Term
| The Principles of Entrepreneurship |
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Definition
Gain entrepreneurship success thru swiftness and experimentation.
-Rapid introduction and continuous improvement of new products, services and business types.
-High risk because typically involved introducing new products, new processes and/or new business models. |
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Term
| Swiftness and Experimentation |
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Definition
Intense initial market monitoring
Rapid Variation
Fast Reintroduction
Follow-up Monitoring |
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Term
| Swift Entrepreneurial Action |
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Definition
| Move from step to step during their problem solving and opportunity taking without delay between steps and with fast paced thinking and action. |
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Term
| Enhance the Determining Factors |
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Definition
-Venture experience
-Related industry experience
-Involvement w/ experts
-Creativity Enhancement Programs
-Goal-Setting Enhancement Programs |
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Definition
-Creativity
-Tenacity
-Entrepreneurial Self-Efficacy
-Goal Setting |
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Definition
-Swiftness
-Experimentation |
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Definition
-Industry Dynamism
-Regional Munificence
-Organization Resources |
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Term
| Importance of Entrepreneurship |
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Definition
Creates wealth thru conversion of technological and organizational innovation into valued products and services.
Motivates established competitors to improve their products and processes.
*Those who found and operate new successful ventures and new small businesses are important in terms of their impact upon absolute GNP and employments, and their POTENTIAL for social and economic impact.* |
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Term
| Definition of Entrepreneur |
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Definition
Early stage entrepreneurs - the people who start these high potential high growth companies are involved in a process of discovery, evaluation and exploitation of opportunities that will introduces new products, services, processes, ways of organizing, or markets.
*Venture success and venture growth* |
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Definition
-Entrepreneur's personal satisfaction
-Rates of commercialized innovation
-Rates of improvement in market efficiency |
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Definition
*Best indicator of entrepreneurship success
-Reflects personal and market gains
-Measurable and well-understood |
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Term
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Definition
-Exploration
-Opportunity recognition
-Evaluation
-Start-up
-Emergence
Begins with exploration for ideas and proceeds thru opportunity evaluation and recognition to start-up.
Start-up is followed by emergence (revenues and employees), and, finally, early stage growth. |
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Term
| Entrepreneurship Disruptive Change |
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Definition
*Face extreme conditions because work involves disruptive change:
Create new markets where none existed; enter established markets with new products; displace other companies/employees; little or no info available to guide expectations
-Unless intellectual property is protected, competitive advantages may be temporary as competitors with valuable substitutes emerge. |
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Term
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Definition
Frequently forced to accept capital from financiers who negotiate from aggressive and powerful positions and who minimize investors' risk by:
-Setting high goals and offering just-in-time cash. |
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Term
| Starting, running and making a successful business |
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Definition
-Formulating the basic vision
-Finding investors
-Hiring competent people
-Finding a suitable location
-Making the product
-Finding customers
-Building a sales force
-Beating out competitors
-Dealing with lawsuits
-Government regulations
-Overcoming setbacks at every phase |
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Definition
*Function in midst of high uncertainty, urgency, surprise, complexity, personal risk and resource scarcity.
-High speed continuous improvements are required to replace continuous erosion of competitive advantages.
-High uncertainty increases value of fast decision making and fast action
-Minimal resources drive to experiment with vigilant monitoring and continuous adaptation to gain and maintain competitive advantages. |
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Definition
*Market acceptance or rejection full of important information, speeds the search for the right products, services, markets and organization forms ahead of competitors.
-Early action can generate information, dynamic hearing and knowledge ahead of rivals.
-Unexpected opportunities sometimes emerge but only if action is started
-Swiftness increases number of trials that can be attempted within time and resource constraints, thereby providing more info and narrowed confidence intervals. |
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Term
| Principle 2 - Experimentation |
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Definition
Involves repeatedly conducting trials or tests to discover something that is not known.
*Involves continuous searches for betterment with repeated goal-driven revision*
-In new venture context: appears as actions toward goals that will involve new (or better) products, services, processes, or organizations. |
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Definition
Reflects more random set of variables for each trial.
-Both experimentation and trial&error suggest repeated cycles of action with monitoring and revision or reformation |
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Term
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Definition
Extemporaneous composition and execution of novel actions.
-Monitoring and revision are not included in conceptions of improvisations
-Follow-up is implicit because improvisation is short-term, real-time learning
*"Bricolage" similar to improvisation but with resources strictly limited to those that are "available" |
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Term
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Definition
Most useful for:
-Information gathering
-Learning
-Resource conservation
-Opportunity taking when follow-up involves close monitoring of response from markets, employees, and stakeholders |
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Term
| Why is Experimentation useful? |
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Definition
-Reveals information about potential markets where no markets exist
-Reveals customer reactions to disruptive product, service, and business model introductions in existing markets.
-May enable recovery from poor past decisions or missed opportunities
-Exposes competitors' "barriers to entry" and guides the rapid changes that are required
-May also expose opportunities to build new products or offer new services |
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Term
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Definition
-Creativity
-Tenacity
-Self-Efficacy
-Goal Setting |
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Term
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Definition
-Intellectual Inventiveness
-Ability to generate high quality novel ideas that meet the needs of a task or context
*Those who have high creativity challenge the status quo and seek alternative ways to solve problems and gain advantage from opportunities*
-High growth entrepreneurs need creativity to commercialize their products and service their customers successfully because creativity enables option generation
-High creativity speeds the conception and description of variant paths which may speed market trials - avoids delays as they search for options
-Surprise barriers to success emerge and high creativity entrepreneurs are better able to quickly see novel ways to to solution. |
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Term
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Definition
Perseverance: trait that involves sustaining goal-directed action and energy even when faced with obstacles - Tenacious people do not give up when things go wrong.*
-Identified as archetypical trait because business start-up process involves confrontation of formidable barriers to market entry.
-Important for high growth entrepreneurs because they must be able to conduct extensive, even continuous, experiments: must persist with search for options and solutions and continue market monitoring after institute a trial. |
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Term
| Where does one draw the line between productive tenacity and foolish persistence? |
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Definition
One common type of foolish persistence is to stick to a strategy that worked in the past, even in the face of mounting evidence that the competitive environment is radically changing
-One guideline is that an entrepreneur should keep close tabs on the outside world when deciding whether or not to retain or abandon a strategy or product. |
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Term
| Entrepreneurial Self-Efficacy |
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Definition
Must be confident that they have everything that they need to perform a task - confidence is reflected in "self-efficacy," the belief or degree of confidence that someone has the ability to successfully perform a task
-Self-efficacy enhances swiftness and experimentation because both behaviors will only occur when entrepreneurs are sufficiently confident that they can move quickly and successfully. When they have confidence, they can, with sufficient trials, find market acceptance. |
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Term
| Definition of Entrepreneurial Self-Efficacy (ESE) |
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Definition
| The strength of a person's belief that he or she is capable of successfully performing the various roles and tasks of entrepreneurship. |
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Term
| Five Factors of Entrepreneurial Self-Efficacy (ESE) |
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Definition
-Innovation
-Risk Taking
-Marketing
-Management
-Financial Control |
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Term
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Definition
| Shown that specific, difficult goals lead consistently to higher performance than vague and/or easy goals. Goal setting works most effectively when people are committed to their goals and have feedback regarding their progress in relation to their goals. |
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Term
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Definition
Help motivate people to use suitable task strategies or to search for suitable strategies, if they lack the knowledge they need.
-sufficient info is not available to reduce uncertainty about market performance or financial returns, so those who set specific, difficult growth goals choose strategies and related behaviors that yield more info faster.
-Firm strategies in large orgs may be more complex, thus more prone to error. Complex strategies are also less easily and less rapidly changed when problems occur and decision makers may not have the knowledge required to achieve the goals. |
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Term
| Industry Dynamism (Moderating Factor) |
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Definition
*Instability or Turbulence*
Refers to level of environmental PREDICTABILITY
-Is manifested in the variance in the rate of market and industry change, and the level of uncertainty about forces that are beyond the control of individual businesses
-Dynamic markets challenge large cumbersome companies when product revision is required
Many dynamic markets caused by new technologies. |
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Term
| Regional Munificence (Moderating Factor) |
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Definition
*Capacity*
Refers to local environment's support for organizational growth - manifested in high industry sales growth.
-Environments provide a reserve against competitive and environmental threats thru availability of sufficient financing, intellectual support from institutions and developed human resource markets. |
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Term
| Organization Resources (Moderating Factor) |
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Definition
Almost always beneficial
-The greater the internal resources of a venture, the greater the benefit from positive entrepreneurial behavior |
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Term
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Definition
Brief treatment of learning experiences points to the importance of venture and industry experience, as well as value of building relationships with expert models.
-Also suggests that creativity-building and goal setting educational programs may enhance one's creativity and inclination to set effective goals.
-Wannabe entrepreneurs should work for a new venture or entrepreneurial company and should focus on the pace and process of product and service development. |
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Term
| Improving your Creativity |
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Definition
Most professionals employ group exercises involving:
-analogies
-brainstorming
-cross-fertilization
-devil's advocacy
-lateral thinking
-vertical thinking
-solitary thinking |
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Term
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Definition
Extended exposure to successful others who are more tenacious may raise a person's intention to be more tenacious
-Motivation thru goal setting, external rewards and punishment or increased self-efficacy may inspire |
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Term
| Improving your Entrepreneurial Self-Efficacy |
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Definition
1. Improve by gaining relevant experience
-Often is developed from childhood experiences in which one undertakes independent projects, masters difficulties and succeeds.
-May also stem from one's own awareness of one's own cognitive ability
*Most valuable experiences are related to time spent starting a new company or with others who start new companies*
-Thru prior ventur experience, entrepreneurs' mental structures about new venture processes are continuously used, revised and reused. |
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Term
| Improving your Entrepreneurial Self-Efficacy |
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Definition
2. Gain industry experience
-Industry knowledge and related industry networks are important assets in specifying the new venture's need for resources, finding those resources, selecting partners and structuring more flexible resource contracts. |
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Term
| Improving your Goal Setting |
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Definition
*Motivates behavior so Improves the pace of action and the rate of experimentation in new ventures*
-Those who aspire to venture success should devote their time, money and other resources to personal and organizational goal setting. |
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Term
| Improving your Goal Setting |
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Definition
Solitary entrepreneur should maintain timeline with goals - will have important tool for personal motivation and for attraction of financial and human resources.
-As venture team is formed, goals/timeline should be formalized, communicated and updated to include team members' views about important indicators of success |
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Term
| Improving your Goal Setting |
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Definition
Important to develop compensation schemes that motivate team members on the basis of performance goals
-As org develops, range of goals should be expanded to include:
-produce improvement
-product quality
-market penetration
Range of goal-based rewards should be expended to include:
-recognition
-increased non-cash benefits
-regular team/employee sessions should address employee knowledge about goals and associated rewards. |
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Term
| Management by Objective (MBO) |
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Definition
Seminars based in goal theory - offer guidance about the types of goals and rewards that are most effective
-Early MBO programs failed because managers set their own goals and judged only on success
-To prevent this, goals below CEO level must be assigned and/or stretch goals should be encouraged with the proviso that goal failure will not be punished as long as the manager has made a creative effort to improve. |
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Term
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Definition
Even high growth entrepreneurs have periods when urgency is not great - when sufficient time and resources are available for a thorough and comprehensive information search and analysis, and swiftness is not important.
Downtime can be used to:
1. Gain advance learning about how to find the needed explicit info
2. Find the best way to conduct the evaluation of new ideas |
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