Management

The Entrepreneurial Challenge: Creating a New Venture

Three Broad Types of Definition

ENTREPRENEURSHIP The start-up of new businesses. The process of transacting business The processes of extracting value from the environment. •a series of qualities needed for success in starting and growing (usually) businesses. THE ENTREPRENEUR someone who starts the new business. The person who transacts business someone who initiates and manages this process. •someone possessing these qualities and uses them to try and succeed in business

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Process of transacting business• By selling the product in the market he pays rent of land, wages to labour, interest on capital and what remains is his profit. (Say, 1803) An entrepreneur is a person who pays a certain price for a product to resell it at an uncertain price, thereby making decisions about obtaining and using the resources while admitting the risk of enterprise. (Cantillon 1755)

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Process of Extracting Value

• Shifting resources from an area of lower into

higher productivity and yield (i.e. value). (Say 1803) • The pursuit of opportunity beyond the resources you currently control (Stevenson 1983)- (implies creativity and perseverance) • Searching for change, responding to it, and exploiting it as an opportunity (Drucker 1985) • Process of transforming innovations into economic goods (Schumpter 1934;) resulting in new organisations or through revitalising old one (Shane 2003) (Most obvious new organisation is a start-up business or company)

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Entrepreneurial Traits

WEBER

MCCLELLAND

•Desire to maximise wealth •Financial rationality •Work is good (work ethic) •Belief in scientific rationality •Moral values (honesty, modesty, fair dealing, benevolence) •Austerity: frugality, prudence, piety, self reliance, thrift

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•opportunity seeking •-Need for achievement • Creativity • willingness to take risks • confidence and self efficacy

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