Marvin RyderAssistant Professor, Marketing & Entrepreneurship

MBA P715Entrepreneurship

Week 2

Psychological Triggers for Entrepreneurship1) Need for control – my hours, my location

Seems to be disproportionately important:

Middle child; moved frequently; rebellious, impulsive; perceived rejection by others; difficulty with authority

2) Need for creativity – realize a dream, use my talents, do something interesting

3) Need for employment – no job opportunities to match perceived skill set

Psychological Triggers for Entrepreneurship - Continued4) Need for money – earn more money, keep

more of what one earns for others

5) Need to exploit an opportunity – take advantage of something that others are missing

6) Need for status/achievement – be an example to others, continue a family tradition

Note: many entrepreneurs face life-long battles with low self-esteem – Entrepreneur’s paradox

Source: Doss, Mazzarol, Volery – Triggers and Barriers Affecting Entrepreneurial Intentionality, 1997

The Genesis of Entrepreneurship

EntrepreneurPerception ofOpportunity

ConsumerDemand

IndustryStructure

EnvironmentalTrends

VentureCreation

Window ofOpportunity

Barriers: 1) Lack of personal or financial capital 2) Compliance costs – taxes, fees, training 3) “Hard” reality – start-up too difficult, too much risk,

window too small

Types of Business Start-ups

Product innovators – Hewlett-Packard, Ron Popeil,Bill Gates

Solo, self-employed entrepreneurs – plumber, consultant Resource exploiters – real estate developer, mining company Economy-of-scale exploiter – discount or big box store Workplace/workforce support – temp agency, machine shop Takover artists – buy a company and grow it – John Y. Brown and KFC Capital aggregators – T. Boone Pickens, Ross Perot,

Warren Buffett Market speculators Franchise entrepreneurs

Entrepreneurial Work EnvironmentLeadership Style Autocratic/Directive

Decision-making Centralized/no delegation

Impulsive/little conscious planning

Operating and strategic decisions have equal importance

Time Horizon Short – one day, one week, one month

Power Close to the entrepreneur

Workplace climate Highly uncertain/poor information flows

Corporate Structure

Lack of formal organization chart

“Spider web” structure

Infrastructure Lack control & information systems

Few standard procedures & rules

Large horizontal span of control