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CHAPTER 1 ENTREPRENEURSHIP ENT530(1).pptx
- 1. CHAPTER 1 ENTREPRENEURSHIP ANDTHE INDIVIDUAL ENTREPRENEUR MINDSET
- 2. Learning Objectives • Tointroduce the concept of entrepreneurship and explain the process of entrepreneurial action • To describe how structural similarities enable entrepreneurs to make creative mental leaps • To highlight bricolage as a source of entrepreneurs’ resourcefulness • To introduce effectuation as a way expert entrepreneurs sometimes think • To develop the notion that entrepreneurs cognitively adapt • To introduce sustainable entrepreneurship as a means of sustaining the natural environment and communities and developing gains for others
- 3. The Nature ofEntrepreneurship • Entrepreneurship plays an important role in the creation and growth of businesses, as well as in the growth and prosperity of regions and nations • Entrepreneurial Opportunities • Situation in which new goods, services, raw materials, and organizing methods can be introduced • Sold at greater than their cost of production • Entrepreneurial Action • Creation of new products/services • Involves entry into new markets • May occur through a newly created organization or within an established organization
- 4. The Nature ofEntrepreneurship • Entrepreneur act on what they believe is an opportunity and because it exist in high uncertainty, entrepreneurs must use their judgment about whether or not to act. • The individual prior knowledge can decrease the amount of uncertainty and his or her motivation indicates a willingness to bear uncertainty. • Entrepreneur act on the possibility that one has identified an opportunity worth pursuing. • Entrepreneurial Thinking • An individuals’ mental processes of overcoming ignorance to: • Decide whether a signal represents an opportunity for someone • Decide whether that opportunity is applicable to the individual specifically • Process feedback from action steps taken
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- 6. How Entrepreneurs Think Entrepreneur Should: ThinkStructurally Cognitively Adapt Effectuate Engage in Bricolage
- 7. Example of acreative mental leap is from knowledge about existing markets to technology that could lead to products/services that satisfy that market Creative mental leap could be from knowledge about a technology to a new market that could benefit from its introduction Making these connection between a new product and a target market where it can be introduced is aided by superficial and structural similarities Superficial Similarities: Basic elements of the technology resemble the basic elements of the market Structural Similarities: Underlying mechanisms of the technology resemble the underlying mechanisms of the market Think Structurally The entrepreneurial challenge often lies in making creative mental leap based on structural similarities
- 8. Engage in Bricolage • Entrepreneursoften lack of resources • As a result they seek resources from others to provide the ‘slack’ necessary to experiment and generate entrepreneurial opportunities, or engage in bricolage • Bricolage: • Entrepreneurs making do by applying combinations of the resources at hand to new problems and opportunities • This involves taking existing resources and experimenting, tinkering, repackaging and/or reframing them so they can be used in a way for which they were not originally designed or conceived Engage in Bricolage
- 9. Entrepreneurs do notalways think through a problem in a way that starts with desired outcomes and focuses on the means to generate that outcome Such process is referred to as causal process Causal process: A process that starts with a desired outcome and focuses on the means to generate that outcome Entrepreneur sometimes use an effectuation process Effectuation: A process that starts with what one has (who they are, what they know, and whom they know) and selects among possible outcomes Effectuate
- 10. Effectuation helps entrepreneurthink in an environment of high uncertainty. Organization today operate in complex and dynamic environment that are increasingly characterized by rapid, substantial, and discontinuous change. Given the nature of this type of environment, most managers of firms need to take on an entrepreneurial mind-set so that their firms can successfully adapt to environmental changes Entrepreneurial Mind-Set: Involves the ability to rapidly sense, act, and mobilize, even under uncertain conditions Effectuate
- 11. • Describes theextent to which entrepreneurs are: • Dynamic, flexible, self-regulating and engaged in the process of generating multiple decision frameworks • Focused on sensing and processing changes in their environments and then acting on them • Metacognitive awareness: • Ability to reflect upon,understand, and control one’s thinking and learning Cognitive adaptability Cognitively Adapt
- 12. • We canachieve cognitive adaptability by asking a series a questions that relate to: Cognitively Adapt Series of Questions Comprehension Questions Connection Task Strategic Tasks Reflection Tasks
- 13. • Comprehension questions –Increase entrepreneurs’ understanding of the nature of the environment • Connection tasks – Stimulate thinking about similarities and differences of current situations with situations previously faced and solved • Strategic tasks – Identify strategies that are appropriate for solving the problem or pursuing the opportunity
- 14. • Reflection tasks •Stimulate entrepreneurs to think about their understanding and feelings as they progress through the entrepreneurial process
- 15. Adapt to new situations Becreative Communicate one’s reasoning behind a particular response Entrepreneurs who are able to increase cognitive adaptability have an improved ability to:
- 16. • Entrepreneurial intentions –Motivational factors that influence individuals to pursue entrepreneurial outcomes • Entrepreneurial self-efficacy – Conviction that one can successfully pursue entrepreneurial outcomes • Perceived desirability – Degree to which a potential entrepreneurial outcome is evaluated as favorable or unfavorable The Intention to Act Entrepreneurially
- 17. Education Age Work History Entrepreneur Backgroundand Characteristics
- 18. • Education – Facilitatesintegration and accumulation of knowledge thus providing a larger opportunity set – Casts a wider net for the discovery or generation of potential opportunities – Assists entrepreneurs in adapting to new situations – Does not necessarily determine whether the individual will create a new business Education
- 19. • Age – Chronologicalage – Usually between the ages 22 and 45 Age
- 20. • Work history –Past work experience of an individual Work History
- 21. • Role models:Individuals whose example an entrepreneur can aspire to and copy • Moral-support network: Individuals who give psychological support to an entrepreneur • Professional-support network: Individuals who help the entrepreneur in business activities Role Models and Support Systems
- 22. • Preserving nature,life support, and community in the pursuit of perceived opportunities to: – Bring future products, processes, and services into existence for gain • Can generate: – Economic gains – Environmental gains – Social gains Sustainable Entrepreneurship
- 23. Group Activity • Selectone organization that practices sustainable entrepreneurship. • Describe the product / service offered by the organization. • What makes you think the organization practices sustainable entrepreneurship? Provide examples. • What else could be done by the organization to promote sustainable entrepreneurship?