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Entrepreneurship

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Entrepreneurship­ MGT602
VU
Lesson 5
THE ENTREPRENEURIAL AND ENTREPRENEURIAL MIND (continued...)
LEARNINGOBJECTIVES
1. To explain the aspects of the entrepreneurial process.
2. To explain the differences between entrepreneurial and managerialdomains.
3. To explain the organizational environment conducivefor entrepreneurship.
4. To identify the general characteristics of an entrepreneur.
5. To explain the process of establishing entrepreneurship in an organization.
MANAGERIALVERSUS ENTREPRENEURIAL DECISIONMAKING
The difference between the entrepreneurial andmanagerial styles involvesfive businessdimensions.
StrategicOrientation
Theentrepreneur's strategic orientationdepends on his or her perception of the opportunity. This
orientation is most important when otheropportunities have diminishingreturns accompanied by rapid
changes in technology, consumer economies, socialvalues or political rules.When the use of planning
systems is the strategic orientation, there is more pressure for the administrative domain to be operant.
Commitment to Opportunity
Theentrepreneurialdomain is pressured by the need for action and has a short time span in terms of
opportunity commitment. The administrativedomain (the ways mangers make decisions) is notonly slow to
act on an opportunity, but the commitment is usually for a longer time span.
Commitment of Resources
An entrepreneur is used to having resources committed at periodic intervals, often based on certain tasks or
objectives being reached. In acquiring theseresources the entrepreneur is forced to achieve significant
milestonesusing very few resources. In the administrative domain, the commitment of resources is for the
total amount needed. Administrative-orientedindividuals receive personalrewards by effectively
administering the resources under theircontrol.
Control of Resources
The administrator is rewarded by effective resource administration and has a drive to own or accumulate as
manyresources as possible. The entrepreneur, under pressure of limited resources,strives to rentresources
on an as-needed basis.
ManagerialStructure
In the administrative domain, the organizational structure is formalized and hierarchical in nature.
The entrepreneur employs a flat organizational structure with informal networks.
CAUSESFOR RECENT INTEREST IN ENTREPRENEURSHIP
Interest in entrepreneurship has resulted fromevents occurring on social, cultural, andbusiness levels.
There is an increasing interest in "doingyour own thing." Individualsfrequently desire to createsomething
of their own. They want responsibility and want more freedom in theirorganizations. Frustrationcan
develop and result in the employeebecoming less productive or leaving the organization. This hasrecently
causedmore discontent in structuredorganizations. When meaning is not provided within the organization,
individualsoften search for an institution, such as entrepreneurship,that will provideit.
Entrepreneurship is one method for stimulating and capitalizing on those whothink that something can be
done differently and better, such as Xerox Corporation's commitment to Xerox Technology Ventures.
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Entrepreneurship­ MGT602
VU
It is important to instill the entrepreneurial spirit in an organization in order to innovate and grow.
In a large organization problems occurthat thwart creativity andinnovation. This growth and diversity that
canresult are critical, sincelarge corporations are moreefficient in a competitive marketthan are smaller
firms. The resistance againstflexibility, growth, anddiversification can be overcome by developing a spirit
of entrepreneurship, called Entrepreneurship, within the existing organization.
There are social, cultural, andbusiness pressures for Entrepreneurship. Hyper competition has forced U.S.
companies to focus on new product development and increasedproductivity.
Reductions in large corporation's staff are being absorbed in the workforce, particularly in small businesses.
Entrepreneurial endeavors consist of fourkey elements.
1. Newbusiness venturing refers to the creation of new business within an existing organization.
2. Organizationalinnovativeness refers to product and serviceinnovation with an emphasis on
development and innovation in technology.
3. Self-renewalreflects the transformation of organizationsthrough the renewal of the keyideas on
which they are built.
4. Proactivenessincludesinitiative and risk taking, as well as competitive aggressiveness
KEY TERMS
Administrativedomain
Theways managers makedecisions
Businessplan
The description of the future direction of the business
Corporateculture
Theenvironment of a particular organization
Entrepreneurialdomain
Theways entrepreneurs makedecisions
Entrepreneurialprocess
Theprocess through which a new venture is created by an entrepreneur
Entrepreneurialculture
Theenvironment of an entrepreneurial-oriented organization
Entrepreneurship
Entrepreneurship within an existing business organization
Opportunity identification
Theprocess by which an entrepreneur comes up with the opportunity for a new venture
Opportunityparameters
Barriers to new product creation and development
Topmanagement commitment
Managers in an organization strongly supporting Entrepreneurship
Traditionalmanagers
Managers in a non-entrepreneurial-oriented organization
Window of opportunity
The time period available forcreating the new venture
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Table of Contents:
  1. THE NATURE AND IMPORTANCE OF ENTREPRENEURSHIP:DEFINITION OF ENTREPRENEUR
  2. THE NATURE AND IMPORTANCE OF ENTREPRENEURSHIP:Possibility of New Venture Formation
  3. ENTREPRENEURIAL PROCESS/START UPS:GOVERNMENT AS AN INNOVATOR
  4. THE ENTREPRENEURIAL AND ENTREPRENEURIAL MIND:ENTREPRENEURIAL PROCESS
  5. THE ENTREPRENEURIAL AND ENTREPRENEURIAL MIND (continued…)
  6. THE ENTREPRENEURIAL AND ENTREPRENEURIAL MIND (continued…):CLIMATE FOR ENTREPRENEURSHIP
  7. THE ENTREPRENEURIAL AND ENTREPRENEURIAL MIND (continued…):PROBLEMS AND SUCCESSFUL EFFORTS
  8. THE INDIVIDUAL ENTREPRENEUR:ENTREPRENEURIAL BACKGROUND AND CHARACTERISTICS
  9. THE INDIVIDUAL ENTREPRENEUR (continued…):Personal Values, Work History, MOTIVATION
  10. THE INDIVIDUAL ENTREPRENEUR (continued…):ROLE MODELS AND SUPPORT SYSTEMS
  11. INTERNATIONAL ENTREPRENEURIAL OPPORTUNITIES:INTERNATIONAL ENTREPRENEURIAL OPPORTUNITIES, Minority interests
  12. INTERNATIONAL ENTREPRENEURIAL OPPORTUNITIES (continued…):DIRECT FOREIGN INVESTMENT
  13. INTERNATIONAL ENTREPRENEURIAL OPPORTUNITIES (continued…):BARRIERS TO INTERNATIONAL TRADE
  14. INTERNATIONAL ENTREPRENEURIAL OPPORTUNITIES (continued…):ENTREPRENEURIAL PARTNERING
  15. INTERNATIONAL ENTREPRENEURIAL OPPORTUNITIES (continued…):SOURCES OF NEW IDEAS
  16. CREATIVITY AND THE BUSINESS IDEA:METHODS OF GENERATING NEW IDEAS, CREATIVE PROBLEM SOLVING
  17. CREATIVITY AND THE BUSINESS IDEA:PRODUCT PLANNING AND DEVELOPMENT PROCESS
  18. LEGAL ISSUES FOR THE ENTREPRENEUR:NEED FOR A LAWYER, PATENTS
  19. LEGAL ISSUES FOR THE ENTREPRENEUR:TRADEMARKS, LICENSING
  20. LEGAL ISSUES FOR THE ENTREPRENEURS:PRODUCT SAFETY AND LIABILITY, INSURANCE
  21. CREATING AND STARTING THE VENTURE:WHAT IS THE BUSINESS PLAN, PRESENTING THE PLAN
  22. CREATING AND STARTING THE VENTURE (Continued….):WRITING THE BUSINESS PLAN
  23. CREATING AND STARTING THE VENTURE (Continued….):
  24. CREATING AND STARTING THE VENTURE (Continued….):WHY SOME BUSINESS PLANS FAIL, MARKETING PLAN
  25. THE MARKETING PLAN:MARKET RESEARCH FOR THE NEW VENTURE
  26. THE MARKETING MIX:STEPS IN PREPARING THE MARKETING PLAN
  27. THE ORGANIZATIONAL PLAN:DEVELOPING THE MANAGEMENT TEAM, LEGAL FORMS OF BUSINESS
  28. THE ORGANIZATIONAL PLAN (Continued….)
  29. THE ORGANIZATIONAL PLAN (Continued….):THE LIMITED LIABILITY COMPANY
  30. THE FINANCIAL PLAN:OPERATING AND CAPITAL BUDGETS
  31. THE FINANCIAL PLAN (Continued….):PRO FORMA INCOME STATEMENTS, PRO FORMA CASH FLOW
  32. PRO FORMA SOURCES AND USES OF FUNDS:PERSONAL FUNDS, FAMILY AND FRIENDS
  33. PRO FORMA SOURCES AND USES OF FUNDS:COMMERCIAL BANKS
  34. BANK LENDING DECISIONS:SMALL BUSINESS ADMINISTRATION LOANS
  35. SOURCES OF CAPITAL:GOVERNMENT GRANTS
  36. SOURCES OF CAPITAL:PRIVATE PLACEMENT, BOOTSTRAP FINANCING
  37. CAPITAL SOURCES IN PAKISTAN:PROVINCIAL LEVEL INSTITUTIONS, FINANCIAL INSTITUTIONS
  38. PREPARING FOR THE NEW VENTURE LAUNCH: EARLY MANAGEMENT DECISIONS (Continued….)
  39. PREPARING FOR THE NEW VENTURE LAUNCH: EARLY MANAGEMENT DECISIONS (Continued….)
  40. PREPARING FOR THE NEW VENTURE LAUNCH: EARLY MANAGEMENT DECISIONS (Continued….)
  41. PREPARING FOR THE NEW VENTURE LAUNCH: EARLY MANAGEMENT DECISIONS (Continued….)
  42. PREPARING FOR THE NEW VENTURE LAUNCH: EARLY MANAGEMENT DECISIONS (Continued….)
  43. NEW VENTURE EXPANSION STRATEGIES AND ISSUES:JOINT VENTURES, ACQUISITIONS
  44. NEW VENTURE EXPANSION STRATEGIES AND ISSUES (Continued….):DETERMINING THE PRICE FOR AN ACQUISITION
  45. ENTREPRENEURSHIP & PAKISTAN:GENDER DEVELOPMENT STATUS WOMAN AS AN ENTREPRENEUR IN PAKISTAN