Entreprenuership (Chapter 4)

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Copyright © 2008 by Nelson, a division of Thomson Canada Limited

ENTREPRENEURSHIP

A PROCESS PERSPECTIVERobert A. BaronScott A. Shane

A. Rebecca Reuber

Slides Prepared by:

Sandra Malach, University of Calgary




4Essential Skills for

Entrepreneurs

1




Learning Objectives1. Describe several social skills and explain how social

competence (which is composed of these skills) caninfluence entrepreneurs‘ success.

2. Describe the difference between calculus-based trustand identification-based trust, and explain their rolesin the development of cooperative workingrelationships.

3. Define conflict and describe its major causes. 4. Explain how entrepreneurs can effectively manageconflict, especially affect-based conflict.




Learning Objectives5. Describe the techniques that individuals use most

frequently to influence others in work settings.

6. Describe various techniques that people use for

gaining compliance —for getting others to agree torequests they have made —and the basic principleson which these rest.

7. Define stress and describe its major causes.

8. Describe the adverse effects of stress, and explainseveral techniques entrepreneurs can use to reducethe level of stress they experience.




Quotation ―Marvelous is the power which can be

exercised, almost unconsciously, over a

company, or an individual, or evenupon a crowd by one person gifted withgood temper, good digestion, good

intellects, and good looks.‖(Anthony Trollope, 1863)




Social Skills Definition: A set of competencies

(discrete skills) that enable individuals

to interact effectively with others

Being able to get along with others is

an essential skill for entrepreneurs




5 Social Skills for Entrepreneurs1. Social Perception

2. Expressiveness

3. Impression management

4. Persuasion and influence

5. Social adaptability




Social Perception Accuracy in perceiving others accurately

―Read People‖

Important when:

Choosing Partners

Hiring people

Negotiation




Expressiveness Expressing one‘s own reactions and

emotions clearly

Important when:

Generating enthusiasm

Sales

Venture capitalists invest in people whodisplay passion




Impression management Making a good first impression

Important when:

Acquiring capital




Persuasion and influence. Changing others‘ attitudes or behaviour

in desired directions

Important when:

Making sales

Influencing Partners

Motivating Employees




Social Adaptability Adapt to a wide range of social

situations and to feel comfortable with

individuals from a wide range ofbackgrounds

Important when:

Making ―cold calls‖ to customers &suppliers




SOCIAL COMPETENCE Persons high in several social skills are

described as being high in social

competence Socially competent entrepreneurs are

actually more successful, in terms of

profitability




Working With Others Most new ventures are started by

teams

2 basic criteria for effective teams:

1. Must work together cooperatively

2. Conflicts must be handled effectively




Kinds of Trust




Conflict

Conflict is a process in which one partyperceives that another party has taken

or will soon take actions that areincompatible with its interests




Affective or Emotional Conflict

A strong element of anger or disliking isintroduced into the situation.

They are upset with each other, do nottrust each other, and experience strong,negative emotions

Generally produces negative results

―When emotions run high, reason flies outthe window.‖




Cognitive Conflict

Individuals become aware ofcontrasting perspectives or interests,

but focus on the issues and not on oneanother.

Cognitive conflict can be constructive.




Causes of Affective Conflict

Basic distrust between individuals orgroups

Pre-existing grudges Faulty attributions – errors concerning

the reasons for poor outcomes

Perception of personal objectivity andbias and irrationality in others

Personality traits or characteristics




Conflict Resolution

Negotiation

If unsuccessful negotiations result in a

deadlock the conflict will intensify

Win-win solution

Acceptable to both




Guidelines forConflict Resolution

Avoid tactics that reflect a win-loseapproach

Uncover the real issues

Broaden the scope of the issuesconsidered




Tactics of Influence

Rational persuasion —Using logical argumentsand facts

Inspirational appeal — Appealing to therecipient‘s values and ideals.

Consultation — Asking for participation indecision making or in planning.

Ingratiation —Getting someone to do whatyou want by putting that person in a goodmood or getting him or her to like you.




Tactics of Influence

Exchange —Promising some benefits inexchange for complying with a request.

Coalition-building —Persuading by seeking theassistance of others, or by noting the supportof others.

Legitimating —Pointing out one‘s authority tomake a request, or consistency with

organizational policies and practices. Pressure —Seeking compliance by using

demands, threats, or intimidation.




Other Tactics of Influence

Friendship/liking. The more otherpersons like us, the more willing they

are to agree to our requests; Commitment/consistency. Strong

pressure to comply with requests thatare consistent with initial commitments.

Scarcity.

Reciprocity.




Stress

A pattern of emotional states andphysiological reactions occurring in

response to demands from manydifferent events in our lives




The Basic Nature of Stress




Stress & Entrepreneurs

People said they gave up because theywere working too hard and wanted to

achieve more balance in their life. Self-employed Canadians work an

average of 56 hours per week, and

24% work more than 70 hours perweek!




Adverse Effects of Stress

Stress plays an important role in from50 to 70 percent of all forms of physical

illness. Stress is a major cause of ‗burnout‘

Physical Exhaustion

Emotion Exhaustion

Attitudinal Exhaustion

Reduced sense of Accomplishment




Stress Prevention

Good physical condition Healthy diet & exercise

Worry only (or at least mainly) aboutimportant things that are at least partlyunder your control

Avoid incompatible reaction procedure Stop awfulizing

Magnifying adverse affects

Entreprenuership (Chapter 4)

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