Chapter 5

Entrepreneurship

Hellriegel, Jackson, and Slocum

MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright 2002

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 entrepreneurs success

Describe the planning requirements associated

with becoming a successful entrepreneur

Recognize intrapreneurs and the organizational

characteristics that encourage intrapreneurship

Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright 2002

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
companys profitability
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright 2002

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

Hellriegel, Jackson, and Slocum

MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright 2002

5.4

Characteristics of Entrepreneurs
Personal
Attributes
Technical
Proficiency

Successful
Entrepreneur

Managerial
Competencies
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright 2002

Adapted from Figure 5.2

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?
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright 2002

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?
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright 2002

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?

Hellriegel, Jackson, and Slocum

MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright 2002

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

Hellriegel, Jackson, and Slocum

MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright 2002

Adapted from Figure 5.4

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

Hellriegel, Jackson, and Slocum

MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright 2002

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
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright 2002