This document discusses issues in entrepreneurship and franchising. It covers the characteristics of corporate entrepreneurs, how corporations develop entrepreneurship, and other issues entrepreneurs face like risks and capital. It also defines franchising and the responsibilities of franchisors and franchisees. The advantages to franchisors are faster expansion and risk sharing, while the disadvantages are diluted equity and challenges with independent owners. For franchisees, the advantages are easier business startup and management support, while the disadvantages are less control and flexibility.

1. BAEB501 : ENTREPRENEURSHIP
CHAPTER 10:
Issues in Entrepreneurship
© 2010 Cosmopoint

2. Chapter 10: Issues in Entrepreneurship
Topic Outlines
10.1 Characteristics of a Corporate Entrepreneur
10.2
Development of corporate Entrepreneurship in Organization
10.3 Other issues
10.4 Franchising and Entrepreneurship
10.5 Some of the strategies adopted by the government
10.6 Responsibilities of Franchisor
10.7 Responsibilities of Franchisee
10.8 Advantages and disadvantages of Franchising
© 2010 Cosmopoint Slide 2 of [11]

3. Chapter 10: Issues in Entrepreneurship
Learning Outcomes
 After completing this chapter, student should be able to:
 Identify the issues in Entrepreneurship
 Understand franchising concepts
 Apply the concepts learnt
© 2010 Cosmopoint Slide 3 of [11] Topics

4. Chapter 10: Issues in Entrepreneurship
10.1 Characteristics of a Corporate Entrepreneur
There are eight characteristics of corporate entrepreneurship:
Proactive
Innovative
Propensity to take moderate and calculated risks
Inspiration to do more than current capacity
Team Work
Creative problem solving
Listening to feedback
Need for achievement
© 2010 Cosmopoint Slide 4 of [11] Topics

5. Chapter 10: Issues in Entrepreneurship
10.2 Development of corporate Entrepreneurship in Organization
 A corporation may venture into a new business
through any of the following:
• Venture Capital
• New venture incubator
• Idea generation and transfer programmes
• Intrapreneurhsip development programmes
© 2010 Cosmopoint Slide 5 of [11] Topics

6. Chapter 10: Issues in Entrepreneurship
10.3 Other issues
 There are several issues occurred in
entrepreneurship. Some of them are
the following:
• Capital (source to start business)
• Risks (2 types of risks)
• Challenges (role conflict, culture,
religion restriction, type of business,
distinct or mainstream)
• Gender (female vs male)
© 2010 Cosmopoint Slide 6 of [11] Topics

7. Chapter 10: Issues in Entrepreneurship
10.4 Franchising and Entrepreneurship
 What is franchising?
 It is a form of business involving a
franchisor granting franchisees the
right to run similar business in
certain areas.
 Who is franchisor?
 A franchisor has proven business
that has been systematized. In other
words, all operations are put in
system and are documented.
 Who is franchisee?
 Franchisees are those who are given
the right to run business in areas
agreeable to both the franchisor and
the franchisees.
© 2010 Cosmopoint Slide 7 of [11] Topics

8. Chapter 10: Issues in Entrepreneurship
10.5 Some of the strategies adopted by the government
 To develop homegrown franchise products and
systems
 To convert existing viable business info
franchise systems
 To identify foreign franchises that can be
bought or brought
 To educate the masses about franchising
 To identify different target groups as potential
franchisors and franchisees
 To increase the number of franchise
consultants
 To emphasize R&D activities
 To encourage and assists homegrown to
venture internationally
 To offer comprehensive and attractive financial
schemes
 To promote Malaysian franchises abroad
 To coordinate and cooperate with other
governmental and non governmental bodies.
© 2010 Cosmopoint Slide 8 of [11] Topics

9. Chapter 10: Issues in Entrepreneurship
10.6 Responsibilities of Franchisor
 Franchisor:
 Ensuring the continuity and stability of the
business
 Offering rights to franchisees to the
business name, trademark, logo, overall
image, and business concept.
 Imparting systems and knowledge
pertaining to the business
 Conducting pre and post operation training
covering both knowledge and skills
 Offering pre and pos operation support and
guidance
© 2010 Cosmopoint Slide 9 of [11] Topics

10. Chapter 10: Issues in Entrepreneurship
10.7 Responsibilities of Franchisee
 Franchisee:
 Compensating the franchisor for the
award of the right (usually in the form
of franchise fee and royalty)
 Working closely with the franchisor
by conforming to standards and
having regular communication
 Ensuring unwavering commitment to
the business under the guidance of
the franchisor
 Like other ventures based on
partnership, misunderstandings are
quite common but the synergies and
dynamics are there to be exploited.
© 2010 Cosmopoint Slide 10 of [11] Topics

11. Chapter 10: Issues in Entrepreneurship
10.8 Advantages and disadvantages of Franchising
 To franchisor, the advantages:
 Faster pace of expansion
 Risks are shared
 Lighten the burden of
managing a network of
outlets.
 But the disadvantages are:
• Equity ownership seems
diluted
• Challenges in dealing with
independent owners
compared to own staff
© 2010 Cosmopoint Slide 11 of [11] Topics

12. Chapter 10: Issues in Entrepreneurship
10.8 Advantages and disadvantages of Franchising
 To franchisee, the advantages:
 Relatively easier to start a business
 Lesser risk due to proven business
 Relatively easier to manage with franchisor’s
guidance and support
 But the disadvantages:
 The feeling that one is not an owner in control
 Limited creativity and flexibility
© 2010 Cosmopoint Slide 12 of [11] Topics