Enterprenuership process1

1,452 views
1,333 views

Published on

Published in: Business, Economy & Finance
0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,452
On SlideShare
0
From Embeds
0
Number of Embeds
66
Actions
Shares
0
Downloads
0
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide

Enterprenuership process1

  1. 1. THE ENTREPRENEURIAL PROCESS8/20/2012 11:46:12 PM by Dr.Rajesh Patel,Director, nrv mba 1
  2. 2. The entrepreneurial process involvesfinding, evaluating, and developing anopportunity by overcoming the strongforces that resist the creation of somethingnew.8/20/2012 11:46:12 PM by Dr.Rajesh Patel,Director, nrv mba 2
  3. 3. Phase 1: Identify and Evaluate the Opportunity. 1. Opportunity identification: Most good business opportunities result from an entrepreneur being alert topossibilities. a. Fruitful sources include consumers and business associates. b. Channel members in the distribution system—retailers, wholesalers, or manufacturer’s reps—are alsohelpful. c. Technically-oriented individuals often identify business opportunities when working on other projects. 2. Each opportunity must be carefully screened and evaluated—this is the most critical element of theentrepreneurial process. 3. The evaluation process involves looking at: a. The length of the opportunity. b. Its real and perceived value. c. Its risks and returns. d. Its fit with the skills and goals of the entrepreneur. e. Its uniqueness or differential advantage in its competitive environment. 4. The market size and the length of the window of opportunity are the primarily bases for determining risksand rewards. a. The risks reflect the market, competition, technology, and amount of capital involved. b. The amount of capital forms the basis for the return and rewards. c. The return and reward of the present opportunity needs to be viewed in light of any possible subsequentopportunities as well. 5. The opportunity must fit the personal skills and goals of the entrepreneur. a. The entrepreneur must be able to put forth the necessary time and effort required for the venture tosucceed. b. He or she must believe in the opportunity enough to make the necessary sacrifices. 6. Opportunity assessment should focus on the opportunity and provide the basis to make the decision,including: a. A description of the product or service. b. An assessment of the opportunity. c. Assessment of the entrepreneur and the team. 8/20/2012 Specifications of all the activities Dr.Rajesh Patel,Director, nrv mba d. 11:46:12 PM by and resources needed. 3 e. The source of capital to finance the initial venture.
  4. 4. Phase 2: Develop a Business Plan. 1. A good business plan must be developed inorder to exploit the opportunity defined. 2. This plan is essential to developing theopportunity and in determining the resourcesrequired, obtaining those resources, and successfullymanaging the venture. 8/20/2012 11:46:12 PM by Dr.Rajesh Patel,Director, nrv mba 4
  5. 5. Phase 3: Determine the Resources Required. 1.Assessing the resources needed starts with an appraisal of theentrepreneur’s present resources. 2.Any resources that are critical need to be differentiated from thosethat are just helpful. 3.Care must be taken not to underestimate the amount and variety ofresources needed. 4.Acquiring needed resources, while giving up as little control aspossible, is difficult. a.The entrepreneur should try to maintain as large anownership position as possible, particularly in the start-up stage. b.As the business develops, more funds will probably beneeded, requiring more ownership be relinquished. c.Alternative resource suppliers should be identified, alongwith their needs and desires, in order to structure a deal with the lowest costand loss of control. 8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 5
  6. 6. Phase 4: Manage the Enterprise. 1.The entrepreneur must use them toimplement the business plan. 2.This involves implementing a managementstructure, as well as identifying a control system. 8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 6
  7. 7. MANAGERIAL VERSUS ENTREPRENEURIAL DECISION MAKING 8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 7
  8. 8. A.The difference between the entrepreneurial style and themanagerial style (administrative domain) involves fivebusiness dimensions. B. Strategic Orientation. 1.The entrepreneur’s strategic orientationdepends on his or her perception of the opportunity. 2.When the use of planning systems is thestrategic orientation, the administrative domain is operant. 8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 8
  9. 9. C. Commitment to Opportunity. 1.The entrepreneurial domain is pressuredby the need for action and has a short time spanin terms of opportunity commitment. 2.The administrative domain is not only slowto act on an opportunity, but the commitment isusually for a longer time span. 8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 9
  10. 10. D. Commitment of Resources. 1.An entrepreneur is used to having resourcescommitted at periodic intervals, often based on certain tasksor objectives being reached. 2.In acquiring these resources the entrepreneur isforced to maximize resource use. 3.In the administrative domain, the commitment ofresources is for the total amount needed. 4.Administrative-oriented individuals receive personalrewards by effectively administering the resources under theircontrol. 8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 10
  11. 11. F.Managerial Structure. 1.In the administrative domain, the organizational structure is formalized and hierarchical in nature. 2.The entrepreneur employs a flat organizational structure with informal networks.8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 11
  12. 12. CAUSES FOR RECENT INTEREST IN INTRAPRENEURSHIP8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 12
  13. 13. A.Interest in intrapreneurship has resulted fromevents occurring on social, cultural, and businesslevels. 1.There is an increasing interest in “doing your own thing.” a.Individuals frequently desire to create something of theirown. b.They want responsibility and want more freedom in theirwork environment. c.Frustration can develop and result in the employee becomingless productive or leaving the organization. d.This has recently caused more discontent in structuredorganizations. e.When meaning is not provided within theorganization, individuals often search for an institution, such asintrapreneurship, that will provide it.8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 13
  14. 14. B.It is important to instill the entrepreneurialspirit in an organization in order to innovate andgrow. 1.In a large organization problems occur thatthwart creativity and innovation. 2.This growth and diversity that can result arecritical, since large corporations are more efficient in acompetitive market than are smaller firms.8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 14
  15. 15. C. The resistance against flexibility, growth, and diversification can be overcomed by developing a spirit of entrepreneurship, called intrapreneurship, within the existing organization.8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 15
  16. 16. D. There are social, cultural, and businesspressures for intrapreneurship. 1. Hypercompetition has forcedcompanies to focus on new productdevelopment, increased productivity, anddecreasing costs.8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 16
  17. 17. E. Entrepreneurial endeavors consist of four key elements. 1. New business venturing refers to thecreation of new business within an existing organization. 2. Organizational innovativeness refersto product and service innovation with an emphasis ondevelopment and innovation in technology. 3. Self-renewal reflects thetransformation of organizations through the renewal of the keyideas on which they are built. 4. Proactiveness includes initiative andrisk taking, as well as competitive aggressiveness and boldness.8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 17
  18. 18. IV.CORPORATE VERSUS INTRAPRENEURIAL CULTURE A. Smaller, aggressive entrepreneurial firms are developing more new products andbecoming dominant in selected markets. 1. Many companies are attempting to create the same spirit, culture, and rewards ofentrepreneurship in their organizations. 2. The typical corporate culture has a climate and reward system that favorsconservative decision making. a. Emphasis is on gathering large amounts of data as the basis for a rationaldecision. b. Risky decisions are often postponed until hard facts are gathered or a consultantis hired. c. Often there are so many approvals required that no individual feels personallyresponsible for the project. d. The guiding principles in a traditional corporate culture are: (i)Follow instructions given. (ii)Do not make mistakes. (iii) Do not fail. (iv)Do not take initiative. (v)Stay within your turf and protect your backside. e. This restrictive environment is not conducive to creativity, flexibility,independence, ownership, or risk taking—the guiding principles of intrapreneurs. 8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 18
  19. 19. 3. The goals of an intrapreneurial culture are quite different: a.Develop visions, goals, and action plans. b.Be rewarded for actions taken. c.Suggest, try, and experiment. d.Create and develop. e.Take responsibility and ownership.8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 19
  20. 20. 4.There are differences in the norms of the two cultures. a.The traditional culture is hierarchical in nature, with established procedures, lines of authority, and control mechanisms. b.These support the present corporate culture, but inhibit new venture creation. An intrapreneurial firm has a flat organizational structure with networking, teamwork, sponsors, and mentors. d.Close working relationships help establish an atmosphere or trust that facilitates accomplishment of visions. e.Individuals make suggestions across functional areas, resulting in cross- fertilization of ideas.8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 20
  21. 21. B.The two cultures produce different types of individuals and management styles. 1.Motivation. a.Traditional managers are motivated primarily by promotion andtypical corporate rewards. b.Entrepreneurs and intrapreneurs thrive on independence and theability to create. c.Intrapreneurs expect their performance to be suitably rewarded. 2.There are also time orientation differences. a.Managers emphasize the short run, entrepreneurs the long run, andintrapreneurs somewhere in between. b. Intrapreneurs and entrepreneurs aremoderate risk takers; managers are much more cautious. c. Most entrepreneurs fail at least once, andintrapreneurs learn to conceal risky projects from management until the last possiblemoment. 3.Traditional managers tend to be most concerned about those at higherlevels, entrepreneurs serve self and customers, and intrapreneurs add sponsors. 8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 21
  22. 22. B.The two cultures produce different types of individuals and management styles.1.Motivation. a.Traditional managers are motivated primarily by promotionand typical corporate rewards. b.Entrepreneurs and intrapreneurs thrive on independence andthe ability to create. c.Intrapreneurs expect their performance to be suitablyrewarded.2.There are also time orientation differences. a.Managers emphasize the short run, entrepreneurs the longrun, and intrapreneurs somewhere in between. b.ntrapreneurs and entrepreneurs are moderate risk takers;managers are much more cautious. c.Most entrepreneurs fail at least once, and intrapreneurs learnto conceal risky projects from management until the last possible moment.3.Traditional managers tend to be most concerned aboutthose at higher levels, entrepreneurs serve self and customers, andintrapreneurs add sponsors. by Dr.Rajesh Patel,Director, nrv mba 8/20/2012 11:46:13 PM 22
  23. 23. V.CLIMATE FOR INTRAPRENEURSHIP A.In establishing an intrapreneurial environment, certainfactors and leadership characteristics need to be present. B.The organization operates on the frontiers of technology. C.Experimentation, or trial and error, is encouraged.intrapreneurial ventures will be developed. D.An organization should make sure that there are no initialopportunity parameters, such as turf protection, inhibitingcreativity in new product development. E.The resources of the firm need to be available and easilyaccessible. F.A multidisciplinary team approach needs to beencouraged. G.The spirit of intrapreneurship cannot be forced onindividuals; it must be voluntary. H.The seventh characteristic is a reward system. 8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 23
  24. 24. VI.INTRAPRENEURIAL LEADERSHIP CHARACTERISTICS A.There are certain individual characteristics neededfor a person to be a successful intrapreneur, including: B.An intrapreneur needs to understand all aspects ofthe environment. C.The intrapreneur must be a visionary leader—aperson who dreams great dreams. D.The intrapreneur must be flexible and createmanagement options. E.He or she needs the ability to encourageteamwork and use a multidisciplined approach. F.Open discussion must be encouraged to develop agood team for creating something new. G.Openness leads to a strong coalition of supportersand encouragers. H.Only through persistence will a new venture becreated and successful commercialization result. 8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 24
  25. 25. VII. ESTABLISHING INTRAPRENEURSHIP IN THE ORGANIZATION A.To establish an intrapreneurial environment, the organization mustimplement a procedure. B.Step 1: The first step is to secure a commitment to intrapreneurshipin the organization by top, upper, and middle management. C.Step 2: Ideas and general interest areas should be identified, alongwith the amount of risk money that is available. D.Step 3: A company needs to use technology to make itself moreflexible. E.Step 4: The organization can use a group of managers to train andshare their experiences with other members. F.Step 5: The organization needs to develop ways to get closer to itscustomers by tapping the data base, hiring from smaller rivals, and helping theretailer. G.Step 6: An organization must learn to be more productive with fewerresources. H.Step 7: The organization needs to establish a strong supportstructure. 1Step 8: The support must involve tying the rewards to theperformance of the intrapreneurial unit. J.Step 9: The organization needs to implement an evaluation systemthat 8/20/2012 11:46:13 PM allows successful units to by Dr.Rajesh Patel,Director, nrv mba expand and unsuccessful ones eliminated. 25
  26. 26. VIII.PROBLEMS AND SUCCESSFUL EFFORTS A.Intrapreneurship, also called corporateventuring, is not without problems. B.There are many examples of companies thathave successfully implemented intrapreneurship. C.The problems of intrapreneurship are notinsurmountable, and implementing intrapreneurship canlead to new products, growth, and the development ofan entirely new corporate environment and culture. 8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 26
  27. 27. 8/20/2012 11:46:13 PM by Dr.Rajesh Patel,Director, nrv mba 27

×