Chapter 2 Entrepreneurial Intentions and Corporate Entrepreneurship

McGraw-Hill/Irwin Copyright 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Hisrich Peters Shepherd

The Intention to Act Entrepreneurially

Entrepreneurial is most often intentional Eg: pursue certain opportunities, enter new markets, offer new product Entrepreneurial intentions - Motivational factors that influence individuals to pursue entrepreneurial outcomes. Intention is stronger when an action is perceived to be:
feasible and desirable.
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The Intention to Act Entrepreneurially

The perception of feasibility has much to do with self-efficacy
Entrepreneurial self-efficacy - Conviction that one can successfully execute the entrepreneurial process. High self-efficacy- initiative & persistence performance Low self-efficacy- effort performance Perceived desirability - The degree to which an individual has a favorable or unfavorable evaluation of the potential outcomes.
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The Intention to Act Entrepreneurially

Individual must also perceive this course of action as desirable
Perceived desirability - The degree to which an individual has a favorable or unfavorable evaluation of the potential outcomes. Eg: creative actions are likely to emerge if they produce personal rewards that are perceived as relatively more desirable than more familiar behaviors

The higher the perceived desirability and feasibility, the stronger the intention to act entrepreneurially

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Entrepreneur Background and Characteristics

Education Age Work History

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Entrepreneur Background and Characteristics

Education
Provides a background about starting a business. Helps in the development of communication skills and problem-solving skills. Provides individuals with a larger opportunity set. However, does not determine whether an entrepreneur will create a new business to exploit the discovered opportunity.

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Entrepreneur Background and Characteristics (cont.)

Age
Most entrepreneurs initiate their entrepreneurial careers between the ages of 22 and 45. Individuals are more inclined to start an entrepreneurial career at milestone ages every five years (25, 30, 35, 40, and 45). Male entrepreneurs tend to start their ventures in their early 30s, while women entrepreneurs do so in their middle 30s.

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Entrepreneur Background and Characteristics (cont.)

Work History
The decision to launch a new venture can be influenced by:
Dissatisfaction with ones job. Previous technical and industry experience.

Managerial skills and entrepreneurial experiences are also important once the venture starts growing. Previous start-up experience is a relatively good predictor of starting subsequent businesses.

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Role Models and Support Systems

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Role Models and Support Systems

Role models - Individuals influencing an entrepreneurs career choice and style
Can be parents, family members, or other entrepreneurs. Successful entrepreneurs are viewed as catalysts by potential entrepreneurs. Role models can serve in a supportive capacity as mentors by providing information, advice and guidance. Entrepreneurs need to establish connections and networks in the venture formation process.
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Role Models and Support System

(cont.)

Moral-Support Network
It is important for entrepreneurs to have a cheering squadindividuals who provide psychological support. Friends can provide honest advice, encouragement, understanding, and assistance. Relatives can be strong sources of moral support, particularly if they are also entrepreneurs.

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Role Models and Support System

(cont.)

Professional-Support Network
Entrepreneurs need advice and counsel throughout the establishment of the new venture which can be obtained from:
Mentorssomeone with whom entrepreneur can share problems & successes, also an expert individuals who have experience starting a buss, clients & buyers as a part of word-ofmouth advertising, expert such as consultants, lawyers or acoountants

Business associates-can be self-employed

Suppliers-

provide adequate availability of materials & info on nature of trends & competititon in industry
keep up with new developments, provide overall industry data

Trade associations-help keep new venture competitive, Personal affiliations-individuals

who shared hobbies as they provide confidence, support, advice & info

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Role Models and Support System

(cont.)

Professional-Support Network
Entrepreneurial activity is embedded in networks of interpersonal relationships.

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Minority Entrepreneurs
There has been significant growth in:
Female self-employment, with women starting new ventures at a higher rate than men. The number of Asian, African American, Hispanic, and Native American majority owned firms.

This growth is likely to be spurred by:

Encouragement of entrepreneurship among minority groups. Increase in the number of role models.
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Minority Entrepreneurs in Malaysia

Womens entrepreneur Indigenous entrepereneur

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Entrepreneurial Intentions Within Existing Organizations

Top management must create an environment that encourages employees to think and act entrepreneurially. Employees will realize that entrepreneurial action within the firm is both personally desirable and feasible.

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