Entrepreneurship - Management Principles - Lecture Slides, Slides of Management Fundamentals

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Entrepreneurship docsity.com Overview • What is an entrepreneur? • Characteristics of an entrepreneur • Planning to be an entrepreneur • Growth pressures, managing a family business, and corporate intrapreneurship docsity.com Small Business Owners • Small business owners are people who own a major equity stake in a company with fewer than 500 employees. • In 1997 there were 22.56 million small business in the United States. • 47% of people are employed by a small business. docsity.com Employee Satisfaction • In companies with less than 50 employees, 44% were satisfied. • In companies with 50-999 employees, 31% are satisfied. • Business with more than 1000, only 28% are satisfied. docsity.com Employee Satisfaction Employee Satisfaction 28 31 44 0 10 20 30 40 50 less than 50 50-999 1000+ Number of Employees S a ti s fa c ti o n P e rc e n ta g e less than 50 50-999 1000+ docsity.com Who are entrepreneurs? • Common traits – Original thinkers – Risk takers – Take responsibility for own actions – Feel competent and capable – Set high goals and enjoy working toward them • Common traits – Self employed parents – Firstborns – Between 30-50 years old – Well educated – 80% have college degree and 1/3 have a graduate level degree docsity.com Successful and Unsuccessful Entrepreneurs • Successful – Creative and Innovative – Position themselves in shifting or new markets – Create new products – Create new processes – Create new delivery • Unsuccessful – Poor Managers – Low work ethic – Inefficient – Failure to plan and prepare – Poor money managers docsity.com Characteristics of Entrepreneurs Successful Entrepreneurs Key Personal Attributes Good Technical Skills Strong Managerial Competencies docsity.com Key Personal Attributes (cont.) • Need for Achievement – A person’s desire either for excellence or to succeed in competitive situations – High achievers take responsibility for attaining their goals, set moderately difficult goals, and want immediate feedback on their performance – Success is measured in terms of what those efforts have accomplished – McClelland’s research docsity.com Key Personal Attributes (cont.) • Desire for Independence – Entrepreneurs often seek independence from others – As a result, they generally aren’t motivated to perform well in large, bureaucratic organizations – Entrepreneurs have internal drive, are confident in their own abilities, and possess a great deal of self-respect docsity.com Key Personal Attributes (cont.) • Self-Confidence – Because of the high risks involved in running an entrepreneurial organization, having an “upbeat” and self- confident attitude is essential – A successful track record leads to improved self-confidence and self-esteem – Self-confidence enables that person to be optimistic in representing the firm to employees and customers alike docsity.com Planning • Business Plan – A step-by-step outline of how an entrepreneur or the owner of an enterprise expects to turn ideas into reality. docsity.com Questions To Keep In Mind • What are my motivations for owning a business? • Should I start or buy a business? • What and where is the market for what I want to sell? • How much will all this cost me? • Should my company be domestic or global? docsity.com Motivations • Deciding what your motivations are will direct you toward what type of business fits you best. • Types: 1. Lifestyle Venture 2. Smaller Profit Venture 3. High Growth Venture docsity.com 3. High Growth Ventures • Goal is maximum profit and growth. • Concentrated on pushing envelope and growing as large as possible. • Focus on innovation docsity.com Start or Buy? • Start – cheapest, but very difficult -requires most planning/research • Buy – expensive – may be out or reach -requires less planning and research • Franchise (middle ground) – a business run by an individual (the franchisee) to whom a franchiser grants the right to market a certain good or service. docsity.com The Market??? • Planning & Research essential • Extensive market surveys (family, friends, neighbors…) • Magazines and Polls offer some information on the market - Businessweek, Harris Poll docsity.com Entrepreneurship: Growth Pressures Entrepreneurs often find that as their business grows, they feel more pressure to use formal methods to lead their organizations. Although this formalization process may compromise some entrepreneurs spirit, it often leads to more focus, organization, and greater financial returns. Basically, it’s a movement from a “seat-of-the-pants” operation to a more structured, legitimate and recognizable business. docsity.com Entrepreneurship: Growth Pressures Entrepreneurial and Formal Organizations differ in six business dimensions:  Strategic orientation  Commitment to opportunity  Commitment to resources  Control of resources  Management structure  Compensation policy docsity.com Entrepreneurship: Growth Pressures Business Dimension Entrepreneurial Organization Formal Organization Strategic orientation Seeks opportunity Controls resources Commitment to opportunity Revolutionary Short duration Evolutionary Long duration Commitment to resources (capital, people, and equipment) Lack of stable needs and resource bases Systematic planning systems Control of resources Lack of commitment to permanent ventures Power, status, financial rewards for maintaining status quo Management Structure Flat Many informal networks Clearly defined authority and responsibility Compensation policy Unlimited; based on team’s accomplishments Short-term driven; limited by investors docsity.com Entrepreneurship: Managing a Family Business Two reasons not to go into business with your family or friends.… Families fight Friends fight. Often, it involves money. So a business environment could potentially breed arguments, disagreements, and feuds. Fighting can occur during early developmental stages when hours are long and pay is low. Or, after success has been achieved. docsity.com Entrepreneurship: Managing a Family Business Six steps to help lead you to a successful Family Business:  Clear job responsibilities  Clear hiring criteria  Clear plan for management transition  Agreement on whether and when to sell business  Commitment to resolving conflicts quickly  Outside advisors are used to mediate conflicts. Clarity is key…. but NO GUARANTEE. docsity.com Entrepreneurship: Managing a Family Business Operational vs. Survival Issues…. Operational = Decisions about the economics of the business and how to balance that with rational and family obligation criteria. THINK: Day-to-day grind. Survival = Develop out of a lack of attention on the operational issues within the business. THINK: Festering problems; ultimately compromise livelihood. docsity.com Entrepreneurship: Corporate INTRA-preneurs Organizations that redirect themselves through innovation have the following characteristics:  Commitment from senior management  Flexible organization design  Autonomy of the venture team  Competent/Talented people with entrepreneurial attitudes  Incentives and rewards for risk taking  Appropriately designed control system docsity.com Entrepreneurship: Corporate INTRA-preneurs In order to for this type of forward thinking to reap long-term benefits, top management must allow it to flourish in the day-to-day operations of the business…. This is known as “skunkworks” Skunkworks = Islands of intrapreneurial activity within an organization. REMEMBER: On the island, formal rules and policies of the organization often DO NOT apply. docsity.com One More Time • What is an entrepreneur? • Characteristics of an entrepreneur • Planning to be an entrepreneur • Growth pressures, managing a family business, and corporate intrapreneurship docsity.com