INTRODUCTION TO

ENTREPRENEURSHIP

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 OBJECTIVE
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 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
 INTRODUCTION
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 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.
 INTRODUCTION
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 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.
 WHAT IS ENTREPRENEURSHIP?
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 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
problem is to identify the distinguishing
features.
 WHAT IS ENTREPRENEURSHIP?
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 The word ‘entrepreneur’ was used for the first time in

economic theory by Richard Cantilon 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 taking and the transformation of
resources.
 WHAT IS ENTREPRENEURSHIP?
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 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.
 WHAT IS ENTREPRENEURSHIP?
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• 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).”
 WHAT IS ENTREPRENEURSHIP?
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• 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
 WHAT IS ENTREPRENEURSHIP?
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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)
 AN ENTREPRENEUR
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 There is no common definition

 A study by Gartiner (1990) found 44 different
definitions some of which shared no common
attributes at all
 AN ENTREPRENEUR
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 Some of definitions of entrepreneurs:-

 The agent who purchases the means of production
for combination into marketable products (Cantilon
19th century).
 One who develops new profitable business
opportunities by combining resources in a new way
(Schumpeter 1934).
 AN ENTREPRENEUR
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 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).
 Etc, etc, etc
 INTRAPRENEURSHIP
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 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”
 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.
 INTRAPRENEURSHIP
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 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.
 Small Business Owner Manager
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 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
 THE ROLES OF
ENTREPRENEURSHIP
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 increasing per capita output and income

 initiating and constituting change in the structure
of business and society
 This change is accompanied by growth and
increased output, which allows more wealth to be
divided by various participants
 Encourages innovations, which is the key in
developing new products and in stimulating
investments interests in the new ventures
 SIGNIFICANCE OF
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ENTREPRENEURSHIP

 In employment creation
 In income generation

 In economic competitiveness

 Overall growth, leading to improved

standard of living
 DIMENSIONS OF
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ENTREPRENEURSHIP
 Entrepreneurship can be used both
constructively (POSITIVELY) and destructively
(NEGATIVELY)
 CONSTRUCTIVE
ENTREPRENEURSHIP
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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
 CONSTRUCTIVE ENTREPRENEURSHIP
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 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
 DESTRUCTIVE ENTREPRENEURSHIP
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 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?……………………………
 ENTREPRENEURIAL VALUES/ATTRIBUTES
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 strong sense of independence

 belief in self/ believe can make things happen
 strong sense of ownership
 belief that rewards come with own effort and hard work
brings its rewards
 strong action orientation
 strong belief in the value of know-who and trust
 readiness to take reasonable risks
 achievement orientation/urge to succeed/conquer
 tendency to take initiative
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ENTREPRENEURIAL SKILLS
 Creative problem solving
 Articulating ideas
 Negotiation/selling/proposing
 Social skills
 Strategic thinking
 Decision making under uncertainty
 Leadership skills
 Assertiveness
 Opportunity identification and deployment skills
 MOTIVATION/TENDENCY/ TO START AND
MANAGE OWN BUSINESS
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 Pull /Push towards the entrepreneurial career

 Ability to see business opportunities
 The will to try/experiment with business and
learn from it
 BUSINESS START-UP/MANAGEMENT
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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
 ENTREPRENEURIAL MANAGEMENT
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 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
 ENTREPRENEURIAL MANAGEMENT
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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

 ENTREPREURIAL GOVERNMENT
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 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
interests, including in trade negotiations
 ENTREPRENEURIAL GOVERNMENT
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 Sets right priorities for immediate and long-

term national interests

 Rewards entrepreneurs and enterprising

behaviour
 Group Assignment
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 Identify chaos or confusion in Tanzanian

business environment
 State how you will provide a solution.

 Submit on Friday, 10th March 2017, at B

410, not later than 1600 hours.