Understanding the Role of the Entrepreneur
•Review
•Definitions
•Approaches to studying entrepreneurs
•Entrepreneurial Mindset v Mangerial
Who or what is an entrepreneur?
What do entrepreneurs do?
•What are the essential skills?
•How do they work?
•Can anyone be one?
•Can entrepreneurial behaviour be learnt?
•What do you think?
Glossary of Terms
Lifestyle Business
Wheeler Dealer
Tycoon
Entrepreneur
Source: Hall D (2000) In the Company of Heroes – An Insiders Guide to Entrepreneurs at Work – Kogan Page
Entrepreneurs are at the Centre
Audit
Banking
Legal
Finance
Technology
transfer
Advertising
Entrepreneur
Suppliers
Sales and
Marketing
Market
Research
Production
Inventors
Transportation
Definitions
An entrepreneur is someone who perceives an
opportunity and creates an organisation to pursue it.
Bygrave (1997:2)
A person who habitually creates and innovates to build
something of recognised value around perceived
opportunities.
Bolton & Thompson (2003)
The Entrepreneurial Process involves all the functions
and actions associated with perceiving opportunities
and creating organisations to pursue them.
Bygrave (1997:2)
Entrepreneurial Process
Business Entrepreneur
THE GROWTH ENTREPRENEUR
- creates a sustained high growth business
THE ENTREPRENEUR
- creates a significant business
THE ENTERPRISING PERSON
- creates a small or micro business
Bolton & Thompson (2003)
Types of Entrepreneurs
1) Quickie
2) Wonderful Wacky MBA
3) Send Money
4) Dreamers
5) One Stripe Zebra
6) Technoid
7) Guts and Brains (the dream team)
Extracted from: Entrepreneur America, Lessons from Inside Rob Ryan's High Tech Start-up Boot Camp"
Approaches to studying Entrepreneurs
• Economic theories - Role of the
entrepreneur in economic development.
• Psychological trait approach Personality characteristics of the
entrepreneur.
• Social behaviour approach - Influence
of the social environment.
Historical Perspective
1730 Cantillon - A self employed person with uncertain returns
1803 Say - A co-ordinator of production with managerial talent
1910 Schumpeter - A Creative Innovator
1921 Knight - manager responsible for direction & control, bears uncertainty
1960 Stepanek - moderate risk taker
1961 McLelland - Need for achievement
1971 Hornaday - Need for achievement; autonomy, aggression; power;
recognition; innovative/independent
1973 Winter - Need for power
1974 Borland - Internal locus of control
1979 Kirzner - An arbitrageur - ability to spot opportunities
Locus of Control
• Internal locus of control Individuals who believe themselves
to be in control of their own destiny
• External locus of control - People
who believe that their lives are
dominated by chance events
outside their own control or
powerful people i.e. “fate” controls
their destiny.
Influences on owner-managers and
entrepreneurs
Personal characteristics and traits
Antecedent
Culture of
influences
society
Situational factors
Psychological trait approach
• Identifies personality characteristics or
traits.
• Entrepreneurs have innate abilities not
possessed by others.
• Suggests that the supply of potential
entrepreneurs is limited, thus there is
little to be gained from direct
intervention to encourage
entrepreneurship.
Core and Desirable Attributes
THE NON-ENTREPRENEURIAL
ATTRIBUTES
Being Macho
DESIRABLE ATTRIBUTES
Intelligence
Outer Control
Invulnerability
Creativity &
Innovativeness
CORE ATTRIBUTES
Capacity
to Inspire
Commitment & Determination
Leadership
Opportunity Obsession
Tolerance of Risk
Ambiguity & Uncertainty
Creativity, Self-Reliance and Adaptability
Motivation to Excel
Perfectionist
Impulsiveness
Knows it all
Values
Energy, Health, and
Emotional Stability
Being antiauthoritarian
Counter/dependency
Timmons (2003:251)
Critiques of the trait approach
Chell , Delmar Criticisms:
• Inappropriate to search for a significant
single trait.
• Ignores environmental factors.
• Static analysis approach
(entrepreneurship is a dynamic process).
• Ignores the role of learning, preparation
and serendipity.
Definitions of Culture
• Culture is the sum total of knowledge, beliefs,
art, morals, laws, customs and any other
capabilities and habits acquired by humans
as members of society. Culture is everything
that people have, think and do as members of
their society.
Ferraro (1994)
• Culture is the collective programming of the
mind that distinguishes the members of one
category of people from those of another.
Hofstede (1988)
Elements of Culture
Language
Religion
Values and
attitudes
Aesthetics
CULTURE
Education
Law and politics
Material culture
Social
organisation
Mental Models
Western Thinking
Eastern Thinking
Individualism
Relationships
Differentiation
Integration
Entrepreneurial Process
Personal
Personal
Sociological
Personal
Organisational
Achievement
Risk Taking
Networks
Entrepreneur
Team
Locus of Control
Job Dissatisfaction
Teams
Leader
Strategy
Ambiguity Tolerance
Job Loss
Parents
Manager
Structure
Risk Taking
Education
Family
Commitment
Culture
Personal Values
Age Commitment
Role Models
Vision
Products
Education
Experience
Innovation
Triggering Event
Implementation
Growth
Environment
Environment
Environment
Opportunities
Competition
Competitors
Role Models
Resources
Customers
Creativity
Incubator
Suppliers
Government Policy
Investors, Bankers, Lawyers
Resources
Government Policy
Bygrave & Zacharakis (2004)
Changing Role of Entrepreneur
HIGH
Owner’s ability to do
Criticality
to
Company
Growth
LOW
People, planning
and systems
Owner’s ability
to delegate
1
Conception/
Existence
2
Survival
3
Growth/
Success
(Adapted from: Churchill and Lewis, 1983)
4
Expansion/
Takeoff
5
Maturity
Managerial v Entrepreneurial Mindset
The Power of Consequences
Positive/Negative
Consequences
Job/Business
Entrepreneur
Farrell (2001) The Entrepreneurial Age
Performance
Dependence-seeking
Subsistence seeking
Averse to
opportunity
Non-innovative
Averse to Venture
Averse to risk
Analytic
Source: Adapted from Entrepreneurship, John G Burch
Tendency calibrator
Lender
Tendencies towards non-entrepreneurial or
entrepreneurial activity
Independenceseeking
Wealth-seeking
Opportunity-seeking
Innovative
Venture-seeking
Risk-seeking
Intuitive
Causal v Effectual Marketing Process
What makes entrepreneurs entrepreneurial? Saras D. Sarasvathy
Comparison of Causal & Effectual Model
Effectual Reasoning: The Process
• Who they are – their traits, tastes and abilities
• What they know – their education, training, expertise and experience
• Whom they know – their social and professional networks
Characteristics of Successful Entrepreneurs
Four Primary Characteristics of Successful
Entrepreneurs
Extreme Entrepreneurship
Do not go where the path may
lead, go instead where there
is no path and leave a trail.
— Ralph Waldo Emerson
www.successmanifesto.com/
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Approaches to studying Entrepreneurs