1. Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-1 12

2. Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-2 Fundamentals of Entrepreneurship Entrepreneurship: is the identification, evaluation, and exploitation of opportunities It is much broader than an individual starting a new business to make money Entrepreneurship Opportunities: are occasions to bring into existence new products and services that allow outputs to be sold at a price greater than their cost of production (a price that produces profit) Entrepreneurs: are those individuals who identify, evaluate, and exploits opportunities

3. Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-3 Fundamentals of Entrepreneurship 75% of new organizations are started by entrepreneurial teams. They perform better than those started by individuals, Why? Because of “ Team advantage ”: the combination of divers skills, experiences, and relationships, of the entrepreneurial team members. Because as new organizations grow, they require leaders with new skills, and it is easier to add team members with these new skills

4. Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-4 Fundamentals of Entrepreneurship

5. Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-5 Fundamentals of Entrepreneurship Understanding entrepreneurship is important because:  Entrepreneurship represents an important fabric of society  High business formation rates and high failure rates 20% to 50% of all individuals engage in entrepreneurial behaviors They find it difficult to keep their businesses alive  34% don’t survive the first 2 years  50% don’t survive the first 4 years  60% don’t survive the first 6 years (these numbers are for understanding only)

6. Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-6 Fundamentals of Entrepreneurship

7. Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-7 Corporate Entrepreneurship Corporate Entrepreneurship: is the process in which an individuals or group of individuals in an existing corporation create a new organization or instigate renewal or innovation within that corporation. Advantage: leverage the parent corporation’s assets, market position, or other resources. It involves creating new organization, product, service, or technology.

8. Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-8 Social Entrepreneurship Social Entrepreneurship : involves the recognition, evaluation, and exploitation of opportunities that create social value as opposed to personal or shareholder wealth. (not as commercial entrepreneurship that generates sales and profit) Social value: refers to the basic long standing needs of society and has little to do with profits. Long standing needs might include providing water, food, and shelter to those individuals in need. Social value might also refer to more specific needs such as providing playground equipment to needy school districts or seeing-eye dogs for those who are blind.

9. Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-9InnovationInnovation Innovation: is the process of applying a new idea to the improvement of organizational processes, products, or services. Innovation is critical (important) to the long-run success of any organization Without innovation, organizations tend to become less competitive and less desirable to customers as well as organization members. Innovation starts with employees.

10. Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-10 Linking Innovation and Creativity Linking Innovation and Creativity (The Relationship between Innovation and Creativity): Innovation involves turning a new idea into new or improved processes, products, or services that promote the attainment of organizational goals. The ideas upon which innovation based come from creativity in the organization, innovation is the process of turning those ideas into something tangible that benefits the organization. Creativity Idea New Products Services Processes Innovation Reality Org. Goals

11. Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-11 Linking Innovation and Creativity An organization that is creative but not innovate is characterized by a fertile source of good ideas, but lacking the ability to make the ideas tangible. An organization that is innovate but not creative is characterized by the ability to turn ideas into tangible benefit, but lacking good ideas to make tangible. Managers should build organizations that are both creative and innovative.

12. Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-12 Linking Innovation and Creativity