2. Learning Objectives
To appreciate the meaning of entrepreneurship and
its influence on enterprise dynamics, job creation
and all other spheres of development
 To examine the evolution of entrepreneurship
 To define the major terms used in
entrepreneurship
 To discuss the roles and significance of
entrepreneurship for economic development
 Differentiate among the legal forms of organizing
an entrepreneurial venture.
 Identify alternative forms of entrepreneurship.
 Describe innovation and demonstrate why it is

3. 1. Introduction
• Creating a new enterprise is one
of the most exciting
management challenges
• Entrepreneurs have built
successful companies by being
able to exploit unmet needs in
the market

4. 1.1. Who is an Entrepreneur?
• Entrepreneurs recognize opportunities
where others see chaos or confusion.
• They are aggressive catalyst for change
within the market place.
• The following characteristics combine
into a special perspective that
permeates entrepreneurs:
 seeking opportunities
 taking risks beyond security
 having the tenacity to push an idea
through to reality.

5. 1.1. Who is an Entrepreneur?
• An entrepreneurial perspective can be
developed in individuals and be
exhibited
Inside or outside an organization;
In profit or not-for-profit
enterprises;
In business and non- business
activities;
• For the purpose of bringing forth the
creative ideas.

6. 1.2. What is Entrepreneurship?
• There is no clear consensus on the
definition of the word ‘entrepreneur’
or that of its derivative
‘entrepreneurship’.
• The key problems in defining
entrepreneurship lies at two levels:
the term is often used loosely to
encapsulates all business owners
It may be used quite narrowly to
refer to a subset of business
owners, and at this level the

7. 1.2. What is Entrepreneurship?
• The word ‘entrepreneur’ was used for the
first time in economic theory by Richard
Cantillon in late 18th century where its
meaning is ‘to undertake’.
• He saw the entrepreneur as one who
undertakes to organize, manage and
assume the risks of a business.
• In England during the same period, the
industrial revolution was evolving, with the
entrepreneur playing a visible role in risk

8. 1.2. What is Entrepreneurship?
• Until the 1950s the majority of definitions and
references to entrepreneurship had come from
economists e.g. Cantillon (1725, just
mentioned
• Jean Baptiste Say (1803), the renowned French
economist
• Joseph Schumpeter (1934), a twentieth century
economic genius
• All these wrote about entrepreneurship and its
impact on economic development

9. 1.2. What is Entrepreneurship?
• In the early 20th century Joseph Schumpeter
presented the most significant meaning of the
term ‘entrepreneur’. He saw the essence of
entrepreneurship as innovative behavior.
• “The essence of entrepreneurship lies in the
perception and exploitation of new
opportunities….it always has to do with
bringing about a different use of national
resources in that they withdraw from their
traditional employ and subject them to new
combinations (Schumpeter 1934).”

10. 1.2. What is Entrepreneurship?
• It is also defined more broadly to encapsulate a range of
behaviours associated with success in any endeavour:
pro-active,
innovative,
ambition,
persuasion,
perseverance,
drive and determination,
calculated risk-taking,
independence, etc.

11. 1.2. What is Entrepreneurship?
• As a process, entrepreneurship has been defined as
follows:
The process of creating something different, with
value, devoting the necessary time and efforts,
assuming the accompanying financial, psychic, and
social risks, and receiving rewards of monetary and
personal satisfaction and independence (Hisrich and
Peters, 1985)

12. 1.2. What is Entrepreneurship?
• There is no common definition
• A study by Gartiner (1990) found 44 different
definitions some of which shared no common
attributes at all

13. 1.3. Types of Entrepreneurs
• Entrepreneurship is a broad term, whose
characteristics/traits can be applied in different
endeavors.
Entrepreneurship
Employment
(Corporate
Entrepreneurship)
Business
(Business
Entrepreneurship)
Societal problem
(Social
Entrepreneurship)
Business
Entrepreneur
Intrapreneur
(Administrative
Entrepreneur)
Social
Entrepreneur

14. 1.3.1. Business Entrepreneurs
• Some of definitions of
business entrepreneurs:-
The agent who purchases the
means of production for
combination into marketable
products (Cantillon 19th century).
One who develops new profitable
business opportunities by
combining resources in a new way
(Schumpeter 1934).

15. 1.3.1. Business Entrepreneurs
An innovator or developer who
recognizes and seizes
opportunities; converts these
opportunities into workable
/marketable ideas; adds value
though time, effort, money or
skills; assumes the risks of the
competitive marketplace to
implement these ideas; and realizes
the rewards from these efforts
(Kuratco and Hodgetts 2004).

16. 1.3.2. Corporate Entrepreneurship or
Intrapreneurship
• It is the entrepreneurial activities
that receive organizational sanction
and resource commitments for the
purpose of innovative results.
• In other words intrapreneurship is
“behaving entrepreneurially in an
established organization it is also
called corporate entrepreneurship”

17. 1.3.2. Corporate Entrepreneurship or
Intrapreneurship
• An intrapreneur is an individual who operates in an
entrepreneurial way, from within an established
organization rather than by founding or building up
his or her own firm.
• This is also called administrative entrepreneur.
• Intrapreneurs are found in all kinds of organizations
• They are highly valued in today’s world, because it
calls for constant improvement, aggressiveness,
vision, ability to assess risks and quickly take action,
etc.

18. 1.3.3. Social Entrepreneurship
• It is the process of pursuing
innovative solutions to social
problems.
• Social entrepreneurs adopt a
mission to create and sustain
social value.
• It operates in a variety of
organizations: large and small;
new and old; religious and secular;
nonprofit, for-profit, and hybrid.

19. 1.3.3. Social Entrepreneurship
Guiding questions/skills/best practice/tools to social
entrepreneurship
1. MOMENT OF OBLIGATION: Why do I want to create change? –
values to change making
2. EXPLORATION: What are my options? – Intersection btw the
societal need and your own interests; Your strengths,
weaknesses, blind spots, and core skills, etc.
3. DECISION: Am I ready to jump? – dedication of your life and
livelihood
4. ACTION: How do I make my vision come alive?

20. 1.3.3. Social Entrepreneurship
3 steps to become a social entrepreneur:
 Focus on the core
 focus your energy on a single point/activity, don’t get
trapped in all kinds of activities.
 Build a practice of renewal
 do things that energize you i.e. spending time with
family, physical exercise, spiritual practices, artistic
endeavors, being in nature, or simply reading a book
on a weekend morning.
 Find your tribe
 finding people who are making similar life choices,
those who understand you and rejoice in seeing you

21. 1.3.4. Alternative Forms of Entrepreneurship
• Simply entrepreneurship in an existing
organization
• A parent company creates a new business,
keeps ownership
 A spin-off may be a method for the
parent to reduce agency costs and
create tax shields
• One party allows another to sell its

22. 1.4. The Importance of Entrepreneurship
• Job creation
 entrepreneurship accounts for most new jobs in the
U.S. Economy.
• Innovation
entrepreneurships are responsible for introducing a
major proportion of new and innovative products and
services into market.
• Opportunities for diverse people
people of diverse background can improve their

23. 1.4. The Importance of Entrepreneurship
• Economic growth
Creation of new businesses creates wealth
• Standard of living
Consumption of high quality goods at affordable
prices
• Investment opportunities
New businesses creates more investment
opportunities
• Tax base
New business become tax payers

24. 1.4.1. Dimensions of Entrepreneurship
• Entrepreneurship can
be used both
constructively
(POSITIVELY) and
destructively
(NEGATIVELY)

25. 1.4.1. Dimensions of Entrepreneurship
Constructive entrepreneurs contribute positively to
wealth creation and social economic development:,
e.g.
 Converts discoveries into profitable ventures
 Brings about new products and services to better
address customers/societal needs
 Brings about convenience through improved
products, distribution systems: internet banking,
shopping, etc
 Is responsible for most business start-ups

26. 1.4.1. Dimensions of Entrepreneurship
 Lowers costs through better technology, improved
processes of production, and organization of production:
automatic, computerized manufacturing, self-service,
office automation, etc
 Brings about effective and efficient ways of addressing
social problems: poverty, diseases, war and civil strife,
environmental degradation, etc.
 Can bring about new approaches to
economic/development management
 Can contribute to changing laws and regulations which
restrict economic productivity and growth

27. 1.4.1. Dimensions of Entrepreneurship
• Destructive entrepreneurs deploy their entrepreneurial
flair to achieve socially unacceptable goals: Often, their
impact on social-economic vitality and development is
negative.
• Examples of destructive entrepreneurial
activities?……………………………

28. 1.5. Key Characteristics of Entrepreneurs
1. High need for achievement
2. Internal locus of control
3. Willingness to take risk
4. Self-confidence
5. Seeing changes as an
opportunities
6. Managing risk
7. Tenacity despite failure
8. Tolerance of ambiguity
9. Creativity
10. Strong sense of ownership

29. 1.5. Key Characteristics of Entrepreneurs
11. Belief that rewards come with own effort and hard
work brings its rewards
12. Strong action orientation
13. Strong belief in the value of know-who and trust
14. Tendency to take initiative

30. 1.5.1. Entrepreneurial Skills
• Negotiation skills
ability to obtain resources that are controlled by other
individuals
• Networking skills
gather information and build alliances, personal
network, business network
• Leadership skills
provide a shared vision

31. 1.5.1. Entrepreneurial Skills
• Creative problem solving
• Articulating ideas
• Social skills
• Strategic thinking
• Decision making under uncertainty
• Assertiveness/confidence
• Opportunity identification and deployment skills

32. 1.5.2. Entrepreneurial Mindset

33. 1.5.3. Why Do Entrepreneurs Do It?

34. Antecedent
Factors
• Family
• Ethnicity
• Gender
• Education
• Previous
employment
• Religion
• Social group
1.5.3. Why Do Entrepreneurs Do It?

35. Situational Factors
•Employment
• Unemployment
• Immigration
• Economic
opportunity
1.5.3. Why Do Entrepreneurs Do It?

36. 1.6. Small Business Owner Manager
• There is a tendency of some people to treat small business
owner managers and entrepreneurs as synonymous.
• He is an individual; who owns and manages a business for
the principal purpose of furthering personal goals.
• The business must be the primary source of income and will
consume the majority of one’s time and resources.
• The owner manager perceives the business as an extension
of his or her personality, intricately bound with family needs
and desires (Carland et al 1984)

37. 1.6.1. Entrepreneurial Venture Vs. Small
Business Management

38. 1.6.2. Key Factors to Succeed in Business

39. 1.7. Entrepreneurial Ecosystem
• A blend of social, economic,
cultural, and political
components coordinated in a
way that enables productive
entrepreneurship within a
particular territory or a
region
• It is created to support the
businesses and startups that
are being commenced
• It builds fertile environments
for new and growing

40. 1.8. Motivation/Tendency/ to Start and
Manage Own Business
• Pull /Push towards the entrepreneurial career
• Ability to see business opportunities
• The WILL to try/experiment the business and
learn from it

41. 1.8.1. Business Start-up/Management
Skills
• Ability to see good business ideas
• Ability to appraise an idea
• Awareness of where to look for support/answers
• Ability to start and run businesses

42. 1.8.2. Starting and Managing an
Entrepreneurship
Business idea
• A business idea is concept that can be used for financial
gain – centered on product of service offered for money
• New ideas come from:
• newspapers, magazines, and trade journals, inventions or
discoveries, trade shows and exhibitions, hobbies, family
members, business school classes

43. 1.8.2. Starting and Managing an Entrepreneurship
Business plan
• Once an entrepreneur conceives a good idea
for a new venture, next critical step is to
prepare a business plan
• It is a blueprint that maps out the business
strategy for entering markets
• It explains the business to potential investors
• It develops strategies and tactics to minimize
risk of failure.

44. 1.8.2. Starting and Managing an
Entrepreneurship
Components of a business plan
• Description of the product or service
• Analysis of market trends and potential competitors
• Estimate for pricing the product or service
• Estimate for the time it will take to generate profits
• Plan for manufacturing the product
• Plan for growth and expansion of the business
• Sources of funding
• Plan for obtaining financing
• Organizational and management plan

45. 1.8.3. Legal Forms of Entrepreneurship
• Proprietorship – business owned by an
individual
• Partnership – association of two or
more persons acting as co-owners of a
business
• Corporation – legal entity separate
from the individuals who own it

46. 1.8.3.1. Sole Proprietorship
Advantages
• Easy to create
• Owner keeps all the
profits
• Owner makes all
decisions
Disadvantages
• Unlimited liability
harder to obtain
credit and capital
• Harder to obtain
credit and capital

47. 1.8.3.2. Partnership
Advantages
• Easy of formation
• Direct share of capital
• Division of labor and
management
responsibility
• More capital available
than in a sole
proprietorship
Disadvantages
• Unlimited liability for
firm’s debt
• Limited continuity of life
of enterprise
• Difficulty in obtaining
capital
• Partners share
responsibility for other
partners’ actions.

48. 1.8.3.3. Corporation
• Advantages
• Owners’ liability for
the firm’s debt limited
to their investment
• Ease of raising large
amounts of capital
• Ease of transfer of
ownership through
sale of stock
• Life of enterprise
distinct from owners
• Disadvantages
• Extensive
government
regulation of
activities
• High corporation
fees
• Corporate capital,
profits, dividends,
and salaries double-
taxed activities
• Limited to those

49. 1.9. Sources of Financial Resources
Debt financing – obtaining a
commercial loan setting up a plan to
repay the principal and interest
Equity financing – raising money by
selling part ownership of the
business to investors
• Private investors
• Venture capitalists
• Public offerings of stock

50. 1.10.Entrepreneurial Management
Is about managing in an entrepreneurial way and
promoting the entrepreneurial culture throughout the
organization:
• It requires policies and practices in:
Receptivity to innovation
Systematic measurement or appraisal of performance
as an entrepreneurial and innovator
Built in learning to improve performance

51. 1.10. Entrepreneurial Management
Entrepreneurial management requires:
• Specific practices relating to structure, staffing, managing,
compensation, incentive and rewards to encourage
entrepreneurial actions
• Rather than holding on to what already exists, innovation
must be made attractive and beneficial to managers
• Innovation plans
• Freeing the best people for innovative activity

52. 1.10.1. Managing Growth
• Entrepreneurs need to manage business
growth by establishing benchmarks based
on:
Market data
A thorough analysis of the firm’s
ability to handle increased demand
without sacrificing quality
• The business plan is a way for planning
growth targets and managing to them.
• Too much growth can strain operations

53. 1.10.2. Problems of Growing too Quickly
• Cash flow crisis as a result of spending most available
cash on expansion and not meeting obligations to
creditors
• Employees are likely to experience stress from rapid
changes and growth
• Accounting and information systems are not adequate
for the larger business
• Growing so quickly that control is lost

54. 1.11. Why Entrepreneurships Fail
• Lack of capital
• Poor knowledge of the market
• Faulty product design
• Human resource problems
• Poor understanding of the competition

55. 1.12. Entrepreneurial Government
• Behaves entrepreneurially:
 Innovative policies, strategies for economic and
social vitality
 Alert to opportunities, and responding to exploit
them
 Government facilitates, rather than hamper the
activities of other actors
 Aggressive and even deliberate protection and
promotion of nationals and their economic

56. 1.12. Entrepreneurial Government
 Sets right priorities for immediate and long-term
national interests
 Rewards entrepreneurs and enterprising behaviour

57. Innovation

58. 2. Meaning of Innovation
• The transformation of ideas into
reality to capture new value or
capture existing value in a more
effective or efficient way
• The application of better
solutions that meet new
requirements, unarticulated
needs, or existing market needs
• First use of a product, service,
process or idea by an

59. Key Game Changers
1. The telephone (1860): Johann
Philipp Reis
2. Light bulb (1879): Thomas Alva
Edison
3. Penicillin (1896): Ernest Duchesne
4. Airplane (1903) : Wilbur & Orville
Wright
5. ATM machine (1968) : Don Wetzel
6. Sliced bread (1928): Otto Frederick
Rohwedder

60. 2.1. Why is Innovation Important
1. Value creation
 Access to new market
 Competitive advantage
2. Survival
3. Relevance and reputation
4. Sustainability
5. Energize employees
“The rate of change is not going to slow down anytime soon. If
anything, competition in most industries will probably speed up
even more in the next few decades” – John P. Kotter

61. 2.1.1. How do Some Organisations Succeed at
Innovation?
1. Focus on differentiating capabilities
2. Allow room for murkiness
3. Stay the course- innovation in the DNA
4. Be alert to competition and externals
5. Create culture of dissatisfaction
“Great ideas have something in common with bad ones:
early on, they both sound ridiculous.” Nike

62. The World's Most Innovative Companies

63. 2.2. Different Types of Innovation
 According to the (2018) Oslo
Manual, there are four main
types of innovation:

64. 2.2.1. Organizational Innovation
• Refers to new ways work can be organized, and
accomplished within an organization to encourage and
promote competitive advantage

65. 2.2.1. Organizational Innovation
Five C’s of Organizational Innovation
1. Capability
2. Culture
3. Cash and recognition
4. Customer Orientation
5. Cut Losses

66. 2.2.1.1. Workplace Barriers to Innovation
1. Structure & chain of command
2. Leadership complacency
3. Technological resources
4. Organisational culture / traditions
5. Lack of inclusion
6. Reward/incentives mechanism
7. Information management
8. Physical environment - office design/layout
9. Size
“You cannot mandate productivity, you must provide the tools to let
people become their best.” —Steve jobs

67. 2.2.2. Process Innovation
• Process innovation is about
implementing a new or
improved production or
delivery approach
• It include changes in
operational methods, the
techniques used and the
equipment or software

68. 2.2.2.1. Why Process Innovation?
• Additionally, employees see the value of process
innovation in their work performance, as it improves the
way of working

69. 2.2.2.2. Process vs Organizational
Innovations
• Process innovations – implementation of new equipment,
software, and specific techniques or procedures,
while
• Organizational innovations – dealing with people and the
organization of work
However,
• Both innovation types intend to decrease costs through
new and more efficient ways of production, delivery and
internal organizations

70. 2.2.3. Product Innovation
Product innovation is the
introduction of a new or
improved good or service.
• These inventions or changes
may have to do with
improving technical
specifications, the materials
or the software used or even
advancing on UX (user
experience)

71. 2.2.3. Product Innovation
• However, product
innovations don’t need to
improve all functions or
performance specifications
• An improvement to or
addition of a new function
• Can also be merged with a
loss of other functions or
the downgrade of some

72. 2.2.4. Marketing Innovation
• Marketing innovation
means developing a new
marketing strategy that
produces changes
• The changes might be
focused in, for instance,
the way a product is
designed or packed, or
even other decisions
regarding price or

73. 2.2.4. Marketing Innovation
• Invention becomes innovation
after its market test and
customers approval
• Innovation can be new
technology, new markets,
business models, adapted
value preposition and
branding

74. 2.2.4.1. Forms of Marketing Innovations

75. 2.2.4.1. Forms of Marketing Innovations
1. Incremental innovation, also known as continuous
improvement, consists of improving a product or
service in its market.
Example, the iPhone going from the iPhone 12 to the 13
and then most probably to the 14
2. Disruptive innovation refers to the actions taken by a
smaller company to shake up an industry by
targeting its large, existing competitors’ overlooked
segments.
Good example is Netflix against Blockbuster.

76. 2.2.4.1. Forms of Marketing Innovations
3. Radical innovation is it is the creation of a brand new
product or service that nobody expected and that tends
to impose itself on the life of users
4. Architectural/Adjacent innovation refers to using
existing capabilities (like technology or knowledge) to
appeal to a new audience or enter a new market
 This provides a competitive advantage to the original
product or service that allows it to be differentiated in
the market