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1. 17/3/2023
1
Entrepreneurship
Tenth Edition
Chapter 1
THE
ENTREPRENEURIAL
MIND-SET
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education. Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
So do you think
like an
Entrepreneur??
1-3
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
Learning Objectives (1 of 2)
• To introduce the concept of
entrepreneurship and explain the process
of entrepreneurial action
• To describe how structural similarities
enable entrepreneurs to make creative
mental leaps
• To highlight bricolage as a source of
entrepreneurs’ resourcefulness
1-4
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
Learning Objectives (2 of 2)
• To introduce effectuation as a way expert
entrepreneurs sometimes think
• To develop the notion that entrepreneurs
cognitively adapt
• To introduce sustainable entrepreneurship
as a means of sustaining the natural
environment and communities and
developing gains for others

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Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
The Nature of
Entrepreneurship
• Entrepreneurial
opportunities
– Situations in which new
goods, services, raw
materials, and organizing
methods:
▪ Can be introduced
▪ Sold at greater than their
cost of production
• Entrepreneurial action:
– Involves creation of new
products or processes
– Involves entry into new
markets
1-6
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
The Nature of Entrepreneurship
May occur through a newly created organization
or within an established organization
Entrepreneurial thinking
– An individuals’ mental processes of overcoming
ignorance to:
▪ Decide whether a signal represents an
opportunity for someone
▪ Decide whether that opportunity is
applicable to the individual specifically
▪ Process feedback from action steps taken
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
Figure 1.1 – Entrepreneurial Action
1-8
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
How Entrepreneurs Think (1 of 7)
Entrepreneurs should:
• Think structurally
• Engage in bricolage
• Effectuate
• Cognitively adapt
• Learn from failures

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1-9
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
How Entrepreneurs Think (2 of 7)
• Think structurally
– Superficial similarities: Basic elements
of the technology resemble the basic
elements of the market
– Structural similarities: Underlying
mechanisms of the technology resemble
the underlying mechanisms of the market
1-10
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
How Entrepreneurs Think (3 of 7)
• Bricolage
– Applying combinations of the resources at
hand to new problems and opportunities
– Taking existing resources and tinkering
and/or reframing them so they can be used
in new ways
1-11
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
How Entrepreneurs Think (4 of 7)
• Effectuation
– Causal process
▪ Starts with a desired outcome
▪ Focuses on the means to generate that outcome
– Effectuation process
▪ Starts with what one has
▪ Selects among possible outcomes
• Entrepreneurial mind-set: Ability to rapidly
sense, act, and mobilize, even under uncertain
conditions
1-12
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
How Entrepreneurs Think (5 of 7)
• Cognitive adaptability
– Describes the extent to which entrepreneurs are:
▪ Dynamic, flexible, self-regulating and engaged in the
process of generating multiple decision frameworks
▪ Focused on sensing and processing changes in their
environments and then acting on them
– Metacognitive awareness - Ability to reflect
upon,understand, and control one’s thinking and
learning

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1-13
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
How Entrepreneurs Think (6 of 7)
• Achieving cognitive adaptability
– Comprehension questions
▪ Increase entrepreneurs’ understanding of the
nature of the environment
– Connection tasks
▪ Stimulate thinking about similarities and
differences of current situations with situations
previously faced and solved
– Strategic tasks
▪ Identify strategies that are appropriate for solving
the problem or pursuing the opportunity
1-14
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
How Entrepreneurs Think (7 of 7)
• Reflection tasks
– Stimulate entrepreneurs to think about
their understanding and feelings as they
progress through the entrepreneurial
process
• Increasing cognitive ability helps in:
▪ Adapting to new situations
▪ Being creative
▪ Communicating one’s reasoning behind a
particular response
1-15
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
The Intention to Act Entrepreneurially
• Entrepreneurial intentions
– Motivational factors that influence individuals
to pursue entrepreneurial outcomes
• Entrepreneurial self-efficacy
– Conviction that one can successfully pursue
entrepreneurial outcomes
• Perceived desirability
– Degree to which a potential entrepreneurial
outcome is evaluated as favorable or
unfavorable
1-16
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
Entrepreneur Background and
Characteristics (1 of 2)
• Education
– Facilitates integration and accumulation of
knowledge thus providing a larger opportunity
set
– Casts a wider net for the discovery or
generation of potential opportunities
– Assists entrepreneurs in adapting to new
situations
– Does not necessarily determine whether the
individual will create a new business

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Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
Entrepreneur Background and
Characteristics (2 of 2)
• Age
– Chronological age – Usually between the
ages 22 and 45
• Work history
– Past work experience of an individual
1-18
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
Role Models and Support Systems
• Role models: Individuals whose example
an entrepreneur can aspire to and copy
• Moral-support network: Individuals
who give psychological support to an
entrepreneur
• Professional-support network:
Individuals who help the entrepreneur in
business activities
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
Sustainable
Entrepreneurship
• Preserving nature, life
support, and community
in the pursuit of perceived
opportunities to:
– Bring future products,
processes, and services
into existence for gain
• Can generate:
– Economic gains
– Environmental gains
– Social gains