Chapter 1 concept and nature of entrepreneurship

Chapter 1 concept and nature of entrepreneurship

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  CHAPTER ONE SUMMARY 1. Conceptof Entrepreneurship 2. Importance of Entrepreneurship 3. Function an characteristics of Entrepreneurship 4. Entrepreneur Vs Manager 5. The entrepreneurship process 6. Ethics and Social Responsibility of Entrepreneurship
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  1. Concept of Entrepreneurship Itis the process of creating something new with value by devoting the necessary time and effort, assuming financial, psychic, and social risks and receiving the resulting reward. It is also defined as the dynamic process of creating incremental wealth. It is the ability to create and build a vision from practically nothing.
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  Concept of .. . In all the definitions of entrepreneurship, we are talking about a kind of behavior that includes; i. Initiative taking ii. Organizing and re-organizing of social and economic mechanism to run resources iii.The acceptance of risks of failure.
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  Who is Entrepreneur? He/sheis one who undertakes to organize, manage and assume risks of a business. (peter, 2008) An innovator/developer Recognize and seizes opportunities, convert those opportunities into workable/marketable ideas. Add values through time, effort, money or skills, Assumes the risk of the competitive market place to implement those ideas.
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  2. Importance of Entrepreneurship Helpsentrepreneurs to fulfill their personal needs New venture has economical contribution Increase national income by creating new jobs Act as a positive force in economic growth Bridge the gap b/n innovation and the marketplace.
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  3. Function ofEntrepreneur Innovation (material resources) Bearing risk and uncertainty Organization building • Perception of market opportunities • Purchasing • Marketing • Dealing with bureaucrats • Managing etc.
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  4. Characteristics of. . . (what personal qualities do they have?) Clear vision and objective Drive to achieve Commitment Initiative taking Persistent problem solving Self confidence Tolerance of uncertainty & failure etc
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  Entrepreneurship Vs Small BusinessOwnership Entrepreneurship describes specific approach to business dev’t and ownership It is a way of thinking that focuses on innovation /innovative product/ 3-steps description of entrepreneurship • Thinking new Ideas • Dong new things • Creating values in the market plae
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  5. Entrepreneur VsManager Entrepreneur Manager Involve in the start up process Involve with running the business Assumes different risks Doesn’t have to bear risks Drive by perception of opportunity Drive by the source he currently posses Initiate change Follow rules and procedures He is his own boss He is a hired employee Gets uncertain rewards Gets fixed rewards and salary
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  6. The entrepreneurialprocess It is the process of pursuing a new venture, / new products into existing markets./ There are four phases: 1. Identification & evaluation of opportunity 2. Development of the business plan 3. Determination of the required resources 4. Managing of the resulting enterprise
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  Phase 1: Identification &evaluation of opportunity a. Opportunity identification is the process by which an entrepreneur comes up with the opportunities for a new venture. Sources of opportunity: •Customers and business associates •Member of the distribution system •Technical people
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  Phase 1: .. . B. opportunity evaluation: Identified opportunities should be screened & evaluated. It is the most critical element of the entrepreneurial process. It involves: • The length of the opportunities • Real and Perceived value • The risk and return • Its fitness with personal skill & goal of the entre. • Uniqueness/differential advantage/ in the env’t
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  Phase 1 .. . Opportunity assessment plan: evaluating opp. Similar to business plan but different in that it focus on only opportunities not the entire venture . Deciding whether or not to act on the opport. It includes: • Description of the product/service • Assessment of opportunities • Assessment of the entrepreneur & the team • Specification of all activities & resources needed • The source of capital to finance the venture
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  Phase 2: developingBP It is the general future direction of the business. It is written document describing all relevant internal and external elements and strategies for starting new venture. It is one of the time consuming phase In BP: • Opportunity will be defined and exploited • Resource required will be obtained & determined • Help to manage the venture successfully
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  Phase 3: determiningthe resource required Focus on the variety and amount of resource Identify and differentiate critical resources from helpful resources Determine resource required Determine the existed resources Identify the resource gap & possible supplier Developing access to needed resources Assessing the downside of insufficient or inappropriate resources
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  Phase 4: managingthe resulting enterprise All about implementing the BP Examining the operational problems • Implementing the management style and structure • Determining the key variables for success Establishing controlling system
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  7. Ethics andsocial responsibility Business ethics concerns itself with the investigation of business practice in light of human value. Ethics refers to the ‘study of whatever is right and good for humans Ethics is the study exploring the general nature of morals and the specific moral choices to be made by the individual in his relation with others.
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  Ethics . .. entrepreneurs have been shown to be particularly sensitive to examine pressure and general social norms in the community, as well as pressures from their competitors. A central question in business ethics: whose Benefit and at whose expense should the firm be managed? In addressing this question the entrepreneur ensures that resources are deployed fairly between the firm and its Stakeholders.