Summary for the book of the course IECS
Chapter 2 – Types of entrepreneur (2.1)
Chapter 3 – The entrepreneurial personality (3.2)
Chapter 4 – Entrepreneurship, cognition and decision making
Chapter 10 – The entrepreneurial process (10.2 – 10.3)
Chapter 11 – The nature of busi...
Summary
Introduction to Strategic Entrepreneurship and
Corporate strategy
Table of Contents
Chapter 1 – The nature of entrepreneurship (1.1 – 1.4).....................................................................2
Chapter 2 – Types of entrepreneur (2.1)............................................................................................6
Chapter 3 – The entrepreneurial personality (3.2)...........................................................................11
Chapter 4 – Entrepreneurship, cognition and decision making........................................................14
Chapter 10 – The entrepreneurial process (10.2 – 10.3)..................................................................16
Chapter 11 – The nature of business opportunity............................................................................18
Chapter 12 – Resources in the entrepreneurial venture..................................................................21
Chapter 18 – The strategy of the venture.........................................................................................25
Chapter 19 - The business plan: An entrepreneurial tool.................................................................29
Chapter 21 – the strategic window: identifying and analyzing the gap for new business................31
Chapter 23 – Locating and measuring the window: Positioning the new venture............................34
Chapter 25 - Closing the window: Sustaining competitiveness........................................................37
Chapter 26 – The dimensions of business growth............................................................................40
1
,Chapter 1 – The nature of entrepreneurship (1.1 – 1.4)
Entrepreneur can be considered as
Manager
Undertaking particular tasks/an activity
In terms of the particular tasks they perform and the way they undertake them
Agent of economic change (Economic terms)
Concentrates on the function they have in facilitating economic processes
In terms of the effects they have on economic systems and the changes they drive
Individual (Psychological terms – personality)
An individual with a particular personality
In terms of their psychology, personality and personal characteristics (including peculiarities
in cognitive strategy and style)
*Function of each perspective is not merely to characterize entrepreneurs but also to distinguish
them from other types of people involved in the generation of wealth
Origin “entrepreneur”; individual commissioned to undertake a particular commercial project by
someone with money to invest
Entrepreneur is a manager & entrepreneurship is a style of management
Entrepreneurship
What the entrepreneur does
Entrepreneurial
How the entrepreneur undertakes what they do
Entrepreneurial process
Process the entrepreneur engages in, in the means through which new value is created as result of
the project the entrepreneurial venture
It is hard to pinpoint who is and is not an entrepreneur, so there is no specific definition
Risk
Innovation
An individual who lives and functions within a social setting
Defined by a particular set of actions aimed at the creation of new wealth with their ventures
Entrepreneurship is characterized by a particular approach to wealth creation
The entrepreneurs tasks
Owning organizations
Ownership VS running an organization
Ownership lies with those who invest in the business and own the stocks – the principals –
whereas the actual running is delegated to professional managers or agents
Also entrepreneur if they don’t own the venture they are managing
Founding new organizations
Manager who manages within existing organizational structure VS making minor or incremental
changes to them
2
, The entrepreneur is the person who undertakes the task of bringing together different elements
of the organization (people, property, productive resources, etc.) and giving them a separate
legal identity
“Buying into” organization VS starting it yourself
Entrepreneurs make major changes in their organizational world, more than merely founding
the organization
Bringing innovations to the market
Entrepreneurs must do something new or there would be no point in entering the market
Innovation
The idea of innovation encompasses any new way of doing something so that value is created
A new product or service
A new way of delivering an existing product or service
New methods of informing the consumer bout a product and promoting to them
New ways of organizing the company
New approaches to the managing relationships with other organizations
Doing something in a way which is new, different and better
Schumpeter: entrepreneurs are not so much as the lubricant that oiled the wheels of an economy,
but as self-interested interested individuals who sought short-term monopolies based on some
innovation
Creative destruction (Schumpeter)
Once an entrepreneurial monopoly was established, a new generation of entrepreneurs came along
with more innovations that aimed to supersede that monopoly
No substance, difference between entrepreneurial and ‘ordinary entrepreneurial’
Identification of market opportunity
Opportunity
A gap in the market where the potential exists to do something better and thereby create value
Opportunities have to be exploited, they must be actively sought out
An innovation (a new way of doing something) is an innovation only if it meets with an opportunity (a
demand for new way of doing something)
No substance, difference between entrepreneurial opportunity and ordinary managers
Application of expertise
Developing a skill VS ‘resource allocation decision making’
Ability in deciding how to allocate scarce resources in situations where information is limited
Expertise is what makes managers valuable to investors
Position of leadership
All the people in the organization have to follow the same route (path)
General managerial skill (rather than one particular to an entrepreneur) however, very
important
The entrepreneur as manager
3
, Tasks are not fundamentally different difference in; what the entrepreneur manages, how they
manage, their effectiveness and the effect they have as a manager, not the particular tasks they
undertake
The role of the entrepreneur
Entrepreneurs create new value, but how do they do this?
Combination of economic factors
Economic factors
Raw materials
Nature offers up
Labour
Physical and mental labour that people provide
Capital
Money
Value is created by combining these economic factors in a way which satisfies human needs
Innovation is a way of finding new combinations of the economic factors
Providing market efficiency
Markets determine price at which goods are bought or sold
Efficiency means that resources are distributed in an optimal way, that is the satisfaction that
people can gain from them is maximized only possible if there is competition
Accepting risk
Managing in situations where risk is high; when faced with a situation of high uncertainty they are
able to keep their heads, communicate an make effective decisions
Convert uncertainty into risk on behalf of the investors
Uncertainty
We do not know what the future will bring, lack of knowledge
If we know the likelihood of various possibilities then uncertainty becomes risk
We pay a certain amount for product, so that we can have the benefits of the product and yet not
face the risk (this is for the entrepreneurs)
Risk
Results from making an investment, risk is the possibility that the return from an investment may be
less than expected (or less than could be obtained from an alternative investment)
Risk for the investors (who invest the money) and not the entrepreneurs
Maximizing investors’ returns
Create and run organizations which generate long-term profits on behalf of the investors that are
higher than would otherwise have been the case
Taking into account the interests of variety of stakeholders
Processing of market information
Keeping an eye out for information that is not being exploited, by taking advantage of this
information they make markets more efficient and are rewarded out of the revenues generated
(information about opportunities)
There is no single economic process in which the entrepreneur’s role is different from other
economic actors
The entrepreneur as a person
4
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