11-1 international business: opportunities and challenges in a flattening world, 1e by mason...

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International Business: Opportunities and Challenges in a Flattening World, 1e

By Mason Carpenter and Sanjyot P. Dunung

© Mason Carpenter 2011, published by Flat World Knowledge

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Chapter 11Global Entrepreneurship and

Intrapreneurship


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Learning Objectives

• Identify what entrepreneurship is

• Understand who an entrepreneur is

• Recognize some of the myths of entrepreneurship

• Understand the different contexts in which entrepreneurship takes place

• Know the three facets of the entrepreneurial process

• Be able to apply the levers of opportunity identification


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Learning Objectives

• Understand why entrepreneurship can vary across borders

• Recognize how entrepreneurship differs from country to country

• Access and utilize the Doing Business and Global Entrepreneurship Monitor resources

• Understand the nature of born-global firms (or global start-ups)

• See why global start-ups are challenging to manage and yet increasing in prevalence

• Know the two phases of global start-up assessment© Mason Carpenter 2011, published by Flat World Knowledge

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Learning Objectives

• Understand the background of intrapreneurship

• Recognize the difference and relationship between entrepreneurship and intrapreneurship

• Know the inputs and challenges to the intrapreneurial organization


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Entrepreneurship and Entrepreneurs

• Entrepreneurship: The recognition of opportunities (needs, wants, problems, and challenges) and the use or creation of resources to implement innovative ideas for new, thoughtfully planned ventures

• Entrepreneur: A person who engages in entrepreneurship


Truths about Entrepreneurs

• Entrepreneurs:

– Work hard and are driven by an intense commitment and determined perseverance

– See the cup half full, rather than half empty

– Strive for integrity

– Burn with the competitive desire to excel and win

– Are dissatisfied with the status quo and seek opportunities to improve almost any situation they encounter

11-8© Mason Carpenter 2011, published by Flat World Knowledge

Truths about Entrepreneurs

– Use failure as a tool for learning and eschew perfection in favor of effectiveness

– Believe they can personally make an enormous difference in the final outcome of their ventures and their lives


Myths about Entrepreneurs

• Entrepreneurs are born, not made

• Entrepreneurs make more money

• Being original is essential

• It takes a lot of money to start a business

• Entrepreneurs must be risk takers


Should You Become an Entrepreneur?

• Understand your personal motivations and be clear about them

• Seek out others who have tried entrepreneurship—both those who have been successful and those who have not

• Assess whether entrepreneurship will provide you with the ability to support and sustain yourself and your family

• Take a look at your professional and personal support systems

• Attitude and confidence – Key factors

• Assess how you handle stress11-11© Mason Carpenter 2011, published by Flat World Knowledge

Entrepreneurship and the Changing Nature of “Corporate” Life

• As corporate life continues to offer less and less security, more people are considering entrepreneurship

• Some entrepreneurs discover their vision and opportunity through a former employer

• The leap from corporate life to entrepreneurship involves major changes

– Entrepreneurs don’t have a buffer between a mistake and total failure

• Many large companies attempt to create the spirit of entrepreneurship inside their organizations

– These internal groups (intrapreneurs) may spur more innovation, but this intrapreneurship is a far cry from the realities of entrepreneurship


What Do Entrepreneurs Do?

• Entrepreneurs build for-profit and nonprofit ventures

– Social entrepreneur: A person who founds an organization (either for-profit or nonprofit) whose focus is to implement innovative solutions to societal problems

• They aim to create large-scale social change through the ventures they create

• Entrepreneurial ventures can operate at any level: local, national, or international


What Is the Entrepreneurial Process?

• Entrepreneurial process: Consists of

– Identifying entrepreneurial opportunities

– Planning and preparing the venture

– Resourcing the venture and taking action


Figure 11.1 - The Entrepreneurial Process


Figure 11.2 - Levers That Lead to Opportunity Identification


How Do People Find Opportunities?

• Disruptive technology: A technology that can make prior technologies obsolete

• Low-end disruption: A disruptive technology that appears at the low end of an industry offering and usually does not lure customers away until it improves and becomes better than the incumbent offering

• New-market disruption: A new-market disruption targets noncustomers rather than low-end customers, thus creating a new market that was previously ignored by the dominant players of the existing market

• hybrid-disruption strategies: A combination of new-market and low-end disruption strategies


The Business Plan

• A formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals

• It may also contain background information about the organization or team attempting to reach those goals

• Contents of a typical business plan

– Executive summary

– Company description

– Products and services

– Market analysis

– Proprietary position 11-18© Mason Carpenter 2011, published by Flat World Knowledge

The Business Plan

– Marketing and sales plan

– Management team

– Operations plan

– Finances


Resourcing the New Venture Plan with People, Money, and Action People

• Money

– Bootstrapping: Exploiting a new business opportunity with limited funds

– Different types of bootstrapping:

• Owner financing

• Sweat equity

• Minimization of the accounts receivable

• Joint utilization

• Delaying payment

• Minimizing inventory

• Subsidy finance

• Personal debt 11-20© Mason Carpenter 2011, published by Flat World Knowledge

Resourcing the New Venture Plan with People, Money, and Action People

– Angel investor: An affluent individual who provides capital for a business start-up

– Venture capitalist: A person or investment firm that makes venture investments and brings managerial and technical expertise as well as capital to their investments

• Action

– Bias for action: The propensity to act or decide without customary analysis or sufficient information


Business Entrepreneurship Across Borders

• Entrepreneurship differs in various countries

• It is easier to do business in some countries than others, and this would likely have an impact on the level of entrepreneurship in each country

• Citizens of different countries vary in terms of their attitudes toward entrepreneurs and entrepreneurship

– A country where people viewed entrepreneurs as positive role models and entrepreneurship as a viable career alternative might encourage others to become entrepreneurs

• A country’s stage of development influences its nature of entrepreneurial activity 11-22© Mason Carpenter 2011, published by Flat World Knowledge


• Global Entrepreneurship Monitor (GEM): An annual assessment of the national level of entrepreneurial activity across countries, started as a partnership between London Business School and Babson College

• Global Competitiveness Index (GCI): System that ranks nations quantitatively according to a weighted index of twelve assessed pillars:

– Institutions

– Infrastructure,

– Macroeconomic stability,

– health and primary

– Education



– Higher education and training

– Goods-market efficiency

– Labor-market efficiency

– Financial-market

– Sophistication

– Technological readiness

– Market size

– Business sophistication

– Innovation11-24© Mason Carpenter 2011, published by Flat World Knowledge


• Factor-driven economies: Economies that are highly sensitive to world economic cycles, commodity price trends, and exchange ratefluctuations; typical in countries that compete on the basis of unskilled labor and natural resources

• Efficiency-driven economies: Economies that are typical in countries that compete on the basis of production processes and increased product quality

• Innovation-driven economies: Economies that are typical in countries that compete on business sophistication and innovation


Global Start-ups and Born-Global Firms

• Born-global firm: Also commonly called a global start-up, a business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries

• Global start-up: A business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries


Two Phases of Global Start-up Assessment

• Phase 1: Deciding if a firm should become a global start-up

• Phase 2: Deciding what the firm needs to do to make that happen


Intrapreneurship and Its Roots

• Intrapreneurship: A form of entrepreneurship that takes place in a business that is already in existence

• Intrapreneur: A person within an established business who takes direct responsibility for turning an idea into a profitable finished product through assertive risk taking and innovation


Differences between Entrepreneurs and Intrapreneurs

• The primary difference between the two types of innovators is their context

– The intrapreneur acts within the confines of an existing organization

– The intrapreneur is typically the intraorganizational revolutionary

– An intrapreneur is someone who operates like an entrepreneur but has the backing of an organization


The Intrapreneurial Organization

• One that seeks to systematically promote the spirit of intrapreneurship in targeted parts of the organization

• Methods that have been used by businesses to foster intrapreneurship:

– Intrapreneurial employees are able to participate in the rewards of what they create

– The firm treats intrapreneurial teams as a profit center, rather than as a cost center

– Team members can choose the projects on which they work or the alliances they join

– Employees have access to training to help them learn new skills


The Intrapreneurial Organization

– Internal enterprises are recognized within the organization and have official standing

– The organization defines and supports a system of contractual agreements between internal enterprises

– The intrapreneurship plan includes a method for settling disputes that may arise around the internal enterprise and employees

• The intrapreneurial organization can take on one or a combination of two forms:

– Coexistence

– Structural-separation 11-31© Mason Carpenter 2011, published by Flat World Knowledge

11-1 international business: opportunities and challenges in a flattening world, 1e by mason...

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