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Week 9

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Ryerson University
Global Management Studies
GMS 200
Robert Hudyma

The Nature of Entrepreneurship Entrepreneurship – strategic thinking and risk taking behaviour that result in the creation of new opportunities for individuals and or organizations, creative and growth behaviour oriented Don’t have to be individuals Example Facebook CEO youngest Who are the entrepreneurs? Entrepreneurs – is a risking taking individual who takes actions to pursue opportunities others fail to recognize, or even view as problems or threats He a person that starts new ventures that bring to life new product or service ideas Founder of business that become large scale enterprise People who: o Buy a local franchise outlet o Open a Small retail shop o Self employed service business People who introduce a new product or operational change in an existing organization – Intraprenoeur Example: Hen Kurtargi: Investor of the Playstations Characteristics of entrepreneurs Common image of an entrepreneur is as the founder of a new business enterprise that achieves large scale success Entrepreneur is anyone one assumes responsibility for introducing a new product or change in operations with an organization is also demonstrating the qualities of entrepreneurship Life-style o Change work to fit life interests Gazelle or High growth o Large skill enterprise Changing Condition Lead to Entrepreneurial Opportunities Demographic Change Social Change Technological Change Regulatory change Economic Change Types of entrepreneurial opportunities New products o Blaceberry New Market o Five Pin Bowling New Production Process o Instant Food Items o The Indian Surgeon – Henry Ford of Heart Surgery Costing costs and Yielding Profits Personality traits and characteristics of entrepreneurs Internal locus of control: Entrepreneurs believe that they are in control of their own destiny; they are self directed and like autonomy High energy level: Entrepreneurs are persistent, hard working and willing to exert extraordinary efforts to succeed High need for achievement: Entrepreneurs are motivated to accomplish challenge goals; they thrive on performance feedback Tolerance for ambiguity: Entrepreneurs are risk takers; they tolerate situations with high degree of uncertainty Self confidence: Entrepreneurs feel competent, believe in themselves, and are willing to make decisions Passion and action orientation: Entrepreneurs try to act ahead of problems; they want to get things done and not waste valuable time Passion and action orientated Self-reliance and desire for independence: Entrepreneurs want independence; they feel self reliant; they want to be their own boss, not work with others Flexibility: Entrepreneurs are willing to admit problems and errors and change a course of action when plans aren’t working Start from a young age Growing the business Risk Taking Grow the market High energy level – international Self confident Typical entrepreneurial backgrounds and experiences: Parents were entrepreneurs or self-employed. Families encouraged responsibility, initiative, and independence. Have tried more than one business venture. Have relevant personal or career experience. Become entrepreneurs between 22 and 45 years of age. Have strong interests in creative production and enterprise control. Seek independence and sense of mastery. Diversity and Entrepreneurs In Canada, one third of employed Canadians in 2002 being women More than 821 000 are women entrepreneurs 33 % of women say that their prior employer didn’t take them seriously 29% experienced the glass ceiling effect What are small busi Entrepreneurship and small business Small business Food good producing forms, with 100 or fewer employees For service firms, with 50 or fewer employees Microenterprise – an organization with fewer than 5 employees and Medium sized enterprises – an organization with 101-499 employees 50 percent of the private labour force works in small business Statistics on Canada small busiesss What % do small firms make up of the all goods-producing employer business in Canada? o 97% What % do small service firms make up of the all goods-producing employer business in Canada? o 95% 1991 to 2002 Average number of new small and medium business set-up o 135 000 Average number of small and medium business close down o 127 000 Net Average number of small and medium business every year o 8000 For 2004 What % of all small business are owned by Women? 33% % growth of self-emplyed Women over the 10 years? 23% % growth of self-emplyed Women over the 10 years? 20% What % of all Canadian exporter were small business? 85 % Types of type od business Some 35% of fortune 500 companies are of this type Account for 50% of U.S gross domestic product Generate 60% of US EMPLOYMENT AND 78% OF ALL NEW JOB CREATIONS Walmart, Ford, News Corporation o Start by entrepreneurs o Family business Reason why people pursue entrepreneurships and launch their own business 1) Waiting to be your own boss and controlling the future 2) Going to work for a family-owned business 3) Seeking to fulfill a dream And a very small % of respondents, do it because they were laid off Common ways to get involved in a small business are: 1) Start a new business 2) Buy an existing one 3) Buy and run a franchise Franchise – is when one business owner sells to another the right to operate the same business in another location Run under the original owners business name and guidance The franchise parent receives a share of income or a flat fee from the franchisee Entrepreneurship and the Internet The internet has opened a whole new array of entrepreneurial possibilities o Ebay, many people run small business from their home o A growing area for Internet entrepreneurship is B2B , business to business websites that link buyers and sellers International Business Entrepreneurship It bring opportunity for expanding market, additional financing, access to quality and possibly low-cost resources, access to labour and technical expertise, and locations for low-cost manufacturing or outsourcing Smaller businesses can find alliance opportunities in strategic ventures with foreign partners Smaller companies are seeking diversification opportunities abroad o There are some insurance against the risk of economic slowdown in any one area Family Business Family Business – is owned and controlled by member of the family Represent a largest percentage of business operating worldwide Can provide an ideal business sitation They face
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