Page 39 - DMGT310_ENTREPRENEURSHIP_AND_SMALL_BUSINESS_MANAGEMENT

Entrepreneurship and Small Business Management

Notes intrapreneurship requires that managers inside the company should be encouraged to be
entrepreneurs within the firm rather than go outside. For an entrepreneur to survive in an
organization he/she needs to be sponsored and given adequate freedom to implement his
ideas. Otherwise, the entrepreneurial spark will die. The entrepreneur who starts his own business
generally does so because he aspires to run his own show and does not like taking orders from
others.
What is needed in large bureaucratic companies is a strong and healthy risk-taking culture,
where risk-taking managers are assured security and rewards. An entrepreneurial culture requires
a constant generation of ideas. It needs managers who listen and respond to new ideas and are
willing to risk their future, a system that rewards managers who may fail but who have generated
and experimented with ideas.

Investigate any big innovation in an organization and you will find an entrepreneur.
“Look back at any great business or invention of just any big company and you will find that an
intrapreneur created it,” says Gifford Pinchot, who invented the word and popularized the term
in his book Intrapreneuring.
Though Pinchot invented the term, the concept (of internal entrepreneurial efforts in an
organization to alter its status quo, harness energies of talented employees and sponsorship to
promising ideas and innovations by them) was being relied upon by forward thinking
organizations for decades.

3.1 Entrepreneurial Process

At its simplest what entrepreneurs do, can be viewed as a six-stage procedure:
They see opportunities where others don’t.

They have a ‘vision’, a clear understanding of the concept and of what they’re trying to do.
They persuade others of their vision, they can communicate the concept effectively.
They gather resources to make their vision become a reality (money, people, things).

They organize these resources to create a new venture, product or market (leadership,
teams).
They constantly change/adapt themselves according to the changing demands of the
market.

3.1.1 Identify an Opportunity

According to Timmons (1989), entrepreneurship is about sensing an opportunity where others
see chaos, contradiction and confusion.
Identification of an opportunity is the first step towards building and running successful business
enterprise. Entrepreneurs identify opportunity where others see obstacles and impossibility.
Identification of opportunity at the right time is of utmost importance as it gives “first mover’s
advantage” and takes an enterprise ahead of others who take time to catch up. The first mover’s
advantage not only provides product identification and higher market credibility but also
provides better profits and faster economies of scale.

Example: Paul Scagnetti, an engineer at Intel came up with the concept of handheld
computer aimed at helping people do just one thing – record and plan their fitness and nutrition.
The gizmo ‘Vivovic Fitness Planner’ hit the market successfully.

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