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Entrepreneurial behavior
- is directly concerned with the understanding.
Prediction and control of human behavior in enterprises. THE EVOLUTION OF ENTREPRENEURSHIP THEORY • Adam Smith (1776): An entrepreneur is a person who act as agent in transforming demand into supply • J B says (1803): An entrepreneur is shifts resources from an area of low productivity to high productivity • John Stuart Mill (1871): An entrepreneur is a prime mover in the private enterprise. The entrepreneur is the fourth factor of production after land, labor and capital. • Carl Menger (1871): the entrepreneur act as an economic agent who transforms resources into products and services. The entrepreneur transform and gives added value • Alfred Marashall (1936): The process of entrepreneurship or business development is incremental or evolutionary. It evolves from sole proprietorship to a public company. Entrepreneurship as a Method
• The Entrepreneurial Method by Professor (Saras Sarasvathi). For her
entrepreneurial method describes a logic of thinking that is usually used by some of the most successful entrepreneurs to form their ventures. (Five effectual principles based on the works of Sarasvathi) 1. Bird in Hand – Creating solutions using the resources available at the disposal of entrepreneurs instead of having goals in mind. 2. Affordable Loss – investing much that an entrepreneur is willing and can afford to lose. If it is an affordable loss and the possible gains are big then the decision can be implemented. 3. Crazy Quilt- This is about entering into new partnership that can bring in new opportunities and reduces uncertainty. Partnerships can help form new markets with people who have a corresponding skill set to the entrepreneur. 4. Lemonade – When looking for new opportunities, it is possible that entrepreneurs shall encounter mistake and meet surprises. 5. Pilot in The Plane – Entrepreneurs in this principle believe that the future is really something that needs to be controlled and not try to predict. Managerial and Entrepreneurial Thinking
Managerial Thinking Entrepreneurial Thinking
Manage and mitigate risk Evaluate and embrace risk
Safeguard inventions and Exchange ideas and share
insights learnings Avoid failing Fail fast and try again
Work within the confines of the Think in terms of possibilities
Personality factor Entrepreneurial traits Trait means a distinguishing quality or characteristics belonging to a person. Some of the entrepreneurial traits are: · Innovation · Passion · Self discipline · Flexibility CHARACTERISTIC OF ENTREPRENEURIAL BEHAVIOR
Behavioral approach to management
Cause and effect relationship
A branch of social science
A body of the theory research and application
Rational Thinking
Human part of enterprise
Change part of enterprise
Role and importance of entrepreneurial behavior
• Understanding human behavior
• Predicting human behavior • Control and direct behavior • Entrepreneurial effectiveness • Motivation • Better human relations TYPES OF ENTREPRENEURSHIP
1. Intrapreneurship – Think and behave like an entrepreneur in your
workplace like, Educator, sales manager, business consultant etc. 2. 2. Entrepreneurs Inside – An entrepreneur starts their own company . Develops a concept for a new business. 3. Buying a Franchise – A franchise is a type of license bought by an entrepreneur as the franchise from an existing branded business (franchisor) under the name of said brand. 4. Buying a Small Business – The entrepreneurs buys out the existing owner and takes the management and operation of the small business. This normally involves more upfront cost and also present less risk than starting from zero. 5. Social Entrepreneurship – Pursuing innovative applications that have the likelihood of solving community- based problems. A lot of entrepreneurs are able to make solutions to social problems such as water shortages, education, poverty and global warming. 6. Family Business – Is owned and managed by members of the family that is usually handed down from generation to generation. 7. Serial Entrepreneurs – Is an entrepreneur who constantly crops up with fresh ideas and start new business. Habitual one who takes challenge of repeatedly initiating on putting up a business. This entrepreneur give the responsibility of running the business operation. Social Responsibility Of An Entrepreneur Towards;
• Customers – Self quality products at fair price
• Society/ Community – Job creation and environmental observation • Suppliers – Be fair with his suppliers by paying them on time as agreed upon • Staff – Promote the welfare of his employees • Competitors – Observe business ethics with his competitors country must pay the correct amount of taxes to the government.
