Module 1: Entrepreneurial Mindset PDF

The Entrepreneurial Mind MODULE 1 Entrepreneurial z Mind z The biggest difference between entrepreneurs and your average businessperson isn’t who they are, it’s the ways they think. And some of them...

The Entrepreneurial Mind MODULE 1 Entrepreneurial z Mind z The biggest difference between entrepreneurs and your average businessperson isn’t who they are, it’s the ways they think. And some of them might surprise you.  z The Entrepreneurial Mind Some people say that there is a specific psychological or motivational theory in entrepreneurship, but that is not true. However, some entrepreneurs have different opinions in achieving a success in new ventures or enterprises such as talent and skills. There are several issues about in the world of entrepreneurship. There are several myths about it.  z The Psychological Theory of Dr. McClelland and Dr. Atkinson This theory is accepted on entrepreneurial behavior. The theory states that people are motivated by three principal needs: 1. Need for power 2. Need for affiliation 3. Need for achievement  z The Psychological Theory of Dr. McClelland and Dr. Atkinson 1. Need for power is an urge to control others: to be able to influence them and make them do things which perhaps they would not have done if left to themselves. McClelland identified four stages within the power orientation: 1. Drawing inner strength from others - being a loyal follower and serving the power of other people. 2. Strengthening oneself - trying to dominate situations. 3. Self-assertiveness - trying to manipulate situations so as to use other people to achieve one‘s own target. 4. Acting as an instrument of higher authority - identifying with some organizations and employing the methods learnt in stages 2 and 3 but now being able to claim formal legitimacy.  z The Psychological Theory of Dr. McClelland and Dr. Atkinson 2. Need for affiliation concerns the desire to be associated with specific people and groups, to have a greater sense of belonging and place. It can play a role in variety of human interactions and in the formation of bonds and friendships. A low need of affiliation can be part of a more independent personality. People who do not feel a strong desire to affiliate with others may have difficulty finding support. 3. Need for achievement is the urge to excel, to accomplish in relation to a set of standards, to struggle to achieve success. The individuals with high achievement needs are highly motivated by competing and challenging work. They look for promotional opportunities in job. They have a strong urge for feedback on their achievement.  The z Difference between Leadership and Management Leaders have been characterized as inspiring or charismatic, but one rarely hears of inspiring or charismatic managers. In the minds of many, management is associated with words such as efficiency, planning, procedures, control, and consistency. Leadership is associated with words such as vision, creativity, dynamism, change, and risk-taking. But are there real differences between managers and leaders? Between leadership and management?  The z Difference between Leadership and Management According to A. D‘Souza, here are some distinctions: 1. Managers are concerned with the present. Leaders look to the future.  The z Difference between Leadership and Management According to A. D‘Souza, here are some distinctions: 2. Managers make sure details are taken care of. Leaders set broad purposes and directions.  The z Difference between Leadership and Management According to A. D‘Souza, here are some distinctions: 3. Managers exercise control to make sure that things work well. Leaders create commitment that things may work better.  The z Difference between Leadership and Management According to A. D‘Souza, here are some distinctions: 4. Managers solve today‘s problems by addressing difficulties caused by changing events. Leaders create a better future by seizing opportunities stimulated by changing events.  The z Difference between Leadership and Management According to A. D‘Souza, here are some distinctions: 5. Managers focus on the process. Leaders focus on the product.  The z Difference between Leadership and Management According to A. D‘Souza, here are some distinctions: 6. Managers focus on problem behavior and try to improve it through counseling, coaching, nurturing. Leaders focus on what is right and praise it.  The z Difference between Leadership and Management According to A. D‘Souza, here are some distinctions: 7. Managers make sure people put in an honest day‘s work for their pay. Leaders inspire people to do their best.  The z Difference between Leadership and Management According to A. D‘Souza, here are some distinctions: 8. Managers organize and plan to meet this year‘s objective. Leaders create a vision of the years down the road.  The z Difference between Leadership and Management According to A. D‘Souza, here are some distinctions: 9. Managers create efficient policies and standard operating procedures. Leaders go beyond the need for standard procedures and create a more efficient system.  The z Difference between Leadership and Management According to A. D‘Souza, here are some distinctions: 10. Managers focus on efficiency. Leaders focus on effectiveness.  The z Difference between Leadership and Management In his Seven Habits of Highly Effective People, Stephen Covey stated: “Management is bottom-line focus: How can I best accomplish certain things? Leadership deals with the top line: what are the things I want to accomplish? Management is efficiency in climbing the ladder of success; Leadership determines whether the ladder is leaning against the right wall.“  The z Difference between Leadership and Management Most current thinking seems to suggest that all managers should become more leadership-oriented. Managers should not be required to become more like leaders, nor should leaders  The z Difference between Leadership and Management Management and Leadership should appreciate and leverage each other's unique strengths. By blending strong management and leadership, we can create a unified approach that highlights their strengths and minimizes their weaknesses, turning potential conflicts into productive outcomes.  z Leadership and Management Skills – A Comparison Both leadership and management skills are needed to build a successful organization. It is also important to realize that the way situations are viewed depends on whether it‘s from the leadership or the management perspective. The best advice is to look at situations from both perspectives so that all aspects are understood.  z Leadership and Management Skills – A Comparison The comparison that follows is presented by Anthony D‘ Souza, to assist with the understanding of these two seperate functions.  z Leadership and Management Skills – A Comparison 1. Leaders gain power through their actions and personal relations. Managers have positional power on which to rely.  z Leadership and Management Skills – A Comparison 2. Leaders are found throughout an organization. Managers are found in the organization‘s higher echelons.  z Leadership and Management Skills – A Comparison 3. Leaders have followers who desire to be on the team. Managers have subordinates who have been assigned to them  z Leadership and Management Skills – A Comparison 4. Leaders depend on people for success. Managers depend on the system for success.  z Leadership and Management Skills – A Comparison 5. Leaders provide vision in terms of “the real benefit to you“. Managers use the “this is your job.“ approach.  z Leadership and Management Skills – A Comparison 6. Leaders have self-conceived goals to better the organization. Managers attempt to meet tbe goals provided by the organization.  z Leadership and Management Skills – A Comparison 7. Leaders strive to change the organization to best meet needs as they perceive them. Managers work to maintain the organization‘s status quo.  z Leadership and Management Skills – A Comparison 8. Leaders often view rules and procedures as bureaucratic red tape. Managers view rules and procedures as necessary controls to provide order.  z Leadership and Management Skills – A Comparison 9. Leaders work for results. Managers follow directives.  z Leadership and Management Skills – A Comparison 10. Leaders work through their people. Managers work with charts and computer print-out  z Leadership and Management Skills – A Comparison Effective leaders build a climate of trust where people can freely express their ideas and concerns. Such an atmosphere requires sensitive leaders who are secure in their own knowledge, skills, and relationships rather than feel threatened by differences or resistance. If used creatively without resentment or suppression, resistance and differences of viewpoint can become a source of new ideas by forcing re-examination of objectives, plans, and implementation.  z Leadership and Management Skills – A Comparison Effective leaders are not only skilled in the dynamics of planned change and goal-achievement; they also empower others. Without shared vision there would be no common direction. Without empowerment of others, there would be no excellence in performance. Leadership is the simultaneous provision of direction and empowerment.  Themes of Desirable and Acquirable Attitudes and z Behaviors  z Commitment and Determination  Entrepreneurial behavior is primarily self-determined behavior, that is, individuals decide for themselves what courses of action they will follow.  Self-determination of its own accord is insufficient to support a claim that an individual is behaving entrepreneurial.  An individual could act in a self-determined way for any number of behavioral roles and reasons which can be easily identified through the individual‘s dedication to ask and conviction to principle  z Commitment and Determination Determination identified by four essential qualities: 1. The individual acts autonomously; 2. Their behavior; 3. Self-regulated; and 4. The individual acts in a self-realizing manner  z Leadership  Leadership and communication are constantly growing together, being intertwined into one another to help develop an organization. To be an effective leader, communication has to be defined in the organization for it to be successful.  Leadership in Entrepreneurship can be defined as “process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task.“ in “one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods.“  This refers to not only the act of entrepreneurship as managing or starting a business but how one manages to do so by these social processes, or leadership skills.  z Leadership  This leads us to see that an entrepreneur must have leadership skills or qualities in order to see potential opportunities and act upon them. An entrepreneur, at the core, is a decision maker. Such decisions often have an impact on an organization as a whole, which is representative of their leadership amongst the organization.  z Leadership According to Fisher, there are four phases of decision making: 1. Orientation Stage - is where the members involved are becoming acquainted both with themselves as well as the problem at hand. 2. Conflict Stage - is where the problem is analyzed with several possibilities presented to resolve problem. 3. Emergence Stage - decision is made about which solution is to be used. 4. Reinforcement Stage - is the supportive of the decision.  z Leadership As the global market grows and technology advances, decision- making in entrepreneurship is now an ongoing process rather than isolated events. This process involves managing knowledge by using intellectual assets to build on past experiences and create new ways of sharing and creating knowledge. Leaders should learn from their mistakes and leverage their past experiences.  z Leadership In different cultures, entrepreneurs succeed or fail based on how well leaders adapt to local conditions. In a globalized world, successful leaders need to understand and adapt to other cultures. Corporate visions are becoming international to address the changes needed to operate or provide services in different cultural contexts.  z Opportunity Obsession Entrepreneurs constantly search for opportunities and take risks to achieve their goals. Opportunities can be discovered or created. Some people have better access to information and are better at processing it due to their job, experience, social networks, and cognitive abilities.  z Opportunity Obsession Entrepreneurs need to adapt to changes in the political, economic, social, and technological environment to create new opportunities. They should also look for customer dissatisfaction with current products as a sign of opportunity. Personal expertise is a valuable source for new ideas, but it's important to assess opportunities carefully before starting a business.  z Tolerance of risk, Ambiguity, and Uncertainty Entrepreneurship means risk. The risk of walking away from security and career path to create something new. The risk of taking yourself and your family into an unfamiliar storm of stress and uncertainty. The risk that you‘ve miscalculated an opportunity, or your own internal resources as you plunge into a new venture.  z Tolerance of risk, Ambiguity, and Uncertainty Entrepreneurship is all about embracing risk. It means leaving behind job security and taking on stress and uncertainty to create something new. Not everyone is cut out for it. Here are some tips for handling the risk:  Assess Your Risk Tolerance: Understand how much risk you can handle before diving in. Even with preparation, risks will still appear.  Prepare Your Home Life: The pressures of a new venture will affect your home and family. Make sure your loved ones are ready and supportive.  Follow Your Passion: Don't become an entrepreneur just for money. Passion will help you overcome the tough days. Being willing to take risks is crucial for entrepreneurs, even though studies show mixed results on whether they are naturally less risk-averse than others.  z Tolerance of risk, Ambiguity, and Uncertainty Entrepreneurs need vision. You must confidently lead people towards a goal, but also stay open to changing direction if needed. This ability to charge ahead while being open to new information shows a high tolerance for ambiguity. It sets entrepreneurs apart, creating order from chaos. To develop this skill: 1. Make Mistakes Early and Often: Learn from failures and grow. 2. Value Questions Over Answers: Stay curious and adaptable. Embrace small challenges and failures to strengthen your tolerance for ambiguity. This journey helps you become who you’re meant to be, using your gifts to make a difference.  z Creativity, Self-reliance, and Ability to Adapt Entrepreneurs need creativity, self-reliance, and adaptability. They see market gaps and create innovations to fill them. Creativity is key, asking "what if" and thinking in new ways. Some struggle with change, but the business world is unpredictable. Adaptability helps business owners change course and act without all the information.  z Motivation to Excel Find your big "why" to stay motivated. Authentic, self-generated motivation leads to more interest and confidence than external motivation. While entrepreneurial behavior can be driven by both intrinsic and extrinsic factors, values are key to maintaining control and effectiveness. Control stifles creativity; freedom fosters it. Stay passionate and focused on what matters to you.  z Closing So can everyone have an entrepreneurial mind? Probably not. But with time and practice, you can begin to think more like entrepreneurs. You can start to make subtle shifts in old, reflexive thinking that keeps us from exploring a new idea or taking the leap and launching your own business. Entrepreneurial thinking may be less of destination and more of a journey as you push your own boundaries and explore exactly what you‘re capable of.  Reference: z Module 1: The Entrepreneurial Mind. (n.d.). Entrepreneurial Behavior. https://entrepreneurialbehavior.weebly.com/module-1-the- entrepreneurial-mind.html