Introduction to Entrepreneurship and Entrepreneurial Process PDF

240902 - Introduction to entrepreneurship and the entrepreneurial process Pre-Readings and Preparation Lecture 1  Pre-Readings Group Discussion Notes Lecture Notes Entrepreneurial Motives...

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 market reach I. expanding transformation and entrepreneurship go hand in hand. 2 enhancing convenience Examples of entrepreneurship and digitalisation Walmart  Revolutionized retail by integrating digital technology to bring the store to the customer's doorstep, enhancing convenience and production efficiency expanding market reach. 1.. Customer 2 customisation 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 3D + > Al- online shopping experience interface. Airbnb  Disrupted the hospitality industry by connecting homeowners with travelers, providing a personalized lodging experience through a lodging digital platform. personalised 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? REWARD Knight 1916 ENT as risk-taker VS RISK  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 Alertness" "Entrepreneurial on the the existing gop filling / bidging Kirzner 1973 ENT as alert seeker of opportunities · market 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) · genetics personality definition - intuitive ability, inborn traits, instincts · temperamenttanoits Neurocism - - agreableness conscientiousness experience - to openess psychological definition - driven by unique values, attitudes and traits - - extraversion (creativity, persistence,…) leaders of people - ability to adapt their style to the need of people Management View: How does the entrepreneurial process organisations unfold? 1. of new emergence opportunities. emergence 2 of Emergence of new organisations initiating → establishment Nascent entrepreneurship Entrepreneurship in the process of starting the business) VENTURE CREATION PROCESS 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  · lock of standardised procedures start up facture rates fear (internal) - · → lack of routines External challenges establish goof relationships with key stakeholders (customers, suppliers, financiers,…) stakeholders · · competence of lack) legitima attracting competence to the firm & essue 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 discovery · · creation not only venture creation but also in established firms · exploitation new business activities renewal of existing business both innovative (pattern breaking) and reproducing (incremental) LRADICAL opportunities Entrepreneurship from an opportunity perspective Shane & Venkataraman, 2000 PRESENCE PRESENCE of OF ENTREPRENEURS nexus of two phenomenon OPPORTUNITIES 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  240903 - Global perspectives on Entrepreneurship Pre-Reading GEM Report Group Work on GEM Report Lecture Notes Global perspectives on Entrepreneurship Why do entrepreneurial activity vary across contexts? different ecosystems subsidies support by the government · · incentives · tot haven's Industrial and Regional development educational differences support by the government physical infrastructure (internet, streets, …) 240903  Global perspectives on Entrepreneurship 1  culture norm (is it encouraging?, probation of role models) Access to professional services (lawyers, etc.) Bureaucracy how difficult is the process UP SUPPORT START Access to entrepreneurial finance (governmental support, VC L barner to entry Governmental rules GEM Report GEM conceptual framework societal values about entrepreneurship good career choice, high status for successful entrepreneur and media attention Individual attributes dempgraphic characteristics, self-perceptions of entrepreneurship and motivation perceived opportunities capabilities fear of failure necessity opportunity improvement Perceived quality of the entrepreneurial ecosystem entrepreneurial finance and education, government policy, commercial and legal infrastructure, social norms Key measures 240903  Global perspectives on Entrepreneurship 2  Total Early-stage Entrepreneurial Activity TEA - working age adult population actively involved in starting or running a new venture (up to 3.5 years) Established Business Ownership EBO - adult population who are owner- manager of an established business (more then 3.5 years old) Entrepreneurial Employee Activity EEA - employees developing new goods or services on behalf of their employer Motives for entrepreneurial activities To make a difference in the world (purpose-driven) To build great wealth or very high income To continue a family tradition To earn a living because jobs are scarce (necessity-driven) The gender gap in TEA higher male rate than women TEA differences across economies Societal and cultural norms about entrepreneurship Lack of alternative income/employment opportunities competition presence of social security systems strengths or weaknesses of local entrepreneurial ecosystems 240903  Global perspectives on Entrepreneurship 3