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ENTREPRENEURSHIP MANAGEMENT:Why Is Entrepreneurship Important?

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Principles of Management ­ MGT503
VU
Lesson 10.28
ENTREPRENEURSHIP MANAGEMENT
What Is Entrepreneurship?
1.
Entrepreneurship--the process where individuals or a group of individuals risk time and money
in pursuit of opportunities to create value and grow through innovation regardless of the resources
they currently control.
2.
Entrepreneurial ventures vs. small businesses
Entrepreneurial ventures--organizations that are pursuing opportunities, characterized by
innovative practices, and have growth and profitability as their main goals.
Small businesses--organization that is independently owned, operated, and financed; has fewer
than 100 employees; doesn't necessarily engage in any new or innovative practices, and has
relatively little impact on its industry, usually remaining small by choice or by default.
Why Is Entrepreneurship Important?
1.
Innovation--a process of changing, experimenting, transforming, revolutionizing, and a key aspect
of entrepreneurial activity.
2.
Number of New Start-Ups
Data collected by the U.S. Small Business Administration shows that the number of new start-ups
rose between 1995 and 2000.
Assuming that some of these new businesses engage in innovative practices and pursue profitability
and growth, then entrepreneurship has contributed to the overall creation of new firms.
3.
Job Creation
The latest figures show that virtually all new net jobs were generated by firms with fewer than 500
employees.
4.
Exhibit P2.1 on p. 144 provides the results of the GEM (Global Entrepreneurship Monitor) study
that looked at the level of entrepreneurial activity in 21 countries.
The Entrepreneurial Process
1.
Exploring the entrepreneurial context
It includes the realities of the new economy, society's laws and regulations that compose the legal
environment, and the realities of the changing world of work.
2.
Identifying opportunity and possible competitive advantages
3.
Starting the venture
It includes researching the feasibility of the venture, planning the ventures, organizing the ventures,
and launching the venture.
4.
Managing the venture
It includes managing processes, people, and growth.
What Do Entrepreneurs Do?
1.
Initially, an entrepreneur is engaged in assessing the potential for the venture, and then dealing with
start-up issues.
2.
Once the venture is up and running, the entrepreneur's attention switches to managing it.
3.
Finally, the entrepreneur must manage the venture's growth.
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Principles of Management ­ MGT503
VU
Answering the Questions
1.
Differentiate between entrepreneurial ventures and small businesses.
Entrepreneurial Ventures--organizations that are pursuing opportunities, characterized by
innovative practices, and have growth and profitability as their main goals.
Small Businesses--organization that is independently owned, operated, and financed; has fewer
than 100 employees; doesn't necessarily engage in any new or innovative practices, and has relatively little
impact on its industry, usually remaining small by choice or by default.
2.
Why is entrepreneurship important in Pakistan?
The important of entrepreneurship in Pakistan can be shown in three areas: innovation, number of
new start-up business and SMEs, and job creation.
3.
Is the pursuit of entrepreneurship important only in Pakistan? Explain.
The Global Entrepreneurship Monitor (GEM) studied the pace of entrepreneurial activity on
economic growth in various countries. Among the major industrialized G-7 countries in particular, there
was a very strong relationship between the level of entrepreneurial activity and annual economic growth.
Same is true for every country like Pakistan i.e. developing nation.
4.
Describe the four key steps in the entrepreneurial process.
Exploring the entrepreneurial context; includes the realities of the new economy, society's laws and
regulations that compose the legal environment, and the realities of the changing world of work.
Identifying opportunity and possible competitive advantages
Starting the venture; includes researching the feasibility of the venture, planning the ventures,
organizing the ventures, and launching the venture.
Managing the venture; includes managing processes, people, and growth.
5.
What do entrepreneurs do?
Initially, an entrepreneur is engaged in assessing the potential for the venture, and then dealing with
start-up issues. Once the venture is up and running, the entrepreneur's attention switches to managing it.
Finally, the entrepreneur must manage the venture's growth.
6.
Why are social responsibility and ethical considerations important to entrepreneurs?
Ethical considerations play a role in decisions and actions of entrepreneurs. The results of a study
of approximately 300 entrepreneurs and corporate managers showed that entrepreneurs generally have
more strict ethical standards than do managers and are also better able to live by their beliefs, probably
because they have more control over their decisions and actions.
Preparing to Operate a Small Business:
1. Writing a Business Plan:
A business plan is a document written by an entrepreneur or perspective owner that details the nature of
business, the product or service, the customers, the competition, the production and marketing methods,
the management, the financing and other significant aspects of proposed business venture.
It has several purposes:
1. To think in concrete terms about every aspect of business.
2. To able to get financing
3. To measure progress
4. To establish credibility with others.
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Principles of Management ­ MGT503
VU
WHAT IS CHANGE?
Organizational change is defined as any alteration in people, structure, or technology. Change is ever
present in organizations and cannot be eliminated. Instead, we need to look at the key issues related to
managing change.
FORCES FOR CHANGE
There are external and internal forces that create the need for change.
A.
External forces that create the need for change come from various sources.
1.
The marketplace
2.
Government laws and regulations
3.
Technology
4.
Labor markets
5.
Economic changes
B.
Internal forces tend to originate primarily from the internal operations of the organization
or from the impact of external changes.
1.
Changes in strategy
2.
Changes in the workforce
3.
New equipment
4.
Change in employee attitudes
STIMULATING INNOVATION
Innovation is important to organizational success in the marketplace.
A.
Creativity versus Innovation.
There is a difference between creativity and innovation.
1.
Creativity is the ability to combine ideas in a unique way or to make unusual associations between
ideas.
2.
Innovation is the process of taking a creative idea and turning it into a useful product, service, or
method of operation.
How can managers foster innovation?
a.
Organic structures positively influence innovation.
b.
The easy availability of organizational resources provides a critical building block for innovation.
c.
Frequent interunit communication helps break down barriers to innovation.
Human resources variables are indicative of the important role that people play in
innovative organizations.
a.
Innovative organizations actively promote the training and development of their employees so their
knowledge remains current.
b.
Innovative organizations offer employees high job security.
c.
Innovative organizations encourage individuals to become idea champions--individuals who
actively and enthusiastically support a new idea, build support, overcome resistance, and ensure that the
innovation is implemented.
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Table of Contents:
  1. HISTORICAL OVERVIEW OF MANAGEMENT:The Egyptian Pyramid, Great China Wall
  2. MANAGEMENT AND MANAGERS:Why Study Management?
  3. MANAGERIAL ROLES IN ORGANIZATIONS:Informational roles, Decisional roles
  4. MANAGERIAL FUNCTIONS I.E. POLCA:Management Process, Mistakes Managers Make
  5. MANAGERIAL LEVELS AND SKILLS:Middle-level managers, Top managers
  6. MANAGEMENT IDEAS: YESTERDAY AND TODAY, Anthropology, Economics
  7. CLASSICAL VIEW OF MANAGEMENT:Scientific management
  8. ADMINISTRATIVE VIEW OF MANAGEMENT:Division of work, Authority
  9. BEHAVIORAL THEORIES OF MANAGEMENT:The Hawthorne Studies
  10. QUANTITATIVE, CONTEMPORARY AND EMERGING VIEWS OF MANAGEMENT
  11. SYSTEM’S VIEW OF MANAGEMENT AND ORGANIZATION:Managing Systems
  12. ANALYZING ORGANIZATIONAL ENVIRONMENT AND UNDERSTANDING ORGANIZATIONAL CULTURE
  13. 21ST CENTURY MANAGEMENT TRENDS:Organizational social Responsibility
  14. UNDERSTANDING GLOBAL ENVIRONMENT WTO AND SAARC
  15. DECISION MAKING AND DECISION TAKING
  16. RATIONAL DECISION MAKING:Models of Decision Making
  17. NATURE AND TYPES OF MANAGERIAL DECISIONS:Decision-Making Styles
  18. NON RATIONAL DECISION MAKING:Group Decision making
  19. GROUP DECISION MAKING AND CREATIVITY:Delphi Method, Scenario Analysis
  20. PLANNING AND DECISION AIDS-I:Methods of Forecasting, Benchmarking
  21. PLANNING AND DECISION AIDS-II:Budgeting, Scheduling, Project Management
  22. PLANNING: FUNCTIONS & BENEFITS:HOW DO MANAGERS PLAN?
  23. PLANNING PROCESS AND GOAL LEVELS:Types of Plans
  24. MANAGEMENT BY OBJECTIVE (MBO):Developing Plans
  25. STRATEGIC MANAGEMENT -1:THE IMPORTANCE OF STRATEGIC MANAGEMENT
  26. STRATEGIC MANAGEMENT - 2:THE STRATEGIC MANAGEMENT PROCESS
  27. LEVELS OF STRATEGIES, PORTER’S MODEL AND STRATEGY DEVELOPMENT (BCG) AND IMPLEMENTATION
  28. ENTREPRENEURSHIP MANAGEMENT:Why Is Entrepreneurship Important?
  29. ORGANIZING
  30. JOB DESIGN/SPECIALIZATION AND DEPARTMENTALIZATION
  31. SPAN OF COMMAND, CENTRALIZATION VS DE-CENTRALIZATION AND LINE VS STAFF AUTHORITY
  32. ORGANIZATIONAL DESIGN AND ORGANIC VS MECHANISTIC VS VIRTUAL STRUCTURES
  33. LEADING AND LEADERSHIP MOTIVATING SELF AND OTHERS
  34. MASLOW’S NEEDS THEORY AND ITS ANALYSIS
  35. OTHER NEED AND COGNITIVE THEORIES OF MOTIVATION
  36. EXPECTANCY, GOAL SETTING AND RE-ENFORCEMENT THEORIES
  37. MOTIVATING KNOWLEDGE PROFESSIONALS LEADERSHIP TRAIT THEORIES
  38. BEHAVIORAL AND SITUATIONAL MODELS OF LEADERSHIP
  39. STRATEGIC LEADERSHIP MODELS
  40. UNDERSTANDING GROUP DYNAMICS IN ORGANIZATIONS
  41. GROUP CONCEPTS, STAGES OF GROUP DEVELOPMENT AND TEAM EFFECTIVENESS
  42. UNDERSTANDING MANAGERIAL COMMUNICATION
  43. COMMUNICATION NETWORKS AND CHANNELS EFFECT OF ICT ON MANAGERIAL COMMUNICATION
  44. CONTROLLING AS A MANAGEMENT FUNCTION:The control process
  45. CONTROLLING ORGANIZATIONAL PERFORMANCE THROUGH PRODUCTIVITY AND QUALITY