Eng lesson 1 onb 2_a02_2011


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Eng lesson 1 onb 2_a02_2011

  1. 1. By PresenterMedia.comBusiness Management 2A24 M a r c h 2011
  2. 2. Lecturer• Mrs C Jasson• Department Of Business Management• Office: D-Ring 532• Tel: (011) 559-4432• Consulting Hours:• Mondays 10:00 tot 11:00• Wednesdays 11h00 tot 13h00• Thursdays 13:00 tot 15:00• Or per appointment
  3. 3. •Important arrangements ONB 2A 02Module test:4 May or 12 May (Thursday) 16:00 – 17:00Venue: DLab[Chapters 1 – 6] (= 40 % of module mark)Continuous assessment:2 Edulink tests (= 10% of module mark)Test 1: 11-15 April (Chapters 1 – 4)Test 2: 26 – 30 May (Chapters 7 – 9)Exam: Tuesday 31 Mei – 14h00 – 17h00
  4. 4. •Other important information1 Class attendance
  5. 5. 2 Participation•Other important information
  6. 6. Class test0%Edulink test5%Edulink test5%Module test40%Exam50%•Other important information3 Tests
  7. 7. •Other important information4 Presentation
  8. 8. •Other important information5 Class reps
  9. 9. • Cell phones• Punctuality• Bladder control• University policy• Language & grammar• Neat appearance•Preparation•Other important information6 Minor irritations!Testtip!Oneeachday!
  10. 10. Lecture 1Chapter 1The nature & developmentof entrepreneurshipChapter 2The entrepreneur
  11. 11. Definition of an entrepreneur
  12. 12. An entrepreneur is a person who sees anopportunity in the market, gathers resources andcreates and grows a business venture to satisfythese needs. He/she takes the risk of the ventureand is rewarded with profit if it succeeds.
  13. 13. Why does a country need entrepreneurs?• Economic development can be derived from the entrepreneurialactivity in a country• Economic growth• Employment creation• Wealth creation• Skills are needed in SA;• Young, qualified entrepreneurs;
  14. 14. Where does Entrepreneurship come from?• Entrepreneurship developed first from theeconomist• Richard Cantillon (1680 – 1734) introduced theterm “entrepreneur”• Derived from the French word “entreprendre”which means “to undertake”• Cantillon defined the entrepreneur as one whobuys at certain prices and sells at uncertainprices, thereby undertaking a risk in exchangefor a potential profit;
  15. 15. • Jean Baptiste Say (1767 – 1832) defines anentrepreneur as someone who usesknowledge, judgment, managementcapabilities , leadership & technicalabilities, to move existing ‘economicresources’ from areas of low productivityto areas of higher productivity.Where does Entrepreneurship come from?• In the process he associates the entrepreneur withinnovation – he views entrepreneurs as change agents[Say = father of entrepreneurship]
  16. 16. Where does Entrepreneurship come from?• Joseph Schumpeter (1883 –1950) really launched thefield of entrepreneurship byassociating it withinnovation• His main contribution toeconomic studies was histheory of business cycles
  17. 17. Schumpeter:“The essence of entrepreneurship lies in the perceptionand exploration of new opportunities in the realm ofbusiness…it always has to do with bringing about adifferent use of national resources in that they arewithdrawn from their traditional employ and subjectedto new combinations”
  18. 18. Where does Entrepreneurship come from?• Schumpeter stated that entrepreneurs undertook fivetypes of innovations:• The introduction of a new good or quality of good• The introduction of a new method of production• The opening of a new market• The utilisation of new sources of supply for raw materials orintermediate goods• The carrying out of some new organisational form of theindustry• The economists (1700 – 1950) were mainly interestedin understanding the role played by the entrepreneuras the motor of the economic system (What theentrepreneurs do)
  19. 19. Where does Entrepreneurship come from?• The Behaviourists (psychologists, psychoanalysts,sociologists and other specialists of humanbehaviour)[1960 – 1980, goal was to defineentrepreneurs and their characteristics]• Max Weber viewed entrepreneurs as innovators,independent people whose role as business leadersconveyed a source of formal authority• David McClelland (1971) defined the entrepreneur assomeone who exercised control over production thatis not just for his personal consumption (need forachievement)
  20. 20. Where does Entrepreneurship come from?• Since the 1980’s the field of entrepreneurshipstarted to explode –Management Sciences perspective• Publication of the first-ever encyclopedia• First major annual conference dedicated to thisfield (Babson conference)• [focused on what entrepreneurs do]• From 1985’s – Social perspective – focused onwhat support is needed by entrepreneurs
  21. 21. Where does Entrepreneurship come from?• Entrepreneurial perspective – [1990 onwards] Focuson what is entrepreneurial activities and whatcompetencies are required to perform them]• Does not look at only the individual entrepreneurialbehaviour but also the more complex forces ofentrepreneurship• Entreprenology (Fillion) = a comprehensivemultidisciplinary understanding of the entireentrepreneurial process
  22. 22. Research trendsPeriod Topics AuthorsWhat do they do?(1700-1950)Economic Cantillon, Say,SchumpeterWho are they? (60’s-80’s)Behaviourists Weber, McClelland,Rotter, De VriesWhat do they do? (80’s) ManagementsciencesDrucker, MintzbergWhat support do theyneed? (mid 80’s)Sociologists Gartner, Welsh,Bygrave, ReynoldCompetencies Entrepreneurs Timmons, Vesper,Brockhaus
  23. 23. Many diverse meanings over the years;We need a comprehensive understanding of the process;Overall we can define it as a field of study about theentrepreneur;Entrepreneurship is an applied research field;However we have not yet studied the behaviour ofentrepreneurs well;Entreprenology (Fillion)The study of the behaviour of the entrepreneur
  24. 24. The theory behind entreprenologyBehaviouristsFlexible models;Multi-dimensionalMulti-disciplinaryEconomistsInnovation;Drive development;
  25. 25. ENTREPRENEUR• Starts & runs his own business;• Object: to make a profit;• Innovative behaviour;• Employs time, effort, resources, &takes risks;• Reward required: success, financial& personal satisfaction• The act of being an entrepreneur;• More than just starting a business;• The emergence & growth of newbusinesses;• Causes changes in the economy;• Process of identifying unmetneeds, allocate resources, andcreate value for self and society.ENTREPRENEURSHIPEntrepreneur & Entrepreneurship
  26. 26. SMALL BUSINESS• Limited growth potential;• Stabilizes at some point;• Object: personal goals/security;• Limited innovative behaviour;• Focus on delivery/client service;• Certain benefits to remainingsmall;• Criteria:• National Small Business Act 26 of2003 (Amended)• Main objective: growth & profit;• Innovation;• Venture into new territory;• Real creators of employment;• Greater growth potential;• Listing on JSE or internationalmarkets;ENTREPRENEURAL VENTUREVenture VS Small Business
  27. 27. An entrepreneurial orientationEntrepreneurial OrientationValue system CultureExperienceEntry of entrepreneursAcquired abilities Inherent abilitiesResults of entrepreneurshipProducts/servicesCooperativeenvironmentExternal supportSupportive environmentFinance LawsTraining
  28. 28. •3 domainsEntrepreneurshipManagementLeadershipDiscovery Exploitation
  29. 29. Success factors of entrepreneursCreativity InnovationPerseveranceRelationshipsPositive attitudeLeadershipCommitment
  30. 30. Succes factors of managersPlanningCompetitorsKnowledgeMarketInsightFocusKYC
  31. 31. OpportunityBusiness PlanResources?StartManageEntrepreneurial process
  32. 32. • Change agents;• See opportunities others don’t;• Create wealth;• Their roles?• Challenges?• Survivalist?• Emerging entrepreneur?• Opportunities forEntrepreneurship?• Necessity of Entrepreneurship?•Focus on Entrepreneurs
  33. 33. • Economic actors – the creators & drivers of business;• SA problem: low growth, unemployment & poverty;• Living standard depends on customer satisfactionlevels;• Advances prosperity of small communities & country;• 1/18 adults in SA are entrepreneurs – too low;• Drive to increase the number of entrepreneurs•A catalyst for economic activity
  34. 34. Entrepreneurs at various levels ofentrepreneurial sophisticationBasic survivalistNo economic independence; littleinvolvement with other entrepreneurs(individualism)Entrepreneurial activities: isolatedfrom markets; unaware of ownpotential; illiterate; few income-generating activitiesPre-entrepreneursFollows the groups initiatives (collectivism)Entrepreneurial activities: welfare-orientated;not expected to be self-sustaining; needstraining in entrepreneurial competencySubsistence entrepreneursSelf-employed, independent incomegeneration; temporary market stall orstandEntrepreneurial activities:inexperienced in business management– needs general support in technicaland management skillsMicro-entrepreneurs0 to 9 employees; operating license from localauthority, fixed workshopEntrepreneurial activities: difficult to get loansfrom banks. Assistance projects focus on creditrather than training and technical assistanceSmall-scale entrepreneurs10 to 49 employeesEntrepreneurial activities: qualifies for bankloan; well educated
  35. 35. •Background of entrepreneurs•Family•Frequently parents were entrepreneurs, but not in SA•Education•The biggest barrier – overcome by tertiary education•Personal values•High values high success rate•Age•In their 20’s-30’s – usually worked beforehand•Work experience•Opportunities spotted during employment
  36. 36. •Characteristics of entrepreneurs• Passion• Locus of control• Need for independence• Need for achievement• Risk taking and uncertainty• Creativity and innovation• Determination and persistence
  37. 37. •Role models & support systems•Social;•Personal;•Extended;•Other•Benefits:•Joint:•Marketing;•Buying of raw material;•Tendering•Sharing:•Intelligence;•Containers;•Supplier info;•Mentor services;
  38. 38. Push/pull factorsIndependenceAchievementRecognitionPersonal developmentPersonal wealthUnemploymentJob insecurityDisagreement with bossBad fit with organizationOut of optionsOpportunity NecessityE
  39. 39. Why do small business fail?Finance:Banks don’t want the risk;Few MFI’sBad business plansMarkets:Follow others;No marketing;No info on consumer demandsTechnology:Competitive advantage;NRF, SABS have SMMEdevelopment programsPeople:Manage employee attitudes;Build team spirit;Life-long learning;Be a role model;Challenges…
  40. 40. Women & emerging entrepreneurs• >40-80< of SA workforce is in the informalsector & most are women;•Economic role of women has evolved;•Adverse conditions:•Overworked, uneducated, denied finance,facing discrimination, tradition•Education, skills & mindset determineentry into formal market
  41. 41. Types of women entrepreneursTraditional InnovativeDomestic RadicalAttachment to traditional gender rolesAttachmenttoentrepreneurialideas
  42. 42. Barriers women entrepreneurs face•Limited start up funds;•No support structures & networks;•Work-life balance;•Socio-cultural attitudes;•Discrimination & bias;•Lack of/inappropriate education & training;•Surviving male domination•Life skills (confidence, communication etc)
  43. 43. Male VS female entrepreneursCharacteristics Male FemaleStarting Laid the foundation – womenmust followLatecomers – uninformed & unawarethat they can conduct businessType Manufacturing/construction. In21st Century - diversifiedService related, eg. Coffee shops,hairdressing, trainingRelationships Short term orientated- focus onresults!Strong relationship focus with eg.banks, suppliers etcFunding Barrier if too little collateral Worse barrier & source ofdiscriminationSupport Friends, spouse, businesspartnersSpouse, associations, family, networks
  44. 44. •New “labels” for entrepreneurship• Emerging entrepreneurship• Previously disadvantaged groups• Survivalist and micro enterprises (informal sector)• Propensity to create employment or grow is limited by a lack of skills,knowledge and resources• Not recognised by the mainstream businesses• Denied basic inputs needed to develop their businesses• = the typical street vendors• Opportunity and necessity entrepreneurship• Youth entrepreneurship• Umsobomvu Youth Fund
  45. 45. •TechnopreneursUsetechnologicalinnovations &translate suchtechnology intosuccessfulproduces orservices.Amazon.com;Dell Computers
  46. 46. •Social entrepreneursRecognizes asocial problem &usesentrepreneurialprinciples toorganize, create &manage a ventureto achieve socialchangeMuhammad YunusFounder of Grameen Bank
  47. 47. •Tourism entrepreneurs
  48. 48. • A South African termcoined by Dr BladeNzimande used todescribe governmentofficials or politicianswho uses theirpowers & influenceto securegovernment tenders& contracts•Tenderpreneur
  49. 49. Homework & preparationAnd Test Tip!
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