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MGT 03 - ENTREPRENEURSHIP
 Introduction to
Entrepreneurship
COURSE OUTCOME 1
LESSONS 1 AND 2

MGT03-Enterpreneurship
 TOPICS COVERED
• Entrepreneurs vs. Small Business Owners
• Entrepreneurship Mindset
• Approaches , Characteristics, and Theory
• Trend in Entrepreneurship Research
• Dark side of Entrepreneurship

MGT 03 - ENTREPRENEURSHIP
What is an Entrepreneur?

MGT03 – ENTREPRENEURSHIP
Entrepreneurs—Challenging the Unknown
• Entrepreneurs
• Recognize opportunities where others see
chaos or confusion
• Are aggressive catalysts for change within the
marketplace
• Challenge the unknown and continuously
create the future

“Improve on what already exists in a meaningful

way."

© 2009 South-Western, a part of Cengage

Learning. All rights reserved.

1–5
 “Anyone can be an entrepreneur who wants to
experience the deep, dark canyons of uncertainty
and ambiguity; and who wants to walk the
breathtaking highlands of success. But I caution, do
not plan to walk the latter, until you have experienced
the former.”

MGT03 - ENTREPRENEURSHIP
 Small Businesses
Owners
• Manage their businesses by
Entrepreneurs expecting stable sales, profits,
vs and growth
Small
Business Entrepreneurs

Owners • Focus their efforts on

innovation, profitability and
sustainable growth

© 2009 South-Western, a part of Cengage Learning. All rights reserved. 1–7

 Entrepreneurship: A Mindset
• Entrepreneurship is more than the mere creation of business:
• Seeking opportunities
• Taking risks beyond security
• Having the tenacity to push an idea through to reality
• Entrepreneurship is an integrated concept that permeates an
individual’s business in an innovative manner.
• Entrepreneurship is a dynamic process of vision, change, and
creation that requires an application of energy and passion
toward the creation and implementation of new ideas and
creative solutions.
© 2009 South-Western, a part of Cengage
Learning. All rights reserved.

1–8
 The Evolution of Entrepreneurship
• Entrepreneur is derived from the French entreprendre, meaning “to
undertake.”
• The entrepreneur is one who undertakes to organize, manage, and assume the
risks of a business.
Essential ingredients include:
The willingness to take calculated risks—in terms of time, equity, or career.
The ability to formulate an effective venture team; the creative skill to marshal needed resources.
The fundamental skills of building a solid business plan.
The vision to recognize opportunity where others see chaos, contradiction, and confusion.

• Although no single definition of entrepreneur exists and no one profile can

represent today’s entrepreneur, research is providing an increasingly sharper focus
on the subject. © 2009 South-Western, a part of Cengage
Learning. All rights reserved.

1–9
 The Myths of Entrepreneurship
• Myth 1: Entrepreneurs Are Doers, Not Thinkers
• Myth 2: Entrepreneurs Are Born, Not Made
• Myth 3: Entrepreneurs Are Always Inventors
• Myth 4: Entrepreneurs Are Academic and Social Misfits
• Myth 5: Entrepreneurs Must Fit the “Profile”
• Myth 6: All Entrepreneurs Need Is Money
• Myth 7: All Entrepreneurs Need Is Luck
• Myth 8: Ignorance Is Bliss For Entrepreneurs
• Myth 9: Entrepreneurs Seek Success But Experience
High Failure Rates
• Myth 10: Entrepreneurs Are Extreme Risk Takers (Gamblers)

© 2009 South-Western, a part of Cengage

Learning. All rights reserved.

1–10
Current Importance of Entrepreneurship

• Innovation
• Number of New Start-ups
• Job Creation

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MGT03 - ENTREPRENEURSHIP
21st Century Trends in Entrepreneurship Research

Venture
Financing

Corporate Social
Entrepreneurship Entrepreneurship

Trends in Women
Entrepreneurial
Entrepreneurship and Minority
Cognition
Research Entrepreneurs

Global
Entrepreneurial
Entrepreneurial
Education
Movement
Family
Businesses

© 2009 South-Western, a part of Cengage

Learning. All rights reserved.

1–12
Sources of Research on
Entrepreneurs
Research and Speeches,
Direct
Popular Seminars and
Observation
Publications Presentations

The
Entrepreneurial
Mindset

© 2009 South-Western, a part of Cengage

Learning. All rights reserved.

2–13
Sources of Research on Entrepreneurs
(cont’d)
• Publications • Direct Observation of Practicing
• Technical and professional journals Entrepreneurs
• Textbooks on entrepreneurship • Interviews
• Books about entrepreneurship • Surveys
• Biographies or autobiographies of • Case studies
entrepreneurs
• Speeches, Seminars, and
• Compendiums about entrepreneurs
Presentations by Practicing
• News periodicals
Entrepreneurs
• Venture periodicals
• Newsletters
• Proceedings of conferences
• The Internet

© 2009 South-Western, a part of Cengage

Learning. All rights reserved.

2–14
 15

MGT 03 - ENTREPRENEURSHIP
Common Characteristics of Entrepreneurs
• Commitment, determination, and
perseverance
• Drive to achieve
• Opportunity orientation
• Initiative and responsibility
• Persistent problem solving
• Seeking feedback
• Internal locus of control
• Tolerance for ambiguity
• Calculated risk taking
• Tolerance for failure
• High energy level
• Creativity and Innovativeness
• Vision
• Self-confidence and optimism
• Independence
• Team building

© 2009 South-Western, a part of Cengage

Learning. All rights reserved.

2–16
 ROLE PLAYING
Choose at least 3 characteristics of an entrepreneur that you
think are vital for a successful venture.

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MGT03 - ENTREPRENEURSHIP
 Entrepreneurship Theory
Entrepreneurs cause entrepreneurship.
• Entrepreneurship is a function of the entrepreneur:
E=
• Thus, the f(e)
continuous examination of entrepreneurial
characteristics aids the evolving understanding of the
entrepreneurial mind-set.
• Entrepreneurship is the interaction of skills related to inner
control, planning and goal setting, risk taking, innovation, reality
perception, use of feedback, decision making, human relations,
and independence.
© 2009 South-Western, a part of Cengage
Learning. All rights reserved.

2–18
The Dark Side of Entrepreneurship
• The Entrepreneur’s Confrontation with Risk
• Financial risk versus profit (return) motive varies in
entrepreneurs’ desire for wealth.
• Career risk—loss of employment security
• Family and social risk—competing commitments of work
and family
• Psychic risk—psychological impact of failure on the well-
being of entrepreneurs
© 2009 South-Western, a part of Cengage
Learning. All rights reserved.

2–19
 Stress and the Entrepreneur
• Entrepreneurial Stress
• The extent to which entrepreneurs’ work demands and expectations
exceed their abilities to perform as venture initiators, they are likely to
experience stress.
• Causes of Entrepreneurial Stress
• Loneliness
• Immersion in business
• People problems
• Need to achieve
© 2009 South-Western, a part of Cengage
Learning. All rights reserved.

2–20
 Dealing with Stress
• Networking
• Getting away from it all
• Communicating with employees
• Finding satisfaction outside the company
• Delegating
• Exercising Rigorously

© 2009 South-Western, a part of Cengage

Learning. All rights reserved.

2–21
 The Entrepreneurial Ego
(Self-Destructive Characteristics)
• Overbearing need for control
• Sense of distrust
• Overriding desire for success
• Unrealistic optimism

© 2009 South-Western, a part of Cengage

Learning. All rights reserved.

2–22
END
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MGT03 - ENTREPRENEURSHIP