Lecture In HRM For Midterm PDF

TOPIC: **ENTREPRENEUR AND ENTREPRENEURSHIP** **[Entrepreneur]** ***[point of view of one businessman]***, \> an entrepreneur is a person who appears as a threat and an aggressive competitor. The same entrepreneur may be looked upon though as an ally, a source of supply and in other positive ways b...

TOPIC: **ENTREPRENEUR AND ENTREPRENEURSHIP** **[Entrepreneur]** ***[point of view of one businessman]***, \> an entrepreneur is a person who appears as a threat and an aggressive competitor. The same entrepreneur may be looked upon though as an ally, a source of supply and in other positive ways by another businessman. Entrepreneur is a person who possesses the kind of **behavior or mindset** that includes the following: - initiative taking - organizing and re-organizing of social and economic mechanisms that bundle resources in innovative ways - Acceptance of risk, uncertainty, and/or the potential for failure. **[Entrepreneurship]** - **Entrepreneurship** as defined by Medina (2014) is the **economic activity.** It is the economic activity of a person who starts, manages, and assumes the risk of a business enterprise. **[Role of Entrepreneurs in Economic Development]** the contributions of entrepreneurs will reveal that no business, big or small, started without the hand of the entrepreneur. Even if many of these businesses failed to survive, still a sizable number developed and proceeded to make the capitalist economy a viable concern. This is made possible because the surviving enterprises are responsible for providing the following: 1. products and services for customers and producers; 2. employment; 3. taxes; 4. demand for suppliers' products and services; and 5. Training facilities for future entrepreneurs. **LESSON 2** **TOPIC: Innovation and the Entrepreneur** **[Innovation Defined]** - Medina defines innovation as "the introduction of a new method, procedure, custom, and device, among others. It could be any of the following: 1. new product; 2. new process of production; 3. substitution of a cheaper material in an unaltered product; 4. reorganization of production, internal function, or distribution arrangement leading to increased efficiency, better support for a given product, or lower costs; or 5. improvement in instruments or methods of doing innovation. Innovation may also be viewed as the last stage in an important process consisting of the following: a. ***[invention]*** -- which refers to the discovery or devising of new products and processes; b. ***[development]*** -- which refers to the process by which the ideas and principles generated the stage of invention are embodied in concrete products and techniques; and c. ***[innovation]** --* which refers to the actual introduction of a new product or process. 1. cordless microphone; 2. microwave oven; 3. cellular phone; 4. kung fu fight scenes developed by Bruce Lee in the movies; 5. karaoke music appliance; 6. use of laser in the treatment of eye conditions; and use of computers by engineers and architects in the design of buildings." Considering the current situation brought about by the COVID19 pandemic, innovations like face shields, face masks, alcohol and sanitizer dispensers, are just a few to mention which relates to the definition of what is innovation. **[Innovation and the Entrepreneur]** Innovation is closely related to entrepreneurship. In the entrepreneurial process, it is in fact, a key function. As stated by Peter Drucker (cited in Kuratko & Hodgetts, 2007), innovation is the means by which the entrepreneur either creates new wealth-producing resources or endows existing resources with enhanced potential for creating wealth. He further states that innovation is the process by which entrepreneurs convert opportunities into marketable ideas. Accordingly, it is the means by which they become catalysts of change **[The Innovation Process]** According to Kuratko and Hodgetts (2007, p.155), there are three things that must be remembered in the innovation process: 1. Most innovations are the result of a conscious and purposeful search for new opportunities. It is both conceptual and perceptual. On the one hand, it is conceptual because it brings up new set of possibilities; on the other hand, it is perceptual because the entrepreneur needs to go out and discover the needs of his customers and product users. 2. Most successful innovations are simple and focused. The product is clear, specific, and carefully designed. As a result, new customers and new markets are created. An example to this is the camera on cell phones. These cameras are easy and convenient to use, yet they are highly sophisticated and quite appealing to people who are into photography. 3. Innovation involves more work than genius. Thomas Edison had put it accurately: *"1% inspiration and 99% perspiration".* The figure below shows a diagram of the Innovation Process.  **[Five Types of Innovators]** There are 5 Types of Innovators as described by Frohman and Pascarella (1990, as cited in Kuratko & Hodges, 2007, p.159): 1. **Gatekeepers** -- these people collect and channel information about changes in the technical environment. They stay current with events and ideas through personal contacts, professional meetings, and the news media. When gatekeepers find relevant information, they send it to the appropriate person or unit for follow-up. 2. **Idea Generators** -- this role involves analysis of information about new technologies, products, or procedures in order to yield new idea for the company. The fresh idea may be an innovative solution to an existing problem in product or business development or the identification of a new marketplace opportunity. 3. **Champions** -- champions advocate and push for the new idea. This role involves obtaining and applying the resources and staff to demonstrate the idea's feasibility. Champions are concerned about results, not risk, and do not spend time studying the consequences of failure. Their mission is to remove obstacles. 4. **Project Managers** -- someone has to draw up schedules and budgets; arrange periodic information sessions and status reports; coordinate labor, equipment, and other resources; and monitor progress against the plan. Project managers integrate and administer the tasks, people, and physical resources necessary to move an idea into practice. 5. **Coaches** -- this function addresses the technical and interpersonal aspects of the work in the innovation process. Coaches provide technical training related to new developments, and help people work together to return an idea into a tangible result. **The revolution of entrepreneurship** - The word entrepreneur is derived from the French "**[entreprendre]**," meaning "to undertake." - The entrepreneur is one who undertakes to organize, manage, and assume the risks of a business. In recent years, entrepreneurs have been doing so many things that it is now necessary to broaden this definition. - Entrepreneur is an innovator or developer who recognizes and seizes opportunities; converts those opportunities into workable/marketable ideas, adds value through time, effort, money, or skills, assumes the risks of the competitive market place to implement these ideas, and realizes the rewards from these efforts. - The literature of entrepreneurial research reveals some similarities, as well as a great many differences, in the characteristics of entrepreneurs, chief among these characteristics are personal initiative, the ability to consolidate resources, management skills, a desire for autonomy, and risk taking. - Other characteristics include: - Aggressiveness - Competitiveness - Goal-oriented - Behavior, - Confidence, - Opportunistic behavior, - Intuitiveness - Reality-based actions, - The ability to learn from mistakes, - The ability to employ human relations skills. - TOPIC: CHARACTERISTICS OF ENTREPRENEURS 9 Personality of an entrepreneur 1\. **The Improver** You are focused on using your company as a means to improve the world. Improvers have an unwavering ability to run their business with high integrity and ethics 2\. **The Advisor** This business personality type will provide an extremely high level of assistance and advice to customers. Companies built by advisors become customers focused. 3\. **The Superstar** Here the business is centered around the charisma and high energy of the Superstar CEO. This personality often will cause you to build your business around your own personal brand. 4\. **The Artist** This business personality is the reserved but highly creative type. As an artist type you'll tend to build your business around the unique talents and creativities you have. 5\. **The Visionary** A business built by a Visionary will often be based on the future vision and thoughts of the founder. You will have a high degree of curiosity to understand the world around you and will set-up plants to avoid the landmines. 6\. **The Analyst** If you run a business as an Analyst, your company is focus on fixing problems in a systematic way. Often the basis for science, engineering or computer firms. Analyst companies excel at problem solving. 7\. **The Fireball** A business owned and operated by a Fireball is full of life, energy and optimism. Your company is life energizing and makes customers feel the company has a get it done attitude in a fun playful manner. 8\. **The Hero** You have an incredible will and ability to lead the world and your business through any challenge. You are the essence of entrepreneurship and can assemble great companies. 9\. **The Healer** If you are a healer, you provide nurturing and harmony to your business. You have an uncanny ability to survive and persist with an inner calm. **[10 essential characteristics to be successful as an entrepreneur: ]** ==================================================================================== **1. Creative** =============== Entrepreneurship starts with an idea. To be successful, you need to always thinking of new ideas and better ways of doing things. **2. Passionate** ================= Perhaps the most important characteristic for entrepreneurs, passion is essential to any business owner or working professional\'s success. Without passion, there is no reason for your work and no drive to do it. Entrepreneurs love what they do and are extremely dedicated to the businesses they create. To be successful, you must be confident in yourself and your business, and you must be proactive with what you do and how you do it. **3. Motivated** In an interview with The Computerworld Smithsonian Awards Program, the late Apple founder Steve Jobs said, \"I\'m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.\" **4. Optimistic** Do you see the glass half empty or half full? For entrepreneurs, it\'s always half full. Entrepreneurs always look on the bright side and are constant dreamers. They look at how they can do things better and make the world a better place. They never dwell on the past or the negative. Instead, they focus on moving forward and moving up. When they\'re confronted with challenges, entrepreneurs don\'t see them as problems; they see them as opportunities. Challenges fuel entrepreneurs and make them reach higher and do more. **5. Future-oriented** Because entrepreneurs are focused on moving forward, they are always looking toward the future. Entrepreneurs are very goal-oriented and know exactly what they want. They set their goals and everything they do is aimed at achieving those goals. Having a strong vision helps propel you toward accomplishment. Consider setting a goal for yourself - a north star that can guide you on your path to success. **6. Persuasive** To be successful in business, you have to know business. If you\'re a people person and know how to get people to listen to you, you could be a successful entrepreneur. Especially when first starting out, entrepreneurs need to gain buy-in from those around them on their big idea. If it\'s an out-of-the-box idea, which it usually is, many people will be skeptical before giving their support or investing any money. That\'s why entrepreneurs need to use their persuasiveness to sell themselves and their ideas. **7. Flexible** According to professional development coach Ruchira Agrawal in an article for Monster, \"As an entrepreneur, you\'ll typically start out as a \'solopreneur,\' meaning you will be on your own for a while. You may not have the luxury of hiring a support staff initially. Therefore, you will end up wearing several different hats, including secretary, bookkeeper and so on.\"Entrepreneurs know how to adapt to unfamiliar situations. If their business requires that they learn how to build a website or send an invoice, they\'ll do it. Whatever it takes, entrepreneurs are ready and willing. They always approach things with an open mind and are willing to change course if they need to. **8. Resourceful** In business, problems aren\'t a matter of if, but when. Entrepreneurs do not shy away from challenges or conflicts. Instead, they face them head on and come up with a solution. They know how to solve problems effectively. Entrepreneurs also know how to make the most of what they have. Time, money and effort are never used haphazardly. Everything has a plan and a purpose. **9. Adventurous** In an interview with Y combinator president Sam Altman, Facebook founder Mark Zuckerberg said, \"In a world that\'s changing so quickly, the biggest risk you can take is not taking any risk. \"Entrepreneurs know that to be successful, they must be willing to take risks. While they don\'t mind walking on the wild side, they don\'t take risks lightly. They know how to plan for the unknown and make a calculated decision that is best for them and their business. **10. Decisive** There is no room for procrastination in business. Entrepreneurs know what needs to be done and don\'t hesitate to make the decisions that will lead them to success. They don\'t let opportunities pass them by; instead, they seize the day and get the job done. **Factors that determine the success or failure of an entrepreneur** **1. A Feasible Business Idea** Having a viable business idea is major pillar of business success. Although this is not enough as you need to market your idea and make it more profitable **2.** **Capital** Capital is very crucial and if forms a significance percentage of business **3. Customer Loyalty** Customer satisfaction is the main factor that determines business success. Establishing a good relationship with your customer as can guarantee you positive business feed backs to win continued customer loyalty, your business must act with high integrity by providing quality products and services. **4.** **Leadership** When starting a business either as a sole proprietor or a group, proper leadership is required. The overall leaders is charged with the responsibility of controlling all the functions of the business. **Mindset of an Entrepreneur** **Background and Characteristics of an Entrepreneur** **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 to exploit the discovered opportunity. **Age** - Most entrepreneurs initiate their entrepreneurial careers between the ages of 22 and 45. - Individuals are more inclined to start an entrepreneurial career at milestone ages every five years (25, 30, 35, 40, and 45). - Male entrepreneurs tend to start their ventures in their early 30s, while women entrepreneurs do so in their middle 30s. **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. - Previous start-up experience is a relatively good predictor of starting subsequent businesses TOPIC: Entrepreneurial Strategy **9 importance of entrepreneurship are:** 1\. Growth of entrepreneurship 2\. Creation of job opportunities 3\. Innovation 4\. Impact on community development 5\. The consequence of business failure 6\. Political and economic integration of outsiders 7\. Spawns entrepreneurship 8\. Enhances standard of living 9\. Promotes research and development 8\. Enhances standard of living 9\. Promotes research and development **1. Growth of Entrepreneurship** Entrepreneurship the advent of new venture particularly small ventures in order to materialize the innovative ideas of the entrepreneurs. Thus, the growth or establishment of small enterprises is the specific contribution of entrepreneurship in every economy of the world. **2. Creation of job opportunities** Entrepreneurship firms contributed a large share of new jobs. It provides entry-level jobs so necessary fur training or gaining experience for unskilled workers. The small enterprises are the only sector that generates a large portion of total employment every year. Moreover, entrepreneurial ventures prepare and supply experienced labor to the large industries. **3. Innovation** Entrepreneurship is the incubator of the innovation. Innovation creates disequilibria in the present state of order. It goes beyond discovery and does implementation and commercialization, of innovations "leapfrog" innovation, research, and development are being contributed by entrepreneurship. Thus, entrepreneurship nurses innovation that provides new ventures, product, technology, market, quality of good etc. to the economy that increases Gross Domestic Products and standard of living of the people. **4. Impact on community development** A community is better off if its employment base is diversified among many small entrepreneurial firms. It promotes abundant retail facilities, a higher level of home ownership, fewer slums, better, sanitation standards and higher expenditure on education, recreation, and religious activities. Thus, entrepreneurship leads to more stability and a higher quality of community life. **5. The consequence of business failure** The collapse of large industry almost has irresistible damage to the development of state and to the state of the economy and to the financial condition of the relevant persons. The incumbents lost their jobs: suppliers and financial institutions face a crisis of recovery. Customers are deprived of goods, services, and the government losses taxes. This could not happen in the case of failure of entrepreneurship. There shall be no measurable effect upon the economy and no political repercussions too. **6. Political and economic integration of outsiders** Entrepreneurship is the most effective way of integrating those who feel disposed and alienated into the economy. Minorities, migrants, and women are safely integrated into entrepreneurship that will help to develop a well-composed plural society. **7. Spawns entrepreneurship** Entrepreneurship is the nursing ground for new inexperienced adventurists. It is the field where a person can start his/her idea of the venture, which may be ended up in a giant enterprise. All the large industrial ventures started as a small entrepreneurial enterprise. Therefore, entrepreneurship provides a wide spectrum of ventures and entrepreneurs in every economy. The vast open arena of entrepreneurship thus acts as an incubator to entrepreneurs. **8. Enhances standard of living** Standard of living is a concept built on increasing amount of consumption of a variety of goods and services over a particular period by a household. So, it depends on the availability of diversified products in the market. Entrepreneurship provides enormous kinds of a product of various natures by their innovation. Besides, it increases the income of the people who are employed in the entrepreneurial enterprises. That also capable employed persons to consume more goods and services. In effect, entrepreneurship enhances the standard of living of the people of a country. **9. Promotes research and development** Entrepreneurship is innovation and hence the innovated ideas of goods and services have to be tested by experimentation. Therefore, entrepreneurship provides funds for research and development with universities and research and development with universities and research institutions. This promotes the general development, research, and development in the economy. Entrepreneurship is the pioneering zeal that provides events in our civilization. **What is Decision Making?** - **[Decision making]** is the act of choosing one alternative from among a set of alternatives. - We have to **first** decide that a decision has to be made and then **secondly** identify a set of feasible alternatives before we select one. **Strategies used to reduce risks** 1\. Risk Avoidance Organizations have the option to refrain from activities that carry unacceptable risks. 2\. Risk Reduction One way organizations respond to the risk of theft is by installing security systems. The challenge is to ensure that there is a correlation between the potential of losses from theft 3. Risk Transfer Risk transfer means getting another party to accept the risk, such as having a syndicate like Lloyd's of London provide insurance for the venture. 4\. Risk Retention This is a viable approach to small risks where the cost of mitigation or insurance would be greater over time than the total losses sustained. KEY TERMS: **Capitalist Economy** An economy where private individuals or businesses own capital goods. **Decision making** is the act of choosing one alternative from among a set of alternatives. **Decision making under certainty** a state of certainty when a decision makes knows, with reasonable certainty. **Decision making under risky** a state of risk exists when a decision maker makes decisions under a condition in which the availability. **Decision making under uncertainty** a state of uncertainty exists when a decision maker does not know all of the alternatives. **Entrepreneur** An innovator or developer who recognizes and seizes opportunities; converts these opportunities into workable/marketable ideas; adds value through time, effort, money, or skills; assumes the risks of the competitive marketplace to implement these ideas; and realizes the rewards from these efforts. **Entrepreneurship** The process of organizing, managing, and assuming the risks of a business. **Innovation** The process by which entrepreneurs converts opportunities into marketable ideas. **New Entry** offering a new product to an established or new market. ======== End of Intro. To Entrep...===== Lets proceed to Chapter 1 in Human Resource Management [Human Resource Management] - is the management of human resources - Its functions in organizations designed maximize employee performance in service of an employer's strategic objectives. - According to *[R. Buettner]*, HRM covers the following core areas: Job design and analysis, Workforce Planning, Recruitment and Selection, Training and Development, Performance Management, Compensation (remuneration) and Legal Issues. Origin and Functions of Human Resource Management - Frederick Taylor introduced a management approach known as " Scientific Method ", that focuses on the idea of scientific selection of employees based on their capabilities. This system provides that workers will be paid additional compensation when they need exceed the standard level of output for a given job, with the aim of motivating them. - Most companies started to develop departmental units focused on maintaining the well-being of employees. The field of industrial psychology, together with the beginning of World War I, led to the development of employment tests and selection techniques. - During this period, the Hawthorne studies, started to have a tremendous effect on management studies and principles such that much attention was given to personal and social interactions in the work --place that affect and influence worker productivity and level of performance 1965. - [1965-1985] - The Civil Rights Act of 1964 reached its highest point when it Prohibited discriminatory practices based on an individual's age, sex, color, religious affiliation, race, and physical or mental disabilities. Employers were advised to adhere to equal employment opportunity provisions and take affirmative steps to avoid workplace discrimination [1985-present] - Diverse labor force, globalization, and strategic HRM functions were three pressing concerns during this period. Employers, primary aim is to effectively cope with the intense demands and effects of change, competition and job efficiency. **[It is prevalent in nature].** The means that HRM is present and performed in all operational and functional areas of management within an organization on a Continuous basis. In other words, it is not an "on-off" function that is performed only when needed. **[It is dynamic].** HRM moves! HRM acts it does not depend on written rules and policies to solve problems; rather**;** it focuses on what can be done through logical and well-grounded solutions and decisions. Its constantly find ways to change situations and events for the betterment of the organization and its employees. **[It is individually-oriented].** In HRM, each employee is considered a human being that is worthy of respect and compassion. In this sense, HRM works towards getting the best out of each employee by seeing to it that they are continually offered the opportunity to be equipped with new skills through training**,** development, and other productivity improvement schemes. In effect, both intrinsic and extrinsic is motivation is increased. **[It is employee-oriented].** Employees are the doing individuals of an organization. Rewarding them for their contributions to organizational success is a strong reinforcement to increase the level of job performance. As firm's HRM strategy that empowers employees makes them feel appreciated for the job they do. **[It is forward-looking].** For an organization HRM function to be successful, it should effectively envisions and assess labor needs for a given period of time. Doing so will assure the managers that only the competent, motivated people with the right match of qualifications are joining the company. **[It growth-oriented]**. For an organization's HRM process is to yield success, it should constantly enhance the conceptual and analytical kills of its employees. A carefully planned design for employee development is almost compulsory if the organization aims for excellence, job rotation is one way for employees to learn various skills **Functions of HRM: Managerial Functions:** #### **[Planning] \>** the continuous process of systematic planning to achieve optimum use of an organization most valuable**.** **[Organizing] \>** involves developing an organizational structure to ensure the accomplishment of the organizational goals. The structure is usually represented by an organization chart which provides a graphic representation of the chain of command within an organization**.** **[Directing]** \> the HR manger can create plans, but implementing the plans smoothly depends on how motivated the people are. Must identify the needs of the employees and the means , methods to satisfy them. Motivation is a common continuous process as employees have new needs and expectations when the old ones are satisfied**.** **[Controlling]** \> is regulating activities in accordance with plans formulated based on the objectives of the organization. This is the fourth function of the HRM and completes the cycle. One of the most important functions of HRM by the department with respect to different operative functions. It also involves appraisals, audit, statistics.etc.