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Department of Electrical and Computer Engineering

Electronics and Communication Unit

Assignment: Entrepreneurship for Engineering

Prepared by:



Submitted to: H/kiros.S Submission date: 11/04/2013

1. The Risk Management Framework

"Risk Management" is the art and science of thinking about what could go wrong, and what should be done to mitigate those risks in a cost -effective manner. In order to identify risks and figure out how best to mitigate them, we first need a framework for classifying risks. All risks have two dimensions to them: likelihood of occurrence, and severity of the potential consequences. These two dimensions form four quadrants, which in turn suggest how we might attempt to mitigate those risks:

No matter what the sizes are, companies must have an approach to risk management since they can be easily managed when identified. To protect a business against risk, an entrepreneur needs to do the following: 1. Stop activities associated with risk: Activities that brings about risks to an organization need to be stopped. For instance, if a business fund is not separated from a personal fund, the temptation of using the company's fund for personal expenses will always be there. Quick and unilateral decisions of top members of the management most times pose great risks to the company. 2. Spread the risk: there is no need for the risk to be concentrated on your desk. Spread the risks in form of contracting out some projects/services with a performance bond signed by the contracted firm can help. Sometimes, selling out products on credit to trusted customers can help to minimize the risk of obsolesce and high inventory cost. 3. Reducing risk through better Introduction Depending on the type of project youre involved with you could have several different risk management models to consider as the project manager. However, the over-riding issue regarding any risk management exercise that you undertake or supervise is, having established a risk within the project are you prepared to make the decision whether to accept or reject the risk and then accept responsibility for your decision? If you are, then you are displaying one of the qualities necessary for a successful project manager, namely assessing risks and taking your chances with them. Of course an inherent risk in any aspect of a project shouldnt result in you feeling isolated in having made your decision, in identifying the risk it then becomes part of your job to ensure that resources are

deployed to minimize it. What is meant by a risk management model?

Impact Risk management Action


Considerable Management required Risks may be worth acceptable with monitoring

Must manage And monitors risks Management effort Worthwhile

Extensive management essential Management effort required



Accept risks

Accept , but monitor risks

Manage and monitor risks


Medium Likelihood


Use a grid like this to help assess just how much of a risk something might be. The situation with risk management is very different. It should not need stating that the likely risks for someone working in healthcare will be significantly different to someone working in construction, and as different again to someone else working in finance. So, imagine that you are the project manager building a new hospital you would need access to and knowledge of all three those models. The simple fact is that risk management models are created to fit each unique project that arises. So, as the project manager you must be prepared to create a new model when planning the project and make a provisional assessment of the risk. The adjoining grid might help you in assessing those risk management actions. When doing this you will find that there are very few internationally accepted risk management models. The vast majorities of risk management models is known as Limited

Models and are really exclusive models to companies and groups with a special interest. 4. Insuring against risk if possible: a company need to insure against damage brought about by fire and natural disasters. 5. Apply improved technology: if risks will be averted, modern techniques will be applied in the operation and service provision of any company. This will enhance the business supply chain management hence making service provision to be excellent. Managing some aspects of our businesses against risks takes automation. This will eliminated a lot of human errors associated with the risks. To be able to reduce risks in planning, monitoring and evaluation, software tools will be a veritable instrument.



This model is common among academicians and those with who gained expertise in the industry. Many corporate executives, after retiring from their regular jobs also take the consulting route, either directly or by taking on director roles at different companies. Many IT professionals, especially those with niche skills and/or certifications also tend to move on to consulting roles.

This model is common among those want to experience entrepreneurship part-time without taking the risks associated with full-time entrepreneurial activities. This model is not really new. Opportunities with industries that use their expertise to implement the research ideas fine-tuned in academia. Some professionals take the public speaking or column writing route where they try to publish their ideas outside the confines of their organizations.


Model applied to professionals and others working in the corporate world or for regular employers. They realize that they have a million dollar idea that they can capitalise on. Employees take their new/innovative idea to the employer with a suggestion to implement it on the job. When the ideas are not taken up by the management, they contemplate the entrepreneurial route if they feel strongly about it


Individuals who do not want to continue in the corporate world decide to start their own venture. Entrepreneur approaches a corporation. Takes on the responsibility of running his business using the brand and marketing support from the enterprise.

3. Negotiation methods

The first step in principled negotiations is to identify the interests involved in an issue area as opposed to dealing with positions of the negotiating parties. This distinction is an important one in the integrative school. Positions represent the stated stances and objectives of the negotiating parties, and are the focus of distributive bargaining whereas interests are the underlying reasons that explain peoples positions. Integrative approaches maintain that to negotiate efficiently negotiators should go beyond positions and seek to satisfy true underlying interests. In so doing, negotiators can approach issues of mutual concern with greater creativity, understanding and flexibility. Interests may be harder to identify than positions and may be unspoken or even hidden behind a partys stated de mand or position. Often parties may not have carefully defined their own underlying interests in a particular issue for themselves. 3.2 People Another element of integrative strategies involves People. In Getting to Yes, Fisher and Ury argue that parties in a dispute often forget that the other side consists of people who, just like themselves, are subject to the human frailties such as emotions, potentials for misunderstandings and mistaken assumptions. Another rule for the principled negotiator is therefore to separate the people from the problem. This means finding a way for solving a problem without getting distracted by personal elements, and coming to an agreement in a manner that will preserve the relationship. The better the relationship, the more cooperation each

side will get from the other, the more information can be shared comfortably, and the higher the prospects for arriving at a win- win solution.

3.3 Alternatives
In order to set realistic goals, negotiators must start by considering certain fundamental questions: where will each side be if no agreement is reached? What alternative solutions are available for meeting your goals if you cannot count on the cooperation of the other side? As seen earlier, attention to alternatives is an important feature of distributive as well as of integrative based approaches. However, in contrast to the emphasis that is placed on concepts such as reservation points and bottom lines in positional approaches to bargaining, integrative approaches tend to take a slightly more nuanced view of the role of alternatives in negotiation. Fisher and Ury argue that it is crucial for both parties to know their Best Alternative to a Negotiated Agreement (BATNA) both before and throughout all stages of a negotiation. Fisher and Ury argue that having a resolute bottom line can come at high costs. By its nature, a bottom line can be inflexible and onerous. It can prevent creative thinking and lock parties into positions that may prevent them from coming to a favorable solution. A BATNA provides negotiators with a measure of flexibility that is lacking from a bottom line. Unlike bottom lines, BATNAs change when negotiators perceive a change in their alternatives. When negotiations are viewed in terms of BATNAs, as opposed to positions or bottom lines, the negotiation can continue even when figures are rejected because negotiators are freer to continue to explore additional possible solutions. Moreover, because negotiation is viewed as a joint decision making process in the integrative approach, there is always a possibility of either side reconsidering their position in

mid-stream and deciding to pursue a different course than originally planned. Negotiators who fail to evaluate (and re-evaluate) their alternatives to an agreement both before and during the process may therefore also be in danger of rushing to an agreement without having fully considered their or the other partys alternatives, leading one side to end up with a deal that should have been rejected.
3.4 Identifying the options

Once parties have begun to build relationships and to exchange information in order to gain a clearer understanding of the interests at stake, the parties should turn to the task of generating options. In negotiations, options are possible solutions to a problem shared by two or more parties. In integrative bargaining, options represent possible ways of meeting as many of both parties interests as possible. As the story of the orange reveals, when two people (or two companies or two nations) get locked into solutions or habitual patterns of thinking, they easily become blinded to the possibilities that a little creative thinking might reveal. Because the process of identifying options, or possible solutions to a problem, promotes creative thinking and expands problem-solving capabilities, it is as critical to the negotiation process as identifying underlying interests. Generating options through techniques such as brainstorming a technique which involves inviting all parties to list any idea that comes to mind without criticizing or dismissing those ideas helps to encourage creative thinking about a problem and increases the chances that the parties involved will formulate a win-win solution.
3.5 Criteria/Legitimacy

When bargaining over positions, negotiators create a situation in which one side must concede his original claim in order for the negotiations to succeed. Positional bargaining is bargaining in which two sides lock into incompatible positions.

According to Fisher and Ury, this can lead to a contest of wills, bitterness, and deadlock. They maintain that when negotiations are approached in this way, even when a deal is made, it may come at a high cost. For example, positional bargainers may finally arrive at a solution that appears to split the difference between their two positions, even though a more rationally composed solution would have suited both parties interests better. Lastly, agreements that are concluded in this manner may prove tenuous to implement if parties later conclude that the agreement called for a solution without legitimacy. The authors maintain that there is a better way to approach the negotiation process. This involves invoking objective criteria as part of the negotiation process.
3.6 Commitments

A negotiated settlement is only enduring if all parties honor the commitments that they make. Of course, those that fail to follow through on their promises stand to suffer a loss of integrity, be subject to the resentment of the other side, and risk that their partner in the negotiations (and possibly others outside of the deal as well if word of their reputation escapes) will refuse to deal with them in the future. No party to a negotiation should intentionally create commitments that they do not intend to honor. Fisher and Ertel (1995) argue that during the negotiating process, parties should think carefully about the kind of commitments they should be prepared to make. Are they capable of honoring them? How broad should commitments be? When will each party be expected to make good on their promises? One way to build trust is to create a commitment structure that can be implemented in stages. Parties may be more willing to make a deal with an opponent when there is an opportunity to demonstrate that each side is honoring their commitments along the way. Once trust is broken, how can parties recover? Gestures are one way through which a party who has lost integrity with another

party due to past bad-faith actions may begin to compensate for earlier grievances. For example, a party who failed to make payment on a contractual obligation may need to offer advance payment on a new contract in order to convince a poorly treated trading partner that they are worth doing business with in the future.
3.7 Communication

Negotiation is only possible through communication. Fisher and Ury maintain that feeling heard is also a key interest for both sides in a negotiation. Good communication can change attitudes, prevent or overcome deadlock and misunderstandings and help to improve relationships. Moreover, good

communication skills are essential to cogently relay your message, and to thoroughly understand the message of the other side. In addition, integrative approaches stress the importance of sharing information as a means of uncovering interests and of helping parties to explore common problems or threats. Still, negotiators are frequently hampered in their roles by common communicational errors or inefficiencies. For example parties may concentrate only on their own responses and forget to listen to what the other side is saying. Listening provides important information about the other side and demonstrates that you are being attentive to the other sides thoughts, and respectful of their concerns. To improve communication skills, Fisher and Ury recommend active listening. This means listening not to phrase a response, but to understand [the other party] as they see themselves. Asking questions, paraphrasing without necessarily agreeing, and constantly acknowledging what is or is not said are good ways to demonstrate that you are listening actively.

4. Time management model As time constraints have been a potential threat to the successful completion of the start-up period effective time management should be an important consideration of the start-up entrepreneur. This paper gives a brief overview of the concept of time management. The focus of this paper is on the individuals perceptions of time control, rather than external aspects of temporality. It specifically discusses strategies which are likely to lead to reduced time stress and increased perceptions of time control for the novice nascent entrepreneur. Time is arguably our most valuable resource, being directly related to all forms of human activity. However, unlike many other resources it cannot be stored for later use. Given that time must be spent (in one way or another), the central issue becomes how we can use it most effectively. Strategies and techniques that purport to enhance the effective use of time are typically discussed under the heading of time management. Although the accepted term is time management, selfmanagement better represents the construct. Time management concerns the processes and outcomes of strategies that people use to manage themselves in relation to time, rather than the management of time per se. That said, the term time management is widely used and understood so will be adopted in this article.

Three main factors which contribute to effective time management: setting goals and priorities; mechanics (including making lists and task time estimation); and preference for organization. These three factors all contribute to a persons perceived control of time. these three factors all contribute to a persons perceived control of time. The important part of this model is that it is perceived control of time (as opposed to some objective time usage type of measure) that results in the positive outcomes cited on the right-hand side of the figure below.
Getting Organized (Creating a week's plan)

STEP 1: List Your Activities STEP 2: Create a Week's Plan STEP 3: When in doubt, prioritize NOTE: Use the steps listed here to create a schedule for a typical week.

List Your Activities

Make a list of everything you need to do during a typical week. Include ALL activities (not just school assignments). List activities that come at fixed times and cannot be changed (e.g., classes, work responsibilities, doctor's appointment). List class assignments and meetings (e.g., study groups, meeting with your advisor, etc.). List recreation and social activities.
Create a Week's Plan 1. Take the list you made of your activities and the day & time.

2. Write these activities down on a week's calendar. 3. Write down any related activities, for example, reading 2 chapters for history or writing a biology lab report.
Prioritize Your Activities (Arrange in order of importance & urgency)

What do you do if you find that you have less time than you had anticipated for your activities? Should you just not do some of the things? Or should you cut out a little time from each activity? What you need to do is PRIORITIZE. In other words, you need to determine the importance and urgency of each activity and use this information to revise your schedule (week's plan). In some cases, you may decide to postpone an activity that is not urgent, or perhaps you will spend less time on an activity that is not so important. To help you prioritize your schedule, use the table below. Write the appropriate number (1, 2, 3 or 4) after each activity. [Note: "Urgent" means that the deadline or due date is coming up very soon; "Not Urgent" means that the deadline is a while away.] Important and Urgent

Important but Not Urgent Not important but Urgent Not Important or Urgent
You should focus on activities with a number 1, giving them the time and Attention that their importance and urgency requires. You may need to make a decision about activities with a number 2. If they are important but not urgent, you may be able to spend less time on them or postpone them temporarily. But you don't want to forget about them. For activities with a number 3, you may decide to eliminate them because, even though they are coming up very soon, they aren't really that important. Finally, if you really are short on time, you will probably want to eliminate activities with a number 4.