Transcript The Myth of Entrepreuneurship

The Myth of Entrepreuneurship
(Donald F. Kuratko and Richard M. Hodgetts, 1995):
1. Entrepreuneur are doers, not thinkers
2. Entrepreuneur are born, not made
3. Entrepreuneur are always inventor
4. Entrepreuneur are academic and social misfits
5. Entrepreuneur must fit the “Profile”
6. All you need is money to be an entrepreuneur
7. All you need is luck to be an entrepreuneur
8. Ignorance is bliss for an entrpreuneur
9. Entrepreuneur seek success but experience high failure rates
10. Entrepreuneur extreme risk takers (gamblers)
The potentials drawback of
entrepreuneur
Norman M. Scarborough, 2000:
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Uncertainty of income
Risk losing your entire invested capital
Long hour and hard work
Lower quality of life until the business get
estabilished
5. High level of stress
6. Complete responsibility
The causes of business failure
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Management incomplete
Lack of experience
Poor financial control
Lack of strategic management
Uncontrolled growth
Inappropriate location
Lack of inventory control
Inability to make “entrepreunial transition”
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The “dark” side of entrepreuneurship:
1. Financial risk
2. Career risk
3. Family and social risk
4. Psychic risk
The Entrepreunerial Ego:
An overbearing need for control
Sense of distrust
Overiding desire for success
Unrealitic optimism
Four causes of enrepreunerial stress
Boyd and Gumpert (1983):
1. Loneliness
2. Immersion in business; most entrepreuneur are
married to their business. They work long
hours, leaving them with little time for civic
organizations, or further educations.
3. People problems
4. Need to achieve
Five specific ways to cope with stress:
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1. Networking
2. Getting away from it all
3. Communicating with subordinates
4. Finding satisfaction outside the company
5. Delegating
Typology of Entrepreunial Styles
Low
Level of Personal Risk
Low
High
risk avoiding
risk accepting
activity seeking
activity seeking
Level of
Profit
Motive
High
risk avoiding
profit seeking
risk accepting
profit seeking
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Variables in New-venture Creation
INDIVIDUAL(S)
ORGANIZATION
PROCESS
ENVIRONMENT
INDIVIDUALS
Need for achievement
Locus of control
Risk-taking propensity
Jon satisfaction
Previous work experience
Entrpreunial parents
Age
Education
ORGANIZATION
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Overall cost leadership
Differentiation
Focus
The new product or
service
Parallel competition
Franchise entry
Geographical transfer
Supply shortage
Tapping unutilized
resources
Customer contract
• Becoming a second
source
• Joint ventures
• Licensing
• Market relinquishment
• Sell-off division
• Favored purchasing by
government
• Govermental rule
changes
PROCESS
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Locates a business opportunity
Acucumulates resources
Markets product and services
Produces the product
Biilds and organization
Respon to government and society
ENVIRONMENTAL
• Venture capital
availability
entrepreuneurs
• Precence of experinced
entrepreuners
• Technial skill lobor force
• Accesibility of suppliers
• Accesibility of customer
or new markets
• Govemental influences
• Proximity of universities
• Availability of land or
facilities
• Acessibility of
transportation
• Attitude of the area
population
• Availability of
supporting services
• Living conditions
• High occupational and
industrial differentiation
ENVIRONMENTAL (CONTINUED)
• High percentage of
recent immigrants in
the populaton
• Large industrial base
• Larger-size urban areas
• Availability of financial
resources
• Barriers to entry
• Rivalry among existing
competitors
• Pressure from
substitute products
• Bargaining power of
buyer
• Bargaining power of
suppliers
A MODEL OF ENTREPREUNIAL MOTIVATION
EXPECTATION/OUT
COME
COMPARISON
INTRINSIC/EXTRI
NSIC REWARDS
PC PE PG
DECISION TO
BEHAVE
ENTREPREUNE
URIALY
BE
ENTRPREUN
ERRIAL
STRATEGY
FIRM
OUTCOMES
ENTREPREUNE
RIAL
MANAGEMENT
IDEA
IMPLEMENTATI
ON/OUTCOME
PERCEPTION
Notes:
PC = personal characteristic
PE = personal environment
PG = personal goals
BE = business environment
INTRAPREUNIAL DEVELOPMENT: JOINT FUNCTI0N
OF INDIVIDUAL AND ORGANIZATION FACTOR
INDIVIDUAL FACTORS
JOB ATTITUDES
Attributes and Role
Requrements
Values
“Noise”
Behavioral Orientations
Organizational
Commitmnet
Job Satisfaction
“ Noise”
include stability
of product, econ cond.
ORGANIZATIONAL
FACTORS
Structure
Reward System
BEHAVIORAL
INTENTIONS
Propensity to leave