Introduction to Entrepreneurship and the Entrepreneurial Process Lecture 1 PDF

💡 240902 - Introduction to entrepreneurship and the entrepreneurial process Pre-Readings and Preparation 📖 Lecture 1 - Pre-Readings Group Discussion Notes Lecture Notes Entrepreneurial Mo...

💡 240902 - Introduction to entrepreneurship and the entrepreneurial process Pre-Readings and Preparation 📖 Lecture 1 - Pre-Readings Group Discussion Notes Lecture Notes Entrepreneurial Motives The individual-opportunity nexus (Shane 2003) Motivation Interest and social acceptance, positive attitude/ role models Opportunity 240902 - Introduction to entrepreneurship and the entrepreneurial process 1  Favorable environment institutions and networks and infrastructure Ability knowledge and skills - Commercial knowledge of customers and markets Entrepreneurship as a phenomenon transformation and entrepreneurship go hand in hand Examples of entrepreneurship and digitalisation Walmart - Revolutionized retail by integrating digital technology to bring the store to the customer's doorstep, enhancing convenience and expanding market reach. Porsche - Embraced digital transformation in automotive manufacturing, improving production efficiency and customer customization options. IKEA - Utilized advanced 3D and visual Al technology to transform the online shopping experience, offering a more interactive and user-friendly interface. Airbnb - Disrupted the hospitality industry by connecting homeowners with travelers, providing a personalized lodging experience through a digital platform. DHL - Improved logistics and transport services by adopting digital solutions for tracking, delivery optimization, and customer service. The entrepreneur A person who is active and achieves something Entreprendre - to undertake something. Organising role: integrating different production factors (e.g. labour, material and machines) Capitalist role: taking the risk that costs would not exceed the contracted price 240902 - Introduction to entrepreneurship and the entrepreneurial process 2  Conceptions of entrepreneurship Conception of Key Issue(s) Focus entrepreneurship function of entrepreneurship What happens on the Economic (uncertainty, opportunity market when the Market (function) creator, coordinator of limited entrepreneur acts? resources,…) Individual characteristics Who is the (Entrepreneurs have certain Behavioural entrepreneur? Why Individual traits, skills and motivations (individual) do they act? (risk-taker, action- oriented,…)) How does the A process oriented view Management emerging entrepreneurial (emergence of organisations (process) venture process unfold? and opportunities) Economist view: What happens ton the markets when the entrepreneur acts? Knight (1916) ENT as risk-taker → Risk and uncertainty ENT is characterised by true uncertainty, ENT receives return for decisions under non-insurable uncertainty conditions Schumpeter (1934) ENT as innovator and opportunity creator → Innovation and creative destruction Innovations (new combinations) of new products, services or methods ENT disrupt existing structures (creative destruction) function delimited in time Kirzner (1973) ENT as alert seeker of opportunities 240902 - Introduction to entrepreneurship and the entrepreneurial process 3  → Alertness and acting upon profit-making opportunities coordination of information to identify a gap between supply and demand acting as a broker between supply and demand to possibly earn money from the difference → Economical science became more mathematical oriented with no more space for entrepreneurship (Kirchoff, 1994) Behavioural View: Who is the entrepreneur and why do they act? (Individual focus) personality definition - intuitive ability, inborn traits, instincts psychological definition - driven by unique values, attitudes and traits (creativity, persistence,…) leaders of people - ability to adapt their style to the need of people Management View: How does the entrepreneurial process unfold? Emergence of new organisations initiating → establishment Nascent entrepreneurship (Entrepreneurship in the process of starting the business) Heterogenous phenomenon (Gartner, 1985) different types of entrepreneurs, ways of creating ventures, contexts, types of ventures,… Behavioural orientation (Gartner, 1988) interest in the individual → contextual and processual aspects of entrepreneurship The entrepreneurship phenomenon (Gartner diagram) 240902 - Introduction to entrepreneurship and the entrepreneurial process 4  Liabilities of newness (LoN) Challenges in handling obstacles and uncertainty typically associated with being a start-up Internal challenges learning new roles and tasks that are yet unestablished recruiting and educating new co-workers building trustful relationships between employees with no common work history 240902 - Introduction to entrepreneurship and the entrepreneurial process 5  → lack of routines External challenges establish goof relationships with key stakeholders (customers, suppliers, financiers,…) attracting competence to the firm considered as a legitim actor on the market → lack of legitimacy Emergence of opportunities how opportunities are discovered, created and exploited by whom and with what consequence not only venture creation but also in established firms new business activities renewal of existing business both innovative (pattern breaking) and reproducing (incremental) opportunities Entrepreneurship from an opportunity perspective (Shane & Venkataraman, 2000) nexus of two phenomenon presence of opportunities presence of enterprising individuals Entrepreneurial opportunities emerge when resources are not put to their best use prior information to identify opportunity (information asymmetry) cognitive properties to value it (new means ends) 240902 - Introduction to entrepreneurship and the entrepreneurial process 6  nature of opportunity (expected value) and individual differences for exploiting the opportunity What is an entrepreneurial opportunity? situations where new goods, services, raw materials and organising methods can bei introduced and sold at greater than their cost of production (e.g. Shane & Venkataraman, 2000, pp. 220) idea with a market (Sarasvathy, 2001) Entrepreneurship as a societal phenomenon (Davidsson, 2005) Entrepreneur only takes part in an activity if it changes the market New economic activities provides customers with a new alternative AND Forces competitors to improve market offering → New activity does not require the first mover to make profit but has to drive the market process Definition: competitive behaviours driving the market process restriction to market context Includes an either successful or infuential outcome Process of discovery and exploitation included links micro-level behaviour with macro-level implications (effects on aggregated levels) Firma and market newness of economic activities (Davidsson, 2005) 240902 - Introduction to entrepreneurship and the entrepreneurial process 7  Preparation for upcoming lecture Global perspectives on Entrepreneurship (Sep, 3) Read briefly part 1 of the GEM report (access via Canvas) Respond individually to the addressed questions (review your selected country, part 2 of the GEM report). Entrepreneurial decision-making (Sep, 9) Read the course literature: Smolka et al. 2018; Gabrielsson & Politis, 2011 + video material (see module) Case A will be discussed at the seminar Entrepreneurial learning (Sep, 10) Read Case B (will be handed out Sep 9) Read the course literature: Lattacher et al., 2024, Politis, 2005; Tofth-Kehler et al., 2014 + video material (see module) 240902 - Introduction to entrepreneurship and the entrepreneurial process 8 240902 - Introduction to entrepreneurship and the entrepreneurial process 9