ch05

Chapter 5

EntrepreneurshipEntrepreneurship

Hellriegel, Jackson, and SlocumMANAGEMENT: A Competency-Based ApproachSouth-Western College PublishingCopyright © 2002


Learning Objectives After reading this chapter, you should be able to:

Explain what entrepreneurs do and describe how

the environment supports their activities

Describe the personal characteristics that

contribute to an entrepreneur’s success

Describe the planning requirements associated

with becoming a successful entrepreneur

Recognize intrapreneurs and the organizational

characteristics that encourage intrapreneurship

5.1


Advantages of Working in a Small Business

Greater opportunity to increase

personal wealth

More likely to have “extremely

satisfied” employees

Variety of skills and responsibilities

Personal performance affects

company’s profitability

5.2


Disadvantages of Working in a Small Business

Lower guaranteed pay

Fewer medical and other insurance

benefits

Expected to use many skills and wear

different hats (could be viewed as

advantage)

Fluctuation in business size and condition

is possible

May be difficult to move to a big company

5.3


Characteristics of Entrepreneurs

PersonalAttributes

TechnicalProficiency

ManagerialCompetencies

SuccessfulEntrepreneur

Adapted from Figure 5.2

5.4


Questions Addressed in a Business Plan

What are my motivations for owning a business?

Should I start or buy a business? What and where is the market for my product

or service? How much will it cost to own the business,

andwhere will I get the money?

Should my company be domestic or global? How will growth be managed?

5.5


Questions to Consider When Deciding to Start a Business

Is there a way to begin the enterprise in stages or with a limited investment?

Can I run the company at first as a home-based business?

Can I continue working for someone else and put in time after hours?

To what extent can I draw on relatives to help me?

5.6


Considerations For Going Global Are the best human resources dispersed among

various countries? Would foreign financing be easier or more

suitable? Do target customers require a venture to be

international? Will worldwide communication lead to quick

responses from competitors in other countries? Will worldwide sales be required to support the

venture? Will domestic inertia be crippling if

internationalization is postponed?

5.7


Clear job responsibilities

Clear hiring criteria for interested family members

Clear plan for management transitions

Committed to resolving conflicts quickly

Outside advisors are used to mediate conflicts

5.8

Adapted from Figure 5.4

Successful Family Businesses


Ensuring equitable estate treatment

Preparing for ownership transfer Minimizing estate taxes Ensuring the financial security of

the senior generation Selecting and developing a

successor

5.9

Strategic Factors for Survival to the Next Generation


Commitment from senior management Flexible organization design Autonomy of the venture team Competent and talented people who

exhibit entrepreneurial behaviors and attitudes

Incentives and rewards for risk taking An appropriately designed control system

5.10

Characteristics of Intrapreneurial Firms

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