DAR ES SALAAM INSTITUTE OF TECHNOLOGY (DIT)

OD 20 – FIRST SEMESTER- ACADEMIC YEAR 2022/2023

Module Name: Small Business Development
Module Code: GST 06112

THE CONCEPT OF ENTREPRENEURSHIP

What is Entrepreneurship?
The broader meaning of entrepreneurship is a way of thinking, reasoning, and acting that result in
the creation, enhancement, realisation and renewal of value for an individual, group, organisation,
and society.
At the heart of this process, is the creation and/or recognition of opportunities followed by the will
and initiative to seize these opportunities.
It is identifying opportunities for adding value in any context and creating the mechanisms, systems,
networks or organisations to exploit it.
In this concept, it is not what you are doing that makes you entrepreneurial: it is how you are
doing it.
So entrepreneurship is the process of searching for change, responding to it and exploiting it as an
opportunity. In this process there is creation of something different with value by devoting time and
efforts assuming the accompanying risks for success.

In business
a) Entrepreneurship can be defined as identifying a business opportunity and creating an
organisation to exploit it/starting a small business. or
b) It is identifying an innovative business opportunity and /or creating an innovative organisation
(business) to exploit it strategically.
Therefore, not all business founders are entrepreneurs. Entrepreneurs are those who identify
innovative business ideas and or operate their businesses innovatively and strategically and
are motivated to seek profit and growth.
c) Is a phenomenon in the economy by which individuals or companies assume risks to create
something new in order to obtain the benefits from the new venture.

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d) Entrepreneurship can also be defined as the act or process of identifying business opportunities
and gathering the necessary resources to initiate and manage successfully a business activity. It
is a creative process which involves identifying problems, deficiencies, gaps, missing elements
and disharmonies, thus identifying business opportunities and finding solutions for eventual
implementation.

WHO IS AN ENTREPRENEUR?
In a broad way an entrepreneur can be defined as a person who always searches for change,
responds to it and exploits it as an opportunity and persistently pursues for such opportunities.
Entrepreneurs can be business owners, managers, employers…….

In business
An entrepreneur is a person who creates a new business in the face of risk and uncertainty for the
purpose of achieving profit and growth by identifying significant opportunities and assembling the
necessary resources to capitalize on them.
Is a person who develops a new idea and takes the risk of setting up an enterprise to produce a
product or service which satisfies customer needs.
He/she is an individual who owns and manages a business for the principal purpose of profit and
growth.
He/she is a person who can see opportunities, converts them into marketable ideas, mobilizes
resources and bears risks for success.
He/she is the business person who is not satisfied with his/her performance and therefore always
finds ways to improve and grow.
Although many people come up with great business ideas, most of them never act on their ideas.
Entrepreneurs do. Entrepreneurs are more than just business creators; they are change agents in
society.
Entrepreneurs are found in all kinds of organizations
They are highly valued in today’s world, because it calls for constant improvement, aggressiveness,
vision, ability to assess risks and quickly take action, etc

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WHAT IS AN ENTERPRISE
An enterprise is defined as any entrepreneurial activity/commercial undertaking.

TYPES OF ENTREPRENEURSHIP
There are three types of entrepreneurship
 Business entrepreneurship
 Corporate entrepreneurship (intrapreneurship)
 Social entrepreneurship
(i) Business entrepreneurship –Owning and operating a business entrepreneurially with
expectations of financial profit and other rewards that the business may generate.

(ii) Intrapreneurship (Corporate entrepreneurship) – Intrapreneurship is the practice of

entrepreneurship by employees within an organization. This involves display of entrepreneurial
behaviours attributes and skills at work place. It is creating organizations or systems that add value
in established organizations. Like
 Religious institution  NGO
 Corporate organization  Community
 Government – central or local  Home/family/relationship

AN INTRAPRENEUR
Is a person who operates in an entrepreneurial way from within an established organization.

Intrapreneurs share the same traits as entrepreneurs such as conviction, zeal and insight. As the
intrapreneur continues to expresses his ideas vigorously, it will reveal the gap between the
philosophy of the organization and the employee. If the organization supports him in pursuing his
ideas, he succeeds. If not, he is likely to leave the organization and set up his own business.

Example of intrapreneurship: A classic case of intrapreneurs is that of the founders of Adobe,

John Warnock and Charles Geschke. They both were employees of Xerox. As employees of Xerox,
they were frustrated because their new product ideas were not encouraged. They quit Xerox in the
early 1980s to begin their own business. Currently, Adobe has an annual turnover of over $3 billion.

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Value adding employees exhibit the following characteristics:

i) Make work/turnover
ii) Have good contacts/networks

iii) Have total customers orientation

iv) Attract/find resources

v) Take independent actions

vi) Look after personal growth

vii) Imagine customers for all initiatives

Restrictive Environment to Intraprenneurs in Organisations

i) Follow the instructions
ii) Do not make any mistakes

iii) Do not fail

iv) Do not take initiative but wait for instructions

v) Stay within your turf (territory) and protect your backside

Others
i) Impersonal relationship
ii) Too many layers of approval

iii) Need for control

iv) Conservatism- restrictive environment

v) Specificity of time dimension –e.g quarterly and monthly reports

vi) Lack of entrepreneurial talent

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vii) Inappropriate compensation methods

viii) Short term performance requirements- short run profits

ix) Planning procedures

x) Lack of ownership of the problem

xi) Mobility of managers

xii) Lack of flexibility in organization

Some companies do this better than others. Why?

i) Organization structure
ii) Hiring innovative people

iii) Listening

iv) Reward structure

v) Allow failure

vi) Teamwork spirit

vii) Corporate communication- dissemination corporate goals

viii) Speed in decision making by core business manager

Developing Entrepreneurial culture within an organization (Climate for Intrapreneurship)

In establishing an Intrapreneurial environment, certain factors and leadership characteristics need to
be present.

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The first of these is that the organization operates on the frontiers of technology. Since research and
development are key sources for new product ideas, the firm must operate on the cutting edge of
technology and encourage and supporting new ideas instead of discouraging them.

Second is encouraging experimentation, or trial and error. Successful new products usually do not
appear fully developed; instead, they evolve. A company wanting to establish an entrepreneurial
spirit has to establish an environment that allows mistakes and failures. Without the opportunity to
fail, few corporate entrepreneurial ventures will be developed.

Third an organization should make sure that there are no initial opportunity parameters, such as turf
protection, inhibiting creativity in new product development.

Fourth, the resources of the firm need to be available and easily accessible. Often, sufficient funds
are allocated not to creating something new but instead to solving a problem that have an immediate
effect. Some companies, such as Xerox, 3M, and AT&T have established separate venture capital
areas for funding new internal ventures.

Fifth A multidisciplinary team approach needs to be encouraged. Developing the needed team work
for a new venture is further complicated by the fact that a team member’s promotion within the
corporation is related to performance in the current position, not in the new venture. The corporate
environment must establish a long-time horizon for evaluating the success of the overall program.

Sixth the spirit of intrapreneurship cannot be forced on individuals; it must be voluntary. Most
managers in a corporation are not capable of being successful intrapreneurs. Those who do emerge
from this self-selection process must be given the freedom to carry a project through to completion.
An intrapreneur falls in love with the new venture and will do almost anything to ensure its success.

The seventh characteristic is a reward system. The intrapreneur needs to be appropriately rewarded
for the energy and effort expended on the new venture. An equity position in the new venture is one
of the best motivational methods.

Eight a corporate environment favorable for intrapreneurship has sponsors and champions
throughout the organization that supports the creative activity and resulting failures.

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BUT: When supporting intrapreneurship, it is very important to understand where to draw the line.
Some businesses fail because they embrace every idea that comes their way before conducting
thorough research on the effect of that idea into the business. Before implementing a new business
idea, a firm business case should be presented and all the pros and cons discussed to find out what
that business idea will do to the company. After consultations and research, a final decision should
be made for the good of the company.

Implication

Whenever you are (Bank, Treasury, School, Consulting firm) always ask yourself: Am I an
intrapreneur or just a normal employee/manager/consultant/business operator? If you are just a
normal employee, your value is very limited.

(iii) Social entrepreneurship - A social entrepreneur is a person who recognizes a social

problem and uses entrepreneurial principles to organize, create and manage a venture to
achieve social change (a social venture). Whereas a business entrepreneur typically measures
performance in profit and return, a social entrepreneur focuses on creating a social change.
A social entrepreneur identifies and solves social problems on a large scale. Just as business
entrepreneurs create and transform whole industries, social entrepreneurs act as the change agents
for society, seizing opportunities others miss in order to improve systems, invent and disseminate
new approaches and advance sustainable solutions that create social value.

Unlike traditional business entrepreneurs, social entrepreneurs primarily seek to generate "social
value" rather than profits. And unlike the majority of non-profit organizations, their work is targeted
not only towards immediate, small-scale effects, but sweeping, long-term change.

The job of a social entrepreneur is to recognize when a part of society is stuck and to provide new
ways to get it unstuck. He or she finds what is not working and solves the problem by changing the
system, spreading the solution and persuading entire societies to take new leaps.

Identifying and solving large-scale social problems requires a committed person with a vision and
determination to persist in the face of daunting odds. Ultimately, social entrepreneurs are driven to
produce measurable impact by opening up new pathways for the marginalized and disadvantaged,
and unlocking society's full potential to effect social change.

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One well-known contemporary social entrepreneur is Muhammad Yunus, founder and manager of
Grameen Bank and its growing family of social venture businesses, who was awarded a Nobel
Peace Prize in 2006.The work of Yunus and Grameen echoes a theme among modern day social
entrepreneurs that emphasizes the enormous synergies and benefits when business principles are
unified with social ventures.He is the father of micro-credit schemes world wide.

Example of social entrepreneurship in Tanzania

With the Tanzanian case, we see that one category of social enterprises which has been working
well is the microfinance providers. Most of them have dual objective of reaching many poor clients
mostly Small and Medium Enterprises, in the rural areas and be financially sustainable. The
proponents of the microfinance enterprises have the major mission of transforming society, bringing
about social change where it is seen impossible. They consider innovative ways of bringing the
well-being of majority of society members, who are poor, in terms of creating to them access to
credit in the absence of collateral. This is what drives social entrepreneurs when starting and
managing social enterprise

CHARACTERISTICS/VALUES/QUALITIES/ATTRIBUTES OF AN ENTREPRENEUR
Researchers have invested a great deal of time and effort trying to paint a clear picture of the
entrepreneurial personality and found out that enterprising individuals share the following General
Enterprising Tendencies (GETs)

i. Need for Achievement

Forward looking, optimistic, dedicated in task accomplishment, energetic, self-sufficient, task
oriented, result-oriented and persistent in pursuing an outcome. Entrepreneurs are achievement
oriented who are driven by a strong desire to excel and succeed in business ventures and
accomplishing their goals.

ii. Need for Independence

Doing unconventional (unusual) things, working independently, ability to self expression,
reluctance to bow to pressure groups. Entrepreneurs have a sense of autonomy by being

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independent in thought and action since they have the need to control their future, so start business
because they want to be their own boss.

iii. Innovative and Creativity

Imaginative and innovative, intuitive, full of ideas, liking novelty and change, curiosity and
versatility.Entrepreneurs add value by using new ways of combining resources, creating new
products, processes, strategies, industries.
Entrepreneurs are innovators because they use new knowledge/information for creating new
products/services and make them available to the market.

iv. Calculated Risk –taking

Assessing accurately own capabilities, being neither over nor under-ambitious, ability to set
challenging but attainable goals, ability to evaluate probable benefits against probable costs.
Entrepreneurs prefer to take moderate calculated risks. These are risks which provide a reasonable
and challenging chance which is brought about by fearlessness and impulsiveness.

v. Drive and Determination

Ability to take advantage of opportunities, being self sufficient, equate results with efforts, discount
fate belief in controlling own destiny. An entrepreneur is not discouraged by difficulties and
problems that come up in the business or his/her personal life. The persistence and determination is
fuelled by a burning desire to achieve the goal of succeeding in the chosen field of business and
other activities and the belief that he/she can control his/her destiny.

Other characteristics include:

Need to control and direct
Entrepreneurs are people who must exercise maximum responsibility and accountability. They
demonstrate that they are in control of both the present and future events to achieve their life goals.

Tolerance of ambiguity and uncertainty

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Entrepreneurs tolerate ambiguity and uncertainty. Constant changes of customer needs and tastes
create ambiguity and stresses for the entrepreneur.

Using feed-back
Entrepreneurs are eager to know how well they are performing so they actively seek out and use
feedback to learn their mistakes and setbacks.

Problem solving
Entrepreneurs possess high levels of determination and desire to overcome hurdles, solve problems
before seeking external help and reach their goals. They are extremely persistent, but they are also
realistic in recognizing what they can and cannot do.

Optimistic
The attention of entrepreneurs is focused on assuring success and they are always hopeful. They do
not get disappointed, discouraged or depressed by set-backs or failures.

Sufficient emotional stability

Entrepreneurs have considerable self-control and are able to handle the anxieties and business
pressures and other problems of life concurrently.
Goal-setting
Entrepreneurs usually set high but attainable goals. Such goals help entrepreneurs define priorities
and provide them with measures of performing their functions well.

Excellent Leadership qualities

Entrepreneurs are leaders. They can lead and influence other people such as partners, subordinates,
customers and other stakeholders. An entrepreneur is individual who has the ability to inspire and
lead others; he/she can enlist support of others in the accomplishment of a common task such as a
business undertaken.

Self-confidence
Entrepreneurs have high personal standards of integrity and reliability. They are self-confident.
Entrepreneurs must demonstrate extreme self-confidence and positive self-concept in order cope
with all the risks of operating their own business. They tend to believe in their own capabilities and

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so tend to be responsible for their own decisions. Belief in ones capabilities is very important in
achieving any goal.

Time-management
Entrepreneurs have a very strong sense of personal commitment to meet deadlines. They perceive
time as an important resource and try to use it in the best possible way.

Foresight
Entrepreneurs are able to see an opportunity where others see chaos, confusion and problems. They
are able to predict future events about businesses and keep themselves prepared.

Long term involvement

Entrepreneurs are committed to their business ventures which are usually long term undertakings.

Future orientation
Entrepreneurs have a well -defined sense of searching for opportunities. They look ahead and are
less concerned with what they did yesterday than with what they might do tomorrow. Not satisfied
to sit back and reveal in their success, real entrepreneurs stay focused on the future.
Flexibility
Entrepreneurs have the ability to adapt to the changing demands of their customers and their
businesses. In this rapidly changing global economy, rigidity often leads to failure. As the society,
people and tastes change, entrepreneurs also must be willing to adapt their businesses to meet those
changes. When their ideas fail to live up to their expectations, successful entrepreneurs change
them.

High degree of commitment

Entrepreneurship is hard work and launching a company successfully requires total commitment
from an entrepreneur. Business founders often immerse themselves completely in their companies.
Most entrepreneurs have to overcome seemingly undefeatable barriers to launch a company and to
keep it growing. That requires commitment. An entrepreneur will work long hours just to be able to
keep his or her promise to his/her client. He/she does the work together with he/her workers to get a

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job done and is task oriented so dedicated to complete the tasks related to his/her business and other
important activities.
Initiative
Opportunity seeking
Information seeking
Organized and goal oriented
Systematic planning and monitoring
Honesty and honor
Perseverance and hard work
Networking and high level of motivation
Good business and managerial expertise

Discussion:
Are people born with entrepreneurial qualities or can they learn?

Write ways you can use to become more entrepreneurial (i.e. to develop entrepreneurial character).

WAYS OF DEVELOPING GETs

i) Always ask the question –is there a better way?
ii) Challenge custom, routine and tradition
iii) Realize that always there more than one answer
iv) See mistakes and failures as mere pit stops/bumps on the way to success
v) Identify yourself with successful people
vi) Expose yourself to difficulty and challenging situations
vii) Share information with others
viii) Add value to everything you do
ix) Be an achiever-finish what you start
x) Solve your own problems before seeking help
xi) Be proud/ feel good about yourself and your work

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xii) Build up stamina (try and try hard)
xiii) Observe others and copy -but don’t be a copycat
xiv) Experiment (try new ways of doing things)
xv) Try to see something from a different perspective
xvi) Exercise time management
xvii) Set both short and long term goals
xviii) Try to make things happen to yourself
xix) Consider different ways of making income
xx) Focus on learning by doing
xxi) Set times for completion of activities

Discussion
1. Imagine you own a business and you are looking for a fresh graduate to assist you and
potentially take over as a general manager in the future. You have to choose from only two people
Nyabongo has a Masters in Business administration (MBA) but very low GETs and Kabuye has a
Bachelor of Arts (Education) and very high GETs.
Which of the two will you select and why?

2. Is there any relationship between GETs and starting businesses?

Ways of Promoting GETs among Workers

i) Sensitize/train staff
ii) Delegate decision making
iii) Attract and work with talented people
iv) Design flexible organization structure
v) Reward risk taking and treat mistakes as learning
vi) Emphasize individual responsibility
vii) Set strong goals
viii) Have a system of feedback

INDICATORS OF ENTREPRENEURIAL BUSINESS V/S SURVIVALIST BUSINESS

Entrepreneurial business Survivalist business

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i) Committed and focused i) Hanging on, not committed
ii) Growing ii) No vision
iii) Innovative, iii) Dependent
iv) dynamic iv) Complaining
v) Confident v) Not proud of the activity
vi) Willing to take reasonable risks vi) Not confident
vii) Networked vii) Not learning actively
viii) Future oriented viii) Self-doubt
ix) Ambitious ix) Blames everyone except self
x) Self-belief

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