IED Fellow s Programme. Simon Stockley Director, FTMBA Programme

Transcription

1 IED Fellow s Programme Simon Stockley Director, FTMBA Programme

2 Recommended texts New Venture Creation Timmons, J.A & S. Spinelli McGraw Hill The New Business Road Test John Mullins FT Prentice Hall The FT Guide to Business Start Up (2009) Sara Williams FT Prentice Hall

3 1. Entrepreneurship and entrepreneurial behaviour Simon Stockley Director, FTMBA Programme

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5 William Baumol: the rules of the game? Entrepreneurs are always with us Defined as people who are creative in the maximisation of their utility (wealth, power, prestige, etc) The allocation of entrepreneurial effort is determined by the rules of the game The rules define the structure of payoffs in a society - The rewards accruing to different types of behaviour vary dramatically The rules are a reflection of a society s underlying value system Entrepreneurial activity can be productive, unproductive or destructive!

6 What are the rules of the game? Societal norms relating to utility what do people want? Structure of payoffs what gets very well rewarded? Nature of entrepreneurial activity how do people seek to maximise their utility? Academia Entrepreneurship UK National Children s Survey To be a celebrity 2. To be a model 3. To be rich 4. To be a football player Denmark...

7 Why pursue a productive entrepreneurial career? Death of the psychological contract Chips & BRICS...you ll probably have no choice! Make the world a better place Get rich (maybe) Fun Patriotic duty? If you don t control your life, someone else will control it for you

8 Differing perspectives on entrepreneurship

9 The evolution of the field Functional Indicative Behavioural? The economic function of the entrepreneur The personality traits and characteristics of the entrepreneur Entrepreneurial behaviour Gene-environment interactions s 1950s present Cantillon 1755 Say 1800 Schumpeter McClelland 1961 Kets de Vries 1977 Gartner 1988 Stevenson 1989 Baron Nicolaou & Shane 2007 The difficulty in defining entrepreneurship stems from a failure to integrate these competing approaches

10 Who is the Entrepreneur? High Inventor Entrepreneur Creativity and innovation Promoter Manager, administrator Low High General management skills, business know-how, networks Source: Timmons 1999 p.46

11 Why do people start businesses?

12 Reasons for starting a business (Birley & Westhead, 1994) n= Freedom to adopt my own approach to work 2. To take advantage of an opportunity 3. To control my own time 4. It made sense at that time in my life (!) 5. Security for myself and family 7. Desire to have high earnings 8. Challenge 9. To achieve something and get recognition 10. To continue learning 11. Respect of friends and family 12. Tax avoidance. 6. Flexible work-life balance

13 Does the motive matter? Research suggests no link to business success Other factors are far more significant However: Intrinsic motivation is important The fit between personal and business goals matters a great deal, especially with a team Stakeholders try to pick winners!

14 Current thinking: Entrepreneurship is: A process or behaviour, not a person An approach to management that begins with opportunity The pursuit of opportunity beyond the resources you currently control

15 The elements of entrepreneurship Opportunity Resources Entrepreneur

16 Managerial vs. Entrepreneurial behaviour Entrepreneur Manager/Bureaucrat Opportunity Driven Quick & Short Minimal, Multi-stage Use or rent Networks, little hierarchy Strategic Orientation Commitment to Opportunity Commitment of Resources Control of Resources Management Structure Resources Driven Long & Slow Single stage Own or employ Formalised hierarchy Value and team based Stevenson 1998 Compensation and Rewards Individual & hierarchical

17 What shapes our behaviour?

18 Behaviour = ƒ(s,a,p) moderated by Context Low High context context environment = weak = strong influence influence on behaviour on behaviour Belief structures self-image perceived societal norms fear of failure heuristics ethical values Motivation Psychological State Ability Aptitude Intelligence Education Training Experience Self-efficacy Personality

19 WE ARE ABLE TO CHANGE OUR PERCEPITIONS, ATTITUDES, BELIEFS AND BEHAVIOURS.BUT

20 The degree behavioural mobility: Potential Potential Current Entrepreneur Manager 1. Will vary between individuals 2. Will respond to differing stimuli and interventions There is no universal recipe or magic formula!...

21 Becoming more entrepreneurial.

22 Straits Times 13 th May 2004

23 Socio-psychological antecedents of entrepreneurial behaviour Self concept I see myself as an entrepreneurial person Belief system Entrepreneurship is a good thing Perceived societal norms People within my environment (family, friends, peers) approve of entrepreneurial behaviour. Perceived instrumentality Displaying entrepreneurial behaviour will help me to achieve my life s purpose (or maximise my utility) Self efficacy I believe that I can display the behaviours and attitudes required to succeed as an entrepreneur Intrinsic motivation Interest and enjoyment (pull) and/or need (push)

24 How to become more entrepreneurial. Locate yourself in suitable environments Get an entrepreneurial mentor Become obsessed with opportunity Take action JFDI Take many small steps Learn by failing fast and often (but make sure the losses are small) Develop your social capital Do stuff you love Get in the game and start playing..