he/she will search for and recognize and opportunity and
then start a business.
– Externally stimulated: exists whenever an entrepreneur
recognizes a problem or an opportunity-gap and creates a
business to fill it.
– Entrepreneur exploit change for profit, seek out opportunities to
make money.
– They see opportunities and do not mind the uncertainty.
ENTREPRENEURS ARE OPPORTUNISTIC
 Video Break….
• http://www.youtube.com/watch?
v=ucunL4M4nwk
• http://www.youtube.com/watch?
v=8QBQ04X_Gtw&feature=related
LEADERSHIP: Characteristics
Entrepreneurial Leadership Skills
• The leader’s authority comes from their expertise and
values rather than their position.
• They lead by example-playing themselves.
• They empower their teams and nurture leaders at all
levels-encouraging solo performance.
• Entrepreneurial leader combine many of the traditional
skills of management with those of the entrepreneur.
• They must reconcile the conflict between the
impatience of the entrepreneur with the constraints
imposed by an organization in its desire to control.
• Leader’s role is more of change agent, championing
individual initiatives, pursuing innovative ideas and
giving firm direction of the company.
Lessem (1998): Roles needed
to move innovation
Entrepreneurial Leadership Skills
1. Visionary 9. Ability to form deep relationships
2. Ability to communicate 10. Ability to generate trust
3. Ability to influence, informally 11. Ability to delegate
4. Ability to motivate 12. Ability to build cohesion and a sense
5. Ability to manage change of belonging
6. Ability to resolve or reconcile 13. Ability to clarify ambiguity and
conflict uncertainty
7. Ability to build confidence 14. Ability to be firm but fair
8. Ability to work as a team 15. Ability to be flexible but consistent
 Video Break….
• http://www.youtube.com/watch?v=--8JI0i5sIY
• http://www.youtube.com/watch?
v=_kbixNB64No&feature=related
 SELF-RELIANCE
• Entrepreneur have an abundance of confidence in their
ability to succeed.
• Tend to be optimistic about their chances for success.
• High level of optimism, explain why some of the most
successful entrepreneurs have failed in business before
succeeding.
• Facing uncertainty, you have to be confident in your own
judgment and ability to start up your own business.
• Entrepreneur needs self-reliance in order to grow their
business given the extreme uncertainty they face.
 HOW ENTREPRENEURS THINK?
• Entrepreneur think differently than non-entrepreneurs.
• Entrepreneur may think differently when faced with different
task or decision environment.
• Need to make decision in highly uncertain environments where
the stakes are high, time pressures are immerse and highly
emotional.
• Entrepreneur’s decision making environment include:
– Effectuation
– Cognitively adaptable
– Learn from failure
 EFFECTUATION
• Entrepreneurs sometimes use an effectuation process,
such as who they are, what they know and whom they
know to select among other possible outcomes.
• Implications of effectuation for entrepreneurs’
– 1. The patchwork quilt principle
– 2. The affordable loss principle
– 3. The bird-in-hand principle
– 4. The lemonade principle
– 5. The pilot-in-the-plane principle
5 effectuation basic principles
COGNITIVE ADAPTABILITY
• Cognitive adaptability:
– the extent to which entrepreneurs are dynamic, flexible, self-
regulating, and engaged in the process of generating multiple
decision frameworks focused on sensing and processing changes in
their environments and acting on them.
• Ability to reflect, understand and control one’s thinking and
learning.
• Ways to improve cognitive adaptability:
– Adopt a new situation: it provides a basis by which a person’s prior
experience and knowledge affect learning or problem solving in a
new situation.
– Be creative: it can lead to original and adaptive idea, solutions, or
insights.
– Communicate: communicate one’s reasoning behind a particular
response.
LEARNING FROM FAILURE
• The possibility that opportunities exist in more stable environments,
the entrepreneur’s new entry may create industry’s instability and
uncertainty.
• Given the inherent uncertainty in entrepreneurial action, there is the
possibility that an entrepreneur will experience failure.
• Failure can be valuable if the entrepreneur is able to learn from it.
• The consequences of business failure:
– Feeling grief: negative emotional response
– Symptoms: behavioral, psychological, and physiological
– Interfere with ability to learn from the failure motivation to move
again
GRIEF RECOVERY PROCESS
Loss Oriented Process of
Recovery From Grief
A DUAL PROCESS FOR GRIEF
Thank you….