MKT
Section 1 The Entrepreneurial Perspective
Chapter 1
The Entrepreneurial Mind-Set
©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
ICS: 394 Entrepreneurship Strategy
Prof. Edward Papabathini
CHAPTER OBJECTIVES
Concept/process of entrepreneurship.
Structural similarities enable entrepreneurs.
Bricolage as a source of entrepreneurs’ resourcefulness.
Introduce effectuation.
Entrepreneurs cognitively adapt.
Sustainable entrepreneurship
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Prof. Edward Papabathini
©McGraw-Hill Education.
The Nature of Entrepreneurship
Entrepreneurial actions begin at the nexus of a lucrative opportunity and an enterprising individual.
An entrepreneurial opportunity could stem from:
A new market.
A new product for an existing market.
Or, a new product for a new market.
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Prof. Edward Papabathini
©McGraw-Hill Education.
Entrepreneurial Action and Thinking
The McMullen-Shepherd model explains how knowledge and motivation influence two stages of entrepreneurial action.
Stage 1 is the realization an opportunity exists for someone.
Stage 2 is determining whether it is an opportunity for themselves.
Acting on and pursuing the identified opportunity involves entrepreneurial thinking.
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Prof. Edward Papabathini
©McGraw-Hill Education.
How Entrepreneurs Think
Entrepreneurs sometimes make decisions in highly uncertain environments, with high stakes and immense time pressures.
They need to think structurally, engage in bricolage, effectuate, and cognitively adapt.
Forming opportunity beliefs often requires creative mental leaps launched from the entrepreneur’s existing knowledge.
Superficial similarities and structural similarities
The challenge often lies in making creative mental leaps based on structural similarities
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Prof. Edward Papabathini
©McGraw-Hill Education.
Bricolage
Entrepreneurs often lack resources.
They sometimes seek resources from others
Bricolage refers to taking existing resources and experimenting, tinkering, repackaging , and/or reframing them to be used in a way they were not originally designed or conceived.
From this process of “making do,” entrepreneurs can create opportunities.
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Prof. Edward Papabathini
©McGraw-Hill Education.
Effectuation
A causal process
The effectuation process
Most managers need to take an entrepreneurial mind-set.
To develop this mindset, managers must:
attempt to make sense of opportunities,
constantly question their dominant logic, and
revisit what they think true about markets and firms.
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Prof. Edward Papabathini
©McGraw-Hill Education.
Cognitive Adaptability
To be good at effectuation, you must have cognitive adaptability.
The extent entrepreneurs are dynamic, flexible, self-regulating, and engaged in sensing and acting on changes in their environments.
Reflected in an entrepreneur’s ability to reflect upon, understand, and control their thinking and learning.
Learn to be more cognitive by asking questions in four areas:
Comprehension questions.
Connection tasks.
Strategic tasks.
Reflection tasks.
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Prof. Edward Papabathini
©McGraw-Hill Education.
The Intention to Act Entrepreneurially
Entrepreneurial action is most often intentional.
When actions are feasible and desirable, there are stronger intentions to act.
Entrepreneurial intentions can be explained the same way.
Entrepreneurial self-efficacy
Perceived desirability refers to an individual’s attitude toward entrepreneurial action
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Prof. Edward Papabathini
©McGraw-Hill Education.
Entrepreneur Background and Characteristics
Education.
A broad knowledge allows for the discovery of potential opportunities and assists adaptability.
Provides transferable knowledge, skills, and problem solving abilities.
Age.
Entrepreneurial age reflects the entrepreneur’s experience.
Most entrepreneurs are between 22 and 45 when starting their career.
Work History.
Work history plays a role in the growth and success of a new venture.
Experience in financing, product development, manufacturing, distribution, and marketing are particularly important.
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Prof. Edward Papabathini
©McGraw-Hill Education.
Role Models and Support Systems
A role model is an important factor influencing an entrepreneur’s career path.
As contacts expand, they form a network with density and centrality.
Establish a moral-support network of family and friends.
Needs advice and counsel obtained from members of a professional-support network.
Mentors, business associates, suppliers, trade associations, and other personal affiliations.
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Prof. Edward Papabathini
©McGraw-Hill Education.
Networks
Entrepreneurial activity is embedded in networks of interpersonal relationships.
These networks offer:
Access to resources.
Assistance in discovering and exploiting new opportunities.
Opportunities to exchange goods and services.
Perceived feasibility that strengthens entrepreneurial intentions.
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Prof. Edward Papabathini
©McGraw-Hill Education.
Sustainable Entrepreneurship
Entrepreneurial action can both sustain and develop.
Sustainable entrepreneurship is focused on preserving nature, supporting life and community in the pursuit of opportunities to bring future products and services into existence for gain.
Those with greater knowledge of the natural environment are more likely to notice changes in the environment that form opportunities.
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Prof. Edward Papabathini
©McGraw-Hill Education.
Entrepreneurial Impact
Entrepreneurs can generate economic wealth for themselves, but their impact on development can be far greater.
They can generate economic, environmental, and social gains for others.
Environmental gains.
Social gains
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Prof. Edward Papabathini
©McGraw-Hill Education.
CHAPTER OBJECTIVES REVIEW
To introduce the concept of entrepreneurship and explain the process of entrepreneurial action.
To describe how structural similarities enable entrepreneurs to make creative mental leaps.
To highlight bricolage as a source of entrepreneurs’ resourcefulness.
To introduce effectuation as a way expert entrepreneurs sometimes think.
To develop the notion that entrepreneurs cognitively adapt.
To introduce sustainable entrepreneurship as a means of sustaining the natural environment and communities and developing gains for others.
1-‹#›
Prof. Edward Papabathini
©McGraw-Hill Education.