Review

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Understanding the Role of the Entrepreneur

• Review
• Definitions
• Approaches to studying entrepreneurs
• Entrepreneurial Mindset v Mangerial

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Who or what is an entrepreneur?
What do entrepreneurs do?

• What are the essential skills?
• How do they work?
• Can anyone be one?
• Can entrepreneurial behaviour be learnt?
• What do you think?

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Glossary of Terms
Lifestyle Business Wheeler Dealer
Tycoon Entrepreneur
Source Hall D (2000) In the Company of Heroes
An Insiders Guide to Entrepreneurs at Work
Kogan Page
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Entrepreneurs are at the Centre
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Definitions
An entrepreneur is someone who perceives an
opportunity and creates an organisation to pursue
it. Bygrave (19972) A person who habitually
creates and innovates to build something of
recognised value around perceived
opportunities. Bolton Thompson (2003) The
Entrepreneurial Process involves all the
functions and actions associated with perceiving
opportunities and creating organisations to
pursue them. Bygrave (19972)
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Entrepreneurial Process
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Business Entrepreneur
THE GROWTH ENTREPRENEUR - creates a sustained
high growth business THE ENTREPRENEUR - creates
a significant business THE ENTERPRISING PERSON
- creates a small or micro business
Bolton Thompson (2003)
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Types of Entrepreneurs
1) Quickie 2) Wonderful Wacky MBA 3) Send Money
4) Dreamers 5) One Stripe Zebra 6) Technoid 7)
Guts and Brains (the dream team)
Extracted from Entrepreneur America, Lessons
from Inside Rob Ryan's High Tech Start-up Boot
Camp"
9
Approaches to studying Entrepreneurs

• Economic theories - Role of the entrepreneur in
  economic development.
• Psychological trait approach - Personality
  characteristics of the entrepreneur.
• Social behaviour approach - Influence of the
  social environment.

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Historical Perspective
1730 Cantillon - A self employed person with
uncertain returns 1803 Say - A co-ordinator of
production with managerial talent 1910
Schumpeter - A Creative Innovator 1921 Knight -
manager responsible for direction control,
bears uncertainty 1960 Stepanek - moderate risk
taker 1961 McLelland - Need for achievement 1971
Hornaday - Need for achievement autonomy,
aggression power recognition
innovative/independent 1973 Winter - Need for
power 1974 Borland - Internal locus of
control 1979 Kirzner - An arbitrageur - ability
to spot opportunities
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Locus of Control

• Internal locus of control - Individuals who
  believe themselves to be in control of their own
  destiny
• External locus of control - People who believe
  that their lives are dominated by chance events
  outside their own control or powerful people i.e.
  fate controls their destiny.

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Influences on owner-managers and entrepreneurs
Personal characteristics and traits

Antecedent influences
Culture of society
Situational factors
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Psychological trait approach

• Identifies personality characteristics or traits.
• Entrepreneurs have innate abilities not possessed
  by others.
• Suggests that the supply of potential
  entrepreneurs is limited, thus there is little to
  be gained from direct intervention to encourage
  entrepreneurship.

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Core and Desirable Attributes
Timmons (2003251)
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Critiques of the trait approach

• Chell , Delmar Criticisms
• Inappropriate to search for a significant single
  trait.
• Ignores environmental factors.
• Static analysis approach (entrepreneurship is a
  dynamic process).
• Ignores the role of learning, preparation and
  serendipity.

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Definitions of Culture

• Culture is the sum total of knowledge, beliefs,
  art, morals, laws, customs and any other
  capabilities and habits acquired by humans as
  members of society. Culture is everything that
  people have, think and do as members of their
  society.
• Ferraro (1994)
• Culture is the collective programming of the mind
  that distinguishes the members of one category of
  people from those of another. Hofstede (1988)

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Elements of Culture
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Mental Models
Western Thinking
Eastern Thinking
Individualism
Relationships
Differentiation
Integration
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Entrepreneurial Process
Bygrave Zacharakis (2004)
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Changing Role of Entrepreneur
HIGH
Owners ability to do
Criticality to Company Growth
People, planning and systems
Owners ability to delegate
LOW
1 Conception/ Existence
5 Maturity
3 Growth/ Success
4 Expansion/ Takeoff
2 Survival
(Adapted from Churchill and Lewis, 1983)
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Managerial v Entrepreneurial Mindset
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The Power of Consequences
Farrell (2001) The Entrepreneurial Age
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Tendencies towards non-entrepreneurial or
entrepreneurial activity
Inventrepreneur
Copycat Entrepreneur
Opportunistic Entrepreneur
Venture Capitalist
Innovative Entrepreneur
Professional
Manager
Bureaucrat
Labourer
Lender
Dependence-seeking Subsistence seeking Averse to
opportunity Non-innovative Averse to
Venture Averse to risk Analytic
Independence-seeking Wealth-seeking Opportunity-se
eking Innovative Venture-seeking Risk-seeking Intu
itive
Tendency calibrator
Source Adapted from Entrepreneurship, John G
Burch
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Causal v Effectual Marketing Process
What makes entrepreneurs entrepreneurial? Saras
D. Sarasvathy
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Comparison of Causal Effectual Model

• Effectual Reasoning The Process
• Who they are their traits, tastes and abilities
• What they know their education, training,
  expertise and experience
• Whom they know their social and professional
  networks

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Characteristics of Successful Entrepreneurs
Four Primary Characteristics of Successful
Entrepreneurs
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Extreme Entrepreneurship
Do not go where the path may lead, go instead
where there is no path and leave a trail. Ralph
Waldo Emerson
www.successmanifesto.com/ Free Download ebook
chapter 1