Unit 2:

Process Approaches to Tourism Entrepreneurship

Overview of tourism entrepreneurial thoughts:

A school of thought (or intellectual tradition) is the
perspective of a group of people who share common
characteristics of opinion or outlook of a philosophy,
discipline, belief, social movement, economics, cultural
movement, or art movement.
Hence Entrepreneurial school of thought can be divided
into two major view:
1. Macro View
2. Micro View
 Overview of tourism entrepreneurial
thoughts
1. Macro View: (External environmental forces)
a. Environmental School of Thought
b. Financial/capital School of Thought
c. Displacement School of Thought

2. Micro View: (Internal environmental forces)

a. Entrepreneurial Trait School of Thought
b. Venture Opportunity School of Thought
 Macro View
a. Environmental School of Thought
It deals with the external factors and forces that affect
the life of entrepreneur. The impact could be positive or
negative in shaping a entrepreneur.
This school of thought says, the desire to become an
entrepreneur is influenced by two factor:
1. Social group: (Atmosphere of friends and relatives
influence the desire to become an entrepreneur)
2. Freedom and Support: People developing new ideas,
creating new methods, loving freedom at work are often
desire to become entrepreneur.
 1. Macro View:
b. Financial/Capital School of Thought
• This thought is based on capital seeking
process.
• Mobilization and utilization of venture capital
during start-up stage, growth stage and the
decline stage is regarded as vital to
entrepreneurship development.
 Macro View
c. Displacement School of Thought
• This thought says the group hinders or help a person to
become an entrepreneur. It focuses on negative side of
group phenomena where a person is displace from the
group ultimately self motivated to start his/her own
business.
• Displacement may be caused in three ways:
1. Political Displacement: Caused by government system,
policies and regulation.
2. Cultural Displacement: Caused by social groups to enter
into certain professional fields.
3. Economic Displacement: Caused by economic recession or
bad timing eg. Depression, job loss, capital scarcity etc.
 Micro View
a. Entrepreneurial Trait School of Thought
This thought advocates that people become
entrepreneur because they poses some successful
entrepreneurial traits within as below:
• Achievement
• Creativity
• Determination
• Technical knowledge
• Family development
• Educational development
 Micro View
b. Venture Opportunity School of Thought:
This school of thought advocates that developing the right
idea at the right time for the right market is the key to
entrepreneurial success.

“Corridor principle” (A new concept, called the Corridor

Principle, is proposed as a possible explanation of the
multiple venture ) has developed from this school of
thought which states that new opportunities arise that lead
entrepreneurs in different direction.
Approaches to Tourism
Entrepreneurship

Approaches to Tourism
Integrative
Entrepreneurship
Approach
Assessment
Approach
Multi-dimensional
Approach
 Integrative Approach
1. Integrative Approach: (combining two or
more things to form an effective unit or
system)
This includes theoretical as well as practical concepts
affecting entrepreneurial activity. It believes in input
and outcomes of entrepreneurial process.
 Integrative Approach
Inputs:
• Environmental Opportunities: Political, social, technological
forces.
• Entrepreneur: Personally responsible for materialization of
new venture.
• Business concept: develops a business concept to take
advantage of opportunity.
• Organizational context: sole trading, company or franchise
• Resources: Financial physical, human and information
resources.
 Integrative Approach
Process:

• Identify Opportunity: Identify new venture.

• Acquire Resources: Acquire financial, physical,
human and information resources.
• Implementation: turn opportunity in action
 Integrative Approach
Outcomes:

• Going Venture: New venture is established

• New Product: New product appears in the market
• New Technology: New technology lead to innovation
• Profit: Entrepreneur makes profit
• Employment : Jobs are created
• Economic Growth: Nation experience economic growth
 Assessment Approach
• This approach makes assessment during
various stages of entrepreneur’s career.
Assessment are qualitative, quantitative,
strategic and ethical. They are done in regard
to entrepreneur venture and environment.
 Multidimensional Approach
• This approach regards 1. Individual Dimension:
entrepreneurship as • Need for achievement
multidimensional and • Risk taking propensity
complex. The emphasis
is given to the • Job satisfaction
interacting dimensions • Previous work
of individual, the experience
environment, the • Entrepreneurial parents
organization and the • Age
venture process.
• Education
 Multidimensional Approach
2. Environmental Dimensions:
• Venture capital availability
• Skill labor force availability
• Accessibility of supplies and
supporting services
• Government influence
• Availability of land and
facilities
• Accessibility of transport
• Attitude of area population
and living conditions
3. Organizational Dimension:
• Type of firm: Sole,
Partnership, company
• Partners in the venture
• Barriers to entry
• Entrepreneurial
environment in the
organization
 Multidimensional Approach
4. Venture process
dimension:
• Mobilizing resources
• Producing the product
• Marketing the product
and services
• Responding to
government and society