ENTERPRISE MANAGEMENT sustainability of the

organization.
Meaning and concept of entrepreneurship Risk Bears moderate risk. Bears all types of risk.
Status Organizational employees The free and sovereign
TERMS expecting freedom at work. person
Enterprise: an enterprise is simply another name for a business. A business enterprise is any Decisions Collaborative decisions to Independent decisions to
type of operation that is involved in providing goods or services with the anticipated outcome execute dreams. execute dreams.
of earning a profit. The terms company, firm, and business enterprise are often used Operation Operates from inside the Operates from outside the
interchangeably. organization. organization.
Entrepreneur: an individual who identifies a business opportunity, assembles resources
required to start a business, organizes these resources and creates a profitable innovative
ENTREPRENEURIAL DEVELOPMENT (ENTREPRENEURIAL PROCESS)
business. The entrepreneur is commonly seen as an innovator, a source of new ideas, goods,
This refers to the successive set of steps taken in order to establish a new enterprise. The
services, and business/or procedures.
entrepreneurship process can be expressed as a set of procedures and methodologies,
Entrepreneurship: the process of creating an innovative business with an aim of making
followed by entrepreneurs to establish a new business or venture.
profits under conditions of risk. It involves generating an idea, getting the necessary resources,
This process involves five steps: -
organizing them and creating a profitable business.
i) Idea generation: the detection of a problem in society and sensing out some
INTRAPRENEURSHIP opportunities, coupled with a concept of a possible solution.
ii) Opportunity evaluation: the screening of the business idea to determine whether it’s
Intrapreneurship is defined as entrepreneurship inside of an existing company.
worth investing in.
Intrapreneurship is also about turning attention towards internal capabilities and looking into
iii) Planning: the development of a business plan to serve as blueprint in implementation of
ways to develop new innovations. At its core, intrapreneurship is about the value people can
the business idea.
bring through their entrepreneurial thinking.
iv) Business formation/launch: the process of actually creating the venture and starting
An intrapreneur is someone who works like an entrepreneur but within the constraints of a
operations.
company that’s already established. They’re empowered to break free from the company’s
v) Growth: entails effectively managing the new firm’s operations in order to move toward
normal business operations and culture in order to bring new ideas, creativity, and innovation.
sustainable performance.
Intrapreneurs include any person within the company that applies entrepreneurial skills,
vision, and forward thinking into the role that they have in the company.
CREATIVITY AND INNOVATION
Even though intrapreneurs have the same mentality as entrepreneurs, they work in different Entrepreneurship is the result of a process that apply both creativity and innovation to
environments. Entrepreneurs either invest their own finances to the venture or look for capitalize on marketplace opportunities.
investors, while intrapreneurs rely on resources provided by the company which means that
the risks are usually smaller. Creativity is the characteristic of a person to generate new ideas, alternatives, solutions, and
possibilities in a unique and different way. It is the ability to conceive something
Differences between Entrepreneurship and Intrapreneurship unpredictable, original and unique.
Innovation is an act of application of new ideas to which creates some value for the business
Intrapreneurship Entrepreneurship
organization, government, and society as well.
Definition Intrapreneurship is the Entrepreneurship is the
entrepreneurship within an dynamic process of creating The primary difference between creativity and innovation is that the former refers to
existing organization. incremental wealth. conceiving a fresh idea or plan, whereas the latter implies initiating something new to the
Core objective To increase the competitive To innovate something new market, which is not introduced earlier. While Creativity is related to ‘imagination’, but
strength and market of socio-economic value. innovation is related to ‘implementation’.

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Differences Between Creativity and Innovation
1) The quality of thinking new ideas and putting them into reality is creativity. The act of
executing the creative ideas into practice is innovation.
2) Creativity is an imaginative process as opposed to innovation which is a productive
process.
3) Creativity can never be measured, but innovation can be measured.
4) Creativity is related to the generation of ideas which are new and unique. Conversely,
innovation is related to introducing something better into the market.
5) Creativity does not require money, while innovation requires money.
6) There is no risk involved in creativity, whereas risk is always attached to innovation.
TYPES OF INNOVATION
1) Invention - the creation of a new product, service or process.
2) Extension - New use or different application of an already existing product, service
or process.
3) Duplication - Creative replication of an already existing concept.
4) Synthesis - the combination of existing concepts and factors into a new formulation
or use.
The creative thinking process
The scientific process of generating new ideas has been found to involve five steps: -
i. Idea perception/recognition/seeding. This involves a free play of imaginative thoughts
and occurs when one takes a keen interest on something. At this stage an individual
becomes aware of a problem.
ii. Immersion/rationalization. The individual concentrates on the problem and becomes
deeply immersed in collecting information about the problem. The individual develops
a hypothesis without necessarily evaluating it. It represents a conscious search of
knowledge about the issue so as to integrate the information in search of answers.
iii. Incubation/fantasy. During this stage, the individual lets his or her subconscious go
through the available information. They see things intuitively into their inner nature
without a deliberate intention and that way they are able to know and recognize
mentally that which is not seen or understood ordinarily. The rational idea incubates in
the mind, assimilating the information into the system.
iv. Illumination/insight/eureka. This is the discovery stage when the individual develops
an integrative idea about the anticipated outcome. It’s a time when the answer comes
bursting through into consciousness.
v. Verification/validation – The person sets out to prove by logic or experiments that the
idea can solve the problem and can be implemented. The idea is tested against the
realities of the practical world.
Enhancing creativity and innovation in organizations
The benefits of creativity and innovation can only be harnessed if all organizational members
make their collective contribution to the organization processes. It therefore follows that
owner(s) of enterprises need to nurture creativity in order to exploit the talent possessed by
employees by creating an environment that is conducive for everyone to contribute ideas. To
this end, some useful strategies that can be employed to tap into skills of workers include: -
a) Employee empowerment: granting workers the authority and allowing them the freedom
to experiment on projects on their own.
b) Specialization: promoting mastery and skill development by assigning workers to their
areas of specialty.
c) Democracy: valuing the ideas and opinions of workers by allowing them to participate in
decision making.
d) Minimizing bureaucracy: de-emphasizing on excessive red tape speed up processes such
as project authorization
e) Risk management policy: providing for insurance and compensation to employees for
risks/losses arising from creativity and innovation.
f) Research resources: investing in research infrastructure and facilities such as labs and
personnel.
g) Training: developing the expertise that can drive research initiatives in the firm.
h) Security of tenure: guaranteeing job security to employees to provide a feeling of
belonging.
i) Access to information: developing and sharing knowledge with workers upon which they
can propose improvements to existing ways or even make new discoveries.
j) Incentives: providing incentives to encourage commitment such as good pay, better
working conditions, recognition and praise, etc.
METHODS OF GENERATING IDEAS
These are structured techniques that follow clear set of rules, guidelines and principles to
develop creative ideas. Common ones include: -
Brainstorming
This is a process of generating ideas through organized groups and discussions are allowed to
give suggestions and comments without criticism. It is an exercise in spontaneity where
participants through a creative thinking process think of as many business ideas as possible,
listing them down then going through the list, systematically and sorting out viable options.
Focus groups
In this groups, a moderator leads a group of people through in-depth discussions about idea
possibilities and members give suggestions and comments.
Free association
A method where ideas are generated through a stream (chain) of associations. The
participants are required to generate a word, symbol or phrase by allowing their minds to
wander without any deliberate intention. Another member then adds meaning to whatever
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has been generated, and the pattern continues producing a stream/chain of associations until
a new idea is born.
Forced association
The simple principle of forced association is of 'banging things together' that have not
previously been brought together.
The forced association technique is an idea generation tool that allows a team to associate or
connect pairs of unrelated concepts, ideas, or terms to search for potential solutions,
improved processes, or new products and services.
Problem Inventory Analysis
This is a method of obtaining new ideas and solutions by focusing of existing problems.
Ideas are generated in attempt to solve these problems and these solutions are modelled into
business ideas.
Gordon Method
This method begins with members not knowing the problem initially then they come up with
many ideas through a normal chat then a problem is revealed and they try to generate
solutions from the ideas they already generated.
BUSINESS PLANNING
This refers to the process of developing a business plan. A business plan is a detailed
document or blueprint that serves as a guideline in implementation of a business idea. It helps
the entrepreneur to visualize the entire business on paper by describing what needs to be
done, by whom and when.
Importance of a business plan.
1. Basis for financing: it is a requirement by providers of finance.
2. Direction: charts a clear path or roadmap on where the business is headed as captured
by vision and mission
3. Focus: clearly defines the activities the resources and efforts should be directed towards.
4. Communication tool: contains all information of any interest to stakeholders on the
proposed business.
5. Management tool: assists the owner to visualize all components of the business,
understand interrelationships, diagnose future problems and devise solutions in advance.
6. Planning tool: assesses and anticipates future business conditions which informs of
appropriate business strategies.
7. Control tool: presents a good way to allocate and manage the firm’s resources
8. Performance evaluation tool: it establishes standards/benchmarks against which actual
performance can be assessed.
COMPONENTS OF A BUSINESS PLAN
A business plan document is divided into a number of sections each of which details different
aspects of the proposed business.
i. The cover page – this is the front page of the business plan and it usually details the
business name, logo, slogan, pictorial or graphic or any other detail that will serve to
recognize the business.
ii. Table of contents – an outline of the entire detail in the document indicating the sections
and sub-sections, and the corresponding pages.
iii. Executive summary – a brief overview of the entire document providing a general and
complete outlook in a short and concise form.
iv. Business description – a chapter that provides detailed general information about the
proposed business.
v. Marketing plan – a chapter that details the proposed firm’s marketing activities and how
they shall be undertaken.
vi. Management/Organizational plan - an element that describes the firm’s human
resource, the structure of power and authority and the positions to be created.
vii. Operational/Production plan – describes the manufacturing/operational activities of the
proposed business i.e., the process that will be involved in providing goods/services.
viii. Financial plan – a component that projects the financial implications of the proposed
business; the amount of capital needed for investment and the projected profitability.
ix. Appendices – any supporting information which is in a form that is too detailed or
technical to be inserted within the main body, hence attached at the back of the main
content.
INTELLECTUAL PROPERTY (IP) – PROTECTION OF BUSINESS IDEAS
IP is a legal concept which refers to creations of the mind for which exclusive rights are
recognized. It is thus an intangible asset of the business. IP laws are premised on the idea that
the function of research and development conducted by firms leading to new discoveries
involves substantial costs and effort, hence its only fair to offer legal protection so as to
encourage future inventions.
There are four forms of intellectual property protection: Patents, Trademarks, copyrights and
trade secrets.
I.PATENTS
A patent is an exclusive right granted for an invention, which is a product or a process that
provides, in general, a new way of doing something, or offers a new technical solution to a
problem. It can also be defined as a legal document granted by the state to an inventor as
proof of invention for a limited period of time.
The word patent originates from the Latin word “patere” which means to “lay open” i.e.,
make available for public inspection, hence the rights are given in exchange of disclosure of
the invention by the inventor.
Upon the elapse of the exclusive rights period, the government releases the invention to the
public to allow for the business idea(s) to be enhanced or developed by other parties.
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In Kenya, registration of patents is governed by the Industrial Property Act, 2001and this law is
administered by KIPI (Kenya Industrial Property Institute).
What are the requirements for patentability?
To get a patent, the person's invention must meet four requirements:
a) The invention must have a useful purpose.
b) The invention must meet the legal definition of "novel."
c) The invention can't be something that anyone could invent.
d) The invention must have patentable subject matter.
What can be patented?
The government has a group of subjects that it names as "patentable subject matter." These
items include:
i) A machine, usually one with moving parts or circuitry.
ii) A process or method i.e., a new way of doing something better and/or more efficiently.
iii) Articles of manufacture i.e., a thing made by hand or machine.
iv) A new plant type that exists through asexual reproduction.
v) A new composition of matter i.e., chemical compositions, which can include a mixture of
ingredients or new chemical compounds.
Types of patents
1) Utility Patents: The most common type of patents. This type of patent covers processes,
compositions of matter, machines, and manufactures that are new and useful.
2) Design Patents: Patents issued for new, original and ornamental designs, embodied in or
applied to an article of manufacture. A design is defined as the "surface ornamentation" of
an object, which can include the shape or configuration of an object. While the object and
its design must be inseparable, a design patent with only protect the object's appearance.
In order to protect the functional or structural features of an object, a person must also
file for a utility patent.
3) Plant Patents: A plant patent can be obtained to protect new and distinctive asexually
reproduced plants. Asexual reproduction means that instead of being reproduced with
seed, the plant is reproduced by grafting or cutting the plant.
II. TRADEMARKS
A trademark is a distinctive sign, which distinguishes the goods or services produced or
provided by one enterprise from those of another. A mark includes any distinctive word,
letter, slogan, device, brand-name, heading, label, ticket, name, signature or
numeral or any combination thereof.
In Kenya, registration of marks is governed by the Trademarks Act, Cap 506 of the Laws of
Kenya, and this law is administered by KIPI (Kenya Industrial Property Institute).
Unlike a patent which holds for a specified period of time, a trademark can last indefinitely or
as long as the mark continues to perform its indicated function.
Types of trademarks
a) Coined or “fanciful” words. These are invented words without any intrinsic or real
meaning.
b) Arbitrary marks: These are words that have a meaning that is not related to the product
they advertise.
c) Descriptive marks: These are marks that describe certain features, qualities, ingredients
and characteristics of a product or service.
d) Suggestive marks: Those that are not generally descriptive, but instead suggest and evoke
one or more characteristics or attributes of a product/service. The customer needs to use
imagination to connect with the product.
Benefits of registering a trademark
1. Ensures that consumers can distinguish between products
2. Enables companies to differentiate their products
3. Its proof of exclusive rights
4. Is a marketing tool and the basis for building a brand image and reputation
5. May be licensed and provide a direct source of revenue through royalties
6. May be a crucial component of franchising agreements
7. Encourages companies to invest in maintaining product quality
8. May be useful for obtaining financing
III. Copyright
Copyright (or author’s right) is a legal term used to describe the rights that creators have over
their literary and artistic works. Section 22 of the Kenya Copyright Act, 2001 provides for the
works that are eligible for copyright as follows:
✓ Musical works;
✓ Audio-visual works;
✓ Sound recordings;
✓ Literary works;
✓ Artistic works; and
✓ Broadcasts.
FAIR USE AND COPYRIGHT PROTECTION
Fair use is a doctrine in law that permits limited use of copyrighted material without having to
first acquire permission from the copyright holder. Fair use and fair dealing are exceptions
applicable to the use of copyrighted works. These exceptions allow third party use of
copyrighted work without the owner’s permission without raising copyright infringement
claims. This doctrine applies when the use of copyrighted material is;
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 ✓ Essential to diffuse knowledge 3) Employees should be barred from discussing matters of business when they are out
✓ For the benefit of society, & in the public.
✓ Not for commercial gain 4) Keep travel plans of sensitive persons secrets.
5) Control information that may be presented by employees at conferences,
IV. TRADE SECRETS workshops, press briefings or in publications such as magazines and journals.
A trade secret is any confidential business information which provides an enterprise a 6) Simple security at premises especially where sensitive information is kept e.g., use of
competitive edge and is unknown to others. lockable file cabinets, passwords on computers, shredders when disposing off paper
Trade secrets are a type of intellectual property that comprise formulas, practices, processes, documents etc.
designs, instruments, patterns, or compilations of information that have inherent economic 7) Avoiding sending sensitive information through fax machines since such information
value because they are not generally known or readily ascertainable by others, and which the can be intercepted.
owner takes reasonable measures to keep secret. 8) Have employees and consultants sign non-disclosure agreements.
9) Documents should be marked confidential when need arises.
Trade secrets encompass both technical information, such as information concerning
manufacturing processes, pharmaceutical test data, designs and drawings of computer
programs, and commercial information, such as distribution methods, list of suppliers and
clients, and advertising strategies.

The unauthorized acquisition, use or disclosure of such secret information in a manner

contrary to honest commercial practices by others is regarded as an unfair practice and a
violation of the trade secret protection.

Conditions for information to qualify as trade secret

In general, to qualify as a trade secret, the information must:
i. not generally known to the public;
ii. confer economic benefit on its holder because the information is not publicly known; and
iii. the holder makes reasonable efforts to maintain its secrecy.

Depending on the legal system, the legal protection of trade secrets forms part of the general
concept of protection against unfair competition or is based on specific provisions or case law
on the protection of confidential information.

While a final determination of whether trade secret protection is violated or not depends on
the circumstances of each individual case, in general, unfair practices in respect of secret
information include industrial or commercial espionage, breach of contract and breach of
confidence.

MEASURES TO PROTECT SECRET INFORMATION

1) policy that requires employees to refer sensitive questions and inquisition to one
person within the enterprise.
2) All visitors to the business premises to be accorded escorts whenever they are to
gain access to sensitive offices.

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