1-1 The Nature and Importance of Entrepreneurship McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright...

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1-1 The Nature and Importance of Entrepreneurship McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 1

Transcript of 1-1 The Nature and Importance of Entrepreneurship McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright...

Page 1: 1-1 The Nature and Importance of Entrepreneurship McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

1-1

The Nature and Importance of Entrepreneurship

McGraw-Hill/IrwinEntrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 1

Page 2: 1-1 The Nature and Importance of Entrepreneurship McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

1-2

Definition of Entrepreneurs Today

Entrepreneurship is the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychic, and social risks, and receiving the resulting rewards of monetary and personal satisfaction and independence.

Four aspects of being an entrepreneur today: Involves creation process. Requires devotion of time and effort. Involves rewards of being an entrepreneur. Requires assumption of necessary risks.

Page 3: 1-1 The Nature and Importance of Entrepreneurship McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

1-3

Entrepreneurs Versus Inventors

Inventor: Creates something for the first time; highly driven and motivated by his or her own work and personal ideas.

Differentiating characteristics of an inventor: Education. Level of experience. Problem-solving skills. Level of self-confidence. Willingness to take risks. Ability to tolerate ambiguity and uncertainty. View of monetary benefits in measuring success.

Page 4: 1-1 The Nature and Importance of Entrepreneurship McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

1-4

The Entrepreneurial Process

Four distinct phases: Identify and evaluate the opportunity.

Window of opportunity.

Develop a business plan. Determine the resource requirement. Manage the resulting enterprise.

Page 5: 1-1 The Nature and Importance of Entrepreneurship McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

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Aspects of the Entrepreneurial Process

Table 1.1

<<Insert Table 1.1>>

Page 6: 1-1 The Nature and Importance of Entrepreneurship McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

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Types of Start-Ups

Lifestyle firm Privately held; usually achieves only modest growth.

Foundation company Created from research and development. Lays the foundation for a new business area.

High-potential venture Receives the greatest investment interest and

publicity. Starts out like a foundation company, but attains

rapid growth. Also called gazelles, is integral to the economic

development of an area.

Page 7: 1-1 The Nature and Importance of Entrepreneurship McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

1-7

Role of Entrepreneurship inEconomic Development

Innovation is depicted as a key to economic development. Product-evolution process: Process through which

innovation is developed and commercialized. Iterative synthesis: Critical point in the product-

evolution process.

Three types of innovation: Ordinary Technological Breakthrough

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1-8

Product Evolution

Need RecognitionNeed Recognition

Initiate InnovationInitiate Innovation DevelopmentDevelopment

IndustrialIndustrial

Press to InventPress to Invent

Page 9: 1-1 The Nature and Importance of Entrepreneurship McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

1-9

Government as an Innovator

One channel for commercializing the results of the synthesis of social need and technology. Frequently called technology transfer.

Relatively few innovations reach commercial markets. Lacks business skills necessary for successful

commercialization. Government bureaucracy and red tape act as

inhibitors.

Page 10: 1-1 The Nature and Importance of Entrepreneurship McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

1-10

Corporate Entrepreneurship

Strengths of an existing business: Financial resources. Business skills. Marketing and distribution systems.

Factors that inhibit successful commercialization: Bureaucratic structure. Emphasis on short-term profits. A highly structured organization.

In the current era of hypercompetition, strategic business units (SBUs) are emerging.

Page 11: 1-1 The Nature and Importance of Entrepreneurship McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

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Independent Entrepreneurship

Factors that inhibit commercialization:

Managerial skills. Marketing capabilities. Financial resources. Unrealistic inventions. Lack of awareness on interfacing with necessary

entities (banks, suppliers, customers, venture capitalists, distributors, and advertising agencies).

Page 12: 1-1 The Nature and Importance of Entrepreneurship McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

1-12

Ethics and Social Responsibility

Entrepreneurs usually develop an internal ethical code.

Personal value systems tend to be influenced

by: Peer pressure. General social norms in the community. Pressures from their competitors.

Page 13: 1-1 The Nature and Importance of Entrepreneurship McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

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Future

Entrepreneurship has gained mileage through a number of ways:

Entrepreneurial education. Increase in academic research. Societal support (media coverage). Corporate entrepreneurship.

Page 14: 1-1 The Nature and Importance of Entrepreneurship McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

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Entrepreneurial Universities

Activities Seminars Consulting Research Case Development Technology Development

& Transfer Joint Ventures & Strategic

Alliances

Structures Business Assistance

Centers Incubators Innovation Centers Industrial Parks Enterprise Development

Centers Venture Capital

Exchanges Inputs

Guest Lectures Board of

Advisors/Trustees Internships Student Projects Source of Funds


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M A R C U S. McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 7-2 7 INNOVATION AND ENTREPRENEURSHIP.

M A R C U S. McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 7-2 7 INNOVATION AND ENTREPRENEURSHIP.

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Control, Change and Entrepreneurship Chapter Eight Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

Decision Making, Learning, Creativity, and Entrepreneurship McGraw-Hill/Irwin Contemporary Management, 5/e Copyright © 2008 The McGraw-Hill Companies,

Decision Making, Learning, Creativity, and Entrepreneurship McGraw-Hill/Irwin Contemporary Management, 5/e Copyright © 2008 The McGraw-Hill Companies,

McGraw-Hill © 2005 The McGraw-Hill Companies, Inc. All rights reserved. 1 The Sociological Perspective McGraw-Hill © 2005 The McGraw-Hill Companies, Inc.

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Entrepreneurship and Starting a Small Business Chapter 06 McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

17-2 Ending the Venture McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 17.

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10-2 The Financial Plan McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 10.

10-2 The Financial Plan McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 10.

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Chapter 05 Decision Making, Learning, Creativity, and Entrepreneurship McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights.

Chapter 05 Decision Making, Learning, Creativity, and Entrepreneurship McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights.

7 CHAPTER McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Business Strategy: Innovation and Strategic Entrepreneurship.

7 CHAPTER McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Business Strategy: Innovation and Strategic Entrepreneurship.

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12-1. 12-2 Managing Innovation and Fostering Corporate Entrepreneurship McGraw-Hill/Irwin Strategic Management, 3/e Copyright © 2007 The McGraw-Hill Companies,

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3-2 Entrepreneurial Intentions and Corporate Entrepreneurship McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc.

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