LECTURE ONE

ADDITIONAL INFORMATION
1.5
The Concept of Entrepreneurship and Intrapreneurship
The development of entrepreneurship and intrapreneurship requires the building of entrepreneurial
knowledge, skills, attitudes, and characteristics of entrepreneurs that distinguishes them from
businessmen.
The Entrepreneur
An entrepreneur is a person who starts an enterprise. He searches for change and responds to it. A
number of definitions have been given of an entrepreneurThe economists view him as a fourth factor of production along with land labour and capital. Here
the entrepreneur is seen as being concerned with
- What to Produce? The type of goods or service and the quantity
- How to Produce? The methods of production
- Where to Produce? Location of the Enterprise
- When to Produce? The period/season of production
Still others feel that entrepreneurs are innovators who come up with new ideas for products, markets
or techniques. To put it very simply an entrepreneur is someone who perceives opportunity,
organizes resources needed for exploiting that opportunity and exploits it. Computers, mobile
phones, washing machines, ATMs, Credit Cards, Courier Service, and Ready to eat Foods are all
examples of entrepreneurial ideas that got converted into products or services.
Scholars have also given several definitions of the concept entrepreneur. For instance in 1816,
Putari (2006) quoted Say who asserts that the entrepreneur is the agent "who unites all means of
production and who finds in the value of the products...the reestablishment of the entire capital he
employs, and the value of the wages, the interest, and rent which he pays, as well as profits
belonging to himself." He views entrepreneurs as change agents (Say, 1816).
Schumpeter (1934) conceives the entrepreneur as the innovator who implements change within
markets through the carrying out of new combinations such as introduction of new techniques of
production, reorganization of an industry and innovation. He further argues that the entrepreneur is
an innovator, one that introduces new technologies into the workplace or market, increasing
efficiency, productivity or generating new products or services (Deakins and Freel, 2009).
In Quick MBA (2010), the entrepreneur is defined as one who combines various input factors in an
innovative manner to generate value to the customer with the hope that this value will exceed the
cost of the input factors, thus generating superior returns that result in the creation of wealth.
The entrepreneur is anyone who has the capacity and willingness to undertake conception,
organization, and management of a productive venture with all attendant risks, while seeking profit
as a reward (Business Dictionary, 2010).
An entrepreneur is the person that perceives the existence of opportunities and takes risks to exploit
the opportunity with a view to providing an innovative product/service that satisfies human needs.
Entrepreneurs possess unique characteristics that businessmen lack.
In summary, an entrepreneur is an individual with passion, who identifies societal needs and wants
(opportunity) and takes risks in mobilizing resources, creatively and innovatively creates value to
meet the identified needs and satisfy the wants.
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Who is an Entrepreneur?
1.
An entrepreneur is a peculiar individual or person who does peculiar things in a peculiar way
at a peculiar time with a view to maximizing financial success having assumed the outcome of
risk involved.
2.
An entrepreneur is a person who is able to identify an opportunity in a turbulent environment
while others see a danger in an opportunity.
3.
An entrepreneur is an inventor, an originator who creates an opportunity where there is none.
4.
An entrepreneur is a calculated risk taker as well as innovator.
5.
An entrepreneur is a change agent.
6.
An entrepreneur is a catalyst to socio-economic development of a nation.
7.
An entrepreneur minimizes financial risk and maximizes Return On Investment (ROI)
8.
Entrepreneurs are opportunity exploiters.
9.
Entrepreneurs are value creators.
10. Entrepreneurs are job creators as well as wealth creators.
Intrapreneurs
There are given situations where an entrepreneur is not able to establish his or her own business and
as such has to work in an organization. In this case they are referred to as Intrapreneurs i.e.
entrepreneurs within an organization. These individuals are entrepreneurs in their own right because
they pursue the exploitation of business opportunities as they emerge and are also visionaries within
a given organization. Thus, once identified, these individuals should be encouraged to manifest their
entrepreneurial abilities to the benefit of the organization otherwise they will be frustrated and may
leave the organization or start their own businesses.
How is entrepreneur different from intrapreneur? An entrepreneur is a person who creates a venture
or start-up a business and nurture it, takes risks of bringing together the factors of production to
meet the societys need at a profit, while an intrapreneur work within an existing organization to
pursue the exploitation of business opportunities.
Businessmen are persons who undertake a legal activity with a view to engage in transactions that
provides satisfaction to customers with a profit motive. Anyone who engages in any activity that is
not legal is not a businessman. There are driven by the lucrativeness of the business opportunity
than the quest for innovative products or doing something new. There are influenced by bandwagon
effects unlike Entrepreneurs who seek to engage in new, risky and innovative products.
1.6
Definition of Entrepreneurship
There are many definitions of the concept entrepreneurship. In 1934, Joseph Schumpeter equated
entrepreneurship with the concept of innovation and applied it to a business context, while
emphasizing the combination of resources. Penrose (1963) views entrepreneurship as the activity
that involves identifying opportunities within the economic system. Gartner (1988) conceives
entrepreneurship as the creation of new organizations.
Okpara (2000) defines entrepreneurship as the willingness and ability of an individual to seek out
investment opportunities in an environment and be able to establish and run an enterprise
successfully based on the identifiable opportunities. In addition, Nwachukwu (1990) regards
entrepreneurship as a process of seeing and evaluating business opportunities, gathering the
necessary resources to take advantage of them and initiate appropriate action to ensure success.

According to Peter Drucker Entrepreneurship is defined as a systematic innovation, which consists

in the purposeful and organized search for changes, and it is the systematic analysis of the
opportunities such changes might offer for economic and social innovation.
Basically, entrepreneurship is about identification of opportunities, exploitation, taking risks to
combine the factors of production through establishment of a venture that is capable of creating
value-added products and wealth for the Entrepreneur.
After critically studying the above definitions, we can summarize by concluding that
entrepreneurship is the process of identifying and exploiting opportunities, taking risks to mobilise
resources, creatively and innovatively create value to meet the needs and satisfy wants of
consumers within a market.
There are so many definitions of entrepreneurship. Entrepreneurship is also defined as follows:
1. Entrepreneurship is a coin of two sides made up of INNOVATION and RISK-TAKING.
2. Entrepreneurship is the dynamic process of creating incremental wealth.
3. Entrepreneurship is the ability to create and build a vision from practically nothing to
something.
4. Entrepreneurship is an embodiment of calculated risk-taking, creativity and innovation.
5. Entrepreneurship can occur when an individual starts a new business.
6. Entrepreneurship is the transformation of an idea into a profit-making exercise.

1.7
Theories of Entrepreneurship
The six schools of thought include:
1. The "Great Person" School of Entrepreneurship
2. The Psychological Characteristics School of Entrepreneurship Recognizing Opportunities
3. The Classical School Entrepreneurship Acting and Managing
4. The Management School of Entrepreneurship
5. The Leadership School of Entrepreneurship Reassessing and Adapting
6. The Intrapreneurship School of Entrepreneurship
The "Great Person" School of Entrepreneurship
Are entrepreneurs (like leaders) born, or are they made? Can one teach another or learn to be a
manager, leader, or entrepreneur, or does the individual come into this world carrying the genes or
the inborn natural capacity to perform these activities? As there is (or was) a school that believes in
the charismatic leader, so there is (or was) a school that might be called the "great person' school of
entrepreneurship.
The stories of many "great people" are widely read for several reasons: (1) the theory is simple and
does not depend upon elaborate concepts and jargonistic definitions; (2) the theory defines an
entrepreneur by the concepts and traits most valued; and (3) the theory is commonly understood by
others and contains common sense truths about people.
The Psychological Characteristics School of Entrepreneurship
It is widely thought that one's needs, drives, attitudes, beliefs, and values are primary determinants
of behaviour. People behave in accordance with their values far more often than not, despite
variations in situations. Similarly, one's behaviour results from attempts to satisfy needs, be they for
power, recognition, achievement, or acceptance and love.
This psychological school, which focuses on personality factors, believes that entrepreneurs have
unique values and attitudes toward work and life. These, along with certain dominant needs, propel
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the individual to behave in certain ways. Entrepreneurs can be differentiated from nonentrepreneurs by personality characteristics.
People who possess the same characteristics as entrepreneurs do, will have a higher tendency (or
potential) to perform entrepreneurial acts, than do people who do not possess such characteristics.
Three personality characteristics have received considerable attention in the research: (a) the
personal values such as honesty, duty, responsibility, and ethical behaviour; (b) risk-taking
propensity; and (c) the need for achievement.
The Classical School of Entrepreneurship
An examination of the origin of the term "entrepreneur" provides insight into the classical
viewpoint which distinguishes between a "manager" and an "entrepreneur." The word derives from
the French verb "entreprendre," meaning "to undertake" and was translated from the German verb
"undertake."
In the early sixteenth century, entrepreneurs were thought of as Frenchmen who undertook to lead
military expeditions. The term was broadened by 1700 to include contractors who undertook to
build for the military: roads, bridges, harbours, fortifications, and the like. At that time, French
economists also used the word to describe people who bore risk and uncertainty in order to make
innovations. These definitions encompass the notion of undertaking (or founding) a venture (or
adventure) which has an element of risk and requires some creativity or innovativeness.
Indeed, according to Schumpeter (1934), the key ingredient of entrepreneurship lies in the
innovativeness of the individual and may not involve ownership at all. If the principal function of
the entrepreneur is to carry out new combinations of means of production, then, these "combiners"
need not necessarily be owners.
The Management School of Entrepreneurship
The management school suggests that an entrepreneur is "a person who organizes or manages a
business undertaking, assuming the risk for the sake of profit". In addition to risk-taking, the
functions of an entrepreneur include supervision, control, and providing direction to a firm. Some of
the textbooks on entrepreneurship deal with functions which relate to start-up: strategizing,
developing the business plan, getting started, and managing development and growth. Other writers
define the transition of moving from entrepreneurial to professional management as a strategy of
coordination which includes the manner in which responsibilities are delegated and the degree of
formality with which those tasks are controlled. Certain functions might include developing formal
business plans, analyzing opportunities, acquiring resources, and working toward goals.
The management school deals with the technical aspects of management and seems to be based on
the belief that entrepreneurs can be developed or trained in the classroom. Since many
entrepreneurial ventures fail each year, a significant proportion of these failures might be traced to
poor managing and decision making, as well as to financing and marketing weaknesses. According
to this school, entrepreneurship is a series of learned activities which focus on the central functions
of managing a firm. The management school is directed at improving a person's management
capability through developing his or her rational, analytic, and cause-and-effect orientation. Since,
according to this school, entrepreneurship can be taught, a central aim is to identify the specific
functions involved and provide training to existing and hopeful entrepreneurs.
The Leadership School of Entrepreneurship
An entrepreneur is often a leader who relies on people to accomplish purposes and objectives. The
leadership school of entrepreneurship is a non-technical side of the management school, which
suggests that entrepreneurs need to be skilled in appealing to others to "join the cause." A successful
entrepreneur must also be a "people manager" or an effective leader/mentor who plays a major role
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in motivating, directing, and leading people. "Thus, the entrepreneur must be a leader, able to define
a vision of what is possible, and attract people to rally around that vision and transform it into
reality".
There are two "streams" of writings concerning entrepreneurial leadership. The first stream of
development has been grouped within the "great person" school, and describes the writings which
suggest that certain traits and personal characteristics are important for success. The "great person"
school follows early leadership research which suggests that traits such as adaptability to situations,
cooperativeness, energy and willingness to take responsibility are important aspects of success.
The most pervasive stream of the leadership school is concerned with how a leader gets tasks
accomplished and responds to the needs of people. Two dimensions are important for the
management of an enterprise-a concern for getting the task accomplished and a concern for the
people doing the work. These two dimensions grow out of previous research which tried to describe
the essential aspects of leadership.
More recently, there have been suggestions that leaders should adjust their leadership style based on
the situations facing them. Entrepreneurial leadership involves more than personal traits or style in
relating to others. The role can be a focal point for change and inculcating values, and it can involve
the skills of setting clear goals and creating opportunities. These include the skills of empowering
people, preserving organizational intimacy, and developing a human resource system. This school
describes a leader as the "social architect" or as one that is "primarily an expert in the promotion
and protection of values".
Certain writers make the distinction between leading and exerting managerial control over people.
The entrepreneur is embedded in a complex social network that can inhibit or enhance venture
development. The network can provide ideas, access to needed resources, the commitment and
assistance to carry out a task, and the skills of involved employees. It has been proposed that more
effective leaders are those who can create a vision, develop commitment to that vision, and
institutionalize it.
This school implies that leaders must be effective in developing and mentoring people. The leader is
an experienced mentor by whom the protege is taught the "critical trade secrets." Because of the
importance of the mentoring process, the entrepreneur is more than a manager, but also a leader of
people.
The Intrapreneurship School of Entrepreneurship
The intrapreneurship school evolved in response to the lack of innovativeness and competitiveness
within organizations. Intrapreneurs, to the limited extent that they possess discretionary freedom of
action, are able to act as entrepreneurs and implement their ideas without themselves becoming
owners. Alertness to opportunities is one dimension of intrapreneurial activity. Such strategic
behaviour provides the means for extending the organization's activities and discovering
opportunities. This allows existing organizations to develop and diversify their activities in other
areas.
1.8
The Entrepreneurship Culture
Entrepreneurial culture includes a number characteristic of variables that address psychological
attributes, personality, attitudes, and behaviour.
The following are the most relevant suggested:
Risk-taking/Risk tolerance
Uncertainty tolerance
Achievement motivation
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Creativity & Innovation

High Internal locus of control
Future orientation
Task orientation
High energy level

Others include:
Resilience & Tenacity
Vision
Capacity to inspire
Emotional Stability
Self-awareness/Self confidence
Proactive
Desire for autonomy
Flexibility
Assertiveness
Commitment to others
Characteristics
Self confidence
Task-result oriented

Traits
Confidence, Independence, Individuality, Optimism
Need for achievement, Profit-oriented, Persistence,

Leadership

Determination, Hard work, Drive, Energy, Initiative

Leadership behaviour, Gets along well with others, responsive to suggestions

Risk-taking
Originality

and criticisms
Risk-taking ability, Likes challenges
Innovative, Creative, Flexible (openness of mind), Resourcefulness, Versatile,

Future-oriented

Knowledgeable
Foresight, Perceptive

Perseverance,

Source: The practice of Entrepreneurship by Meredith, G.G. et al (1991).

1.9
Salient Characteristics of Entrepreneurs
Successful entrepreneurs are individuals who are not afraid of failure. They are incurable optimists
and dreamers who see and recognize opportunities where other people see chaos and disaster. They
are pertinacious and resolute to excel in their undertaking. New characteristics are continually being
added to this ever-growing list. At this point, however, let us examine some of the most often cited
entrepreneurial characteristics.
Commitment, Determination and Perseverance: More than any other factors, total dedication to
success as an entrepreneur can overcome obstacles and setbacks. Sheer determination and a
unwavering commitment to succeed often win out against odds many people who consider
insurmountable.
Drive to Achieve: Entrepreneurs are self-starters who appears to others to be internally driven by a
strong desire to compete to excel against self-imposed standards and to pursue and attain goals.
Opportunity Orientation: One clear pattern among successful, growth-minded entrepreneurs is
their focus on opportunity rather than on resources, structure, or strategy. They start with the
opportunity and let their understanding of it guide other important issues. They are goal-oriented in
their pursuit of opportunities.
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Initiative and Responsibility: Historically, the entrepreneur has been viewed as an independent
and highly self-reliant innovator. Most researchers agree that effective entrepreneurs actively seek
and take initiative. They willingly put themselves in situations where they are personally
responsible for the success or failure of the operation.
Persistent Problem Solving: Entrepreneurs are not intimidated by difficult situations. In fact, their
self-confidence and general optimism seem to translate into a view that the impossible just takes a
little longer.
Tolerance for Ambiguity: Start-up entrepreneurs face uncertainty compounded by constant
changes that introduce ambiguity and stress into every aspect of the enterprise. Setbacks and
surprise are inevitable.
Calculated Risk-Taking: Successful entrepreneurs are not gamblers. When they decide to
participate in a venture, they do so in a very calculated and methodical manner. They often avoid
taking unnecessary and foolish risks.
Integrity and Reliability: Integrity and reliability are the glue and fiber that bind successful
personal and business relationships and make them endure. These two attributes are very crucial to
success.
Tolerance for Failure: Entrepreneurs use failure as a learning experience. The trial a d error nature
of becoming a successful entrepreneur makes serious setbacks and disappointments an integral part
of the learning process. They do not become disappointed, discouraged or depressed by a setback or
failure.
Creativity and Innovativeness: Creativity was once regarded as an exclusively inherited trait.
Creativity can be learned. It is utilization of ones talent maximally. Once an individual identifies
his or her creativity, then he or she should develop and maximize it.
Vision: Entrepreneurs know where they want to go and how they can get there. Without vision there
can be no mission.
Self-Confidence and Optimism: Although entrepreneurs often face major obstacles, they belief in
their ability seldom wavers.
Independence: The desire for independence is a driving force behind contemporary entrepreneurs.
They are somehow allergic to rigid bureaucratic system. They prefer to be insulated from
extraneous control. They are independent-minded and self-opinionated.
1.10 Roles of Entrepreneurs
In order to perform their functions effectively and operate a successful business, entrepreneurs have
to perform certain roles. These roles are the same as the basic managerial roles which are identified
by Henry Mintzberg in 1973. They are as follows:
Figure Head Role: The entrepreneur has to act as figure head in the organization, as such; he/she
has to perform ceremonial duties. This is done by representing the organization in formal and
informal functions.
Leader Role: The entrepreneur has to act as a leader because the entrepreneur is the one who brings
other people together in order to create the business. Thus, he/she has to lead the people in the
organization by hiring, firing, training and motivating them.
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Liaison Role: The entrepreneur has to act as the link between the business and the parties outside
the business.
Monitor Role: The entrepreneur acts as a monitor; he monitors both the internal and the external
environment of the business constantly.
Information Disseminator Role: The entrepreneur has to act as the organizational representative
and transmit information both within and outside the business.
Spokesman Role: The manager has to act as the spokesman of the business; he/she is the person
for the business both inside and outside.
Entrepreneurial Role: This is the basic role of the entrepreneur; he/she launches new ideas for the
business and bears the risk.
Disturbance Handler: The entrepreneur also acts as arbitrator in situations of conflict so as to
maintain organizational harmony.
Resource Allocator: The entrepreneur decides on how the scarce resources of the business are
allocated among its competing ends so as to achieve organizational goals and objectives.
Negotiator Role: The entrepreneur has to negotiate on behalf of the business both with the other
categories of labour and other outside sources.
The specific entrepreneurial roles noted earlier on have a number of activities in each role.
They are specified below:
Social Roles of Entrepreneur
Transformation of traditional indigenous industry into a modern enterprise.
Stimulation of indigenous entrepreneurship.
Job or employment creation in the community.
Provision of social welfare service of redistributing wealth and income.
Economic Roles of Entrepreneur
Bearing the ultimate risk of uncertainty.
Mobilizing savings necessary for the enterprise.
Providing channel for the disposal of economic activities.
Utilizing local raw materials and human resources.
Technological Roles of Entrepreneur
Stimulation of indigenous technology in the production process.
Adapting traditional technology to modern system.
Adapting imported technology to local environment.
Developing technological competence in self and the workforce through innovation.
1.11 Barriers to Entrepreneurial practice.
Barriers to Entrepreneurship can be traced to several hazards. The most common are:
Entry Barriers
Access to Credit
Risk and Reward
Sole proprietorship and lack of continuity
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Geographical immobility of Entrepreneurs

Poor Record-keeping
Managerial Capacity and Skills of Entrepreneurs
Multiplicity of Taxes
Incessant Public Holidays and Strike
Mortality
Misuse of funds
Poor planning and controls
Inadequate delegation
Inadequate business infrastructure