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The Myth of Entrepreuneurship

The Myth of Entrepreuneurship. (Donald F. Kuratko and Richard M. Hodgetts , 1995): Entrepreuneur are doers, not thinkers Entrepreuneur are born, not made Entrepreuneur are always inventor Entrepreuneur are academic and social misfits Entrepreuneur must fit the “Profile”

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The Myth of Entrepreuneurship

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  1. The Myth of Entrepreuneurship (Donald F. Kuratko and Richard M. Hodgetts, 1995): Entrepreuneur are doers, not thinkers Entrepreuneur are born, not made Entrepreuneur are always inventor Entrepreuneur are academic and social misfits Entrepreuneur must fit the “Profile” All you need is money to be an entrepreuneur All you need is luck to be an entrepreuneur Ignorance is bliss for an entrpreuneur Entrepreuneur seek success but experience high failure rates Entrepreuneur extreme risk takers (gamblers)

  2. The potentials drawback of entrepreuneur Norman M. Scarborough, 2000: • Uncertainty of income • Risk losing your entire invested capital • Long hour and hard work • Lower quality of life until the business get estabilished • High level of stress • Complete responsibility

  3. The causes of business failure • Management incomplete • Lack of experience • Poor financial control • Lack of strategic management • Uncontrolled growth • Inappropriate location • Lack of inventory control • Inability to make “entrepreunial transition”

  4. The “dark” side of entrepreuneurship: • 1. Financial risk • 2. Career risk • 3. Family and social risk • 4. Psychic risk The Entrepreunerial Ego: • An overbearing need for control • Sense of distrust • Overiding desire for success • Unrealitic optimism

  5. Four causes of enrepreunerial stress Boyd and Gumpert (1983): • Loneliness • Immersion in business; most entrepreuneur are married to their business. They work long hours, leaving them with little time for civic organizations, or further educations. • People problems • Need to achieve

  6. Five specific ways to cope with stress: • 1. Networking • 2. Getting away from it all • 3. Communicating with subordinates • 4. Finding satisfaction outside the company • 5. Delegating

  7. Typology of Entrepreunial Styles Level of Personal Risk Low High Low risk avoiding risk accepting activity seeking activity seeking Level of Profit Motive High risk avoiding risk accepting profit seeking profit seeking

  8. Variables in New-venture Creation • INDIVIDUAL(S) • ORGANIZATION • PROCESS • ENVIRONMENT INDIVIDUALS Need for achievement Locus of control Risk-taking propensity Jon satisfaction Previous work experience Entrpreunial parents Age Education

  9. ORGANIZATION • Overall cost leadership • Differentiation • Focus • The new product or service • Parallel competition • Franchise entry • Geographical transfer • Supply shortage • Tapping unutilized resources • Customer contract • Becoming a second source • Joint ventures • Licensing • Market relinquishment • Sell-off division • Favored purchasing by government • Govermental rule changes

  10. PROCESS • Locates a business opportunity • Acucumulates resources • Markets product and services • Produces the product • Biilds and organization • Respon to government and society

  11. ENVIRONMENTAL • Venture capital availability entrepreuneurs • Precence of experincedentrepreuners • Technial skill lobor force • Accesibility of suppliers • Accesibility of customer or new markets • Govemental influences • Proximity of universities • Availability of land or facilities • Acessibility of transportation • Attitude of the area population • Availability of supporting services • Living conditions • High occupational and industrial differentiation

  12. ENVIRONMENTAL (CONTINUED) • High percentage of recent immigrants in the populaton • Large industrial base • Larger-size urban areas • Availability of financial resources • Barriers to entry • Rivalry among existing competitors • Pressure from substitute products • Bargaining power of buyer • Bargaining power of suppliers

  13. A MODEL OF ENTREPREUNIAL MOTIVATION EXPECTATION/OUT COME COMPARISON INTRINSIC/EXTRINSIC REWARDS PC PE PG BE IDEA DECISION TO BEHAVE ENTREPREUNEURIALY ENTRPREUNERRIAL STRATEGY FIRM OUTCOMES ENTREPREUNERIAL MANAGEMENT IMPLEMENTATION/OUTCOME PERCEPTION

  14. Notes:PC = personal characteristic PE = personal environment PG = personal goals BE = business environment

  15. INTRAPREUNIAL DEVELOPMENT: JOINT FUNCTI0N OF INDIVIDUAL AND ORGANIZATION FACTOR INDIVIDUAL FACTORS JOB ATTITUDES “Noise” “ Noise” include stability of product, econ cond. ORGANIZATIONAL BEHAVIORAL FACTORS INTENTIONS Attributes and Role Requrements Values Behavioral Orientations Organizational Commitmnet Job Satisfaction Structure Reward System Propensity to leave

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