OPERATIONAL DEFINITION OF ENTREPRENEURSHIP Taimoor shah ,Shehzad Khan Khalil ,Rooh ullah

Key points

What is entrepreneurship?

What are the boundaries of entrepreneurship paradigm?

Who are entrepreneurs?

Importance of definitionLack of direction for policy makers and academia

Good science has to begin with good definitions (Bygrave & Hofer)

No clear boundaries of the discipline

Entrepreneurship Problems with previous definitions

Repetition of same definition

Very vague (never defined entrepreneurs)

No agreement different samples were used

Entrepreneurs were attributed larger than life

Entrepreneurship (cont’d)

There are two approaches for defining entrpreneurship 1.Based on

observation of entrepreneur

2.A priori definition of

entrepreneurship

Entrepreneurship (cont’d) A priori definition method is adopted.

The term entrepreneurship is derived from French verb “entreprendre” means “undertake”.

Entrepreneurship (cont’d) Some previous definitions are : Bearing risk by buying at certain prices

and selling at uncertain prices (Cantillon) Jean Baptiste say added factors of

production.

Entrepreneurship (cont’d) Definition of entrepreneurship by

Schumpeter He for the first time added the creation

of an “enterprise” to the definition . He added that making a sub

organization in an existing organization also comes under entrepreneurship.

Entrepreneurship (cont’d) He differentiated entrepreneurship from

general management. He said that entrepreneurs looks for

continuous growth while managers accounts stability.

Entrepreneurship involves creation of new organization

Entrepreneurship (cont’d) Gartner (1990) expressed eight themes which constitutes

entrepreneurship

1. The entrepreneur

2. Innovation

3. Organization creation

4. Creating values

5. Profit or non profit

6. Growth

7. Uniqueness

8. Owner-manager

Entrepreneurship (cont’d) After synthesizing many concept it is proposed that : Entrepreneurship is the pursuit of discontinuous

opportunity involving the creation of an organization (or sub-organization) with the expectation of valve creation to the participants. the creation of organization involves the accumulation and deployment of resources and the building of organizational structure to pursue an opportunity.

Boundaries of Entrepreneurship paradigm

It means when entrepreneurship begins and when it ends and general management starts.

To enter the entrepreneurship paradigm one must create a new venture.

The antecedents to the creation of a new venture are also part of the entrepreneurship paradigm.

Boundaries of Entrepreneurship paradigm

When the entrepreneurship ship ends? The entrepreneurship ends when the organization

becomes self sustaining. The building of organizational structure &

networks , accumulation of resources & competitive advantage are necessary elements of paradigm.

The entrepreneurship also ends when the firm fails.

Boundaries of Entrepreneurship paradigm

Boundaries of Entrepreneurship paradigm

There are two parts of entrepreneurship paradigm.

1.New venture formation. 2.New venture performance.

Boundaries of Entrepreneurship paradigm

1.New venture performance includes: Antecedents to the formation of new

venture and its creation. The last thing is trigger event which

leads the entrepreneur to form a new venture.

Boundaries of Entrepreneurship paradigm

2.Venture performance include: Development and implementation of new venture

strategy. Accumulation of resources Capturing resources Organization building Capturing customers Financial success

Who Are Entrepreneurs? Entrepreneurs are those who engage in

entrepreneurship The entrepreneur is the individual or team that

identifies the opportunity, gathers the necessary resources , creates and is ultimately responsible for the consequences of the organization.

A person remains no longer an entrepreneur when the business becomes self – sustaining.

Who Are Entrepreneurs? (cont’d) Entrepreneur spends significant amount of his

time seeking opportunities and implementing changes in the organization.

The entrepreneurs are mostly found in small businesses because the key to survive is innovation.

Who Are Entrepreneurs? (cont’d) There are some characteristics cited in

entrepreneurs.

1. Desire for independence

2. Creativity

3. Risk taker

4. Need for achievement These traits also have a great influence in new

venture formation.

Who Are Entrepreneurs? (cont’d) There are some characteristics suggested for

entrepreneurs.

1. Prior Managerial experience

2. Prior Startup experience

3. Prior experience in line of business These traits have an influence on venture

performance. The most significant determinant for venture

performance is venture strategy.

Who Are Entrepreneurs? (cont’d) Individual repeatedly successfully engage in

entrepreneurship are professional entrepreneurs. They are also known as serial entrepreneurs They are distinct from individual that acts once. They act more quickly than others to exploit

opportunity.

Conclusion Entrepreneurship is the pursuit of a discontinuous

opportunity involving the creation of an organization (or sub-organization) with the expectation of value creation to the participants.

Entrepreneurs is the individual (or team ) that identifies the opportunity , gathers resources, creates and is ultimately responsible for the consequences of the organization.

Entrepreneurship is the mean by which new organizations are formed.