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Comm320 02 TheEntrepreneur
Comm320 02 TheEntrepreneur
Any individual that sees and acts upon an opportunity This includes introducing a new product or service, identifying new markets, or putting a twist on an existing product, process or service Also, includes the raising of capital, taking the risk and controlling the new venture Embodies creativity, aggressiveness, and determination By assembling various resources, s/he takes risks and creates a venture from an idea, hobby, or simply a dream
Source of creativity, unconventional in approach, trial and error rather than methodical Management of resources, strategy development and implementation, focus on developing a structure to exploit the opportunity
Manager/Coordinator:
Environment
Behavior
2.
their character internal attributes Environmental Approach: entrepreneurs are a product of their environment external factors Behavioural/Managerial Approach : it is neither internal nor external factors but actions & behaviors that lead to entrepreneurship
3.
Contingency Approach
High need for achievement need to always achieve new bold goals Risk taking propensity willingness to take financial risks Tolerance for ambiguity no fear of the unknown Innovation ability to create new or modify existing business concepts Intuition make decisions based on gut feelings High need for independence & autonomy make own decisions Internal locus of control belief that the future is determined by their own actions Low need for conformity unhappy in environment with strict rules Proactive plans for events before they occur
Strong desire to set own goals and carry them out Want to take responsibility for actions
Desire to solve problems, gain satisfaction Ability to take moderate risks after assessing alternatives Need for feedback as a measure of success
Want to work independently and be their own boss Attitude may result from resentment of authority figures (parent, bank manager) May impede firms growth due to reluctance to delegate or let go control
Take calculated risks Consider alternative solutions before reaching decision For the Entrepreneur, the new business may be considered less risky than other alternatives
Refers to Entrepreneurs perception that all events are under their control They are able to influence events and determine outcomes of their own actions Dont attribute outcomes to fate or luck or external environment Individuals tend to: be alert, discover opportunities and scan environment effectively
Ambiguity = lack of complete and definitive information Ability to perceive ambiguity in a positive and challenging way Trait seen as an asset because allows Entrepreneur to organize thoughts and make decisions under conditions of uncertainty
Drucker defines innovation as the mechanism by which Entrepreneurs create or increase wealth Arises from search for opportunity in internal/external situations Internal: unexpected occurrences, incongruities, process needs External: economic or political trends, changes in customer preferences
Ability to take control of events Ability to take initiative in solving problems Ability to set objectives and implement solutions
Environmental Approach
Choice of Entrepreneurship is related to external factors beyond the individuals control, seen as a cultural phenomenon Culture
Entrepreneurs are products of their culture Some cultural groups see Entrepreneurship as a more desirable career opportunity Canada has highest percentage of Entrepreneurs who were born outside the country
locus of control correlation exists with reception of special attention & care Role models: entrepreneurial environments foster the development of entrepreneurial traits risk-taking, independence, creativity and achievement Rejection: rejection from family relations can lead to the development of independence (to avoid authority figures)
Level of education: more and more entrepreneurs are educated Experience: managerial and industry experience A large percentage of entrepreneurs start businesses in industries they are familiar with
Dislike 9am to 5pm routine Problem with acceptance of authority Difficulty in coping with bureaucracy
Minorities who feel discriminated against, women experiencing the glass ceiling often start own business out of necessity
Behavioral/Managerial Approach
Based on the entrepreneurs ability to achieve goals Success depends on the entrepreneurs ability to obtain resources, implement an appropriate strategy and develop an appropriate structure to exploit the opportunity Actions are the key criteria to determining whether or not an individual fits the profile of an entrepreneur Strategic thinking, goal setting, and planning, are all part of defining the characteristics of an entrepreneur under this theory
Contingency Approach
Combination of ALL factors
The ability to sense the opportunity (result of E traits)
Motivation varies from individual to individual Foreign refugees: people escaping political or religious persecution or to seek economy with greater opportunities Corporate Refugees: people dissatisfied with corporate environment Parental refugees: children of self-employed parents Feminist Refugees: women who feel discriminated against by supervisors, peers, education system, corporate world Social Refugees: people who do not agree with certain aspects of their society -- usually start a business tied to their hobby or craft Educational Refugees: young people who drop out of the education system -- feel restricted or because of circumstances