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Approaches to Entrepreneurship
• Schools of entrepreneurial Thought Approach
• Process Approaches
Entrepreneurial Schools-of-Thought Approach
Environmental School of ThoughtFinancial School of ThoughtDisplacement School of Thought{Macro View
{Micro View
Entrepreneurial Trait School of Thought (People School)Venture Opportunity School of ThoughtStrategic Formulation School of Thought
Macro View(External locus of control)
The Environmental School of Thought• The Financial/Capital School of Thought• The Displacement School of Thought
1. Political Displacement
2. Cultural Displacement
3. Economic Displacement
The Micro View(internal locus of control)
• The Entrepreneurial Trait School of Thought• The Venture Opportunity School of Thought• The Strategic Formulation School of Thought
Ronstadt Views Strategic Formulation as a Leveraging of Unique Elements
• Unique Markets: mountain gap strategies• Unique People: great chef strategies• Unique Products: better widget strategies• Unique Resources: water well strategies
Process Approaches• Integrative Approach• Entrepreneurial Assessment
Approach• Multidimensional Approach
An Integrative Model of Entrepreneurial Inputs and Outcomes
Identify Opportunity
Assess and acquirenecessary resources
Implementation
Environmentalopportunities
Entrepreneurialindividuals
An organizational context
Unique business concepts
Resources
Inputs
The Entrepreneurial
Process
Number of events(and)
degree ofentrepreneurship
•A going venture•Value creation•New products, services•Processes•Technologies•Profits and/or personal benefits•Employment, asset, and revenue growth
Outcomes
EntrepreneurialIntensity
Innovation Proactive-ness
Risk taking
Entrepreneurial Assessment Approach
Typeof
Venture
Typeof
Entrepreneur
Typeof
Environment
Qualitative,Quantitative,Strategic, and
Ethical
ASSESSMENTS
Do the Results of the Assessments Make Sense Given:
Prior Experienceand Education
EarlyCareer
MidCareer
LateCareer
Stage of Entrepreneurial Career
Multidimensional Approach
Individual(s)
OrganizationEnvironment
Process
Entrepreneurial Management• The underlying theme of this book is the discipline
of entrepreneurial management:– Entrepreneurship is based upon the same principles,
whether the entrepreneur is an existing large institution or an individual starting his or her new venture single-handed. It makes little or no difference whether the entrepreneur is a business or a nonbusiness public-service organization, nor even whether the entrepreneur is a governmental or nongovernmental institution. The rules are pretty much the same, the things that work and those that don’t are pretty much the same, and so are the kinds of innovations and where to look for them. In every case there is a discipline we might call Entrepreneurial Management.
What is an entrepreneur?
• Two broad schools of thought– Attributes
• An entrepreneur is someone who possesses attribute X
– Behavioral/functional• An entrepreneur is someone who does Y
– So what are X and Y?
Attribute Approach
• Psychological Traits– Intelligence, extraversion, locus of control, need for
achievement, social competence, creativity, risk-taking
• Demographics– Social networks, age, marital status, parental
influences, work experience, education, income level, social status
• Are these attributes necessary?– Founding vs. Success
Behavioral/Functional Approach
• Cantillon• Knight
• Schumpeter
• Kirzner• Gartner• Stevenson
• Phelan
• One who works for uncertain wages • One who buys factors at certain prices and
sells them in the future at uncertain prices (1921)
• One who creates new products, processes, inputs, markets, or organizations (1911)
• One who is alert to profit opportunities• One who creates a new venture• One who pursues opportunities regardless of
resources currently controlled• One who seeks to earn entrepreneurial
profits
Exhibit 1.2
The Entrepreneurial Mind in Action
• Successful entrepreneurs have a wide range of personality types– Research has considered genetics, family, education,
career experience, etc., but no psychological model of entrepreneurship has been supported.
• Acquired skills are more important that specific inherent traits
Converging on the Entrepreneurial Mind
• Desirable and Acquirable Attitudes, Habits and Behaviors
• Six Dominant Themes1. Commitment and Determination
2. Leadership
3. Opportunity Obsession
4. Tolerance of Risk, Ambiguity and Uncertainty
5. Creativity, Self-Reliance, and Adaptability
6. Motivation to Excel
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