1. Chapter 5
Entrepreneurship
© SB InstitutE

2. 5.1
Learning Objectives
After reading this chapter, you should be able to:
Explain what entrepreneurs do and describe how the
environment supports their activities
Describe the personal characteristics that contribute to an
entrepreneur’s success
Describe the planning requirements associated with becoming a
successful entrepreneur
Recognize intrapreneurs and the organizational characteristics
that encourage intrapreneurship
© SB InstitutE

3. 5.2
Advantages of Working in a Small Business
Greater opportunity to increase personal wealth
More likely to have “extremely satisfied” employees
Variety of skills and responsibilities
Personal performance affects company’s
profitability
© SB InstitutE

4. 5.3
Disadvantages of Working in a Small Business
Lower guaranteed pay
Fewer medical and other insurance benefits
Expected to use many skills and wear different
hats (could be viewed as advantage)
Fluctuation in business size and condition is
possible
May be difficult to move to a big company
© SB InstitutE

5. 5.4
Characteristics of Entrepreneurs
Personal
Attributes
Technical Successful
Proficiency Entrepreneur
Managerial
Competencies
© SB InstitutE
Adapted from Figure 5.2

6. 5.5
Questions Addressed in a Business Plan
What are my motivations for owning a business?
Should I start or buy a business?
What and where is the market for my product
or service?
How much will it cost to own the business, and
where will I get the money?
Should my company be domestic or global?
How will growth be managed?
© SB InstitutE

7. 5.6
Questions to Consider When
Deciding to Start a Business
Is there a way to begin the enterprise in
stages or with a limited investment?
Can I run the company at first as a
home-based business?
Can I continue working for someone else and
put in time after hours?
To what extent can I draw on relatives to
help me?
© SB InstitutE

8. 5.7
Considerations For Going Global
Are the best human resources dispersed among various
countries?
Would foreign financing be easier or more suitable?
Do target customers require a venture to be international?
Will worldwide communication lead to quick responses from
competitors in other countries?
Will worldwide sales be required to support the venture?
Will domestic inertia be crippling if internationalization is
postponed?
© SB InstitutE

9. 5.8
Successful Family Businesses
Clear job responsibilities
Clear hiring criteria for interested family members
Clear plan for management transitions
Committed to resolving conflicts quickly
Outside advisors are used to mediate conflicts
© SB InstitutE
Adapted from Figure 5.4

10. 5.9
Strategic Factors for Survival to the Next
Generation
Ensuring equitable estate treatment
Preparing for ownership transfer
Minimizing estate taxes
Ensuring the financial security of the senior
generation
Selecting and developing a successor
© SB InstitutE

11. 5.10
Characteristics of Intrapreneurial Firms
Commitment from senior management
Flexible organization design
Autonomy of the venture team
Competent and talented people who
exhibit entrepreneurial behaviors and attitudes
Incentives and rewards for risk taking
An appropriately designed control system
© SB InstitutE