edcs unit 1

8/2/2019 EDCS Unit 1

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Unit 1: Entrepreneur and

Entrepreneurship


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Definitions & Concepts

A good entrepreneur is one

who is capable of inspiring confidence in people,

has the capability to motivate them to work with him/her

in fulfilling the economic goals set by him/her Entrepreneur is a French word, is derived from the word

Entreprendre

It means to undertake

the person who undertakes the risk of new enterprise

Richard Cantilon has coined the word a person who buys factory services at certain prices with

a view of selling its products at uncertain prices ==>Bearer of risk


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The rate of growth in an economy depends to a great

extent on the activities of entrepreneurs Joseph A. Schumpeter defines the entrepreneur in an

advanced economy is

an individual who introduces something new in the economy.

His function is to reform/ revolutionize the pattern of

production by exploiting an invention or an untried

technological possibility for producing a new commodity

The process of development is a deliberate and

continuous phenomenon which is actively promoted

by a change agent who provides economic leadership


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Adam Smith, Father of Economics

Did not use the word, Entrepreneur

Instead used employer, merchant, undertaker,

master

F.H. Knight:

Wrote an article Risk, Uncertainty, and Profit

Entrepreneur are a specialized group of people

who bears risk and deal with uncertainty


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Four Key elements of an Entrepreneur:

Innovation

Risk taking

Vision

Organizing Skill


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Traits and Characteristics

Imagination/Vision Old problems, new ways of thinking

Always questioning

Strong positive attitude

Willingness to try new things--and fail

great decision maker

the Q-CAT System: Q = Quick.

C = Committed

A = Analytical

T = Thoughtful.


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Traits and Characteristics

Entrepreneurs need a keen eye to understandeconomic, social, and scientific realities and thecapacity to understand evolutionary processes in thefuture.

They need to understand how institutions work, andindividuals react in order to introduce activities and

products that serve peoples need and that aresustainable economically and politically.

Entrepreneurs also need dedication and commitmentsand the capacity to overcome failure.


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Entrepreneur Scan

Knowledge Wanting

Capable of Being

Knowledge and Motivation

Experience

Capabilities Characteristics


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Knowledge

Market

Environment

People

Production

Finances


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Motivation

Internally driven

autonomy

achievementpower

--Externally driven

Unemployment

Gap in the market

Interest in subject

Certainty of clients


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Capabilities (depends upon Company life cycle)Early phase

Market orientation

Creativity

Flexibility

Mature phase

Manage

Motivate

Organizeplan

Financial and administration


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CharacteristicsAchievement

Autonomy

Power

AffiliationEffectiveness

Endurance

Taking risks

Thinking Styles

Pioneer

Salesperson

Manager

Expert


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Innovation

Build a better mousetrap, and the world will

beat a path to your door--- Ralph Waldo Emerson


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Innovation

An innovation starts as a concept that is refined anddeveloped before application. Innovations may be inspired by reality. The innovationprocess, which leads to useful technology, requires:

ResearchDevelopment (up-scaling, testing)ProductionMarketing

Use Experience with a product results in feedback and leadsto improved innovations.


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Innovation

Innovations respond to need and economic conditions.Inventors, investors, and researchers put effort into solvingburning problems, and that leads to innovations.

Labor shortages led to mechanized equipment.

Drought conditions led to improved irrigation. Energy crises led to higher efficiency cars.

Farmers cooperatives were established during periods ofexcessive low farm prices.

Environmental regulations trigger cleaner technologies. A tax on carbon will lead to improved stoves and power

plants, and hopefully better cars!!


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Invention vs. Innovation

Invention is the creation of new products or

processes through the development of new

knowledge or from new combinations of existing

knowledge Innovation is the initial commercialization of

invention by producing and selling a new product,

service, or process

Product innovation

Service innovation

Process innovation


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Incremental Innovation

Incremental innovation refers to simplechanges or adjustments in existing products,services, or processes

Continuousimprovement, what in Japaneseis called kaizen, is the process of relentlessly

trying to find ways to improve and enhance acompanys products and processes fromdesign through assembly, sales, and service


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Six Sigma is a rigorous and analytical

approach to quality and continuous

improvement with an objective to improve

profits through defect reduction, yield

improvement, improved consumer satisfaction,

and best-in-class performance


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10 Essential Elements that

Lead to Incremental Innovation1. Define quality and customer value

2. Develop a customer orientation

3. Focus on the companys business processes

4. Develop customer and supplier partnerships5. Take a preventive approach

6. Adopt an error-free attitude

7. Get the facts first

8. Encourage every manager and employee to participate

9. Create an atmosphere of total involvement

10. Strive for continuous improvement


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Breakthrough Innovation

A breakthrough innovation is an innovation

in a product, process, technology, or the cost

associated with it that represents a quantum

leap forward in one or more of those ways

Breakthrough approaches to innovation are

inherently more risky than incremental

innovation approaches


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Innovation and Entrepreneurship

Innovations are new ways to achieve tasks.

Types of innovations include:

Mechanicaltractors, cars.

Chemicalpesticides.

Biologicalseed varieties.

Managerialextra pay for work, overtime.

Institutionalwater users association, patents,banks, stock market.


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Fostering Innovative

EntrepreneurshipThree Approaches:

Internal Corporate Venturing

Cooperating to Produce Innovation

Acquiring innovative Capability


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CorporateEntrepreneurship can occur as either a

bottom-up process or as a top-down process

Autonomous strategic behavior is a bottom-up

process through which Product Champions pursuenew product ideas to commercialization

Product Champions are individuals who have an

entrepreneurial vision for a new product and seek

support for its commercialization


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Induced strategic behavior is a top-down

process in which the current strategy and

structure foster product innovations that are

closely associated with the current strategy

Requires a decision on which corporate

resources to deploy for new technology

development and which innovative ideas tobring to market


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Cooperating to Produce Innovation

Strategic alliances can help to foster innovation by

combining the knowledge and resources of two or

more partners

Firms must focus on building knowledge, identifyingcore competencies and developing strong human

resources to manage these projects

Firms can also give away their core competencies by

outsourcing to alliance partners rather than

developing their own capabilities over time


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Acquiring Innovative Capability

Many firms now use acquisitions of other

firms as a substitute for developing

innovations internally

This can reduce risk and lower costly R&D

investments

The drawback is that firms can eventually lose

their ability to generate innovations internally


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Importance of Entrepreneurship

Providing leadership for the industrial

development

Introducing innovative changes

Increasing productivity

Providing employment improving std of living

Promoting regional and national growth Promotes import/export (trade)


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helps develop community leaders

creates better ties between communities and

broader business world by promoting

wealth generation

job creation

community building for existing inner-city small

businesses and organizations interested in growth.

to facilitate access to new markets, capital,

and knowledge


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In short, entrepreneurs are engines of job

creation because they are committed to

growing as fast as the marketplace allows!


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Intrapreneurship

Intrapreneurship is the use of entrepreneurialtechniques within an corporation or

organization which allow employees to

become Intrapreneurs (or corporateentrepreneurs) within the firm.

The employee/intrapreneur can use their

creativity and innovative ideas to create fortheir employer new products, services or new

entire divisions for the firm with the full

backing of the firms resources.


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Exploit Your Companys Competitive

Advantages

Enlist Key Supporters at the Top

Recruit Allies in Other Departments

Look Beyond Quantifiable Metrics

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