Professional Documents
Culture Documents
What are some of your habits or qualities that you possess that make you feel that you can
become an entrepreneur?
Will do something if they decide on it
Willingness to try new things despite fear
Satisfaction of doing a job well is satisfaction enough
Ask for what they want and don’t wait for someone to offer it to them
Urge to try something out even if others say it can’t be done.
Internal control to sustain drive needed to establish and run the enterprise
Other Feelings about Control
Need for independence – being one’s own boss
Need for achievement – a need to be recognized
Risk taking – whether financial, social or psychological
Improvement in lifestyle
Creation – [Value for audience and entrepreneur] – Devotion of time & effort – Assuming
necessary risks - Rewards
Definition of Entrepreneurship
Process of creating something new with value by devoting the necessary time and effort,
assuming the accompanying financial, psychological and social risks and receiving the resulting
rewards of monetary and personal satisfaction and independence.
Venture Capatalist is a professional money manager who makes risk investments from a apool of
equity to obtain a high rate of return on investments.
Innovation and newness – reform or revolutionize (not necessarily invent) methods and
inventions. Creating uniqueness. Can be related to production, organizational structure,
distribution. Can be difficult.
Must understand the nature and development of entrepreneurship, the decision process involved
in becoming an entrepreneur and the role of entrepreneurship in the economic development of a
country.
Research and development of new idea in Technology or filling gaps in customer needs and
wants in Marketing. Can also be due to workplace disruption and completion of educational
degree.
Individual feels that forming the new company is desirable and possible.
Desirable comes from culture (country), subculture (sects, districts), family (a family’s
inclination), teachers and peers.
Possible comes from government (infrastructure, taxes, bureaucracy), background (business &
work experience), marketing (is there a sufficient market ,best combo of product, price,
distribution and promotion), role models (if someone else succeeded so can I), finances (funding,
personal and risk capital).
Types of Start-Ups
Lifestyle Firms – privately held, modest growth, 30-40 employees, to support owners, little
opportunity for expansion.
Foundation Companies – result of r&d, foundation for a new business area, over time up to 400
employees, private investors.
High Potential Ventures – rapid growth, 500+ employees, important for economic development
of an area, high investment interest and publicity.
Intersection of knowledge and a recognized social need is key in product evolution. Also point
where idea fails to make it to market as a product and needs considerable attention. Matching
technology with appropriate market and making needed adjustments is tricky.
Assessment of opportunity - What need it fills and the demand, personal observations about need
or available market research data, patents, sizing up current and expected competition and its
behavior, the international market and competition, where is the money to be made in this
activity.
o Format
o Contents, Summary, Appendixes nad exhibits.
o Major sections include:
i. Description of business and industry
ii. Technology plan
iii. Marketing plan
iv. Financial plan
v. Production plan
vi. Organizational plan
vii. Operational plan
3. Resources Required
Appraisal of present resources.
Sort by importance – critical vs helpful
Sort by types
Entrepreneur should maintain as much control as possible especially in start-up
stage. Ownership relinquished as more financing comes in.
Alternative suppliers with their requirements to help secure lowest costs and least
loss of control.
Can be viewed from five key business dimensions. Managerial styles are known as the
administrative domain i.e. the way they make decisions.
1. Strategic Orientation
Depends on entrepreneur’s perception of the opportunity.
Use of planning systems and measuring performance to control resources the
administrative domain is operant like multinational organizations.
2. Commitment to Opportunity
Entrepreneurial domain – pressured by need for action, short decision windows,
willingness to assume risk, few decision constituencies and short time span for
commitment.
Administrative domain – Slow to act, commitment is often long lasting.
3. Commitment of Resources
Resources are committed at periodic intervals based on tasks or objectives being
met.
Resources difficult to obtain – usually from others and hence, often maximize
resource usage.
Multistage commitments allowed interested investors to monitor track record at
each interval and minimize exposure.
In administrative funding may be periodic but commitment to entire fund is made
initially.
4. Control of Resources
Entrepreneur – faces pressure of limited resources, obsolesce, a need for
flexibility – strive to rent vs own, and use resources on an as-needed basis.
Administrative – rewards based on accumulating resources
5. Management Structure
Entrepreneurial - Flat organization with informal networks throughout.
Administrative – formalized, hierarchical structure, clear lines of authority.
INTRAPRENEURSHIP
Important to maintain and instill entrepreneurial spirit in a corporation to
encourage innovation and growth.
Flexibility and creativity can be critical for a large organization to grow and adapt
new systems and techniques.
International Entrepreneurship
Nature – Exporting, licensing, opening a sales office in another country or something as simple
as advertising in a foreign newspaper.
Key difference between International and domestic entrepreneurship is the variation in the
relative importance of factors affecting sales, costs and profits.
Economics – currency valuations, government policies, banking, venture capital, marketing and
distribution systems.
Balance of payments – It is the difference in the value of country’s imports and exports over
time. It affects valuation of a currency.
Political-legal environment – restriction on imports, trade agreements and restrictions, taxes, oil
price fluctuations, types of ownership and organizational forms.
Technological Environment – variations and availability. Industry standards e.g permissible car
emissions in different countries.
Strategic Issues
Who will take responsibility?
Reporting, planning and control systems
Organizational structure
Standardization