Enterprise and Entrepreneurship PDF

Entrepreneur -someone who spots an opportunity in a gap in the market and uses initiative to create a new product/service in the hope of making a profit whilst taking the financial and personal risk -entrepreneurs are proactive by anticipating what is needed and doing something about it rather...

Entrepreneur -someone who spots an opportunity in a gap in the market and uses initiative to create a new product/service in the hope of making a profit whilst taking the financial and personal risk -entrepreneurs are proactive by anticipating what is needed and doing something about it rather than being reactive and waiting for things to happen before responding -spots opportunity in market gap -aim of making profit -proactive rather than reactive -personal and financial risk -takes initiative -eg Richard Branson of Virgin Group, Pat McDonagh of Supermacs -business enterprise eg diversification into new products -personal enterprise eg enrolling in a night class -social enterprise eg fundraising for charity -government enterprise eg rationalisation of government departments (eliminate structural and functional duplications and overlaps of state departments) Reasons for Entrepreneurship 1. Increase Income (employees are often limited in earnings potential due to a set wage/salary, entrepreneurs have the potential to maximise income and keep profits) 2 2. Independence (entrepreneurs do not have to answer to anyone and are their own boss, can make their own decisions and create their own paths rather than employees whose actions are dictated by their employer) 3 Gap in Market (employees may spot a product/service opportunity but may be dismissed or can not directly gain from the idea profits, setting up ones own business gains total control) 4. Inspired (new found age of pro-entrepreneurship in current media eg Diary of a CEO) 5. Government Support (Local Enterprise Offices offer financial and educational support to new local business with under 10 employees, Enterprise Ireland offers grants, mentorship, programmes and training to High Potential Start-Ups) 6. Ambition (employees may feel they have reached a plateau in their current career, self-actualisation desires and ambition for growth forges entrepreneurship) (Unit 3 Notes) 7. Redundancy (employee might have been let go with very few job prospects, no other option but to create a business to earn a living) Intrapreneurship -an intrapreneur is someone who is enterprising within an organisation, displaying entrepreneurial qualities of innovation and initiative in coming up with new ideas/products/services and business methods or improves existing goods/services or business methods -intrapreneurs don’t risk their own money -reward may be promotion or a salary increase -intrapreneurship is an attempt to harness the entrepreneurial spirit of staff in an organisation -organizations that encourage and reward enterprise are more likely to identify new products, new markets and new ways to reduce waste and improve efficiency -eg Cadbury Time Out Bar was created by factory line employees -eg machinery salesman suggested a way of improving company's machines to streamline production and reduce wastage which boosted the company's productivity and reduced costs 3 Intrapreneurship Benefits 1. New Products/Services/Markets (intrapreneurship results in new products/services being developed, new product development is very important to ensure the continued viability of all businesses) 2. Business Growth (staff loyalty and innovation contributes to the growth and success of the business resulting in many new procedures/products/services being introduced into the business) 3. Increased Productivity/Profitability (various ideas introduced result in greater productivity in the business, many new ideas and cost cutting measures introduced result in greater profitability in the business eg on-line booking system will result in lower administration costs, as customers complete their own bookings on line, increasing the profit margins for the firm) 4. Improved Corporate Image (intrapreneurship improves the corporate image for recruiting purposes, most important business resource is talent, a focus on intrapreneurship improves the corporate image and makes it easier to attract and keep top talent) 5. Greater Morale (nurturing of in-house talent where staff are offered the opportunity to be intrapreneurial means they are generally more productive, happier and more fulfilled in their work, there is greater motivation and improved industrial relations which saves time and money in the business) Methods for Promoting Intrapreneurship -financial rewards for effort and creativity -providing resources to help employees pursue ideas eg finance, time -teamwork encourages creativity eg weekly team brainstorming sessions -formation of a research and development (R&D) department