Title: Entrepreneurship and

New Venture Opportunities

Manoj Joshi, Ph.D, Chartered Er. (Mech)
Professor- Strategy, Entrepreneurship & Innovation

OBJECTIVES:
1. Describe how entrepreneurship evolved from economic theory.
2. Explain entrepreneurship and the characteristics of entrepreneurs.
3. Discuss small business as a dimension of entrepreneurship.
4. Describe the concept of corporate entrepreneurship.
5. Explain how entrepreneurship has influenced economic development and
productivity, in recent years.
AN ENTREPRENEURIAL PERSPECTIVE
Entrepreneurship is one of the four mainstream economic factors: land, labor,
capital, and entrepreneurship. The word itself, derived from 17 th-century
French entreprendre, refers to individuals who were undertakers,
meaning those who undertook the risk of new enterprise. They were
contractors who bore the risks of profit or loss, and many early
entrepreneurs were soldiers of fortune, adventurers, builders, merchants,
and, incidentally, funeral directors.

Investment

Entrepreneur buys
farm produce at
certain prices

Transformation

Entrepreneur repacks
and transports farm
produce to market

Profit or loss

Entrepreneur sells food

Produce in city at
Uncertain prices

Cantillons Early View of Entrepreneurial Behavior

Priority 1

Priority 2

Priority 3

Delivered baked
bread is highestvalue use

Bread at bakery for

sale has high value

Milled flour for

baker has high
value

Intermediate steps in transformation

Bulk grain from
farmer has low
value
Grain in field
has very low
value

Priority 7

Priority 8
Mengers Model of Value-Added Transformation of4
Resources

Entrepreneurship as a Process
Schumpeter described entrepreneurship as a process and entrepreneurs as innovators who use the process to shatter the status quo
through new combinations of resources and new methods of commerce.
DEFINING ENTREPRENEURSHIP
The entrepreneur seeks, in Schumpeters words, to reform or revolutionize the
pattern of production by exploiting an invention or, more generally, an untried
technological possibility for producing a new commodity or producing an old one
in a new way, by opening up a new source of supply of materials or a new outlet
for products Entrepreneurship, as defined, essentially consists in doing
things that are not generally done in the ordinary course of business routine.
Ronstadts definition of entrepreneurship:
Entrepreneurship is the dynamic process of creating incremental wealth. This
wealth is created by individuals who assume the major risks in terms of equity,
time, and/or career commitment of providing value for some product or service.
The product or service itself may or may not be new or unique but value must
somehow be infused by the entrepreneur by securing and allocating the
necessary skills and resources.
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Exhibit 1-1 Characteristics of Successful Entrepreneurs

Self-confident and optimistic

Energetic and diligent

Able to take calculated risk

Creative, need to achieve

Response positively to challenges

Dynamic leader

Flexible and able to adapt

Responsive to suggestions

Knowledgeable of markets

Take initiatives

Able to get along well with others

Resourceful and persevering

Independent minded

Perceptive with foresight

Versatile knowledge

Responsive to criticism

Corporate
entrepreneurship,
sometimes
referred
to
as
intrapreneurship, is concerned with innovation that leads to new
corporate divisions or subsidiary ventures in established, larger firms.
The concept of entrepreneurship does not exclude managers in large
organizations from being entrepreneurs if they combine resources in
unusual ways to create innovative new products or sercices.
Defining Small Business
According to the Small Business Administration, a small business is
one that does not dominate its industry, has less than $10 million in
annual sales, and has fewer than 1,000 employees.
Family enterprises are locally owned and operated, often by one
person called a sole proprietor. Proprietors may have started their
businesses in an effort to supplement or replace family income.
Personal service firms rely crucially on unique skills of their
founders or key employees.
Franchises represent an extraordinary growth sector of the American
economy that is spreading overseas at an accelerated pace.
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Exhibit 1-2 Types of Small Business: Advantages and Disadvantages

Type

Advantages

Family enterprise

Offers economic independence;

promotes family unity
ccession
Personal service
Offers personal freedom and
use of talents and skills for
personal growth
Franchise

Franchisor provides most

business start-up needs with
relative income security
sor for services and

Disadvantages
Family liability for the
business; unsure suPersonal liability and
lack of secure income
without clear succession
Less freedom and adventure than other;
contracted to franchiroyalty lease payments
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SYNOPSIS FOR LEARNING

1. Describe how entrepreneurship evolved from economic theory.
2. Explain
entrepreneurship
entrepreneurs.

and

the

characteristics

of

3. Discuss small business as a dimension of entrepreneurship.

4. Describe the concept of corporate entrepreneurship.
5. Explain how entrepreneurship has influenced
development and productivity in recent years.

economic

CASE QUESTIONS/DISCUSSIONS/LEARNING:

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