FALL 2012

Editorial Note……………………………1

Energy-Neutral Cities: The Case

of Masdar, Abu Dhabi……….………1

Entrepreneurship Studies in the

European Business Schools………4

Systemizing Reactive Risk Man-

agement of Large-Scale Develop-

ment Projects in Developing

Countries……………………………………6

Is the Entrepreneur a Romanti-

cist? A New Paradigm of Entre-

preneurship………………………….……8

Authors, Issues and Con-

tacts…………………………………………10

From the carbon-saturated smog of Sherlock Holmes’ London, through waves of pollution as industrialization has unfold-ed, to disasters such as Three Mile Island (1979), Chernobyl (1986), and the oil spill catastrophe in the Mexican Gulf (2010), the evolution of energy production catering to humanity’s hitherto ever-increasing needs is full of dramatically problematic side-effects. As utterly serious these and many other energy-related catastrophes have been, the phenome-non of global climate change is even more serious, as it concerns the entire population of the planet.

Energy-Neutral Cities: The Case of Masdar, Abu Dhabi

The environmental effects, in terms of storms and floods in some areas, exces-sive heat or cold in other, erosion of soils and spreading of deserts in still other, cannot be ignored, let alone escaped from. Fortunately, the last decade has seen an increasingly serious and scientifically documented debate on global climate change emerging, although the notion of sustainable development has been around much longer than so. Starting from policy debate, interdisciplinary research and more or less successful global summits and declarations such as the Rio Summit (1992), Kyoto (1997), Copenhagen (2009) and Doha (2012), we now finally witness concrete realizations of sustainable energy solutions in urban and infrastructure planning, scientific and corporate R&D, innovation, and product and process development. For pioneering countries like Germany, that already relies on renewable sources for some 20% (2011 figure) of its en-ergy needs, effective and practical green energy solutions have made it possi-ble to proceed to what was very recently still an unrealistic utopia in industrial-ized countries, namely to concretely plan for phasing out nuclear energy.

Continued on page 2

Editorial Note The lead article in this issue, authored by Dr. Mohammad Baydoun and myself, presents the Case of Masdar City in Abu Dhabi, UAE and its ambitions goal of becoming an energy-neutral city by applying state-of-the-art energy solutions that have attracted the eyes of energy-conscious leaders and policy-makers world-wide. This article was previously published in the third 2012 Newsletter of the Energy Club of the MBA International at AUEB.

The reminder of this year’s issue presents the InnKnow articles published on the website of MSL (www.msl.aueb.gr) as “stories of the month” during 2012. In the article entitled “Entrepreneurship Studies in the European Business Schools” Ioannis Katsikis analyz-

es the educational programs and courses on entrepreneurship in leading European Business Schools using data from an empirical survey with the use of a content analysis. Dr. Mohammad Baydoun presents interesting findings from a research into Risk Manage-ment of Large-Scale Development Projects, and in the final article Visiting Professor Shailendra Kumar Rai and Associate Professor Sumita Rai of MDI, Gurgaon, India, discuss a new paradigm of the “Entrepreneur as a Romanticist”.

Klas Eric Soderquist

InnKnow F O R U M

ISSN 1790 - 515X ISSUE 15

Management Science Laboratory—Innovation and Knowledge Management Unit

Dept. of Management Science & Technology—Athens University of Economics and Business

1

Klas Eric Soderquist

and Mohammad

Baydoun

by

2

Such successful realizations are promising for the future, but there is a huge need for focused de-velopment, and real-world experimentation push-ing the applicability and performance envelope continuously further. One of the most concrete examples of action-taking in this sense is the Masdar project in Abu Dhabi, UAE, launched in 2006. Masdar, which means ‘the source’ in Arabic, is a commercially driven enterprise that operates through five integrated units. A wholly owned subsidiary of the Abu Dhabi Government-owned Mubadala Development Company, Masdar is bound to act as a catalyst for the economic diver-sification of the Emirate through introducing busi-nesses related to alternative energy and reducing dependency on fossil oil.

Masdar City, one of the five integrated units of the Masdar project, is a real-world experiment aiming at tackling the technological, financial and social challenges involved with the ecological meta-challenge of an energy-neutral and zero emission urban entity. The Government set the vision for the Masdar City as “a carbon-neutral, zero waste urban community” (Nader, 2009. p. 3952). The master plan is for a city of 6km2 housing, when fully built out by 2025, some 40.000 residents and hundreds of business. The first buildings of the Masdar Institute of Science and Technology, oper-ated in collaboration with MIT, are already fully operational. Other early residents will include Sie-mens, Schneider, GE, BASF and the International Renewable Energy Agency IRENA.

The Masdar Vision

The vision is to build a city that should become a real-life example of the feasibility of creating an energy-neutral and zero-emission city, adopting a vision-driven experimental approach to the devel-opment of a range of interconnected concepts and technologies. The vision strongly emphasizes workable economic responses to tackle the energy-environmental sustainability problems under way. The core activities in Masdar City are research, development, testing, manufacturing, implemen-tation, marketing and showcasing of renewable energy, clean technologies and sustainable living

principles. To be able to materialize all this, the Masdar project relies on five interconnected pil-lars:

Masdar Institute, which is an independent, re-search-driven graduate institute developed in cooperation with Massachusetts Institute of Technology (MIT).

Masdar Capital, which helps its portfolio of promising renewable energy and clean tech-nology companies to grow and scale-up by providing capital and management expertise.

Masdar Power, which is a developer and opera-tor of renewable power generation projects, making direct investments in individual pro-jects in all areas of renewable energy.

Masdar Carbon, which manages projects in car-bon emissions reduction including the pioneer-ing Carbon Capture and Storage Project

(further commented below).

Masdar City, which aspires to be one of the most sustainable cities in the world and the concrete realization of the application and implementa-tion of all principles and technologies devel-oped within Masdar.

What is important related to the five pillars is the concretization of an integrated and holistic innova-tion eco system, where synergies between educa-tion, technology, entrepreneurship and needs-driven demand have all possible conditions availa-ble to develop.

What is further particularly interesting in Masdar is the combination of emission and waste reduction on the one hand, and clean energy production on the other. Concerning emission reduction the Car-bon Capture and Storage Project is an innovative application for oil producing countries consisting of injecting CO2 into oil reservoirs in order to both replace precious natural gas traditionally used for the purpose of enhancing oil recovery and neu-tralize the CO2 through its dissolving in oil. In terms of waste reduction, intelligent construction materials, intelligent design and architecture in-cluding natural shading and underground commu-nication networks, zero-emission transportation and water optimization (desalination, recycling) are some of the approaches implemented and developed. Moreover, there is a maximum use of cradle-to-cradle products and materials, i.e., fully recyclable goods in all aspects of the city’s materi-al and equipment needs.

Energy-Neutral Cities:

The Case of Masdar, Abu Dhabi

In terms of clean energy production, finally, 100% of the energy need will come from renewable sources including photo voltaic (around 50%), concentrated solar power (around 25%), evacuated tube collectors, waste-to-energy, and wind power.

Current Challenges

The 2008 crises has been reported to have slowed down some of the original plans and there has been a particu-lar concern about to what extent the personal rapid transit system must be limited to parts of the city (Mandel, 2010). In addition, governance issues like rely-ing on the municipality to run the infrastructure has in some cases limited the options for technologies to be adopted. However, development is now again pacing and momentum starts building up in terms of the positive synergies between the five pillars of Masdar.

Major challenges include the social side of sustainability, as the project also relies a lot on changing behaviors and habits of individuals and collectives. Population in the city is still small, and how the social side of sustainability will

evolve remains to be seen (Baydoun, 2012).

Moreover, Masdar focuses on promoting sustainability in a fully new green-field setting, while it is unclear how and to what extent the approaches developed can be transferred to existing urban settings, where the majority of problems exist (Baydoun, 2012).

Undoubtedly, Masdar and Masdar City are initiatives of utmost importance to the extent they arrive at proving the technical and economic viability of sustainable urban development. If the mandate of the city evolves to find solutions that respond to challenges of both existing and new urban settlements, its contribution to the future of energy production and use promises to be seminal.

Sources

Baydoun, M. (2012), “Using innovation research to achieve sustainability in urban developments: the case of Masdar”, Conference on Innovation Systems and the New role of Universities (COSINUS) 5 – 6 September 2011, Bristol: United Kingdom.

C2HMHILL, Masdar – Powerpoint Presentation http://www.cmic.org/cmic/patrocinios/turismo/memorias/PANEL4/JOSE_MARIA_GUERENA.pdf (accessed 26/03/12)

Mandel, J. (2010), Financial Woes Crimp Celebrated Mid-dle East 'Green City', New York Times, 2010/03/17.

Masdar (2010) “Building the World’s Most Sustainable City”, Powerpoint Presentation.

Masdar – A Mubadala Company www.masdar.ae (accessed 26/03/12)

Nader, S. (2009), “Paths to a low-carbon economy – the Masdar example”, Energy Procedia 1: 3951–3958.

Interviews and local observations (M. Baydoun).

3

Energy-Neutral Cities: The Case of Masdar, Abu Dhabi

Education in entrepreneurship poses a major challenge in EU today, as it is closely related to creativity, innovation and the launch of new business ventures. it is Alt-hough regarded as a key instrument for mobilizing economic and social advance-ment, education and training in entrepreneurship still suffer from inadequacies in the methods and practices followed and the lack of comprehensive educational models.

Here, we present the findings of an empirical survey on the educational programs in entrepreneurship in the “top” European Business Schools (EBSs), according to the FT 2011 ranking list. We adobe a content analysis approach in order to exam-ine the objectives and the structure of such programs, reveal their characteristics and further analyze their educational approaches.

Ioannis Katsikis

by

4

Methodology

In this paper we adobe a content analysis approach in order to examine the objectives and the structure of such programs, reveal their characteristics and further analyze their educational approaches. Information about the Entrepreneurship programs was gathered by content analyzing the programs’ official websites. Content analysis has been exten-

sively employed in the Management literature (Bergh and Fairbank, 2002; Scandura and Williams, 2000), and the Entrepreneurship literature as well.

However, as Smith and Duchon (2009) high-light relying on the information posted on various university and college websites can be problematic. For example, website infor-mation can be expected to present a “best face” view of a program that may not coin-cide with student accounts of their experi-ence, or outside “objective” reviews. Yet, peer evaluation and “objective” data are im-portant parts of the programs’ ranking. Thus it is reasonable to accept accounts of what

the programs claim they are doing because even if the claims cannot be fully substantiat-ed, the claims at the very least represent what the programs believe they ought to be doing. In order to materialize our intentions we used the list of the Financial Times Euro-pean Business School Ranking for 2011.

Analysis of the Results

Entrepreneurship as a distinctive course or an organized program of studies is offered in all the levels of university education: undergrad-uate, graduate, or a specific training course (professional, summer school, etc). The ma-jority of the institutions of the sample include such a course in their curricula. Either as a distinctive organized focus or as an option embedded within their existing structures. Thus, entrepreneurship has been delivered even as a workshop, executive, postgraduate,

summer school topic. The courses reported were: Entrepreneurship; Business plan; eco-nomics of entrepreneurship, Entrepreneurship management, Entrepreneurship in tourism, Family entrepreneurship. Here we focus our analysis on reporting some preliminary results on the descriptive statistics of our study and on the embeddedness of entrepreneurship courses in the programs of the EBSs.

The findings of our study reveal the attitude of European Business Schools (EBSs) towards entrepreneurship education. The majority of the EBSs of our list (65%) provide education-al programs in entrepreneurship (Table 1). Those programs are usually limited in a num-ber. Thus, the 40% of ESBs provide only one program in entrepreneurship. There are though, although limited in numbers ESBs that offer two or even more programs in en-trepreuneurship, recognizing the importance of this discipline in business studies.

Programs EBSs Percent 0 26 35% 1 30 40%

2 14 19% 3 4 5% 4 1 1%

Total 75 100%

Additionally, as seen on the following table (Table 2) the majority of programs offered are usually developed at the postgraduate level (57%). Undergraduate studies remain away from teaching entrepreneurship and this takes place in a limited only number of schools (9%). This is an important founding of our research since it highlights the weak embeddedness of entrepreneurship studies in the undergraduate programs of the EBSs. At the same time, it is important to notice that there is only one institution offering both postgraduate and undergraduate programs in entrepreneurship.

Entrepreneurship Studies in the

European Business Schools

Level Frequency Percentage Undergraduate 7 9%Postgraduate 43 57%Post+Undergrad. 1 1% Training 25 33% Total 76 100%

We should also emphasize on the role of training since 33% of the institutions of our sample operate training courses in entrepreneurship. This result is another fact relevant to the weak embeddedness of entrepreneurial studies in the curricula of EBSs. Although, they do recog-nize its importance as a field of study they prefare to offer distictive courses on the topic rather than employ and add those courses within their existing programs.

Conclusion and Discussion

This paper is the first part of a greater research setting aiming to develop curriculum and educational models for teaching entrepreneurship. The empirical survey of the

practices of the top European Business Schools is a start-ing point that offers a valuable input towards this pro-cess. Here, we presented the findings of an empirical survey on the educational programs in entrepreneurship in the “top” European Business Schools (EBSs), according to the FT 2011 ranking list. We adobe a content analysis approach in order to examine the objectives and the structure of such programs, reveal their characteristics and further analyze their educational approaches.

The findings reveal the attitude of European Business Schools towards entrepreneurship education. Today, there is already a large number of the (top) European Business Schools provide educational programs in entre-preneurship which are usually developed at the post-

graduate level or as independent training programs. The analysis of the structure and the curriculum content of those programs reveal the most important topics of inter-est and at the same time help us to highlight best prac-tices for the education of future entrepreneurs.

The above analysis took a broader view on entrepreneur-ship to understand the trends and to highlight the im-portance of universities in facilitating and promoting en-trepreneurship. Entrepreneurship is seen as a crucial factor in enhancing economic activity and development. The analysis of European Union policies, OECD guidelines and consulting agencies indications demonstrated that entrepreneurship is vital for the economic development of a region. This analysis pointed forward the benefits of entrepreneurship as well as the constraints that the full

development of entrepreneurship faces. The promotion of entrepreneurial spirit and competence within educa-tion is the basic approach to promote the entrepreneurial learning of individuals, social settings and organizations.

Acknowledgements

The work presented here was conducted as a part of the project “ENTRE+GB: Greek ‐ Bulgarian network for edu-cation and training in entrepreneurship: Models, pro-grams and virtual enterprise infrastructures”, funded by the European Territorial Cooperation Program “Greece‐Bulgaria 2007‐2013” (INTERREG IV).

Indicative References

Busenitz, L.W. (1999), “Entrepreneurial Risk and Strate-gic Decision Making: It’s a Matter of Perspective”, Journal of Applied Behavioral Science, Vol. 35 No. 3, pp. 325-40.

Byrne, J. and Fayolle, A., (2010), “Trends and Perspec-tives on Entrepreneurship Education in the OECD Coun-tries”, Universities, Skills and Entrepreneurship Confer-ence, October 2010, Trento, Italy

Charney, A.H. and Libecap, G.D. (2003), “The Contribu-tion of Entrepreneurship Education: An Analysis of the Berger Program”, International Journal of Entrepreneur-ship Education, Vol. 1 No. 3, pp. 385-417

Chia, R. (1996), “Teaching Paradigm Shifting in Manage-ment Education: University Business Schools and the Entrepreneurial Imagination”, Journal of Management Studies, Vol. 33 No. 4, pp. 409-28.

Grilo, I. and Thurik, R., (2005), “Latent and Actual Entre-preneurship in Europe and the US: Some Recent Devel-opments”, International Entrepreneurship and Manage-ment Journal, Vol. 1, No. 4, pp. 441-459

Jones, C. and English, J., (2004), “A Contemporary Ap-proach to Entrepreneurship Education”, Education and Training, Vol. 46, No. 8/9, pp. 416-423

OECD (2007), OECD Framework for the Evaluation of SME and Entrepreneurship Policies and Programmes,

Paris.

OECD (2011), Entrepreneurship at a Glance 2011, OECD Publishing

Peterman, N. and Kennedy, J. (2003), “Enterprise Educa-tion: influencing Students’ Perceptions of Entrepreneur-ship”, Entrepreneurship Theory and Practice, Vol. 28 No. 2, pp. 129-45.

Porter, L. (1994), “The Relation of Entrepreneurship Edu-cation to Business Education”, Simulation and Gaming, Vol. 25 No. 3, pp. 416-9.

Wilson, K.E., (2008), “Entrepreneurship education in Europe”, Entrepreneurship and Higher Education, Chap-ter 5, OECD

Zahra, S.A., (2007), “Contextualising Theory Building in Entrepreneurship Research”, Journal of Business Ventur-ing, Vol. 22, No. 3, pp. 443-452

5

Entrepreneurship Studies in the

European Business Schools

Systemizing Reactive Risk Manage-ment of Large-Scale Development

Projects in Developing Countries

Introduction

The research presented in this article is based on case studies of development projects managed by Millennium Development International (MDI), a leading company in the field of development management. Established in 2000, MDI is known to be one of the first companies in the Middle East to provide this service. Despite the fact that MDI has set a highly sophisticated management approach, this approach does not include specific guidelines for the management of risks that the large-scale projects might face. Analysing the projects that were accomplished during the last ten years for the purpose of revealing best prac-tices in risk management and in developing a risk

management system will help in guiding project managers and enhancing their efficiency when facing risks in the execution of large-scale pro-jects.

Literature review

This section explores the types of risks faced by large-scale projects, the risk management ap-proach to be followed and the stage–gate system that is found to be beneficial in the context of projects under discussion.

Types of risks in large-scale development projects

As risk identification is the initial step in risk man-agement, understanding risks and their categories is essential to come up with an effective risk man-agement system. Therefore, a comprehensive list of risks was formulated based on the review of literature. The identified list was organized along the three identified risk levels that were found to be applicable to the context of large-scale devel-opment projects, namely, project environ-ment (Datta and Mukherjee 2001; Dey 2009; Gil 2009; Perera, Dhanasinghe and Rameezdeen 2009; Siebert 1987), external environment (Datta and Mukherjee 2001; Dey 2009; Gil 2009; Lehto-nen 2004; Perera, Dhanasinghe and Rameezdeen 2009; Senge and Carstedt 2001; Senge et al. 2007; Siebert 1987) and institutional arrange-ment (Koppenjan and Enserink 2009; Sagalyn 2007; Vanmarrewijk et al. 2008).

However, little was found on how to mitigate these risks. Risk categories that were found to be relevant to the case studies are indicated in the section Findings: The risk management system.

Approaches of Risk Management

The review of the literature shows the classic approach of risk management to be inappropriate for application to large-scale projects (Charette 1996; Pavlak 2004; Pitsis et al. 2007). The classi-cal approach of risk management focuses on us-ing databases of previous projects in order to predict potential risks. Based on that, an action plan is established to overcome these risks and a contingency budget is accordingly allocated. While this can be true for small-scale projects with limited number of parameters, it does not apply to large-scale ones. Large-scale projects are complex, with a high level of unpredictability and uniqueness, which renders databases from previ-ous projects inadequate. Furthermore, allocating a contingency budget for every possible risk with-in such projects that are full of uncertainty is not cost-effective.

The literature on risk management of large-scale projects promotes reactive risk management as opposed to the classical proactive risk manage-ment (Charette 1996; Pavlak 2004; Pitsis et al. 2007). This new approach focuses on reacting to risks as soon as they emerge and on investigating different alternative solutions that need not be part of databases containing tested solutions. When following this approach, the project manag-er will have to address all processes related to risk management (planning, implementation and monitoring) as part of his/her daily activities, ra-ther than merely focusing on monitoring the im-plementation of a predetermined risk manage-ment plan.

Stage–gate systems

Stage–gate is a strategic management system that aims to assessing risk at conjunctional in-stances of product development, which are con-sidered as high-risk projects (Cooper and Edgett 1996). This system acknowledges the inapplicabil-ity of classical risk management in high-risk pro-jects and promotes identification of critical mile-stones of the project, at which reactive risk man-agement is practiced instead of counting on a plan that is set prior to project initiation (Cooper 2008, 2009; Cooper and Edgett 2008).

Mohammad Baydoun

by

The last two decades saw the ‘development sector’ booming worldwide, especially in developing countries that are rich in natural resources. This boom increased the pressure on governments to develop large-scale urban projects that can ac-commodate the newly emerging developments. Due to lack of necessary exper-tise and financing, governments in most developing countries found partnership with the private sector to be the way forward for developing these projects and having them delivered in time (Koppenjan and Enserink 2009).

6

Such a system can be beneficial for formalizing the identi-fied risk management approach by enabling identification of the critical instances of the project. This system has its own set of challenges that need to be listed in order to understand its risks (Cooper 2008, 2009; Cooper and

Edgett 1996, 2008).

These risks are the following: ‘killing’ decision might not be an option as this can be considered as a mismanage-ment problem; decisions at gates might not be taken seri-ously; first-tier managers might not be included, which can affect implementation of decisions; and gatekeepers might not be committed to gatekeeping meetings.

Research Methodology

The main question of this research is the following: how to manage risks of large-scale development projects in developing countries? As this is a ‘how’ question, this re-search falls under the category of qualitative research (Royce and Bruce 1999; Yin 2009).

This research is a qualitative case-study research as it does not require control over behavioural events (Yin 2009). Multiple case studies were used in order to formu-late a ‘cross-case’ research conclusion. Data was collected from interviews with managers and assistant managers of selected projects Results of the interviews were supple-mented with personal observations and progress reports of selected projects.

The case studies were selected based on the largeness of scale, international recognition and coverage of a wide spectrum of development phases. The following are the selected case studies:

Al Shamiyah Project in Makkah, Saudi Arabia (a

1,400,000 m2 project with a construction cost of around two billion USD);

Aktau New City Project in Aktau, Kazakhstan (a

5,000,000 m2 project);

Jabal Omar Project in Makkah, Saudi Arabia (a

1,000,000 m2 project and the first real-estate project to be listed in the Saudi Stock Exchange market);

Medini Development Project in South Johor, Malaysia

(a one-and-a-half billion USD investment);

Bandar Jissah Project (a 2,000,000 m2 project); and

Al Dariyah Project (a 600,000 m2 project with a con-

struction cost of around six hundred million USD).

Findings: The Risk Management System

The collected data were analysed and interpreted in order to come up with a risk management system that answers the main question of this research. As risk identification is the initial step in risk management, we will go through

different categories of identified risks before illustrating the suggested risk management system.

Categories of risk in large-scale development projects

The risks discovered in the case studies were found to be spread along the three levels that were identified in litera-ture, namely, project environment, institutional arrange-ment and external environment (Figure 1).

At the level of project environment, the identified catego-ries of risk are market, financial, technological, manage-ment risks, completion, technical risks, operational, armed conflicts and legal risks. At the level of institutional ar-rangement, the risk categories are lack of multidisciplinary expertise in public authorities, conflicts between different authorities, lack of approvals facilitation and delay of in-centives to be provided by the government. At the level of external environment, the identified risk categories are political, social, economic and environmental risks.

Each of these risk categories contains a subset of risks that contributes to the high complexity and riskiness of large-scale development projects. For example, the cate-gory of market risks includes risks of land prices, risks of construction costs and revenue risks. Furthermore, each subcategory contains its own subset of risks. This variety of risks shows the high level of complexity and riskiness that are associated with large-scale develop-ment projects.

Furthermore, it confirms that the classical approach of risk

management, which is based on predicting risks associat-ed with each project and allocating necessary budget thereof, is inefficient. This together with the results of the interviews conducted for the study suggests that reactive risk management would be more appropriate as an ap-proach to the management of risk in large-scale develop-ment projects.

7

Systemizing Reactive Risk Management of Large-

Scale Development Projects in Developing Countries

Figure 1: Relation between different environments that can impact the project along with their set of risks. Source: Baydoun (2011), p.243.

Risk management system

As per the value chain of MDI that reflects different phases of development, the end of each phase is considered to be a major milestone at which clear objectives are achieved. The next phase cannot start unless the objectives of the previous one are met. Hence, these milestones can be con-

sidered as key junctions at which the level of risk of the project needs to be assessed in order to decide whether the project is to be continued or stopped. As discussed earlier, due to the complexity and riskiness of large-scale development projects, such decisions cannot be made early on. At each of these milestones, the decision-makers are better informed as new information about the project is provided, which will allow for better risk-assessment exer-cise.

In risk management meetings to be held at these mile-stones, decision-makers assess whether risks that emerged during the completed phase or expected to emerge in the coming phase can be mitigated or not, based on the infor-mation provided. If risks can be mitigated, the cost of miti-

gation can be assessed to check the feasibility of the pro-ject. If the project is still feasible, a ‘go’ decision is taken. Otherwise, the ‘kill’ decision will prevail. Such approach is similar to the risk management approach that is followed in the stage–gate system. Furthermore, this approach allows formalization of MDI’s current risk management approach in order to make it more efficient through identification of the critical instances of the project at which risk needs to be assessed. Similar to the stage–gate system, the key milestones can be called ‘gates’.

Similar to MDI’s current practice in risk management meet-ings, in gate meetings everyone would be allowed to ex-press his/her opinion freely. The focus of these meetings is to brainstorm solutions for a set of risks not confronted in previous projects.

As per the literature, a stage–gate system has some chal-lenges that need to be considered. As risk management is not currently institutionalized in MDI, these challenges

were not revealed in the case studies. Hence, the challeng-es identified in the literature would need to be considered when implementing this system.

Despite the fact that the MDI’s phases of development were followed in different case studies, the business oppor-tunity development phase was found to contain sub-phases that might vary from one project to another. The main reason behind these variations was found to be related to the risk behaviour of the client. A risk-taking client would expedite the process through running phases in parallel (as observed in the case studies) and collapsing sub-phases of the business opportunity development phase. On the other hand, a risk-averse client would take the project step by step in order not to venture into advanced phases before securing a solid ground for the project. Different scenarios for the development phases were categorized in order to create different versions for the system under discussion, depending on the level of risk the client is willing to take. Figure 2 and Figure 3 illustrate examples of these versions.

Figure 2: Conservative risk-taking version of risk management system. Source: Baydoun (2011), p.246.

Figure 3: Very high risk version of risk management system. Source: Baydoun (2011), p.247.

8

Systemizing Reactive Risk Management of Large-

Scale Development Projects in Developing Countries

Conclusion

This paper contributes to the risk management literature through the risk management system formulated for large-scale development projects in developing countries. Cur-rently, the reactive risk management approach promoted for application to the large-scale projects does not call for identification of key milestones, at which enough infor-mation for risk assessment and mitigation would be avail-able. By analysing case studies from projects managed by MDI, these milestones were identified and formalized in a risk management system.

This system contains gates of risk management of large-scale development projects along with its different ver-sions. These versions depend on the levels of risk to be taken by the client. Furthermore, through identification of key milestones, this system will help in making the neces-sary coordination early on, in order to bring key decision-

makers on the same table for risk assessment at different gates. A list of potential risks that might be faced in the type of projects under discussion was also identified to be used as a guide for risk identification in risk management gates.

*The article is a summary of the following published pa-per: Baydoun, M. (2011), ‘Risk management of large-scale development projects in developing countries: Cases from MDI’s projects’, International Journal of Technology Man-agement and Sustainable Development, 9(3): 237–249.

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Vanmarrewijk, A., Clegg, S. R., Pitsis, T. S., et al., (2008), ‘Managing public–private megaprojects: Paradoxes, com-plexity, and project design’, International Journal of Pro-ject Management 26: 6, pp. 591–600.

Verveniotis, P. (2008), ‘Mega-project control: effective program, project, and WBS granularity decisions’, AACE International Transactions PM: 02, pp. 1–5.

Yin, R. K. (2009), Case Study Research: Design and Meth-

ods, 4th edn, Thousand Oaks, CA: SAGE Publications Ltd.

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Systemizing Reactive Risk Management of Large-

Scale Development Projects in Developing Countries

Is the Entrepreneur a Romanticist?

A New Paradigm of Entrepreneurship

However, entrepreneurship remains the phe-nomenon which is the most emphasized yet least understood by economists (Hebert and Link 1988, Ripsas, 1998) notwithstanding a large and diverse literature (e.g., Hobert and Link 1988; Casson 2003).

The term entrepreneur comes from the French language where it was originally used to refer to military leaders, contractors, organizers and architects of musical or other forms of enter-tainment. Scholars in the field of entrepreneur-ship continue to struggle with the concept, and researchers/scholars from multiple disciplines in the social sciences have not been of one mind on the meaning of the term entrepreneurship. Over time, different scholars have identified entrepreneurship with:

The function of risk-bearing under uncer-

tainty (Cantillion, 1755; Mill, 1848; Knight, 1921; Palmere, 1971; Brockhaus, 1980; Deakins and Freel, 1999),

The introduction of new products, new

techniques, new methods and new mar-kets (Schumpeter, 1951; Mc Clelland,

1961; Hagen, 1962),

The coordination of the various factors of

production (Say, 1803; Usher, 1954; Cas-son, 1990),

The generator of profit (Cole, 1959; Smith,

1776; Marshall, 1961; Ronstadt, 1984),

The function of economics (Vesper, 1982;

Drucker,1985),

The introduction of multiple innova-

tions (Harbison, 1956; Leibenstein, 1978; Kao and Stevenson, 1984; Baumol, 1990), and, finally,

The function of opportunities (Kirzner,

1979; Shane and Venkatraman, 2000).

Thus, on the basis of the above, it may be said that definitions of entrepreneurs and entrepre-neurship are many and varied and these have evolved over time. At present, there is no sin-gle accepted definition of entrepreneurship in the literature. Nearly everything that might be said about entrepreneurship has been said at one time or another, in one way or another. Although there is no single definition to capture the essence of an entrepreneur, the massive research work in this area can be divided in to

the three main categories (Stevenson & Jarillo, 1990):

What happens when entrepreneur act

Why they act; and

How they act.

Our present work is an attempt to establish the linkage between the ‘what’ and the ‘why’ of entrepreneurs’ acts, introducing the notion of the entrepreneur as a romanticist.

The Entrepreneur as a Romanticist

An entrepreneur is a person who creates wealth for others (Schumpeter 1934; Leiben-stein 1968; Baumol 1993). As such a wealth creators, is the entrepreneur a ‘romanticists’? In the following an attempt is made to eluci-date the term romanticist and connect it with entrepreneurship.

The term romanticist is somewhat synonymous with such terms as dreamer, optimist, enthusi-ast and visionary. Entrepreneurs dream, other-wise they are not entrepreneurs. Entrepreneurs live in their imagination, fused to their imagina-tion by their passion for creating great, extraor-dinary companies.

Shailendra Kumar Rai

and Sumita Rai

by

10

From the analysis of a number of Indian first-generation entrepreneur cases, entrepreneur’s characteristics and motivations to make great contributions were investigated.

Entrepreneurship is an area that has captured significant amount of attention of scholars, yet it is still not well understood. This work is an attempt to highlight the different approaches that scholars have proposed, and their application based on new insights on the entrepreneur as an individual. We introduce the concept of the ‘entrepreneur as a romanticist’ and relate it Indian first generation entrepreneur cases. The theory of entrepreneurship has been one of the most intriguing subjects for economists for decades.

The ability to be optimistic, yet realistic is an important trait. It helps the entrepreneur think in creative ways and create enthusiasm/passion to solve problems that emerge so that the entrepreneur keeps trying to find possible answers and exploring ideas which, in turn, broaden his/her vision. In

short, the entrepreneur should be recognized as the individ-ual who dreams (Dhirubhai Ambani, Walt Disney, Narayana Murthy and others), is optimistic (G. Reza Arabsheibani & David de Meza & John Maloney & Bernard Pearson, 2000, Frank (1988, Fraser and Greene 2006), enthusiastic (Bass & Stogdill, 1990; House & Shamir, 1993), and visionary (Bird 1992, Filion 1990) and others.

If a person has a dream then he/she has to be an optimist and enthusiast in order to get that dream accomplished, which, in turn, will broaden the horizon of the vision. In oth-er words, a dream begets a business, bolsters enthusiasm which helps in developing binocular vision, which, in turn, makes the entrepreneur a risk-taker, creator and wealth creator. (fig.1).

Fig.1 ‘What’ and ‘Why’ of an Entrepreneur

Looking at it from the other side, one can support that a dreamer, optimist, enthusiast and visionary, i.e., a romanti-cist, only has one professional option; one that involves risk-taking (Cantillion 1755; Mill 1848; Knight 1921), innovation (Schumpter 1951; McClelland 1961; Hagen 1962; Druker, 1985) co-coordination of various factors of production (Say 1803; Usher 195; Casson 1990) and maximization of profit (Smith 1876; Marshall 1961). Hence, the romanticist be-comes an entrepreneur and the entrepreneur is a romanti-cist. A romanticist person is the innovator and the creator, the risk taker and the profit maker, the wealth creator, the inconsolable pursuer of the impossible who sees visions where others only see work. Thus, an entrepreneur is a per-son who dreams, imagines, evokes through inspiration, and has a vision, and a picture of a future reality that no one else has yet seen.

French writer and Nobel Prize winner Anatole France once said, "to accomplish great things, we must not only act, but also dream; not only plan, but also believe."

Albert Einstein said "imagination is the most important than knowledge."

Dhirubhai Ambani, one of India’s most dynamic and flam-boyant entrepreneurs [1], said "Our dreams have to be big-ger, our ambitions higher, our commitment deeper and our efforts greater".

Walt Disney teaches us to dream BIG - even when you are starting with very small means. Disney, with little more than $40 in his pocket, stated that he would make great Holly-wood movies someday.

What set Bill Gates and Lakshimi Mittal aside from other entrepreneurs? The answer is: Dream, optimism (self-confidence), passion, strong vision.

Tata’s Jamsetji Nusserwanji ranks among the greatest vi-

sionaries of Industrial enterprises of all times. Gifted with a most extraordinary imagination and prescience, he laid the foundations of Indian industry, contributed to its consolida-tion, and became a key figure in India’s industrial renais-sance. He was the first pioneer entrepreneur who helped India take its place in the club of industrialized nations. His dreams, ideals and vision shaped an exceptional business conglomerate. The industrialist in Jamsetji was a dreamer, a pioneer and a visionary, who possessed a spirit of entrepre-neurial adventure and acumen never seen before or since in a native of colonial India.

A final example is visionary software engineer N.R. Naraya-na Murthy, former CEO and co-founder of Infosys and a pioneer in India's high-tech industry, who when he dreamt of forming his own company, says that certainly we were

very optimistic, ambitious, and enthusiastic considering that we were starting with just $250.

_________________________

[1] Head of the multibillion-dollar Reliance group of industries with extensive interests in textiles, petrochemicals, energy and telecom-munications

11

Is the Entrepreneur a Romanticist? A New

Paradigm of Entrepreneurship

Thus, in a nutshell, the ability to dream, and dream BIG, lies at the heart of entrepreneurship. Entrepreneurship requires seeing what other people don't see, identifying opportunities, dreaming of a future and taking off on a path towards the realization of that dream. The lines of a famous poem apply – 'to strive, to seek and not to yield.' That is the spirit of entre-preneurship. Entrepreneurs come in all shapes and sizes and backgrounds. What they share is the ability to dream, to think big, to see opportunities and to make judgments against a backdrop of massive uncertainty because big dreams entail big risks as the path from the present to the realization is not known.

Therefore, the assumptions would be that entrepreneurs nourish their dreams with knowledge, generate ideas based on information, transform these ideas into projects and bring such projects into existence. Thus, the first propositions we suggest are that entrepreneurs dream and identify opportuni-ties and that is why they are entrepreneurs. A creative entre-preneur is a romanticist. A romanticist man is an ingenious person who has a dream that forces him to think differently and be cerebral.

To date no scholar has tried to establish the relationship among the four important factors and their relationships have also not been examined. The effort is an attempt to propose a "new" paradigm, which is an entrepreneurial exercise in itself. This effort consists largely of combining existing ideas in new ways.

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Is the Entrepreneur a Romanticist? A New

Paradigm of Entrepreneurship

20. Kirzner, I (1979), Co,mpetition and Entreprenruship, Chi-cago, University of Chicago Press.

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Is the Entrepreneur a Romanticist? A New

Paradigm of Entrepreneurship

Contributing Authors

Dr. Mohammad Baydoun is a Project Manager at Millennium Development International, Lebanon and a Visiting Re-search Fellow at the Management Science Laboratory of the Athens University of Economics and Business, Greece.

Ioannis N. Katsikis is a Doctoral Researcher at the Department of Management Science and Technology of AUEB and affiliated to the InnKnow Unit of the Athens University of Economics and Business, Greece.

Shailendra Kumar Rai is an Assistant Professor, Management Development Institute, Gurgaon, India and the 2012 Spring Term Visiting Chair of Entrepreneurship at the Athens University of Economics and Business, Greece.

Sumita Rai is an Associate Professor at the Management Development Institute, Gurgaon, India.

Klas Eric Soderquist is an Associate Professor of Innovation and Knowledge Management at the Department of Man-agement Science & Technology and Head of the InnKnow Unit of the Management Science Laboratory at AUEB.

Director of MSL

Klas Eric Soderquist, soderq@aueb.gr

Head of InnKow and Chief Editor of InnKnow FORUM, Klas Eric Soderquist, soderq@aueb.gr

Senior Research Fellows:

George Kakouros, Yiannis Nikolaou, Alexandros Papalexandris, Yiannis Spanos, Maria Vakola.

Research Fellows:

Dimitris Brachos, Katerina Fameli, Konstantinos

Kostopoulos, Sophia Philippidou.

Doctoral Candidates:

Ioannis Katsikis, Vasilios Mantas, Krystallia Syrigou

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Professor Gregory P. Prastacos, gpp@aueb.gr

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Ioanna Tranou, itranou@aueb.gr

Phone: +30 2108203661, Fax:+30 2108828078

Website: www.msl.aueb.gr/innknow

Issue Editors:

I. Katsikis (text), A. Kompoliti (images)

InnKnow FORUM

ISSN 1790-515X

InnKnow FORUM is published annually by the Innovation and Knowledge Management Unit (InnKnow) operating at the Management Science Laboratory (MSL), of the Department of Manage-ment Science and Technology in the Athens Uni-versity of Economics & Business, Athens, Greece.

The focus of previous newsletters, available on our website, was:

Publicly Funded R&D and Innovation – lead article (no 14, fall 2011)

Size, Experience and Innovation Impact – lead article (no 13, fall 2010)

Exploration into the Relationship between Managers' Sensemaking and CSR Outcomes – lead article (no 12, fall 2009)

The Architecture of an Information Revolution – lead arti-cle (no 11, fall 2008)

Customer Involvement in Innovation and Marketing – lead article (no 10, spring 2007)

Strategic Entrepreneurship – lead article (no 9, spring 2006)

The Role of Gender in Family Business Succession – lead article (no 8, fall 2005)

Innovation Hot Spots – lead article (no 7, spring 2005)

New Product and Service Development (no 6, fall 2004).

Competency-Based Management (no 5, spring 2004).

Managing Knowledge (no 4, fall 2003).

Innovation and Entrepreneurship (no. 3, spring 2003).

Strategic Performance Measurement – Balanced Score-card (no 2, fall 2002).

Change Management (no 1, spring 2002).

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