chapter 1 of hisrich et al

Chapter 1
Entrepreneurship and Entrepreneurial Mind-Set
The Nature of Entrepreneurship
A person who destroys the existing economic order by introducing
new products and services, by introducing new methods of production,
by creating new forms of organization, or by exploiting new raw
According to Schumpeter, that person is most likely to accomplish
this destruction by founding a new business but may also do it within
an existing one.
 Who perceives an opportunity and creates an organization to pursue
The Nature of Entrepreneurship
Entrepreneurship is the process of designing, launching and running
a new business
Entrepreneurial process includes all the functions, activities, and
actions associated with perceiving opportunities and creating
organizations to pursue them.
The Nature of Entrepreneurship
Entrepreneurial Opportunities
Those situation in which new goods, services, raw materials and
organizing methods can be introduced and sold at greater than their cost
of production.
• Introducing an existing technological product used in one market to create a new market
• Creating a new technological product for an existing market or creating both a new product/service
and a new market.
• Represents something new.
Entrepreneurial Action
Knowledge: Prior
Personal strategy
Attention Stage: Ignorance
Action: firstperson
Evaluation Stage: action-specific uncertainty
How Entrepreneurs Think
Think Structurally
• Superficial similarities: basic elements of the technology resembles with the basic elements of the market
• Structural similarities: underlying mechanisms of the technology resembles with the underlying mechanisms of the
• Able to create or see structural matches between a technology and a target market, especially in the presence of
superficial mismatches.
• Knowledge and skill can facilitate this ability
*Entrepreneurs making do by applying combinations of the resources at hand to new
problems and opportunities
*Taking existing resources and experimenting, repairing, repackaging and reframing them
so they can be used in a way for which they were not originally designed or conceived.
* Entrepreneurs creates opportunities from this making do process
How Entrepreneurs Think
• Casual process: A process that starts with a desired outcome and focuses on the means to generate that
• Effectuation process: a process that starts with what one has (who they are, what they know, and whom they
know) and selects among possible outcomes.
Cognitive Adaptability
Describe the extent to which entrepreneurs are dynamic, flexible, self-regulating and
engaged in the process of generating multiple decision frameworks focused on sensing and
processing changes in their environments and then acting on them.
*Comprehensive Questions
*Connections Tasks
*Strategic Tasks
*Reflection Tasks
The Intention to Act Entrepreneurially
Entrepreneurial Intention
The motivational factors that influence individuals to pursue
Entrepreneurial outcomes
Entrepreneurial Self-Efficacy: The conviction that one can
successfully execute the entrepreneurial process
Perceived desirability: The degree to which an individual has a
evaluation or unfavorable evaluation of the potential Entrepreneurial
Entrepreneur Background and Characteristics
Work History