Hisrich Peters Shepherd Chapter 2 Entrepreneurial Intentions and Corporate Entrepreneurship Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

2-2  “Never assume that anybody cares as much about your business as you do.” - Jordan Entrepreneur’s Adage #6

2-3 The Intention to Act Entrepreneurially  Entrepreneurial Motivations - factors that influence individuals to pursue entrepreneurial outcomes.  Intention is stronger when an action is perceived to be feasible and desirable.  Entrepreneurial self-efficacy - Conviction that one can successfully execute the entrepreneurial process.  Perceived desirability - The degree to which an individual has a favorable or unfavorable evaluation of the potential process and outcomes.

2-4 Entrepreneur Background and Characteristics  Education  Provides a background about starting a business.  Helps in the development of communication skills and problem-solving skills.  Provides individuals with a larger opportunity set.  Does not determine whether an entrepreneur will create a new business to exploit the discovered opportunity.

2-5 Entrepreneur Background and Characteristics (cont.)  Age  Most entrepreneurs initiate their entrepreneurial careers between the ages of 22 and 45.  Individuals are more inclined to start an entrepreneurial career at milestone ages every five years (25, 30, 35, 40, and 45).  Male entrepreneurs tend to start their ventures in their early 30s, while women entrepreneurs do so in their middle 30s.

2-6  Work History  The decision to launch a new venture can be influenced by:  Dissatisfaction with one’s job.  Previous technical and industry experience.  Managerial skills are more important once the venture starts growing.  Previous start-up experience is a relatively good predictor of starting subsequent businesses.  DOES CORPORATE EXPERIENCE HELP OR HURT BEING ENTREPRENEURIAL? Entrepreneur Background and Characteristics (cont.)

2-7 Role Models and Support Systems  Role models/Mentors - Individuals influencing an entrepreneur’s career choice and style  Can be parents, family members, friends or other entrepreneurs.  Successful entrepreneurs are viewed as catalysts by potential entrepreneurs.  Mentors/Role models can be supportive by providing connections, information, advice, guidance and moral support.  Entrepreneurs must establish networks in the venture formation process.

2-8  “It’s important for you to set boundaries about what you will and won’t do in your business and to then determine whether that’s a feasible mode of operation.” - Jordan Entrepreneur’s Adage #7

2-9 Minority Entrepreneurs  There has been significant growth in:  Female self-employment, with women starting new ventures at a higher rate than men.  The number of Asian, African American, Hispanic, and Native American majority owned firms.  This growth is likely to be spurred by:  Encouragement of entrepreneurship among minority groups.  Increase in the number of role models.

2-10 Corporate Entrepreneurship  Increasing interest in “doing your own thing” and doing it on one’s terms.  New search for meaning and impatience has caused more discontent in structured organizations. Retention Tool.  Organizations are encouraging corporate entrepreneurship i.e. stimulating, and capitalizing on, employees who think that something can be done differently and better.  The Crowdsourcing phenomenon (P&G).

2-11 Characteristics of an Entrepreneurial Environment

2-12  Problems and Successful Efforts  A study found that new ventures started within a corporation performed worse than those started independently by entrepreneurs.  Reasons cited:  Corporation’s difficulty in maintaining a long-term commitment.  A lack of freedom to make autonomous decisions.  A constrained environment.  On average, independent start-ups become:  Profitable twice as fast.  End up twice as profitable. Corporate Entrepreneurship

2-13  Companies that have been successful with corporate entrepreneurship:  Minnesota Mining and Manufacturing (3M).  Hewlett-Packard (HP).  IBM  Procter & Gamble  Google  Facebook Establishing Corporate Entrepreneurship in the Organization (cont.)

2-14  “Being an Entrepreneur is a tough thing to be… not only because it involves a lot of hard work with uncertain outcomes, but also because you often have to be the one who initially champions then later kills your own idea.” - Jordan Entrepreneur’s Adage #8