Section 2

Section 2 - Objectives
• To describe the entrepreneurial mind-set.
• To present the major sources of information useful in profiling
the entrepreneurial mind-set
• To identify and discuss the most commonly cited characteristics
found in successful entrepreneurs
• To discuss the “dark side” of entrepreneurship
• To identify and describe the different types of risk
entrepreneurs face as well as the major causes of stress for
these individuals and the ways they can handle stress
• To examine entrepreneurial motivation
 The Entrepreneurial Mindset

• Entrepreneurial Mindset
– Describes the most common characteristics associated
with successful entrepreneurs as well as the elements
associated with the “dark side” of entrepreneurship.
• Who Are Entrepreneurs?
– Independent individuals, intensely committed and
determined to persevere, who work very hard.
– They are confident optimists who strive for integrity.
– They burn with the competitive desire to excel and use
failure as a learning tool.
 Common Characteristics of
Entrepreneurs

• Calculated riskdetermination,
Commitment, taking and perseverance
• Drive to achieve
Tolerance for failure
• Opportunity
High energy level
orientation
• Initiative and
Creativity andresponsibility
Innovativeness
• Persistent problem solving
Vision
• Seeking feedback
Self-confidence and optimism
• Internal locus of control
Independence
• Tolerance
Team building
for ambiguity
Outline of the Entrepreneurial Organization

Imagination

Acceptance
Flexibility
of Risks
 Characteristics Often Attributed
to Entrepreneurs
1. Confidence 15. Intelligence 29. Pleasant personality
2. Perseverance, determination 16. Orientation to clear goals 30. Egotism
3. Energy, diligence 17. Positive response to challenges 31. Courage
4. Resourcefulness 18. Independence 32. Imagination
5. Ability to take calculated risks 19. Responsiveness to suggestions and 33. Perceptiveness
6. Dynamism, leadership criticism 34. Toleration of ambiguity
20. Time competence, efficiency
7. Optimism 35. Aggressiveness
21. Ability to make decisions quickly
8. Need to achieve 36. Capacity for enjoyment
9. Versatility; knowledge of product, 22. Responsibility 37. Efficacy
market, machinery, technology 23. Foresight
38. Commitment
10. Creativity 24. Accuracy, thoroughness
39. Ability to trust workers
11. Ability to influence others 25. Cooperativeness 40. Sensitivity to others
12. Ability to get along well with 26. Profit orientation
41. Honesty, integrity
people
27. Ability to learn from mistakes 42. Maturity, balance
13. Initiative 28. Sense of power
14. Flexibility

Source: John A. Hornaday, “Research about Living Entrepreneurs,” in Encyclopedia of Entrepreneurship, ed. Calvin Kent, Donald
Sexton, and Karl Vesper, © 1982, 26–27. Adapted by permission of Prentice-Hall, Englewood Cliffs, NJ.
 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
 Typology of Entrepreneurial Styles

Source: Thomas Monroy and Robert Folger, “A

Typology of Entrepreneurial Styles: Beyond
Economic Rationality,” Journal of Private
 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
 Entrepreneurs:
Type A Personalities

• Chronic and severe sense of time urgency.

• Constant involvement in multiple projects subject to
deadlines.
• Neglect of all aspects of life except work.
• A tendency to take on excessive responsibility,
combined with the feeling that “Only I am capable
of taking care of this matter.”
• Explosiveness of speech and a tendency to speak
faster than most people.
 Dealing with Stress

• Networking
• Getting away from it all
• Communicating with
employees
• Finding satisfaction
outside the company
• Delegating
• Exercising Rigorously
 Section 3

Corporate Entrepreneurial Mind-Set

 Objectives

1. To understand the entrepreneurial mindset in organizations

2. To illustrate the need for entrepreneurial thinking in organizations
3. To define the term “corporate entrepreneurship”
4. To describe the corporate obstacles preventing innovation
within corporations
5. To highlight the considerations involved in reengineering
corporate thinking
6. To describe the specific elements of a corporate entrepreneurial strategy
7. To illustrate the interactive process of corporate entrepreneurship
 The Entrepreneurial Mindset in
Organizations

• Factors in the emergence of the entrepreneurial

economy:
– The rapid evolution of knowledge and technology
promoted high-tech entrepreneurial start-ups.
– Demographic trends adding fuel to the proliferation of
newly developing ventures.
– The venture capital market became an effective funding
mechanism.
– American industry began to learn how to manage
entrepreneurship.
 Assessing Support for Innovation

• Does the firm encourage entrepreneurial thinking?

• Does the firm provide ways for innovators to stay with their ideas?
• Are people permitted to do the job
in their own way, or are they
constantly stopping to explain their
actions and ask for permission?
• Has the firm evolved quick and
informal ways to access the
resources to try new ideas?
• Has the firm developed ways to
manage many small and
experimental innovations?
 Assessing Support for Innovation (cont’d)

• Is the system set up to encourage risk taking and to tolerate

mistakes?
• Are people in your company more concerned with new ideas
or with defending their turf?
• How easy is it to form functionally complete, autonomous
teams in the firm’s corporate environment?
 Rules for an Innovative Environment

1. Encourage action.
2. Use informal meetings whenever possible.
3. Tolerate failure and use it as a learning experience.
4. Persist in getting an idea to market.
5. Reward innovation for innovation’s sake.
6. Plan the physical layout of the enterprise to encourage informal
communication.
7. Put people on small teams for future-oriented projects.
8. Encourage personnel to circumvent rigid procedures and bureaucratic
red tape.
9. Reward and promote innovative personnel.

Source: Reprinted by permission of the publisher from “Corporate Venturing Obstacles: Sources and Solutions,” by Hollister B.
Sykes and Zenas Block, Journal of Business Venturing (winter 1989): 161. Copyright © 1989 by Elsevier Science Publishing Co., Inc.
 Encouraging an Intrapreneurial Environment

• Steps to help restructure corporate thinking and

encourage an intrapreneurial environment:
1. Early identification of potential intrapreneur
2. Top management sponsorship of intrapreneurial
projects
3. Creation of both diversity and order in strategic
activities
4. Promotion of intrapreneurship through experimentation
5. Development of collaboration between intrapreneurial
participants and the organization at large
 Benefits of an Entrepreneurial Philosophy

• Leads to the development of new products and services and helps

the organization expand and grow.
• Creates a work force that can
help the enterprise maintain
its competitive posture.
• Promotes a climate conducive
to high achievers and helps
the enterprise motivate and
keep its best people.
 The Need for Corporate
Entrepreneurship

• Rapid growth in the number of new and sophisticated

competitors
• Sense of distrust in the traditional methods of corporate
management
• An exodus of some of the best and brightest people from
corporations to become small business entrepreneurs
• International competition
• Downsizing of major corporations
• An overall desire to improve efficiency and productivity
 Model of the Corporate
Entrepreneurship Strategy Process

• Corporate entrepreneurship strategy is

manifested through the presence of three
elements:
– An entrepreneurial strategic vision
– A pro-entrepreneurship organizational
architecture
– Entrepreneurial processes and behavior as
exhibited across the organizational hierarchy.
 Model of the Corporate Entrepreneurship
Strategy Process (cont’d)

• Linkages in the model:

1. Individual entrepreneurial cognitions of the organization’s
members
2. External environmental conditions that invite entrepreneurial
activity
3. Top management’s entrepreneurial strategic vision for the firm
4. Organizational architectures that encourage entrepreneurial
processes and behavior
5. The entrepreneurial processes that are reflected in
entrepreneurial behavior
6. Organizational outcomes resulting from entrepreneurial
actions.
 Conceptualizing a Corporate
Entrepreneurial Strategy

• Critical steps of a corporate entrepreneurial

strategy:
– Developing the vision
– Encouraging innovation
– Structuring for an intrapreneurial climate
– Developing individual managers for corporate
entrepreneurship
– Developing venture teams.
 Innovation Rules

• Don’t kill a project

• Tolerate failure
• Keep divisions small
• Motivate the champions
• Stay close to the customer
• Share the wealth
 Preparing for Failure
• “Learning from Failure”
– Recognizing the importance of managing the
grief process that occurs from project failure.
– Understanding how organizational routines
and rituals are likely to influence the grief
recovery.
– Ensuring that the organization’s social
support system can encourage greater
learning, foster motivational outcomes, and
increase coping self-efficacy in affected
individuals.