Homework 400 words with 3 references
Nara
Kuratko10e_IE_PPT_Ch02.pptxThe Entrepreneurial Mind-Set in Individuals: Cognition and Ethics
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
PowerPoint Presentation by Charlie Cook
Part I The Entrepreneurial Mind-Set in the 21st Century
C h a p t e r 2
Learning Objectives
To describe the entrepreneurial mind-set and entrepreneurial cognition
To identify and discuss the most commonly cited characteristics found in successful entrepreneurs
To discuss the “dark side” of entrepreneurship
To identify and describe the different types of risk entrepreneurs face as well as the major causes of stress for these individuals and the ways they can handle stress
To discuss the ethical dilemmas confronting entrepreneurs
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Learning Objectives (cont’d)
To study ethics in a conceptual framework for a dynamic environment
To present strategies for establishing ethical responsibility and leadership
To examine entrepreneurial motivation
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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The Entrepreneurial Mind-Set
Entrepreneurial Mind-Set
Describes the most common characteristics associated with successful entrepreneurs as well as the elements associated with the “dark side” of entrepreneurship.
Who Are Entrepreneurs?
Independent individuals, intensely committed and determined to persevere, who work very hard.
They are confident optimists who strive for integrity.
They burn with the competitive desire to excel and use failure as a learning tool.
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Entrepreneurial Cognition
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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The mental functions, processes (thoughts), and states of intelligent humans—attention, remembering, producing and understanding language, solving problems, and making decisions.
Cognition
Posits that knowledge structures (mental models of cognitions) can be ordered to optimize personal effectiveness within given situations.
Social Cognition Theory
The knowledge structures that people use to make assessments, judgments, or decisions involving opportunity evaluation, venture creation, and growth.
Entrepreneurial Cognition
Metacognitive Perspective
Cognitive Adaptability
The ability to be dynamic, flexible, and self-regulating in one’s cognitions given dynamic and uncertain task environments.
Metacognitive Model
Describes the higher-order cognitive process that results in the entrepreneur framing a task effectually, and thus why and how a particular strategy was included in a set of alternative responses to the decision task (metacognition).
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Sources of Research on Entrepreneurs
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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The Entrepreneurial Mindset
Speeches, Seminars and Presentations
Direct Observation
Research and Popular Publications
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Sources of Research on Entrepreneurs (cont’d)
Publications
Technical and professional journals
Textbooks on entrepreneurship
Books about entrepreneurship
Biographies or autobiographies of entrepreneurs
Compendiums about entrepreneurs
News periodicals
Venture periodicals
Newsletters
Proceedings of conferences
The Internet
Direct Observation of Practicing Entrepreneurs
Interviews
Surveys
Case studies
Speeches, Seminars, and Presentations by Practicing Entrepreneurs
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Characteristics of the Entrepreneurial Mind-Set
Determination and perseverance
Drive to achieve
Opportunity orientation
Initiative and responsibility
Persistent problem solving
Seeking feedback
Internal locus of control
Tolerance for ambiguity
Calculated risk taking
High energy level
Creativity and innovativeness
Vision
Passion
Independence
Team building
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Outline of the Entrepreneurial Organization
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Imagination
Flexibility
Willingness to accept risks
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© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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2.1 Characteristics Often Attributed to Entrepreneurs
Source: John A. Hornaday, “Research about Living Entrepreneurs,” in Encyclopedia of Entrepreneurship, ed. Calvin Kent, Donald Sexton, and Karl Vesper (Englewood Cliffs, NJ: Prentice Hall, 1982), 26–27. Adapted by permission of Prentice-Hall, Englewood Cliffs, NJ.
Confidence
Perseverance, determination
Energy, diligence
Resourcefulness
Ability to take calculated risks
Dynamism, leadership
Optimism
Need to achieve
Versatility; knowledge of product, market, machinery, technology
Creativity
Ability to influence others
Ability to get along well with people
Initiative
Flexibility
Pleasant personality
Egotism
Courage
Imagination
Perceptiveness
Toleration of ambiguity
Aggressiveness
Capacity for enjoyment
Efficacy
Commitment
Ability to trust workers
Sensitivity to others
Honesty, integrity
Maturity, balance
Intelligence
Orientation to clear goals
Positive response to challenges
Independence
Responsiveness to suggestions and criticism
Time competence, efficiency
Ability to make decisions quickly
Responsibility
Foresight
Accuracy, thoroughness
Cooperativeness
Profit orientation
Ability to learn from mistakes
Sense of power
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Entrepreneurship Theory
Entrepreneurs cause entrepreneurship.
Entrepreneurship is a function of the entrepreneur:
Entrepreneurship is characterized as the interaction of skills related to inner control, planning and goal setting, risk taking, innovation, reality perception, use of feedback, decision-making, human relations, and independence.
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Dealing with Failure: The Grief Recovery Process
Loss Orientation
Involves focusing on the particular loss to construct an account that explains why the loss occurred.
Restoration Orientation
Involves both distracting oneself from thinking about the failure event and being proactive towards secondary causes of stress.
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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The Entrepreneurial Experience
Entrepreneurs
Create ventures much as an artist creates a painting.
Are formed by the lived experience of venture creation.
Experiential Nature of Creating a Sustainable Enterprise
Emergence of the opportunity
Emergence of the venture
End emergence of the entrepreneur
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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The Dark Side of Entrepreneurship
The Entrepreneur’s Confrontation with Risk
Financial risk versus profit (return) motive varies in entrepreneurs’ desire for wealth.
Career risk—loss of employment security
Family and social risk—competing commitments of work and family
Psychic risk—psychological impact of failure on the well-being of entrepreneurs
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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2.1 Typology of Entrepreneurial Styles
Source: Thomas Monroy and Robert Folger, “A Typology of Entrepreneurial Styles: Beyond Economic Rationality,” Journal of Private Enterprise 9, no. 2 (1993): 71.
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Entrepreneurs: Type A Personalities
Chronic and severe sense of time urgency.
Constant involvement in multiple projects subject to deadlines.
Neglect of all aspects of life except work.
A tendency to take on excessive responsibility, combined with the feeling that “Only I am capable of taking care of this matter.”
Explosiveness of speech and a tendency to speak faster than most people.
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Stress and the Entrepreneur
Entrepreneurial Stress
The extent to which entrepreneurs’ work demands and expectations exceed their abilities to perform as venture initiators, they are likely to experience stress.
Sources of Entrepreneurial Stress
Loneliness
Immersion in business
People problems
Need to achieve
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Dealing with Stress
Networking
Getting away from it all
Communicating with employees
Finding satisfaction outside the company
Delegating
Exercising rigorously
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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The Entrepreneurial Ego
Self-Destructive Characteristics
Overbearing need for control
Sense of distrust
Overriding desire for success
Unrealistic externalized optimism
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Entrepreneurial Ethics
Ethics
Provides the basic rules or parameters for conducting any activity in an “acceptable” manner.
Represents a set of principles prescribing a behavioral code of what is good and right or bad and wrong
Defines “situational” moral duty and obligations.
Sources of Ethical Dilemmas
Pressure from inside and outside interests
Changes in societal values, mores, and norms
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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2.2 Classifying Decisions Using a Conceptual Framework
Source: Verne E. Henderson, “The Ethical Side of Enterprise,” Sloan Management Review (Spring 1982): 42.
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Entrepreneurial Ethics (cont’d)
Ethical rationalizations used to justify questionable conduct involve believing that the activity:
Is not “really” illegal or immoral.
Is in the individual’s or the firm’s best interest.
Will never be found out.
Helps the firm so the firm will condone it.
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Table 2.2 Types of Morally Questionable Acts
| Type | Direct Effect | Examples |
| Nonrole | Against the firm | Expense account cheating Embezzlement Stealing supplies |
| Role failure | Against the firm | Superficial performance appraisal Not confronting expense account cheating Palming off a poor performer with inflated praise |
| Role distortion | For the firm | Bribery Price fixing Manipulating suppliers |
| Role assertion | For the firm | Investing in unethically governed countries Using nuclear technology for energy generation Not withdrawing product line in face of initial allegations of inadequate safety |
Source: James A. Waters and Frederick Bird, “Attending to Ethics in Management,” Journal of Business Ethics 5 (1989): 494.
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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2.3 Overlap Between Moral Standards and Legal Requirements
Ethical Dilemmas
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Reasons for Unethical Behaviors Occur
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Greed
Distinctions between activities at work and activities at home
Survival (bottom-line thinking)
A reliance on other social institutions to convey and reinforce ethics
Lack of a foundation in ethics
Entrepreneurial Ethics (cont’d)
Extended consequences
Multiple alternatives
Mixed outcomes
Uncertain ethical consequences
Personal implications
Complexity of Ethical Decisions
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Entrepreneurial Ethics (cont’d)
Online Ethical Dilemmas in E-Commerce
Continuing to obtain consumer trust.
Protecting their business’s online reputation.
Avoiding tactics that betray trust.
Continuing to exhibit strong ethical responsibility.
Establishing an ethical strategy.
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Establishing a Strategy for an Ethical Venture
Ethical Code of Conduct
Is a statement of ethical practices or guidelines to which an enterprise adheres.
Are becoming more prevalent in industry.
Are proving to be more meaningful in terms of external legal and social development.
Are more comprehensive in terms of their coverage.
Are easier to implement in terms of the administrative procedures used to enforce them.
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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“Always Do the Right Thing”
Reasons for management to adhere to a high moral code:
It is good business because unethical practices have a corrosive effect not only on the firm itself, but on free markets and free trade which are fundamental to the survival of the free enterprise system.
Improving the moral climate of the firm will eventually win back the public’s confidence in the firm.
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Ethical Responsibility
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Establish a strategy for ethical responsibility that encompasses:
Ethical consciousness
Ethical process and structure
Institutionalization
Ethical Considerations of Corporate Entrepreneurs
Organizational barriers that invite unethical behaviors:
Systems
Structures
Policies and Procedures
Culture
Strategic Direction
People
Promote ethical employee behaviors by:
Providing flexibility, innovation, and support of initiative and risk taking
Removing barriers for entrepreneurial middle managers
Including an ethical component to corporate training
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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2.4 Ethical Challenges for Corporate Entrepreneurship
Unethical Consequences
Source: Donald F. Kuratko and Michael G. Goldsby, “Corporate Entrepreneurs or Rogue Middle Managers? A Framework for Ethical Corporate Entrepreneurship,” Journal of Business Ethics 55 (2004): 18.
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Ethical Leadership by Entrepreneurs
The value system of an owner/entrepreneur is the key to establishing an ethical organization.
A code of ethics provides a clear understanding of the need for:
Ethical administrative decision-making
Ethical behavior of employees
Explicit rewards and punishments based on ethical behavior
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Entrepreneurial Motivation
Entrepreneurial Motivation
The quest for new-venture creation as well as the willingness to sustain that venture
Personal characteristics, personal environment, business environment, personal goal set (expectations), and the existence of a viable business idea
Entrepreneurial Persistence
An entrepreneur’s choice to continue with an entrepreneurial opportunity regardless of counterinfluences or other enticing alternatives
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Key Terms and Concepts
career risk
code of conduct
cognition
cognitive adaptability
dark side of entrepreneurship
entrepreneurial behavior
Entrepreneurial cognition
entrepreneurial experience
entrepreneurial mind-set
entrepreneurial motivation
entrepreneurial persistence
ethics
failure
family and social risk
financial risk
grief recovery
metacognitive model
psychic risk
rationalizations
risk
role assertion
role distortion
role failure
social cognition theory
stress
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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