Ent Ldrship 1

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Entrepreneurial Leadership.

Dr Tariq uz Zafar.

BSc, MBBS, MSc (Hosp Mgt)

Head of Department

Healthcare Management

Hamdard Institute of Management Sciences,

HAMDARD UNIVERSITY, KARACHI.


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Definition: Individual who takes risks and starts something new:this includes 1) initiative taking 2) organising & reorganising social

& economic mechanisms to turn resources & situations topractical account; and 3) acceptance of risk or failure.

Origin: 17thcentury French: entreprendre: under taker, go-between. The undertaker undertook the risk of a profit or loss inan enterprise. Usually they paid for a license to collect taxes in anarea. If they managed to collect more than they paid for thelicense, then they ended up with a profit. The governmentbasically outsourced or contracted tax collection to the

entrepreneurs of the time.

Jean-Baptiste Say (19th century French economist): entrepreneur- one who undertakes an enterprise, especially a contractor,acting as intermediatory between capital and labour.

Class 1: The Nature and Importance of Entrepreneurs.


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1725: Richard Cantillon: (initial Def) person bearing risks is different fromperson supplying capital.

1803: Jean-Baptiste Say: separated profits of entrepreneur from profits ofcapital.1876: Francis Walker: distinguished b/w those who supplied funds and receivedinterest and those received profit from managerial capabilities.1934: Joseph Schumpeter: entrepreneur is an innovator and develops untriedtechnology.1961: David McClelland: entrepreneur is an energetic, moderate risk taker.1964: Peter Drucker: entrepreneur maximises opportunities.1975: Albert Shapero: entrepreneur takes initiative, organises some social andeconomic mechanisms, and accepts risk of failure.1980: Carl Vesper: entrepreneur seen differently by economists, psychologists,

business-persons and politicians.1983: Gifford Pinochet: INTRApreneur is an entrepreneur within an alreadyestablished organisation.1985: Robert Hisrich: entrepreneurship is the process of creating somethingdifferent with value by devoting the necessary time and effort; assuming the

accompanying financual, psychological and social risks; and receiving theresulting rewards of monetary and personal satisfaction.

Development of Entrepreneurship Theory & the term Entrepreneur.


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1934 Joseph Schumpeter: Concept of entrepreneur as an Innovator*. Theentrepreneur reforms/revolutionises production by exploiting an invention or anuntried technology to produce a new commodity, or, to produce an oldcommodity in a new way, open a new source of supply of materials or a new

outlet for products, by opening a new industry.*innovation: the act of producing something new.

To the economist, the entrepreneur enhances the value of resources, labour,materials and other assets, and also one who introduces changes, innovations

and a new order.To the psychologist, he is typically driven by certain forces: the need to obtainor attain something, to accomplish or to escape the authority of others.

To one business person the entrepreneur appears as a threat, an aggressive

competitor, while to the other business person he may be an ally, a source ofsupply, a customer or someone who creates wealth for others, as well as findsbetter ways to resources, reduce waste, and produce jobs that others are gladto get.


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Definition: Entrepreneurship. The process of creatingsomething new with value, by devoting the necessary time &effort, assuming the accompanying financial, psychological and

social risks and receiving the resulting rewards of monetary andpersonal satisfaction and independence.Entrepreneurship is the dynamic process of creating wealth.

Change from

present life-style

Work-environment.Disruption.

Form new

enterprise

Desirable:1. Cultural2. Subcultural3. Family4. Teachers5. PeersPossible:1. Govt2. Background3. Marketing4. Financing5. Role models

Decisions for a potential Entrepreneur.


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Change from Personal Life-style:

Difficult decision: requires courage & energy.R&D (technology) and Marketing specially good for new enterprises.Disruption: a strong negative force that is one of the main incentives to start anew enterprise. Retirement, re-location, being fired: the individual feels thatforming a new enterprise is both desirable & possible.

Desirability of New venture formation:

Results from an individuals culture, sub-culture, family, teachers and peers. Aculture that places a high value on being ones own boss, having individual

opportunities, being a success, making money (which are all aspects ofentrepreneurship) will give rise to more venture formations than a culture thatdoes not.Subcultures (e.g., Silicon Valley, California; Bangalore, India) supportive ofnew ventures exist within cultures.

Very often parents who valued independence can be found in the family ofindividuals who desire to form new ventures.Teachers and schools offering exciting courses in entrepreneurship andinnovation encourage individuals to form new companies.Peers are very imp in starting a new company: an area with a meeting place

to enable sharing of entrepreneurial ideas and experiences encourages newenterprise.


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Possibility of new venture formation:

A Govt supportive of new ventures, necessary educational background,previous business experience, marketing and role models all play a part in anew venture. Entrepreneurs are not born: they develop.Finally, financial resources must be readily available. Most start-up money fornew companies comes from personal savings, credit, friends and relatives.However, seed-money in the form of risk-capital plays an essential role in thedevelopment and growth of entrepreneurial activity.TYPES OF START-UPS

TYPE OF START-

UP

OWNER-

SHIP

GROWTH (5-10 YEARS) SOURCE OF

CAPITAL

Lifestyle firm Private Modest.

30-40 employees.

$2 million

Personal, limited

Foundationcompany

Private Lays foundation of new business area.40-400 employees.

$10-20 million

Private investors

High-potentialventure (gazelles)

ReceivesgreatestPublic

interest

Greatest investment interest.

500 employees.

20-30 million

Venture capital


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Documents

Ent Ldrship 1