Chapter 2 - Entrepreneurial Intentions and Corporate Entrepreneurship PDF

Chapter 2 Entrepreneurial Intentions and Corporate Hisrich Entrepreneurship Peters McGraw-Hill/Irwin...

Chapter 2 Entrepreneurial Intentions and Corporate Hisrich Entrepreneurship Peters McGraw-Hill/Irwin Shepherd The Intention to Act Entrepreneurially  Entrepreneurial intentions - Motivational factors that influence individuals to pursue entrepreneurial outcomes.  Intention is stronger when an action is perceived to be feasible and desirable.  Entrepreneurial self-efficacy - Conviction that one can successfully execute the entrepreneurial process.  Perceived desirability - The degree to which an individual has a favorable or unfavorable evaluation of the potential outcomes. 2-2 Entrepreneur Background and Characteristics  Education  Provides a background about starting a business.  Helps in the development of communication skills and problem-solving skills.  Provides individuals with a larger opportunity set.  Does not determine whether an entrepreneur will create a new business or not. 2-3 Entrepreneur Background and Characteristics (cont.)  Age  Most entrepreneurs initiate their entrepreneurial careers between the ages of 22 and 45. 2-4 Entrepreneur Background and Characteristics (cont.)  Work History  The decision to launch a new venture can be influenced by:  Dissatisfaction with one’s job.  Previous technical and industry experience.  Managerial skills and entrepreneurial experiences are also important once the venture starts growing. 2-5 Role Models and Support Systems  Role models - Individuals influencing an entrepreneur’s career choice and style  Can be parents, family members, or other entrepreneurs. 2-6 Role Models and Support System (cont.)  Professional-Support Network  Entrepreneurs need advice and counsel throughout the establishment of the new venture which can be obtained from:  Mentors.  Suppliers.  Trade associations.  Personal affiliations.  Government Initiatives 2-7 Managerial Versus Entrepreneurial Decision Making  Entrepreneurial management is distinct from traditional management in terms of:  Strategic orientation.  Commitment to opportunity.  Commitment of resources.  Control of resources.  Management structure.  Reward philosophy.  Growth orientation.  Entrepreneurial culture. 2-8 Table 2.1 – Distinguishing Entrepreneurially from Traditionally Managed Firms 2-9 Corporate Entrepreneurship  Corporate entrepreneurship is most strongly reflected in the following endeavors:  New business venturing (corporate venturing) - The creation of a new business within an existing organization.  Innovativeness - Product and service innovation, with emphasis on development and innovation in technology.  Self-renewal - Transformation through renewal of the key ideas on which an organization is built.  Proactiveness - Includes initiative, risk taking, competitive aggressiveness, and boldness. 2-10 Table 2.3 - Characteristics of an Entrepreneurial Environment 2-11 Establishing Corporate Entrepreneurship in the Organization  Step one:  Secure a commitment to corporate entrepreneurship in the organization by top, upper, and middle management levels.  Identify, select, and train corporate entrepreneurs. 2-12 Establishing Corporate Entrepreneurship in the Organization (cont.)  Step two:  Identify ideas and areas that top management is interested in supporting.  Identify amount of risk money available to develop the concept.  Establish overall program expectations and target results of each corporate venture.  Establish mentor/sponsor system.  Step three:  Use of technology to ensure organizational flexibility. 2-13 Establishing Corporate Entrepreneurship in the Organization (cont.)  Step four:  Identify interested managers to train employees and share their experiences.  Step five:  Develop ways for the organization to get closer to its customers.  Step six:  Learn to be more productive with fewer resources. 2-14 Establishing Corporate Entrepreneurship in the Organization (cont.)  Step seven:  Establish a strong support structure for corporate entrepreneurship.  Step eight:  Tie rewards to the performance of the entrepreneurial unit.  Finally:  Implement an evaluation system that allows successful entrepreneurial units to expand and unsuccessful ones to be eliminated. 2-15 Comparison of Independent Entrepreneurs, Corporate Entrepreneurs, and Traditional Managers Table 3.2 Source: An extensively modified version of a table in G. Pinchot, Intrapreneuring (New York: Harper & 2-16 Row, 1985), pp. 54–56.