FEATURE
PAPER
The Entrepreneurial Process: The Interplay of Social Competence,
Opportunity Recognition and Success an an Entrepreneur
The
following paper was presented at the 2007 USASBE/SBI Conference.
It was written by Gretchen M. Bender
and TL Hill of Temple University.
Abstract
Entrepreneurs and
their decision-making process provide an intricate and complex
problem for understanding decision making. Educators are
actively attempting to map success and failure
with traits and skills found in entrepreneurs. The complexity is aggravated by
how the entrepreneur uses social skills and social capital,
and their perception of themselves and of the
business world. Various models exist for analyzing the decision-making process,
but this paper proposes a cyclical model that examines the
interplay of certain concepts. Insights from various
applications of this model will significantly add to mapping entrepreneurial
skills, traits, and
behaviors to financial success in business.
Executive Summary
This paper presents a framework
and methodology for obtaining information that is potentially critical
to understanding an entrepreneur’s success. The business community should
be invested in discovering and understanding the reasoning behind an
entrepreneur’s decisions because it is
powerful information that can aid decisions in every aspect of business.
The implications of this study are vast because the findings can be applied to
individual influences on business decisions involved in the entrepreneurial
decision-making process. By
identifying pitfalls and understanding the process behind decisions, and by making
the process scientific, we can map success or failure to key personality
traits. Investors can educate
themselves regarding the type of entrepreneur they are financially backing, and
identify personality aspects that are too risky or may lead to venture
failure. Having this context in which
to evaluate business ventures can help mitigate risk.
The approach proposed here provides a framework in which data on entrepreneurs
can be applied to mapping success and failure with certain traits, behaviors,
and perceptions. It also suggests a
cyclical interplay between all factors involved in the decision making process
and the outcome. By applying qualitative data found through interviews
and research of certain ventures and
outcomes, we may begin to show how necessary this approach is for financial success.
This proposal, however, raises the challenge of engaging entrepreneurs
in this approach, and having
them integrate it into their businesses. It raises questions about how to provide
information that is timely and relevant in a useful manner, and also
about the limitations of this approach.
Read
the Entire Paper...
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Establishing Corporate Entrepreneurship in the Organization
An organization desiring to establish and entrepreneurial environment must implement a procedure for its creation. Although this can be done internally, frequently it is easier to use someone outside to facilitate the process. This is particularly true when the organization's environment is very traditional and has a record of little change and few new products being introduced.
The first step in this process is to secure a commitment to corporate entrepreneurship in the organization by top, upper, and middle management levels. Without top management commitment, the organization will never be able to go through all the cultural changed necessary for implementation. Once the top management of the organization has been committed to corporate entrepreneurship for a sufficient period of time (at least three years), the concept can be introduced throughout the organization. This is accomplished most effectively through seminars, where the aspects of corporate entrepreneurship are introduced and strategies are developed to transform the organizational culture into an entrepreneurial one. General guidelines need to be established for corporate venture development. Once the initial framework is established and the concept embraced, corporate entrepreneurs need to be identified, selected and trained. This training needs to focus on identifying viable opportunities and their markets and developing the appropriate business plan.
Second, ideas and general areas that top management is interested in supporting should be identified, along with the amount of risk money that is available to develop the concept further. Overall program expectations and the target results of each corporate venture should be established. As much as possible, these should specify the time frame, volume, and profitability requirements for the new venture, as well as the impact of the organization. Along with entrepreneurial training, a mentor/sponsor system needs to be established. Without sponsors or champions, there is little hope that the culture of the organization can be transformed into an entrepreneurial one.
Third, a company needs to use technology to make itself more flexible. Technology has been used successfully for the past decade by small companies that behave like big ones. How else could a small firm like Value Quest Ltd. compete against very large money management firms, except through a state-of-the-art personal computer and access to large data banks? Similarly, large companies can use technology to make themselves responsive and flexible like smaller firms.
Fourth, the organization should be a group of interested managers who will train employees as well as share their experiences. The training sessions should be conducted one day per month for a specified period of time. Informational items about corporate entrepreneurship in general - and about the specifics of the company's activities in developing ideas into marketable products or services that are the basis of new business venture units - should be well publicized. This will require the entrepreneurial team to develop a business plan, obtain customer reaction and some initial intentions to buy, and learn how to coexist within the organizational structure.
Fifth, the organization needs to develop ways to get closer to its customers. This can be done by tapping the database, hiring from smaller rivals, and helping the retailer.
Sixth, an organization that wants to become more entrepreneurial must learn to be more productive with fewer resources. This has already occurred in many companies that have downsized. Top-heavy organizations are out of date in today's hypercompetitive environment. To accommodate the large cutbacks in middle management, much more control has to be given to subordinates at all levels in the organization. Not surprisingly, the span of control may become as high as 30 to 1 in divisions of such companies. The concept of "lean and mean" needs to exist if corporate entrepreneurship is to prevail.
Seventh, the organization needs to establish a strong support structure for corporate entrepreneurship. This is particularly important since corporate entrepreneurship is usually a secondary activity in the organization. Since entrepreneurial activities do not immediately affect the bottom line, they can be easily overlooked and may receive little funding and support. To be successful, these ventures require flexible, innovative behavior, with the corporate entrepreneurs having total authority over expenditures and access to sufficient funds. When the corporate entrepreneur has to justify expenses on a daily bases, it is really not a new internal venture but merely an operational extension of the funding source.
Eighth, support also must involve tying the rewards to the performance of the entrepreneurial unit. This encourages the team members to work harder and compete more effectively since they will benefit directly from their efforts. Because the corporate venture is a part of the larger organization and not a totally independent unit, the equity portion of the compensation is particularly difficult to handle.
Finally, the organization needs to implement an evaluation system that allows successful entrepreneurial units to expand and unsuccessful ones to be eliminated. The organization can establish constraints to ensure that this expansion does not run contrary to the corporate mission statement. Similarly, corporate ventures that fail to show sufficient viability should not be allowed to exist just because of vested interests.
| Robert
D. Hirsch, Michael P. Peters, Dean A. Shepherd. Entrepreneurship
7th Edition.
2008. McGraw-Hill/Irwin. p75-76. |
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CONFERENCES
ASU
|
| Who: |
Arkansas
State University
|
| What: |
Identity
Solutions Symposium & Workshop
|
| Where: |
Jonesboro,
Arkansas, USA |
| When: |
February
21-22, 2007 |
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IIEE
|
| Who: |
Illinois
Institute for Entrepreneurial Education
|
| What: |
2007
Youth Entrepreneurship Conference
|
| Where: |
Lincolnshire,
Illinois, USA |
| When: |
May
3-5, 2007 |
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N/A
|
| Who: |
Alfred
University College of Business, Penn State University-Altoona
Department of Business and Engineering, & University
of Guam School of Business and Public Administration
|
| What: |
Doing
Business in the Global Economy
|
| Where: |
Marriott
Hotel Resort and Spa, Tumon, Guam |
| When: |
March
5-6, 2007 |
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APBO
|
| Who: |
Asia/Pacific
Business Outlook
|
| What: |
Asia
Pacific Business Outlook 2007 Conference
|
| Where: |
University
of Southern California
Los Angeles, California, USA |
| When: |
March
26-27, 2007 |
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ICSB
|
| Who: |
International
Council for Small Business (ICSB)
|
| What: |
World
Conference
|
| Where: |
Turku,
Finland |
| When: |
June
13-15, 2007 |
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CALLS FOR PAPERS
AA
|
| Who: |
Allied
Academies |
| What: |
2007
International Conference
|
| Where: |
Jacksonville,
Florida, USA |
| When: |
April
11-14, 2007 |
Submission
Deadline:
March 1, 2007
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CNU
|
| Who: |
Christopher
Newport University
|
| What: |
"Truth & Consequences" Exploring
Economic Development from Entrepreneurship to Relationship
|
| Where: |
Newport
News, Virginia, USA |
| When: |
September
28-30, 2007 |
Submission
Deadline:
April 1, 2007
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AMA
|
| Who: |
Atlantic
Marketing Association
|
| What: |
Atlantic
Marketing Association Annual Meeting
|
| Where: |
New
Orleans, Louisiana, USA |
| When: |
September
26-29, 2007 |
Submission
Deadline:
April 17, 2007
|
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FBD
|
| Who: |
Federation
of Business Disciplines
|
| What: |
Annual
Meeting
|
| Where: |
Hyatt
Regency, Houston, Texas, USA |
| When: |
March
4-8, 2008 |
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