Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-1 12.

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-1

12


Fundamentals of EntrepreneurshipFundamentals of EntrepreneurshipFundamentals of EntrepreneurshipFundamentals of EntrepreneurshipEntrepreneurship: is the identification, evaluation, and

exploitation of opportunities

It is much broader than an individual starting a new business to make money

Entrepreneurship Opportunities: are occasions to bring into existence new products and services that allow outputs to be sold at a price greater than their cost of production (a price that produces profit)

Entrepreneurs: are those individuals who identify, evaluate, and exploits opportunities


Fundamentals of EntrepreneurshipFundamentals of EntrepreneurshipFundamentals of EntrepreneurshipFundamentals of Entrepreneurship75% of new organizations are started by entrepreneurial teams.They perform better than those started by individuals, Why?

Because of “Team advantage”: the combination of divers skills, experiences, and relationships, of the entrepreneurial team members.

Because as new organizations grow, they require leaders with new skills, and it is easier to add team members with these new skills


Fundamentals of EntrepreneurshipFundamentals of EntrepreneurshipFundamentals of EntrepreneurshipFundamentals of Entrepreneurship


Fundamentals of EntrepreneurshipFundamentals of EntrepreneurshipFundamentals of EntrepreneurshipFundamentals of EntrepreneurshipUnderstanding entrepreneurship is important because:

Entrepreneurship represents an important fabric of societyHigh business formation rates and high failure rates

20% to 50% of all individuals engage in entrepreneurial behaviorsThey find it difficult to keep their businesses alive

34% don’t survive the first 2 years50% don’t survive the first 4 years60% don’t survive the first 6 years(these numbers are for understanding only)


Fundamentals of EntrepreneurshipFundamentals of EntrepreneurshipFundamentals of EntrepreneurshipFundamentals of Entrepreneurship


Corporate EntrepreneurshipCorporate EntrepreneurshipCorporate EntrepreneurshipCorporate EntrepreneurshipCorporate Entrepreneurship: is the process in which an

individuals or group of individuals in an existing corporation create a new organization or instigate renewal or innovation within that corporation.

Advantage: leverage the parent corporation’s assets, market position, or other resources.

It involves creating new organization, product, service, or technology.


Social EntrepreneurshipSocial EntrepreneurshipSocial EntrepreneurshipSocial EntrepreneurshipSocial Entrepreneurship: involves the recognition, evaluation,

and exploitation of opportunities that create social value as opposed to personal or shareholder wealth.(not as commercial entrepreneurship that generates sales and profit)

Social value: refers to the basic long standing needs of society and has little to do with profits.

Long standing needs might include providing water, food, and shelter to those individuals in need.

Social value might also refer to more specific needs such as providing playground equipment to needy school districts or seeing-eye dogs for those who are blind.


InnovationInnovationInnovationInnovationInnovation: is the process of applying a new idea to the

improvement of organizational processes, products, or services.

Innovation is critical (important) to the long-run success of any organization

Without innovation, organizations tend to become less competitive and less desirable to customers as well as organization members.

Innovation starts with employees.


Linking Innovation and CreativityLinking Innovation and CreativityLinking Innovation and CreativityLinking Innovation and CreativityLinking Innovation and Creativity (The Relationship between Innovation and Creativity):

Innovation involves turning a new idea into new or improved processes, products, or services that promote the attainment of organizational goals.

The ideas upon which innovation based come from creativity in the organization, innovation is the process of turning those ideas into something tangible that benefits the organization.

Creativity Idea NewProductsServicesProcesses

Innovation Reality Org. Goals


Linking Innovation and CreativityLinking Innovation and CreativityLinking Innovation and CreativityLinking Innovation and CreativityAn organization that is creative but not innovate is characterized

by a fertile source of good ideas, but lacking the ability to make the ideas tangible.

An organization that is innovate but not creative is characterized by the ability to turn ideas into tangible benefit, but lacking good ideas to make tangible.

Managers should build organizations that are both creative and innovative.


Linking Innovation and CreativityLinking Innovation and CreativityLinking Innovation and CreativityLinking Innovation and Creativity

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-1 12.

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