Learning Objectives

- Causal and Effectuation

- Entrepreneurship and Strategy

- Entrepreneurial Creativity
- Crafting Strategy - Assignments & Case Studies

Entrepreneurship and Strategy

Causal and Effectuation Evaluation of Strategy Crafting strategy Leading Creatively Effectuation represents a paradigmatic shift in the way that we understand entrepreneurship. Since its introduction, however, few researchers have attempted to empirically test effectuation. Our purpose is to encourage effectuation research. To do so, we review the effectuation literature and make suggestions for how to design and conduct empirically rigorous effectuation studies consistent with the developmental state of the research stream.

Entrepreneurship scholars have made significant efforts to explain how and why new firms originate, survive, and grow (Davidsson, 2004; Gartner, 1985; Schumpeter, 1934). These efforts have converged into a teleological model of entrepreneurship as a rationally planned, risk-taking and linear process of opportunity recognition and exploitation (e.g., Bhave, 1994; Bird, 1988; Jenkins & Johnson, 1997; Shane & Venkataraman, 2000). This model has now become the mainstream model of the entrepreneurship process. Recently, however, some scholars have started to question the validity of this model. As an alternative, these scholars have developed a model of entrepreneurship as a means-driven, risk-aversive, and circular process involving bricolage and effectuation (e.g., Baker & Nelson, 2005; Sarasvathy, 2001a; Sarasvathy & Dew, 2005). This alternative model could be described as the pragmatist model of entrepreneurship (cf. James, 1907; Peirce, 1931; Rescher, 2005). The merit of the pragmatist model is that it provides a counterbalance against an overly rational view on entrepreneurship. As such, it addresses some of the limitations of the teleological model.

Cont
At the same time however, it has appeared that also the pragmatist model
does not provide a sufficient explanation of the entrepreneurship process and its relation to firm survival and growth. This has led scholars from both sides to believe that, to arrive at a better explanation, both models are needed or that the two models should be combined Comparison of the Two Models In several of her publications, Sarasvathy systematically compares the causation and the effectuation model. Six dimensions appear repeatedly in these comparisons, mostly in the form of dichotomies: means-driven vs. ends-driven, control vs. prediction, affordable loss vs. expected returns, new vs. existing products and markets, cooperation vs. competition, and cyclicality vs. linearity (see Table 1). Below we summarize Sarasvathys arguments and assess them.

Comparison of the causation and effectuation model Dimension Causation model (teleological) Effectuation model (pragmatist) Starting point Ends are given Means are given Assumptions on future Predictability means controllability Controllability reduces need to predict Predisposition towards risk Expected return Affordable loss Appropriate for Existing products and markets New products and markets Attitude toward outside firms Competition Cooperation Type of model Linear Cyclical Means-driven vs. ends-driven

Important Points
The key distinction that Sarasvathy stresses in all her publications on effectuation is the different starting point of the two models. She argues that the causation model starts with goals as a given and that the basic decision for that model is the decision on what means should be accumulated to achieve these goals. Effectuation, on the other hand, starts with means and focuses on the decision on what effect can be created given these means. The idea that effectuation starts with means and takes them as a given does not imply that it is merely a variation of the resource based view (e.g., Barney, 1991).

Strategic Management and Entrepreneurship contains four module, the first module is about the Strategic management concepts, it will cover the organizations Vision , Mission, Objectives, Goals, Strategies and Tactics. The second module is about Company Resources and capabilities, this will explore the value of SWOT Analysis, Environmental Scanning, Five Force Theory and value chain analysis. The third module is about Strategy Choice, Formulations and Control that will cover the details about Corporate Strategies, Types of diversification and Strategic Control. The last module will equip an MBA students about the Entrepreneurship Development, it will deals with entrepreneurial competence and mobility, motivation , development and growth strategies for small business enterprises. This entire modules will cover almost 30 hours.
Module 1: Strategic Management Concept This module will explore the definitions and applications of purpose of strategic management concept, the organizations Vision, Mission, Objectives, Goals, Strategies and Tactics, Concept and process of strategic Management, Strategic Business Unit (SBU). Module II: Company Resources and Capabilities This module will discuss the Environmental Scanning, the SWOT analysis, the Internal and External environmental analysis, Competition Analysis: Porters Approach to Generic strategies, Five Force Theory, Competitive Advantage, and Value chain analysis.

cont

cont

Module III: Strategy Choice, Formulation and Control This module will explore the Business Strategy, Corporate Strategy, Diversification: Mergers, Acquisitions, Strategic alliances (Joint ventures), Divestment, BCG, GE Matrices, Overview of Strategic evaluation and Strategic Control.

Module IV: Entrepreneurship Development This module will deals with the Concept, Growth , Characteristic of Entrepreneur, Factors affecting entrepreneurial growth, entrepreneurial motivation, competencies and mobility, Entrepreneurship Development program. Growth strategies in small business.

cont

Entrepreneurial Creativity is about coming up with innovative ideas and turning them into valuecreating profitable business activities. Entrepreneurial creativity = creativity entrepreneurial action. "Entrepreneur is a person who habitually creates and innovates to build something of recognized value around perceived opportunities.1 In this definition of the Entrepreneur, "creates" means starting from scratch and bringing into being something that was not there before. Leading for Creativity Advantage in Entrepreneurial Startups Key Concept ~ The creativity of the organization must be a strategic imperative for success in the 21st century. Unless youre a Millennial, we all must appreciate the fact that we matriculated through a business world that was optimized for the Industrial Age. Leadership philosophies, managerial processes, attitudes towards inclusion and process that we were taught are completely incongruent with the nature of business today. Fortunately, the first calibration entrepreneurs need to make in order to embrace the new paradigm is close to homeit lies within ones self.

Connecting people to one another. Connecting seekers to data. Connecting businesses to each other. Connecting tribes of similarly minded individuals into larger, more effective organizations. Connecting machines to each other and creating value as a result. In the connection revolution, value is not created by increasing the productivity of those manufacturing a good or a service. Value is created by connecting buyers to sellers, producers to consumers, and the passion to cater each others needs. Leading for creativity advantage demands that the soil be tended and cared for in order for intellectual property to germinate. This starts with the leaders level of consciousness, with their insights and understanding of how to connect, engage, and inspire those around them. In order to do this with resonance, the leader must first connect, engage, and inspire their authentic self. Transformation cannot occur without transparency. The answers to our adaptive challenges arent out there floating in the technological ether, theyre in here, within our own capacity to create new neural pathways and actually change the way we see, think about and react to the world. This does entail some self-reflective work, and typically doesnt emerge of its own accord. In short, creativity/creative idea alone will not help. To grow, survive and prosper, an Entrepreneur, needs to put his creative thought into:

1) 2) 3) 4) 5) 6)

Explore the right opportunity to invest/expand/start his firm Implement strategies basis the type/nature of business/business needs/Action by connecting with people (buyers, sellers, producers, consumers) Engaging with his staff Looking at the technology/any technological upgradation Take up issues & face the challenges Be passionate and transparent in what ever he is doing

Krafting Strategy

Planning Versus Crafting Strategy:

Henry Mintzberg offers a distinction between planning strategy and crafting strategy:

Imagine someone planning strategy. What likely springs to mind is an image of orderly thinking: a senior manager, or a group of them, sitting in an office formulating courses of action that everyone else will implement on schedule. The keynote is reason rational control, the systematic analysis of competitors and markets, of company strengths and weaknesses, the combination of these analyses producing clear, explicit, full blown strategies.

Now imagine someone crafting strategy. A wholly different image likely results, as different from planning as craft is from mechanization. Craft evokes traditional skill, dedication, perfection through the mastery of detail.
What springs to mind is not so much thinking and reason as involvement, a feeling of intimacy and harmony with the materials at hand, developed through long experience and commitment. Formulation and implementation merge into a fluid process of learning through which creative strategies evolve.

Assignments
1) Discussion on: Which is the most important motivating factor for an entrepreneur? A) Desire to work independently B) Earning Profits C) Family Background D) Success Stories of all Entrepreneurs
2)

One of your school friends, Rohit, an entrepreneur, who pioneered cost effective and environment friendly Garbage Disposal System some 10 years back. He was rewarded and recognized by the Government of India for his innovative idea and was earning profits. But he is extremely de motivated due to large competition in his business, shrinking profit margins, lack of demand, no new clientele and no recognition for his work. How will you motivate him? An entrepreneur creates Value by connecting buyers to sellers, producers to consumers, and the passion to cater each others needs. If yes, then how?

3)

Give examples for different type of entrepreneurs. Professional Bill Gates, Steve Jobs, Narayan Murthy Serial Richard Branson, Mukesh Ambani Spontaneous Meru Cabs Life Style Shehnaz Husain, Javed Habib Pure Sunil Mittal, Kishore Biyani Social Tata, GD Birla, Baba Ramdev
4)

Thank you!!!!