ENTREPRENEUR AND ENTREPRENEURSHIP

An Entrepreneur is a person who flies off the cliff and

manages to build his helicopter in air before landing on to the ground

Dr. Parminder Singh

 What is an Entrepreneur?
French word (noun) means “ to manage/undertake”

Schumpeter (1965) “entrepreneurs as individuals who exploit market

opportunity through technical and/or organizational innovation”

Peter Drucker (1970) “entrepreneurship is about taking risk”

Hitt (2001) Entrepreneurship is defined as “Identification and

exploitation of previously unexploited opportunities”.

Schumpeter J. A. (1965). Economic Theory and Entrepreneurial History. In: Aitken HG (ed) Explorations in enterprise.
Harvard University Press, Cambridge, MA
Knight, Frank H. (1921). Risk, Uncertainty, and Profit. Boston, MA: Hart, Schaffner & Marx; Houghton Mifflin Company.
 Hisrich (1990) “an entrepreneur is someone who demonstrates initiative and creative
thinking, is able to organize social and economic mechanisms to turn resources and
situations to practical account, and accepts risk and failure”

Eckhardt, J. T., & Shane, S. A. (2003) “ . . as the discovery, evaluation, and

exploitation of future goods and services . . . [by] . . . creation or identification of new
ends and means previously undetected or unutilized by market participants”

Onuoha (2007) “is the practice of starting new organizations or revitalizing mature
organizations, particularly new businesses generally in response to identified
opportunities.”

Hisrich, R.D. (1990) Entrepreneurship/Intrapreneurship. Am Psychol 45(2), 209–222.

Onuoha G., (2007) Entrepreneurship, AIST International Journal 10, 20-32.
Eckhardt, J. T., & Shane, S. A. (2003). Opportunities and entrepreneurship. Journal of Management, 29, 333–349.
• Entrepreneurship is a process of discovery,
evaluation and exploitation of opportunities

• Set of individuals who discover, evaluate and

exploit opportunities are entrepreneurs.
“Intrapreneurship or entrepreneurship?” by S. Parker, Journal of Business Venturing Volume 26, Issue 1, January 2011
 INTRAPRENEURSHIP

Malek, M. & Ibach, P.K. (2004). Entrepreneurship. Principles, Ideas and Business Models for Starting a Business in the Information
Age, dpunkt.verlag, pp. 105-113
 ENTREPRENEURSHIP

Malek, M. & Ibach, P.K. (2004). Entrepreneurship. Principles, Ideas and Business Models for Starting a Business in the Information
Age, dpunkt.verlag, pp. 105-113
Entrepreneurship and intrapreneurship: similarities and
differences
Similarities
• Both involve opportunity recognition and definition.
• Both require a unique business concept that takes the form of a product, process, or
service.
• Both are predicated on value creation and accountability to a customer .
• Both entail risk and require risk management strategies.
• Both require harvesting strategies.
Differences
• In start-up, the individual entrepreneur owns the concept and business, whereas in
intrapreneurship the company typically owns the concept and intellectual rights.
• In a start-up potential rewards for the individual entrepreneur are theoretically unlimited where in
intrapreneurship an organizational structure is in place to limit rewards/compensation to the
entrepreneur/ employee.
• In a start-up the entrepreneur is subject or more susceptible to outside influences; in intrapreneurship
the organization is more insulated from outside forces or influence.
Morris, M.H., & Kuratko, D.F. (2002). Corporate Entrepreneurship. Harcourt College Publishers: Florida.
 What is Entrepreneurship?

“The pursuit of opportunity beyond the resources you currently control”

– Howard Stevenson, Harvard Business School
Entrepreneurship motivation
 Motivation
• Motivation is the desire to achieve a goal, combined with the energy
to work towards that goal

• Motivation is the basic drive for all of our actions and it directs our
behaviour

• A motive is a need for specific experiences

• Motives are stimulated by the situation

 Motivation Factors (McClelland, 1985)
• Achievement motivation
is based on reaching success and achieving all of our aspirations in life. An individual
with achievement motivation wishes to achieve objectives and advance up on the ladder
of success. Here, accomplishment is important for its own sake and not for the rewards
that accompany it.
• Power motivation
is the drive to influence people and change situations. Power motivated people wish to
create an impact on their organization and are willing to take risks to do so.

• Affiliation motivation
is a drive to relate to people on a social basis. Persons with the affiliation motivation
perform better when they are complimented for their favorable attitudes and co-
operation.
A capacity to derive satisfaction from establishing, maintaining, and restoring positive
relationships with others.
Explicit motives are expressed through
deliberate choices…
I am a person who…
(PRF, Jackson, 1984)
Achievement: I am basically a competitive person, and I
compete just for the sake of competing.
Autonomy; In my work assignments, I try to be my own boss
Affiliation: When I have a choice, I try to work in a group instead
of by myself.
Power: I seek an active role in the leadership of a group.
Implicit motives are spontaneous
impulses to act…
(Winter, 1991)
• What is going on here?

• Who are these people?

• What do they think?

• What do they want?

• What will happen?

 Opportunity vs Necessity
• Opportunity driven entrepreneurs
(future orientation)…
- want to exploit a perceived business opportunity
- strive for independence, self-actualisation, recognition and profit maximization
- on average they rise higher than necessity driven entrepreneurs

Necessity driven entrepreneurs

(‘away from’ orientation)…

- are pushed into entrepreneurship because all other options for work are
either absent or unsatisfactory

- dissatisfaction with working conditions, contents and time

- pursue entrepreneurship to secure their own existence

 1. Estimation of start up chances in a given
environment

2. Perception of own necessary skills and

abilities Start up
Motivation
3. Availability of role models

4. Fear of failure and its personal, social,

and financial consequences

• Needs
• Reinforcement
Motivation Factors • Equity
• Expectancy
• Goal theory
 BIG 5 ANALYSIS: PERSONALITY TRAITS

EXTROVERSION Introvert Extrovert

AGREEABLENESS Challenger Adapter

CONSCIENTIOUSNESS Flexible Focused

EMOTIONAL STABILITY Reactive Resilient

OPENNESS Preserver Explorer

Type of theory Basic Idea Approach

Trait Theory Human behaviour is traced to the combined Trait (enduring

effect of individual’s inherited capabilities characteristics)

Social Learning Human behaviour results from an individual’s State (conditions)

Theory past learning, current perceptions, and higher

level processing of thinking

The Sweet Spot

• Timely
• Willingness • Profitable
to learn • Solvable
• Skills

• Take challenges
• Commitment
Self-made through their actions
Can Passion, Smarts, Guts, and Luck be taught, nurtured and developed?

• Passion: To a large extent is something you’re born with. But following your
Heart is an explicit decision.

• To act on one’s passion, that takes Guts.

• Smarts is mostly about pattern recognition, a capability that definitely can

be practiced and improved.

• Luck: can be cultivated by being open and humble, by having the right
attitude and approach toward relationships and by building Lucky Networks
 What an entrepreneur does?
24

 Identify opportunities
 Invests resources (time, money)
 Undertakes risks
 Creates an organization
 Process/Develop opportunities
 Exploit opportunities
In order to generate surplus and sustain an organization
The first few questions for a potential entrepreneur usually are:

 Do I have it in me, to be a successful entrepreneur?

 Do I have an entrepreneurial personality?

 Are entrepreneurs special type of people; different from non-

entrepreneurs?
But, unfortunately
26

Research has not discovered

any significant differentiating feature between
entrepreneurs and small business owners or managers
(Brockhuas & Horwitz, 1985)
• Each business personality type can succeed in business if one stays
true to one’s character.

• Knowledge of one’s strong traits can act as a compass & invaluable

insight for building a team.

• One may need outside help to balance one’s business personality.

 Vegetable seller

CASE1 CASE2
• Direct Purchase from • Purchase Direct from farmer
farmer at lower price • Apply air tight packaging
• Profit will increase • Open another outlet in the
same area
• Shelf life of Vegetables increase,
Food life, Better taste, High
pricing
• More profit
What is the characteristics
differences?
Markets
 Entrepreneurship

• Existence of Need based on feedback from

customer and self experience Profit
• People want Fresh vegetable
• Shelf life of vegetables
• Evaluation
• People are ready to pay more
• Maintenance cost
Minimization
• Exploitation of loss
• Processed Vegetables with use of technology
• Packed and hygienic food in the shop
• Higher price
 38

Traits that are useful for entrepreneurs

 Tolerant of risk: Not too much afraid to take risks, but he is not a gambler either.

 Persons with medium-level risk attitude survive more often as an entrepreneur than those
with low or high risk attitudes.

 Decisive: Comfort-level with uncertainly and ambiguity.

 They have an action bias and are decisive and do not wait for 100% information to be
available to take an action.

 Innovative & creative: With respect to product/ process/ resources

 Traits that are useful for entrepreneurs

 Narcissism: It plays a significant role in explaining entrepreneurial intentions.

Entrepreneurs score significantly higher on narcissism than other vocational
groups.
It is positively correlated with self-efficacy, locus of control & risk propensity.

 Self-Possessed: A strong sense of self & self-confidence but at the same time
having no ego issues while interacting with team, employees, customers….

 Need for autonomy: Need to be one’s own boss, explicit preference for the
autonomy.
 Traits that are useful for entrepreneurs

 Passionate: Driven by a clear sense of purpose and maintain simple, clear

focus. Because they are likely to be working too hard, for too long, with no
guarantee.

 Flexible: How to be at peace with, and learn from, a failure and adjust to new
information & changing circumstances.

 Resilient: Spirit of determination coupled with a high pain tolerance.

having the door slammed in the face repeatedly,
the best entrepreneurs learn to feed off the negativity & actually gain strength
from it.
 Abilities that are useful for entrepreneurs

 Ability & willingness to Sell: Entrepreneur is selling all

the time to prospective partners, funding sources, recruits,
customers, employees.

 Network orientation: Able and willing to create and

maintain social networks.

 Trust: Higher trust decreases the likelihood of being self-

employed.
We must understand that

Although traits play a vital role in entrepreneurial success yet they don’t

guarantee success because entrepreneur or entrepreneurial personality

is one of the factors and may not be the only one.

 Personality Traits of an Entrepreneur

• Risk taking
• Intention/willingness to exploit opportunity
• Focused
• Creative
• Risk averter
• Either create mean, or end or mean/end
• Ambitious
Hannu Littunen, (2000) "Entrepreneurship and the characteristics of the entrepreneurial personality",
International Journal of Entrepreneurial Behavior & Research , Vol. 6 Issue: 6, pp.295-310
 The University Entrepreneurs
Agarwal et al. (2007, p. 267) note that existing firms and scientists at
research institutions facilitate knowledge spillover when they engage
in the entrepreneurial act of new venture formation.
While research suggests that only 12% to 16% of university-assigned
inventions are transferred to private new ventures (AUTM, 2002,
2011; Di Gregorio and Shane, 2003), university-based start-ups have
the greatest potential to affect the greater economy and realize the
hopes of government R&D policy makers venture formation.

Marion, Tucker J., Denise R. Dunlap, and John H. Friar. "The university entrepreneur: a census and survey of attributes and outcomes." R&D
Management 42.5 (2012): 401-419.
Agarwal, R., Audretsch, D., and Sarkar, M.B. (2007) The process of creative construction: knowledge spillovers, entrepreneurship and economic
growth. Strategic Entrepreneurship Journal, 1, 263–286.
Association of University Technology Managers (AUTM) FY (2002) The AUTM Licensing Surveys; University Start-up Data. Norwalk, CT: AUTM Inc.
Di Gregorio, D. and Shane, S. (2003) Why do some universities generate more start-ups than others? Research Policy, 32, 209–227.
Thanks...