Entreprenuership (Chapter 1)
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Transcript of Entreprenuership (Chapter 1)
Copyright © 2008 by Nelson, a division of Thomson Canada Limited
ENTREPRENEURSHIPA PROCESS PERSPECTIVE
Robert A. BaronScott A. ShaneA. Rebecca Reuber
Slides Prepared by:Sandra Malach, University of Calgary
Copyright (c) 2008 by Nelson, a division of Thomson Canada Limited.
1ENTREPRENEURSHIP:
A FIELD—AND AN ACTIVITY
1
Copyright © 2008 by Nelson, a division of Thomson Canada Limited
LEARNING OBJECTIVES1. Define “entrepreneurship” as a field of
business.2. Explain why the activities of entrepreneurs
are so important to the economies of their countries, and why entrepreneurship is an increasingly popular career choice.
3. Describe the process perspective on entrepreneurship, and list the major phases of this process.
4. Explain why entrepreneurship can be viewed as arising out of the intersection of people and opportunities.
Copyright © 2008 by Nelson, a division of Thomson Canada Limited
LEARNING OBJECTIVES
5. Explain why certain sources of knowledge about entrepreneurship are more reliable and useful than others.
6. Describe the basic nature of systematic observation, experimentation, and reflection.
7. Explain the role of theory in the field of entrepreneurship.
Copyright © 2008 by Nelson, a division of Thomson Canada Limited
“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”
(Sir Winston Churchill)
Copyright © 2008 by Nelson, a division of Thomson Canada Limited
DEFINITION
Entrepreneurship seeks to understand how opportunities to create something new arise and are discovered or created by specific persons who then use various means to exploit or develop them, thus producing a wide range of effects.
(Shane & Venkataraman)
Copyright © 2008 by Nelson, a division of Thomson Canada Limited
FURTHER DEFINED
Intersection of opportunities generated by changing economic, technological, and social conditions and enterprising people capable of distinguishing potentially valuable opportunities from less valuable ones and of actively exploiting them.
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KEY ACTIVITIES
Identifying an opportunity Exploiting or developing this
opportunity Launching a new venture Running a new business
successfully
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INTRAPRENEURS
Persons who create something new inside an existing company
Allows them to adapt to changing conditions in the business environment. (Keil)
Develop a corporate culture receptive to new ideas and provide concrete rewards for innovation.(Koen & Baron)
Copyright © 2008 by Nelson, a division of Thomson Canada Limited
SOCIAL ENTREPRENEURSHIP
Entrepreneurship to benefit humanity Ventures may be for-profit or not-for-
profit Most important goals are social
Economic development, Environmental sustainability and Disaster relief.
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ENTREPRENEURSHIP STATISTICS
More than 125,000 new businesses are launched annually (Industry Canada, 2005)
Over 2.5 million (15%) individuals are self-employed. (Industry Canada, 2005)
Activity is highest for those aged 25-34. (Riverin et al)
40% of the private sector GDP is produced by SME’s (Industry Canada, 2005).
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TREND TOWARDS ENTREPRENEURSHIP
Media accounts of successful entrepreneurs
Change in “employment contract” Desire for an independent lifestyle
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FOUNDATIONS IN OTHER DISCIPLINES
(1) the economic, technological, and social conditions from which opportunities rise,
(2) the entrepreneurs who recognize these opportunities
(3) the business techniques and legal structures they use to develop them, and
(4) and the economic and social effects produced by such development.
Copyright © 2008 by Nelson, a division of Thomson Canada Limited
FOUNDATIONS IN OTHER DISCIPLINES
Economics behavioural science
Psychology, cognitive science Sociology
Copyright © 2008 by Nelson, a division of Thomson Canada Limited
MACRO AND MICRO PERSPECTIVES
Micro Perspective behaviour and thoughts of individuals
or groups Macro Perspective
Environmental factors Economic, financial, political
Both are key in understanding the entrepreneurial process
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A CONFLUENCE OF FACTORS
NewMarkets/Channels
NewMarkets/Channels
TechnologyTechnology
EconomicChange
EconomicChange
Social Change
Social Change
OpportunityOpportunity
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THE PROCESS
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VARIABLES
Societal Group
Individual
EntrepreneurialProcess
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THE ESSENCE OF ENTREPRENEURSHIP
The intersection of valuable opportunities and enterprising individuals is the essence of entrepreneurship.
Copyright © 2008 by Nelson, a division of Thomson Canada Limited
“There are three principal means ofacquiring knowledge: observation,
reflection and experimentation. Observation collects facts; reflection combines them;
experimentation verifies the result of that combination…”
--Diderot
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SYSTEMATIC OBSERVATION
Observe aspects of the world systematically
Generate and test hypothesis Use this information as a basis for
conclusions Doesn’t resolve question of
causation
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EXPERIMENTATION Determines Causation Systematically changes one
variable in order to see if changes affect one or more other variables
Involves active intervention Difficult to use in the study
of entrepreneurship
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REFLECTION
Combining facts in a careful and systematic way to reach conclusions
Central to case method and other qualitative methods of research
Qualitative Method
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THEORY
Moves beyond efforts to merely describe phenomena
Moves to the point at which we can explain why and how things happen as they do
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DEVELOPING A THEORY
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TWO FINAL POINTS
Theories are never proven in any final, ultimate sense
Research should never be undertaken to prove or verify a theory
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“’Tis a sort of duty to be rich, that it may be in one’s power to do good…”
--Lady Mary Montagu
Copyright © 2008 by Nelson, a division of Thomson Canada Limited
TO DO GOOD
Entrepreneur’s products and services improve the lives of countless millions of persons
Entrepreneurs are often extremely generous in their donations to worthy causes