Entrepreneurship & SMEs Chapter 2 The Entrepreneurial & Intrapreneurial Mind

An American pharmaceuticals magnate, philanthropist, and Major League baseball o ner pharmaceutical compan! "edridden #or a !ear at age $$ %au##man or&ed as a pharmaceutical salesman until $'()

*ormed Marion Laboratories ith a +(,))) in,estment, operating it initiall! out o# the basement o# his home E ing %au##mans curiosit! about the orld, his attention to detail, and his o n li#e e-periences #ormed the basis #or his philanthrop!. /e established the E ing Marion %au##man *oundation In $'00. E ing %au##man as the protot!pical entrepreneur, ho started ith #e resources, gre his #irm into a multibillion1dollar compan! o,er #our decades, and did so in an ethical and compassionate manner. /e e-perienced #irst hand the re ards o# education and entrepreneurship #or himsel#, his #amil!, his or& associates, and his communit!. /e belie,ed philanthrop! could and should promote entrepreneurship and education as means to impro,e li,es. 2eople in the compan! sharing plan ere called associates, not emplo!ees1 o##ered a pro#it

Mr. %, philosophies re arding those ho produce & allo ing decision ma&ing through out the 3451 concepts hat is no called intrapreneurship in a compan! Li&e Mr. %, man! other entrepreneurs and #uture entrepreneurs #re6uentl! as& themsel,es 7Am I reall! an entrepreneur or an intrapreneur8 79o I ha,e hat it ta&es to be a success8

79o I ha,e su##icient bac&ground & e-perience to start & manage ne ,enture8:

*act is that more ne

business ,entures #ails than succeed or& & luc&

To be success#ul entrepreneurs re6uire more than just hard

Hard, honest assessment Of viability of the prospective Business

 3nes o n strength &

ea&ness

The Entrepreneurial 2rocess

The process through $. 2. ;. <. hich ne ,enture is created b! an entrepreneur Identi#ication & e,aluation o# the opportunit! 9e,elopment o# the business plan 9etermination o# the re6uired resources Management o# the resulting enterprise

$. Identi#! & E,aluate the 3pportunit! The process b! hich an entrepreneur comes up ith the opportunit! #or a ne ,enture 4esults #rom entrepreneurs alertness to possibilities or in some cases the establishment o# mechanisms 3ne entrepreneur constantl! loo&ing #or a need & opportunit! to create a better product Another monitors pla! habits & to!s o# her niece1 loo&ing #or uni6ue to! product niche

3ther sources = = = =
Consumers & business associates
>best sourceso# ideas #or a ne ,enture > 7i# onl! there as a product that ould= .: >businesse-ecuti,escom plainingabout technical riting & ord processing resulted in the creation o# ne business

Member o# the distribution s!stem

>Close contact ith the end user, channel m em bers see product needs >Entrepreneursidenti#ied businessopportunitiesthrough discussion ith a retailer, holesaler & m anu#acturersrepresentati,es >started boo&stores1lac& o# ser,ice & high cost boo&s ith onl! boo&store on cam pus

T echnical people

 Each opportunit! must be screened and e,aluated? critical element o# Entrepreneurial process@it allo s the entrepreneur to assess hether the speci#ic product or ser,ice has the returns needed #or the resources re6uired 3pportunit! must #it the personal s&ills and goals o# the entrepreneur. 2. 9e,eloping a "usiness 2lan The description o# the #uture direction o# the business Title page Table o# contents E-ecuti,e summar! 9escription o# business 9escription o# industr! Mar&eting1 #inancial1 production13rganiAational1 3perational 2lan Summar! ;. 9etermine the resources re6uired The resources needed #or the opportunit! must also be determined Maintains as large o nership as possible particularl! in start1up stages Alternati,e suppliers o# resources must be identi#ied ? enables the resources to be ac6uired at the lo est possible cost

<. Manage The Enterprise Entrepreneur must emplo! the resources ac6uired through the implementation o# business plan 3perational problems o# the gro ing enterprise must also be e-amined Implementing a management st!le and structure Control s!stem must be identi#ied so that an! problem areas can be care#ull! monitored Some 7E: ha,e di##icult! managing & gro ing the ,enture the! created111 di## bt entrepreneurial & managerial decision ma&ing

Intrapreneurship

Intrapreneurship is one method o# stimulating & then capitaliAing on, indi,iduals in an 345, ho thin& that something can be done di##erentl! and better Causes #or interest in intrapreneurship Indi,iduals ho belie,e strongl! in their o n talents #re6uentl! desire to create something o# their o n The! ant responsibilit! & ha,e a strong need #or indi,idual e-pression & more #reedom in their present 345 structure Bo #reedom? #rustration at or& & become less producti,e? lea,e 345 to achie,e sel#1actualiAation else here Cero- Corporation
Ensure that its creati,e emplo!ees do not lea,e Set up CTD ECero- Technolog! DentureF 5enerating pro#its b! in,esting in the promising technologies o# the compan! hich ould ha,e been o,erloo&ed a,oid mista&es o# past ha,ing 7a s!stem to pre,ent technolog! #rom lea&ing out o# the compan!:@4obert Adams 2resident CTD ;) M #unds supported doAen start1ups 9ennis a Cero- emplo!ee o# 2( !ears idea as to ma&e a batter!1 operated, plain paper copier. $) !ears idea as not appro,ed b! C operating committee Idea as #unded b! CTD & Tai ans Ad,anced Scienti#ic Corp? all companies #unded b! CTD, 2) G o# each compan! is o ned b! the #ounder and &e! emplo!ees CTD pro,ides #inancial bene#its to its parent Cero Hhat Cero- recogniAed is hat hundreds o# e-ecuti,es are also becoming a are o# in their organiAations Its important to &eep the entrepreneurial sprit in an 345 in order to inno,ate & gro The resistance against #le-ibilit!, gro th and di,ersi#ication can, in part, be o,ercome b! de,eloping a spirit o# entrepreneurship ithin the e-isting 345, called intrapreneurship Intrapreneurship increased due to Hyper competition, both at home and abroad--- forced US companies to increase interest in such areas

as new product development, diversification and increased productivity reduction in companies labor #orce ()) companies decreased b! se,eral million people these and ne indi,iduals absorbed into the H* Esmall business1start ups

Entrepreneurial efforts consist of following elements

New business Venturing

Creation o# businesses ithin e-isting 3rg creating something ne 1 rede#ining Co. current product 3r ser,ices, de,elop ne mar&ets ne ,entures are the most salient mani#estations o# intrapreneurship

Innovativeness
Emphasis on 2roduct de,elopment1 product and ser,ice inno,ation 1 inno,ation in technolog!

Self-renewal
dont let the business sta! stagnant changing the ,enture to suit mar&et needs in a timel! manner sel# rene al indicates that u must be strategic and change the 345

Pro activeness
2roacti,e 3rg ta&e ris&s b! conducting e-periments1 ta&e initiati,e & is bold & aggressi,e in pursuing opportunities 3rg ith proacti,e sprit lead rather than #ollo competitors in business areas11 intro to ne products etc

Corporate versus Intrapreneurial Culture

Emplo!ees o# other organiAation catch the 7entrepreneurial #e,er: man! C3s no attempting to create the same spirit, culture, challenges & re ards o# 7E: in the 345 Hhat are the di## bt Corporate & entrepreneurial cultures8 Among managers, entrepreneurs and intrapreneurs

Corporate culture
Climate & re ard s!stem that #a,or conser,ati,e decision ma&ing 4is&! decisions are o#ten postponed until enough hard #acts can be gathered Man! appro,als re6uired #or a large scale project that no indi,idual #eels personall! responsible 5uiding directi,es in traditional corporate cultureI 9o not ma&e an! mista&es 9o not #ail or ta&e intitiati,e but ait #or instructions Sta! ith in !our tur# & protect !our bac&side En,ironment not conduci,e to creati,it!1 independence or ris& ta&ing

Intrapreneurial Culture
9e,elop ,isions, goals & action plansJ to be re arded #or actions ta&enJ To suggest, tr! and e-perimentJ to create & de,elop regardless o# the areaJ & to ta&e responsibilit! & o nership

Intrapreneurial Leadership Characteristics

Knderstands the en,ironment Disionar! and #le-ible Encourages team or& Encourages open discussion "uilds a coalition 3# supporters 2ersists
Summar! o# the chapter There is more to success#ul business than a good ideaJ there must be a good entrepreneur Ideal entrepreneur cannot be pro#iledJ Ccitics & trends the! ma! #ollo Entrepreneur goes through E process1 *inding1e,aluating & de,eloping opportunities #or creating a ne ,enture There are both #ormal & in#ormal mechanisms #or identi#!ing business opportunities I. *ound ithin a more established compan! II. In#ormal sources is to be sensiti,e to The complaints & chance comments o# #riends And associates

 3pportunit! identi#ied no e,aluation process begins1 basic screening is to understand the #actors that create opportunit!: technology, mar et changes, competition or changes in govt regulations Idea should #it the personal s ills & goals o# the entrepreneur 4e6uired resources should be1 obtain at the lowest possible cost Managing ne ,enture di##ers #rom managing an e-isting operation1 along #i,e dimension 9istinctl! diff sets of s ills o#ten needs to be de,eloped to run entrepreneurial ,enture b! a manager than corporate manger1 either through e-perience or through educationI !B" Social # business pressures caused an increase in ne ,enture creation bothI outside # inside corporate structures Hithin corporate structures, this entrepreneurial spirit and e##ort is called intrapreneurship 9e,elop successful innovation, a corporation should establish a conduci,e organi$ational climate Traditional mangersI Strict to establish hierarchical structures Less ris& oriented1emphasis on short term results hich inhibit creati,it!, ris& re6uired #or ne ,entures 3rg desiring intrapreneurial climate- encourage ne ideas1 e-perimental e##orts1 eliminate opportunit! parameters1 ma&e resource a,ailable1promote team or& approach & ,oluntar! intrapreneurship1 top mangt support Intrapreneur must ha,e leadership characteristics ? addition to ,isionar!, creati,e1 must also or& ithin corporate culture Encourage team or& & or& diplomaticall! across established structures 3rg must care#ull! choose intrapreneurial leaders, de,elop general guidelines #or ,entures1 establish strong support s!stem1 incenti,es & re ards to encourage team members

Manager who takes ownership Of a project & provides the leadership & vision that take a product from the idea Stage to the final customer Group of intrapreneurs who are deliberatel separated from the normal operation of an org to encourage them to devote all their attention to developing new products !n autonomous division that is given all the resources it needs to develop and market a new product managers become intrapreneur & in charge of product develop