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UNDERSTANDING ENTREPRENEURSHIP

1

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Definition of Entrepreneurship… (a review)

“The process by which individuals—either on their own or in organizations—pursue opportunities without

regard to the resources they currently control.”

~ H. H. Stevenson

Entrepreneurship is a mindset that is:• Opportunity-focused• Risk taking• Innovative• Growth-oriented

An Entrepreneur…

©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Role of Entrepreneurship Three schools of thought:1. An integrated input/output model 2. The career assessment approach 3. The new venture creation process

Affected by three categories of variables:• The entrepreneur and what he/she brings to

process• The environment (external variables)• The organization (strategic aspects of the new

venture)

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New Venture Creation Process Figure 1.1

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The Role of Entrepreneurship (cont’d)

Entrepreneurial process provides many benefits to society:• Economic Growth

• New Industry Formation

• Job Creation

©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Industry Life Cycle

Source: Adapted from M. R. Darby and L. G. Zucker, “Growing by Leaps and Inches: Creative Destruction, Real Cost Reduction, and Inching Up,” Economic Inquiry (January 2003), pp. 1-19.

Figure 1.3

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The Nature of Entrepreneurial Startups An entrepreneurial venture brings

something new to the marketplace.

Three primary characteristics:

1. Innovative2. Value-creating3. Growth-oriented

The Entrepreneurial Revolution… United States founded on the principle

free market economics (The Wealth of Nations-Adam Smith).

The term entrepreneur didn’t come into popular use until the 1980s.

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New Venture Action Plan

Read broadly about entrepreneurs and new ventures.

Interview an entrepreneur.

Become more aware of new trends, particularly in an industry/market in which you’re interested.

End of Chapter 1…

Understanding Entrepreneurship