Entrepreneurship
Explain the historic foundations of entrepreneurship in our
free enterprise system.
Entrepreneurship appeared in the economic literature of
the sixteenth and seventeenth centuries as a description of
merchants or craft workers who contracted their services.
Entrepreneurship emerged as an explanation for free enterprise
during the late eighteenth century, and then as the basis for
industrial capitalism at the turn of the twentieth century. Only
recently has it been recognized as a field of study in American
business schools. We have refined the definition of
entrepreneurship to mean those people who create new ventures by
bringing together resources in new ways to benefit society,
undertaking the risk for profitable rewards.
Discuss profiles of entrepreneurs and career implications
for managers.
Entrepreneurs are motivated to achieve unusual results,
persistent in their endeavors, and intensely focused,
optimistic, self&-reliant, and energetic. They also tend to
persevere where others retreat, championing new ideas with
determination. Although these characteristics may apply equally
to many
professionals
and managers not involved in new ventures, entrepreneurs join to
them a fierce independence and commitment to a new, often risky,
idea. Managers can emulate this behavior, and many of the most
successful corporate leaders have achieved success by behaving
as entrepreneurs.
Discuss the concept of corporate entrepreneurship, or
intrapreneurship.
Corporate entrepreneurship, or intrapreneurship, is a
label for corporate innovation that results in new products, new&-venture
units, and often new companies. Instead of starting companies
from scratch, however, corporate entrepreneurs work within
existing companies to launch new ideas. They are supported by
company resources and encouraged to take risks beyond the normal
scope of company operations.
Identify stages of development for new and growing firms.
In the incubation, or pre&-start&-up stage of
planning, entrepreneurs realize an idea is worth pursuing and
set about to investigate how to bring it alive. In the second,
or start&-up, stage, entrepreneurs try to acquire seed
financing to launch the enterprise, build product prototypes,
and develop initial sales. In the third, or early&-growth,
stage, entrepreneurs recognize opportunities for rapid growth;
they now need substantial capital, resources, and an
organization capable of achieving growth objectives. In the
fourth, or later&-growth, stage, the entrepreneurial
venture must make the transition to a professionally managed
firm. Often companies "go public" at this stage to
attract the investment needed for major operations.
Explain planning, organizing, leading, and controlling in
new ventures.
In planning new enterprises, entrepreneurs are without
resources, market information, or experience with the new
product or service. Planning is risky, and managers have little
prior information on which to base future predictions of
success. In organizing a new venture, entrepreneurs are
concerned with acquiring resources, hiring employees, and making
choices about how to structure the new enterprise. Leading new
ventures can be a multirole responsibility because entrepreneurs
can seldom afford to hire personnel to handle specialized tasks.
In controlling a new venture, entrepreneurs are preoccupied with
managing cash to keep the firm alive, but since they lack a
cadre of supporting managers, they are often forced to
personally control production, get involved in product design,
lead field sales efforts, and do all the administrative work
needed to keep the business going.
Describe how entrepreneurship and small&-business
management differ.
Entrepreneurs seek to create growing business enterprises
by commercializing new ideas and encouraging wealth formation
through innovation. Small&-business owners may also start
new businesses that grow and create wealth, but frequently they
seek autonomy of ownership by serving a local market with
established products and services. According to the Small
Business administration, a small business does not dominate its
industry, has less than $10 million in sales, and employs fewer
than 1,000 people.
