2. Entrepreneurial Intentions and Corporate Entrepreneurship

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Entrepreneurial Intentions and Corporate EntrepreneurshipMcGraw-Hill/IrwinEntrepreneurship, 7/eCopyright 2008 The McGraw-Hill Companies, Inc. All rights reserved.3-#The Intention to Act EntrepreneuriallyEntrepreneurial intentions: motivational factors that influence individuals to pursue entrepreneurial outcomes.

Perception of feasibility leads to an entrepreneurs self-efficacy. Entrepreneurial self-efficacy: conviction that one can successfully execute the entrepreneurial process.Perceived desirability: degree to which an individual has a favorable or unfavorable evaluation of the potential entrepreneurial outcomes

3-#Entrepreneur Background and CharacteristicsEducationAgePast Work ExperienceRole Models and Support SystemsMoral Support Network (Psychological Support to an entrepreneur)Professional Support Network3-#Entrepreneur Background and Characteristics: EducationResearch findings indicate that education is important in the upbringing of an entrepreneur. This is reflected in:Level of education.Role it plays in helping entrepreneurs cope with the problems they confront. Ability to communicate clearly is important

Education does not determine whether an entrepreneur will create a new business to exploit the discovered opportunity.3-#Entrepreneur Background and Characteristics: Personal ValuesEntrepreneurs diverge significantly from the bureaucratic organization in:Nature of the enterprise.Opportunism.The institution.Individuality.

Ethics and ethical behavior of the entrepreneur is also of importance. 3-#Entrepreneur Background and Characteristics: AgeMost entrepreneurs initiate their entrepreneurial careers between the ages of 22 and 45.

Other factors needed to launch and manage a new venture successfully: Experience.Financial support.High energy level.

3-#Entrepreneur Background and Characteristics: Work ExperienceDissatisfaction with aspects on ones job often motivates launch of a new venture.Previous technical and industry experience is important once decision to launch is made. Experience in the following areas is important: Financing.Product or service developmentManufacturingDevelopment of distribution channelsPreparation of a marketing plan.Previous start-up experience is a relatively good predictor of starting subsequent businesses.3-#Role Models and Support SystemRole models can be parents, family members, or other entrepreneurs. Successful entrepreneurs are viewed as catalysts by potential entrepreneurs. Role models serve in a supportive capacity as mentors during and after launch of a new venture. Entrepreneurs need to establish connections and eventually networks early in the new venture formation process.Strength of the ties between the entrepreneur and any individual in the network is dependent upon the frequency, level, and reciprocity of the relationship. 3-#Moral-Support NetworkIndividuals who give psychological support to an entrepreneur.Entrepreneurs need to establish a moral-support network of family and friendsa cheering squad.Friends can provide:Advice.Encouragement.Understanding.Assistance. Relatives can be strong sources of moral support, particularly if they are also entrepreneurs. 3-#Professional-Support NetworkEntrepreneurs need advice and counsel throughout the establishment of the new venture which can be obtained from:MentorsBusiness associatesTrade associationsPersonal affiliations

Entrepreneurial activity is embedded in networks of interpersonal relationships.

3-#Minority EntrepreneursMale vs FemaleOther communities like Asian American, African, HispanicBohra, Memon, Dewan, Chinoti, etc3-#Male Entrepreneur CharacteristicsMotivationMake Things Happen, Role In Corp. Not Important, Desire To Be In ControlDeparture PointDissatisfied With Present Job, Sidelines, Discharged/Laid-Off, Acquisition OpportunityFund SourcesPersonal Assets/Savings, Bank, Investors, Family/Friends LoansOccupational BackgroundExperience, Recognized Specialist, Competent In Business FunctionsPersonalityOpinionated/Persuasive, Goal-Oriented, Innovative/Idealistic, Self-Confident, EnergeticBackgroundAge = 25-35, Father Self-Employed, College-Educated, Firstborn ChildSupport GroupsFriends, Professional Acquaintances (Lawyers, Accountants), Associates, SpouseBusiness StartedManufacturing/Construction3-#Female Entrepreneur CharacteristicsMotivationAccomplishment Of Goal, Do It AloneDeparture PointJob Frustration, Recognition Of Opportunity, Change In Personal CircumstanceFund SourcesPersonal Assets/Savings, Personal LoansOccupational BackgroundExperience, Mid-Management/Administrative Experience, Service OccupationPersonalityFlexible/Tolerant, Goal-Oriented, Creative & Realistic, Self-Confident, Energetic, SocialBackgroundAge = 35-45, Father Self-Employed, College Educated (Liberal Arts), Firstborn ChildSupport GroupsFriends, Spouse, Family, Womens Prof. Groups, Trade AssociationsBusiness StartedService-Related3-#Men Vs. Women EntrepreneursMotivated to achieve independence and make things happen.

Departure point: job dissatisfaction, layoff.

Support group: friends, professional acquaintances.

Initiates between ages 25-35. More likely to start a business in manufacturing, construction or high tech.Motivated to accomplish a goal and achieve independence.

Departure point: job frustration, change in personal circumstances.

Support group: spouse, family, close friends.

Initiates between ages 35-45. More likely to start a service business.Most other dimensions show no differences.3-4(Hisrich & Peters, p. 76)3-#145Comparison of Male and Female Entrepreneurs (1 of 2)

3-#Comparison of Male and Female Entrepreneurs (2 of 2)

3-#Minority EntrepreneurshipResearch on minority entrepreneurship has been sporadic. Problem is in understanding differences in:Behavior of various ethnic groups in the context of the environment.Economic opportunities (or lack thereof) available in the societal context.

Future research needs to focus on the overall process used by ethnic entrepreneurs in developing and maintaining an enterprise. 3-#Entrepreneurial Intentions within Existing OrganizationsUnderlying assumptionActing entrepreneurially is something people choose to do.Top management of an organization can influence that choice by the corporate environment that it creates.

Fostering environment Enhances organizational members perceptions of entrepreneurial action as both feasible and desirable.3-#Managerial vs. Entrepreneurial Decision MakingEntrepreneurial Management is distinct from traditional management in terms of eight dimensions (Table 2.1)Strategic OrientationCommitment to OpportunityCommitment to resourcesControl of Resources

3-#Managerial vs. Entrepreneurial Decision MakingManagement StructureReward PhilosophyGrowth OrientationEntrepreneurial Culture3-#Causes for Interest in Corporate EntrepreneurshipInterest in entrepreneurship within established businesses has intensified due to events occurring on: Social.Cultural.Business levels.

Social reasons:Increasing interest in doing your own thing and doing it on ones terms. New search for meaning and impatience involved, causes more discontent in structured organizations. 3-#Corporate Entrepreneurship (1of 2)Resistance against flexibility, growth, and diversification can, in part, be overcome by developing a spirit of entrepreneurship within the existing organization. A method of stimulating, and capitalizing on, individuals in an organization who think that something can be done differently and better.

Example: Xerox

3-#Corporate Entrepreneurship (2 of 2)Increase in corporate entrepreneurship reflects an increase in social, cultural, and business pressures.

Hypercompetition has forced companies to have an increased interest in certain areas:New product development.Diversification.Increased productivity.Decreasing costs by methods such as reducing the companys labor force.3-#Entrepreneurial EndeavorsConsist of the following four key elements:New business venturing: corporate venturing; refers to creation of a new business within an existing organization.Innovativeness: refers to product and service innovation, with emphasis on development and innovation in technology.Self-renewal: transformation of an organization through renewal of the key ideas on which it is built.Proactiveness: includes initiative and risk taking, competitive aggressiveness and boldness particularly reflected in orientations and activities of top management. 3-#Comparison of Independent Entrepreneurs, Corporate Entrepreneurs, and Traditional Managers

Source: An extensively modified version of a table in G. Pinchot, Intrapreneuring (New York: Harper & Row, 1985), pp. 5456.Table 3.23-#Establishing a Culture for Corporate EntrepreneurshipCorporate Entrepreneurship means entrepreneurial action within an established organizationIn establishing an entrepreneurial environment within an established organization, certain factors and leadership characteristics need to be present (Table 2.3)3-#Culture/Climate/Environment for Corporate EntrepreneurshipOrganization operates on frontiers of technology.New ideas encouraged.Trial and error encouraged.Failures allowed.No opportunity parameters.Resources available and accessible.Multidiscipline teamwork approach.Long time horizon.Volunteer program.Appropriate reward system.Sponsors and champions available.Support of top management.3-#Leadership Characteristics of Corporate EntrepreneursUnderstands the environment.Reflected in individuals level of creativity.Visionary and flexible.Creates management options.Encourages teamwork.Encourages open discussion.Builds a coalition of supporters.Persistence.3-#Establishing Corporate Entrepreneurship in the Organization (1of 4)Step One: Secure a commitment to corporate entrepreneurship in the o