ENTREPRENEURSHIP FOR ENGINEERS

HANDOUT 1- ENTREPRENEURSHIP CONCEPTS

Entrepreneurship concepts can be defined in different ways:

Entrepreneurship

According to Schumpeter the essence of entrepreneurship lies in the perception and exploitation
of new opportunities. It always has to do with bringing about a different use of national resources
in that they withdrawn from their traditional employ and subjected to new combinations. He
identified five types of new combinations i.e. a new product, method of production, market,
sources of materials or inputs and organization.

“Entrepreneurship is a phenomenon in the economy by which individuals or companies assume

risks to create something new in order to obtain the benefits from the new venture”.

“Entrepreneurship is a creative and innovative response to the environment. Such responses can
take place in any field i.e engineering, technology, business, agriculture, education, social work
and the like. This involves doing new things or doing things that are already being done in a
new way.

Entrepreneurship is also a process of exploring the opportunities in the market place and
arranging resources required to exploit these opportunities for long term gain. It can be
distinguished as an ability to take risk independently to make utmost earnings in the market.

Intrapreneurship

Intrapreneurship is the entrepreneurial behaviours, attributes and skills that employees display in
an established organization.

Its essence is value addition, value adding employees exhibit the following:

 Make work/turnover
 Have good contacts/networks
 Have total customer orientation

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  Attract/find resources
 Take independent actions
 Look after persona growth
 Imagine customers for all initiatives.

Enterprise

An enterprise is an entrepreneurial activity/ business undertaking.

Entrepreneur

An entrepreneur is a person who develops a new idea and takes the risk of setting up an
enterprise to produce a product or service which satisfies customer needs.

He/she is a person who can see opportunities, converts them into marketable ideas, mobilizes
resources and bears risks for success.

He/she is an individual who owns and manages a business for the principal purpose of profit and
growth.

He/she is the business person who is not satisfied with his/her performance and therefore always
finds ways to improve and grow.

Therefore an entrepreneur is a person who always searches for change, responds to it and
exploits it as an opportunity and persistently pursues for such opportunities. Entrepreneurs can
be business owners, managers, and employers.

Intrapreneur

An intrapreneur is a person who operates in an entrepreneurial way from within an established

organization.

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Entrepreneurial Characteristics/ Qualities/ Attributes

Initiative

An entrepreneur takes actions that goes beyond job requirements or the demand of the situation.

Opportunity seeking

An entrepreneur is opportunist so he/she quickly sees and seize opportunities. He/she searches
for change, responds to it and exploits it as an opportunity.

Drive and Determination

An entrepreneur is not discouraged by difficulties and problems that come up in the business or
his/her personal life. This persistence and determination is fueled by a burning desire to achieve
the goal of succeeding in the chosen field of business and other activities and the belief that
he/she can control his/her own destiny.

Information seeking

An entrepreneur undertakes personal research on how to satisfy customers and solve problems.
He/she knows that different people have different capabilities that can be of help to them. He/she
seeks relevant information from his/her clients, suppliers, competitors and others. He/she always
wants to learn things which will help the business to grow.

Demand for quality and efficiency

An entrepreneur is always competing with others to do things better, faster, and at a less cost,
he/she strives to achieve excellence.

Risk taking

An entrepreneur has a venture spirit and willingness to take risks which enable one to calculate
their risks before taking action. They place themselves in situations involving moderate risk so
they are moderate risk takers.

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Organized and goal-oriented

An entrepreneur sets meaningful and challenging goals for him/herself. He/she thinks and plans
what he/she does. He/she knows the value of organization in business and/or other activities.

Commitment to work

An entrepreneur will work long hours after just to be able to keep his/her promise to his/her
client. He/she does the work together with his/her workers to get a job done and is task oriented
so dedicated to complete the tasks related to his/her business and other important activities.

Systematic planning and monitoring

An entrepreneur plans for whatever he/she expects in the business. He/she takes realistic
approach to planning by breaking large tasks down into small ones and puts time limits for
them. Since and entrepreneur knows what to expect at anytime he/she is able to change plans and
strategies to achieve what he/she aims at.

Honesty and Honor

A good entrepreneur has to be honest and honorable in all business dealings and interpersonal
relationships - whether it is between business partners, employees, peers or investors.

Perseverance and Hard Work

An entrepreneur is a person who shows determination and works very hard in carrying out his
tasks in order to achieve his goals. He/she should have the capacity to cope with long and
flexible hours required in carrying out business activities.

Networking

An entrepreneur acts to develop and maintain business contacts by establishing good working
relationship.. He/she builds networks with relevant stakeholders since know-who is important to
build trust.

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Independence

Entrepreneurs have a sense of autonomy by being independent in thought and action. Since they
have the need to control their future, so start business because they like to be their own boss.

Self-confidence

Entrepreneurs must demonstrate extreme self-confidence and positive self-concept in order to

cope with all the risks of operating their own business. They tend to believe in their capabilities
and so tend to be responsible for their own decisions. Belief in one's capabilities is very
important in achieving any goal.

High level of motivation

An entrepreneur is an individual who has a strong inner drive that makes him/her committed to
pursue the objective of setting up a business by assessing and developing one’s capabilities for
setting up and running a business

Excellent leadership qualities

An entrepreneur is a person who has the ability to inspire and lead others, he/she can enlist
support of others in the accomplishment of a common task such as business undertaking.

Good business and managerial expertise

An entrepreneur is an individual who owns and manages a business for the principle of profit and
growth. He/she employs strategic management practices in the business.

Problem solving attitude

An entrepreneur is able to respond and solve problems related to his/her business and

other activities before seeking external help.

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Psychological explanation of entrepreneurial behavior

Need for Achievement

This is the desire to do well for the sake of inner feeling of personal accomplishment. A person
endowed with such a need will spend time considering how to do a job better or how to
accomplish something important to them. Such persons like situations where they can take
personal responsibility for finding solutions to problems. They prefer striving to achieve targets
which present both a challenge and are not beyond their capabilities.

Locus of Control

This is a measure of the extent to which people believe they can control their own destinies.
People with an internal locus of control are those individuals who believe themselves to be in
control of their own destinies. In contrast people with an external locus of control believe that
fate in form of events, outside their control or powerful people has a dominating influence over
their lives. Therefore people who believe they control their destinies would be more likely to
venture into uncertainties and challenges involves in running a business. In comparison, people
who believe that most of what happens to them is outside their control are unlikely to venture
into business.

Risk-taking Propensity

This is the tendency to choose more risky alternatives, the level of risk preference (low,
moderate, high) is thought to influence individuals to start business. Risk level is known to be
specific to individuals due to differences in experiences, capital, resources, capability, etc.
Successful entrepreneurs tend to take moderate calculated risks.

Creativity and Innovation

Creativity is the act of bringing something new into existence resulting in new products, new
processes. Entrepreneurs add value by using new ways of combining resources, create new
products/processes, strategies, industries, new ways of organizing resources.

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Innovation is the process of converting opportunities into marketable ideas. Entrepreneurs are
innovators because they use knowledge/information for creating new products/services and make
them available to the market.

Developing/Creating Entrepreneurial Attributes

 Try to see something from a different perspective.

 Challenge routine and custom
 Observe others and copy
 Experiment
 Exercise time management

 See mistakes and failures as stops on the way to success

 Identify yourself with successful people
 Add value to everything you do
 Expose yourself to challenging situations
 Set both short and long term goals
 Finish what you start
 Try to make things happen to yourself
 Solve your own problems before seeking help
 Feel proud about yourself and your work
 Set times for completion of activities
 Focus on learning by doing
 Consider different ways making an income

Some Factors which hinder entrepreneurial achievement

 A society (as part of entrepreneur’s environment) which does not encourage or facilitate
entrepreneurial spirit and urge to excel.

 Some social-cultural beliefs in society that act as barriers to entrepreneurial development

e.g. the belief that high profit is unethical, or that industrial or technical-oriented
activities are basically roles of a particular social, gender or ethnic category.
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 Political systems which discourage individual freedom, free market economy and private
enterprises and therefore policies which contradict individual motives and desire to excel.

 The economic environment in terms of policies, financial institutions (and the governing
funding regulations) which for instance have a very rigid credit system in the banking
system or non-existence of funding organizations.

 Psychological factors like security – orientation, conformity and compliance and high
need for affiliation. In other words, a psychological environment which is not endowed
with drives and urges for entrepreneurial excellence.

 Inadequate provision of physical economic infrastructures like reliable roads, water,

electricity, and machinery in a given geographical setting.

 Inadequate educational orientation, limited entrepreneurial experience and market

opportunities.

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