Individual & Organizational Leadership

Final Project
Dr.Amr Sukar
Submitted by: Hytham khairy

Managing Entrepreneurial Ventures

Introduction

Management has been introduced in many ways and a lot of researches talked about the
subject of management but the majority of this work was focused on large corporations and
well stablished firms. whereas the study considered with small firms’ sector has remained
limited. New Venture management is about the process of getting a new venture started,
growing the venture, successfully harvesting it. New research covered areas such as
innovation, comfort with change, chaos, team driven efforts, equity-based incentives, and
consensual decision making.

Researchers also found cultures and value systems where people, integrity, honesty and
ethics, a sense of responsibility to one’s environment and community, and fair play were
common. Much of what is sought after and

emulated by companies trying to reinvent themselves and to compete globally today

embodies many of these principles, characteristics, and concepts of entrepreneurship
(STEPHEN SPINELLI JR. ROBERT J. ADAMS JR. 2007).

Under this research we will discuss Different Entrepreneurial ventures management

concepts and how entrepreneurs and managers can better perform and lead their
organizations effectively, planning activities in entrepreneurial environment, The idea of
creativity and innovation and its key role in entrepreneurship, risk management and the
Entrepreneurial Marketing Mix.

Starting and managing a new business involves considerable risk and effort to overcome the
problems in creating and growing a new venture. As we might know, Entrepreneurship is
related with such concepts as the establishing of new business ventures, introduction of
new innovative ideas and technologies, and the willingness to take the risks. The main part
in entrepreneurship is to creation something new (Lumpkin & Dess, 1996).and this requires
accordingly a slightly different management model than the normal models we are using in
management organizations. This also refers to the act of launching a new venture that can
involve starting up a new business, innovating a new company from a running business, or
creation of new business activities within an existing firm. It can be achieved by either
creation of new products and services, or entry into new markets. In summary,
entrepreneurship is the process of creating new entry opportunities and can involve both
new business start-up as well as the development of existing firms. (Brisbane Queensland
.2004)

Entrepreneur or a Manager?
There is some miss understanding and confusion about the nature of roles of an
entrepreneur against that of a manager. Although entrepreneur is different from the
traditional manager, entrepreneurship is in essence a kind and role of management.
Management involves achieving the goals of an organization at the same time reducing
variability to increase stable processes. It involves accomplishing work through employees in
the organization. To manage effectively means to forecast, plan, organize, coordinate,
communicate, lead, facilitate, motivate, and control. Management is also the
transformation of inputs into outputs through conceptual, human, and technical skills.
Managers are required to efficiently and effectively utilize resources to achieve optimum
results in line with organizational goals and objectives (Robert D. Hisrich • Veland Ramadani
1017). On the other side entrepreneurship is more about looking to the future, and
searching for opportunities and identifying innovations to fulfil these opportunities. The
process in entrepreneurship involves more than just problem solving they must develop an
idea and evolve it by managing all the resistance to the new idea they are coming up with.
They must also be familiar and recognize the process and know how to manage it
effectively.

The entrepreneurial process has four distinct phases:

(1) identification and evaluation of the opportunity

(2) development of the business plan

(3) determination and evaluation of resource requirements

(4) implementation and management of the resulting enterprise

The main characteristics that entrepreneurs must have to be able to manage a venture are
for example: a strong drive and energy; a motivation to change; a desire to achieve;
challenge the past way of doing things; focuses on future and new opportunities; takes risks;
is very proactive; and develops a strong team and coalition.

Importance of planning in effective management

To successfully manage an enterprise, we need to know exactly where we are heading to,
that is why planning is considered the initial step in any management process, without
planning we lose direction and consequentially lose control and all this will lead eventually
to financial loses. The plan therefore indicates the entrepreneur vision and his strategy and
the costs involved. The main reasons plan is essential when managing entrepreneurial
ventures are that first the plan will Determining the time and resources needed. The plan
indicates the existing resources of the firm, the resources needed and some potential
suppliers of these resources. This allows the Managing team to determine how much money
is needed at various times to obtain these resources and what approach to develop and use
to obtain the money as well as any other resources. Second, the plan also Establishes the
direction and the goal of the firm. Since the plan should be a comprehensive document, it
fully treats all the major issues facing starting and growing the venture. This enables the
Manager to develop strategies and contingency plans to reduce the impact of any problems.
The third reason a plan is an essential tool for mangers is the Guiding and evaluating role.
When determining goals and milestones for the venture, the plan puts out the intentions of
the entrepreneur and his values also accomplishments and results can be measured and
deviations from the plan corrected in a timely manner. These results can be reported to all
interested stakeholders and to outside providers of financial resources. By being put
together by the entrepreneur and the management team and being reviewed and revised
frequently, the plan can be used to guide decisions and help avoid conflicts.

Creativity and Innovation.

Without creativity, there would be no innovation, as creativity is the foundation on which
innovation is built on, develops and grows, it’s also one of the main key aspect
entrepreneurial ventures are built on and managing those enterprises should consider this
key factor when managing people and resources.

Creativity is about developing ideas, processes, or concepts, while innovation is the practical
application of these. (R.D. Hisrich, V. Ramadani, 2017). people are the main factor in
creativity and innovation, people who have the required competencies, motivation, and
curiosity to discover and invent something new are therefore key in the entrepreneurship
and therefore organization must support and nurture this as part for their benefit.

Managers in any entrepreneur venture should know the creative process and know how to
manage people accordingly the 5-step process is: Preparation; Incubation; Illumination;
Validation; and Implementation.

Preparation is the background, experience, and knowledge that an individual brings to the
opportunity recognition process. Incubation is the stage where the person starts thinking
about a problem and considers an idea. The help and support of a manager here in this
stage is important as it gives the support and push for employees to proceed and work in a
safe environment where they can be creative and come up with innovative solutions.

Illumination The illumination stage involves coming up with an outline of an answer to the
question or problem it’s when the ideas hit the creative mind and an innovative idea pops
out. Validation The individual selects the best choice with a calculated level of risk and
uncertainty. The ultimate success of the chosen alternative depends on whether it can be
translated into action. Implementation is where the mangers’ role is clear and effective and
greatly effects the others stages of this process if the mangers abilities here is weak, this
stage involves the use of managerial, administrative, and persuasive abilities to ensure that
the selected alternative is carried out effectively. This is the transformation of the creative
idea into reality

Managers can use different tools to facilitate this process and enhance the innovation
process in an enterprise, such as:

 Focus groups
 Brain storming
 brain writing
 Problem Inventory Analysis
 Reverse Brainstorming
 Checklist Method
 Gordon Method

Risk Management in Entrepreneurial ventures

The connection between entrepreneurship and risk was first introduced by Richard Cantillon
(1680–1734) he was among the first economists who identified this connection.
Entrepreneurs are surrounded with the fact that the risk is always there and their task is to
find the best ways for its reduction. Entrepreneurs face different risky situations, such as
loss of market share, non-payment of sold goods, decay of products in stores or
warehouses, inadequate supply in terms of quality and time, leaving the company by any
important employee, theft by customers or employees, fires, earthquakes, floods, traffic
accidents and similar. All these pose risk situations that make the venture managing very
difficult. The risk cannot be eliminated totally, it can only be minimized.
Managers and entrepreneurs before thinking of minimizing the risk in their work, they
should define what the risk is and in what forms and types it can occur. Some authors (Byrd
& Megginson, 2013; Ramadani & Hisrich, 2015) divide risks in pure, speculative and
fundamental risks, which characteristics are elaborated as follow:

• Pure risk. The risk is considered as pure, when it causes a sure loss, or a situation that it is
in break-even point and it is always unpredictable. As examples of this type of risk are
counted: fire, death of the owner, loss of any significant customer, traffic accident, theft etc.
Many companies own personal transportation vehicles and they face with the traffic
accidents risk, some others own buildings that can be touched by the risk of fire, or some
others may be exposed towards thefts from outside (customers) and inside (employees).

• Speculative risk. When the risk is pure, the entrepreneur faces with those situations in
which can only lose, while in a speculative risk, he can lose or can win. An entrepreneur can
buy a parcel (land) hoping that its value will increase in the future; another entrepreneur
will sell his current business to buy another one with hope that the second one will be more
profitable than the first; someone else can buy shares of a certain company and hope for
their greater value in the future. As profits can be expected from these investments, there
also can occur unpredictable and plot situations, where the new purchased business, land or
shares lose their previous value and all this will end up with losses for the entrepreneur.

• Fundamental (unavoidable) risk. This type of risk is different from the previous types,
because when it occurs, includes all companies which operate in a respective country or
community. As possible sources of this type of risk can be the natural forces, political
factors, economic factors, social factors, etc. For example, floods, earthquakes, wars,
inflation, etc. are fundamental risks.

Managing a risk is therefore an important function mangers and entrepreneurs play in

organizations, it includes all activities that are related to the treatment of risks, such as
planning, identification, analysis, compilation of proactive and reactive strategies,
monitoring and control of risks. A manger needs to treat risks effectively for two main
reasons,
first the Treatment of negative situations in the beginning reduces the probability of their
occurrence, and if they occur, it will greatly reduce negative consequences. All this allows
the company to deal with fewer surprises and less expenses incurred in order to correct the
eventual mistake

second, Risk management enables to accumulate large amounts of data and information
from the external and internal environment, which contribute for a better decision-making
process in a company.

Managing the Entrepreneurial Marketing Mix

Studies about entrepreneurial marketing assume that began over three decades ago, and
focusing on the elements that connect these two concepts (marketing and
Entrepreneurship), Stokes (2000) differs entrepreneurial marketing from traditional
marketing in these dimensions:
first is in terms of business orientation, it is concluded that, unlike traditional marketing,
which is customer-oriented, entrepreneurial marketing is oriented towards entrepreneurs
and innovations. More specifically, if the traditional marketing’s concept requires assessing
market needs before developing a new product, entrepreneurial marketers start with an
idea, which convert it to a new product or service and then try to find a market for it.
In terms of collecting information from the market, entrepreneurial marketers are aware of
the importance of monitoring the marketing environment. But they use informal methods,
such as personal observation or gathering information through their networks or contacts.
They oppose formal research methods as a logical consequence of the fact that they do not
believe in the ability to predict the future
From a tactical perspective, entrepreneurial marketing does not fit to the model of the 4P’s,
because entrepreneurs have developed an interactive marketing approach, which is based
on personal and direct contacts with customers. Entrepreneurial marketers interact with
customers in personal selling and other marketing activities. Important to entrepreneurial
marketing are word-of-mouth and references from customers.
From a strategic perspective, traditional marketing requires a top-down approach, a clearly
defined order of activities, such as segmentation, targeting and then positioning.
Entrepreneurial marketers practice an opposite approach, i.e., bottom-up. As they identify a
potential market opportunity, they test it through the ‘trial and error’ process and after
that, the company starts to satisfy the needs of some clients, and then began to expand
through direct contact with customers and finds out their needs and preferences. Later
come new customers with a similar profile to those who have purchased the product earlier
So, for us to define the entrepreneurial marketing we can say it is: “proactive identification
and exploitation of opportunities for acquiring and retaining profitable customers through
innovative approaches to risk management, resource leveraging and value creation”
(Morris, Stonecutter, & La Forge, 2002, p. 5)
for managers of entrepreneurial ventures to manage effectively their firms they have to able
to deal with and efficiently mange these six aspects of entrepreneurial marketing:

 Customer-intensity. Customer-intensity includes the enthusiasm, passion, zeal and

belief in where marketing is attempting to take the company and how will do that.
This element strengthens the passion for the customer and the employees’
identification with products and services, as the core values of the company.
 Continuous innovation. This element has to do with the ability of the company to
continuously provide or produce creative ideas, which will be converted into
products, services or new processes.
 Strategic flexibility. This element is related to the willingness of the company to
continuously review and adjust its strategies, action plans and methods of resource
allocation, and structure, culture and management systems of the company as well.
 Calculated risk taking. Risk taking involves the willingness to pursue opportunities
that have real chances to generate reasonable loss or significant performance
inconsistency. An entrepreneurial marketer does not take uncontrolled risks that can
be fatal for the future of the company, but he takes risks that can be calculated and
continuously tries to find ways to control the factors that contribute to the risks’
appearances. Simply said, they are too vigilant in decision-making.
 Proactiveness. Entrepreneurial marketers do not take the external environment, as a
given or as a set of circumstances in which the company can only be adapted. The
environment is perceived as a horizon of possibilities. More specifically, marketers
try to redefine the elements of the external environment in order to reduce the
uncertainty of the environment, reduce dependence and vulnerability of the
company, and/or modify the environment in which the company operates.
 Resource leverage. In essence, leveraging means ‘doing more with less ‘managers
should be able to leverage resources in different ways, such as to use resources
much longer than others have used in the past; use resources that others are not
able to see them as resources; use the resources of other people or companies to
fulfil their goals.
Conclusion:
As organizations, industries, and consumers become more dynamic, effective
entrepreneurial management becomes more important. In most industries, nations, and
markets, effective entrepreneurial management challenges existing assumptions and look to
generate value in more innovative and creative ways. Effective entrepreneurial
management changes the way business is conducted by identifying opportunities and
successfully filling them. Since organizations need to renew themselves in order to sustain
competitiveness.

References:

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