Extensive summary of the book Entrepreneurship in Theory and Practise. All chapters for the exam are summarized (ch. 1 till 10 except ch. 6). When you learn this summary you will definitely pass the exam! I got a 8,5 for the exam by learning this summary :-).
Book: Suna Løwe Nielsen, Kim Klyver,...
Global Entrepreneurship and Business Pre-master cours, Book chapters: 1 t/m 5 + 7,8,9
Global Entrepreneurship and Business Pre-master cours, Book chapters: 1 t/m 5 + 7,8,9 and Lectures 1 t/m 5
SUMMARY Global Entrepreneurship & Business (GEB) pre-master Business Administration
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Universiteit Twente (UT)
Pre-Master Business Administration
Global Entrepreneurship & Business (201700039)
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it's a fine summary, but not complete (chapter 11 is not in it)
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Summary Global Entrepreneurship & Businesses
Index
Summary Global Entrepreneurship & Businesses........................................................................................... 1
Chapter 4: Evaluatio if ippirtuoitee................................................................................................................1
Chapter 9: The bueioeee plao...............................................................................................................................4
Chapter 1: What ie eotrepreoeurehip?.................................................................................................................8
Chapter 2: Whi ie the eotrepreoeur?.................................................................................................................11
Chapter 3: Emergeoce if ippirtuoitee.............................................................................................................15
Chapter 5: Orgaoizatio if ippirtuoitee..........................................................................................................17
Chapter 10: Deeigo thiokiog...............................................................................................................................22
............................................................................................................................................................................26
Chapter 7: Reeiurcee..........................................................................................................................................27
Chapter 8: Netwirke..........................................................................................................................................31
Chapter 4: Evaluation of opportunities
Opportunity evaluation: the evaluation of each opportunity, whereby the
entrepreneur seeks to determine whether the idea that he or she intends
to pursue, creates value in the eyes of the market and can thus be
considered as a real, strong and feasible option.
Evaluation is the key to diferentiate an idea from an opportunity.
Not all ideas are opportunities: the idea should represent an economically
viable option (long-term).
Evaluation is a bridge between the emergence and organizing of
opportunities: it tells the entrepreneur whether it makes sense to use
resources to pursue the opportunity by organizing activities.
There are two perspectives on opportunity evaluation:
1. Instrumental evaluation perspective: emphasizes how opportunity
evaluation is a means to achieve a particular result or goal.
- Diferent formal business administration techniques and methods are
needed to assess the extent to which it is possible to achieve the goal.
- The evaluation is perceived to be an instrumental and decisive action.
- The evaluation process is characterized by the entrepreneur systematically
pursuing specifc and predefned rules of analysis.
The instrumental perspective seeks to give the entrepreneur control over
the evaluation process with the entrepreneur’s own situation as a starting
point.
,Barringer and Ireland (2010) suggest that the entrepreneur should focus
on four areas by evaluating the product or service; the market or industry;
organization; fnancing. A procedural model might look like:
The human factor (i.e. attributes/skills entrepreneur) also has an
importance of evaluating. The structures and processes of external and
internal factors create a picture of whether the entrepreneur’s idea can
result in a product, process of service that creates value for others and is
thus feasible.
Evaluating opportunities methods (Instrumental):
Wickham (2004) emphasizes three criteria: analyzing the potential in the
light of the ‘scale’, ‘scope’, and ‘span’. Scale = opportunity size, scope =
value, span = durability over time.
Hindle et al (2007) created a model that provides a systematic evaluation
process ‘the Venture Intelligence Quotient (VIQ)’. It takes place on three
levels: idea assessment, idea enhancement and venture implementation.
For each of these levels, fve dimensions are evaluated: product (the
essence of the idea), market (interested stakeholders), industry
(competitors), people (the entrepreneur), and money. Level ‘1 idea
assessment’ covers the
evaluation of whether the idea
is worth pursuing. The second
level ‘idea enhancement’
focuses on strengthening the
idea: identifying and
understanding the idea’s
potential. The third level
‘venture implementation’
deals with the efective
implementation of the idea. It
provides suggestions as to how the entrepreneur can actually build a new
organization based on the idea.
2. Legitimate evaluation perspective: emphasizes that the creation of
legitimacy is essential for the evaluation of options. The legitimatization
process is fundamentally a social process in which the entrepreneur,
through interaction with the market, achieves an impression of whether
the idea represents an opportunity or not. The entrepreneur’s success
, depends on whether he/she can get others to accept the opportunity as
being valuable and attractive.
Evaluation opportunities methods (legitimacy)
Instead of evaluating instrumentally, entrepreneurs simply act and create
legitimacy for themselves and their processes. Some ideas are so ‘ready’
that it is possible to test them right away, but there is no time for a
detailed instrumental evaluation (innovative ideas).
Something is legitimate if it complies with the norms, values, beliefs,
practices and procedures that are accepted by a particular social group. It
is afected by economical, social, political and environmental factors and
regularities. Legitimacy is solely retrieved by social interaction.
Legitimacy as a process
Johnson et al (2006) indicate the process by which new ideas gain
legitimacy and are thus evaluated as a real possibility. The process
consists of four phases: (1) innovation, (2) local validation which contains
convincing local stakeholders, (3) difusion and (4) general validation. The
spread is dependent on social interaction and acceptance, which controls
the progress of the process.
Strategies for building legitimacy
1. Imitate other organizations that have already been accepted into the
environment
2. Cooperations with others
3. Creating trust among key stakeholders, who will provide for access to
resources
4. Piggybacking on people who have high legitimacy within a particular
business area
5. Contacting an organization that has legitimacy can produce greater
legitimacy (“trusted by..”)
Paradox Instrumental vs. legitimate evaluation:
Social interaction determines how the evaluation process unfolds and its
outcome, rather than a formal evaluation process with a specifc start and
end point. The main point: “Is the evaluation instrumental or legitimate?”
An idea is evaluated according to the legitimacy perspective through
exploration and experimental activities and social interactions rather than
through the utilization of systematic and analytical tools prior to the actual
entrepreneurial process. Evaluation takes place in the process.
The process of evaluating entrepreneurial opportunities difers from the
typical evaluation process: evaluation aims to determine whether the
concept represents a future attractive option in a market that may not
even exist yet, making the idea’s evaluation and development difcult to
, predict. The purpose of evaluation is to assess the future potential of an
idea, making the evaluation process more uncertain, complex and risky.
Instrumental Legitimate
Evaluation Tool to achieve a Legitimacy creation
perception certain objective
Evaluation objective To state the direction To convince the actors
for action of the market of the
idea
Evaluation criteria They should be They emerge during
formulated before the the entrepreneurial
process process
Evaluation process Rational, systematic, Social, interactive,
and analytic experimental and
exploring
Evaluation Evaluation and Evaluation and
character entrepreneurial action entrepreneurial action
are two separate are two inseparable
activities activities
Chapter 9: The business plan
Business plan: a plan that precisely defnes the business, identifes the
goals and serves as the frm’s resume. Its basic components include a
current and pro forma balance sheet, an income statement and a cash
fow analysis. It helps you allocate resources properly, handle unforeseen
complications, and make the right decisions.
In favor of the planning perspective: organizational processes can be
controlled.
Is the business plan a management tool or creativity burb?
The “need” to create a business plan, depends on several factors:
- The kind of industry
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