Textbook Notes (368,150)
Canada (161,680)
GMS 200 (566)
Chapter 5

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Department
Global Management Studies
Course
GMS 200
Professor
Ricardo Reyes
Semester
Winter

Description
Chapter 5 – The Nature of Entrepreneurship Entrepreneurship • Strategic thinking and risk-taking behavior that results in the creation of new opportunities for individuals and/or organizations Entrepreneurs • Risk-taking individuals who take actions to pursue opportunities and situations others may fial to recognize or may view as problems or threats Entrepreneurs are… • Founders of businesses that become large-scale enterprises • People who: o Buy a local franchise outlet o Open a small retail shop o Operate a self-employed service business • People who introduce a new product or operational change in an existing organization Typical characteristics of entrepreneurs: • Internal locus of control – believe they are in control of their own destiny • High energy level – persistent, hard working • High need for achievement – motivated to accomplish challenging goals • Tolerance for ambiguity – risk takers who tolerate with high degrees of uncertainty • Self-confidence – feel competent, believe in themselves • Passion and action-orientation – try to act ahead of problems, get things done and not waste time • Self-reliance and desire for independence – want independence, self-reliant, and be their own bosses • Flexibility – willing to admit problems and errors and change a course of action when plans aren’t working Typical entrepreneurial backgrounds and experiences: • Parents were entrepreneurs or self-employed • Families encouraged responsibility, imitative, 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 1 • Seek independence and sense of mastery Reasons for women and member of visible minorities becoming entrepreneurs: • Out of necessity (necessity-based entrepreneurship) • Gain economic independence • Provide a pathway to career success that may be blocked otherwise Common myths about entrepreneurs: • Are born, not made • Gamblers • Money is key to entrepreneurial success • Have to be young • Degree in business to be an entrepreneur Small businesses… • Less than 100 employees • Independently owned and operated • 48% of private labour force in small businesses • Are established by: o Starting a new business o Buying an existing business o Buying and running a franchise Internet entrepreneurship • Internet offers numerous entrepreneurial opportunities • 85% of small business operate over the internet Family businesses… • Owned and controlled by family members • Largest percentage of businesses worldwide • Provide ideal business situation • Problems: o Family business feud – major disagreement over how the business should be run with family members o Succession problem – issue with who will run the business when the current head leaves 2 • Succession plan – formal statement that describes how the leadership transition and related financial matters will be handled when current head leaves Reasons for small business failures: • Lack of experience • Lack of expertise • Lack of strategy and strategic leadership • Poor financial control • Growing too fast • Insufficient commitment
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