Unformatted text preview: Entrepreneurial Behaviors and Attitudes Introduction Introduction Entrepreneurship and new venture creation often: Involve a great deal of risk and personal sacrifice Must constantly reinventing itself, developing new markets, and implementing more efficient internal processes. The majority of business startups fail within their first five years. Entrepreneurs and small business owners must rely on their own resolve and resiliency to try and try again until they achieve success. Introduction (cont.) Introduction (cont.) A manager working within an organization will also need entrepreneurial skills to help his or her division and company succeed. Entrepreneurial skills involve the ability to: Seize opportunities Deal with uncertainty Gather necessary resources Organize business processes to pursue specific goals The Entrepreneurial Personality The Entrepreneurial Personality What characteristics and/or personality traits do you believe are essential to becoming an entrepreneur? The Individual Entrepreneur The Individual Entrepreneur The commonplace definition for the entrepreneur is a person who starts his or her own new and small business Entrepreneurs serve customers in new ways, enter underserved markets, and exploit opportunities that others have missed. The Individual Entrepreneur (cont.) The Individual Entrepreneur (cont.) Contingency theories of management assert that: Different behaviors, cognitions and attitudes are effective in different contexts. There is no single personality “type” that is defined as an “entrepreneurial type.” Some ways of behaving and thinking are more effective than others for success in entrepreneurial careers. Entrepreneurial Behaviors Entrepreneurial Behaviors David McClelland determined that founders of high growth companies appear to share personal characteristics: He also identified four fundamental behaviors:
Belief Commitment Focus Drive High need for achievement Low need to conform Persistence High energy level Risk taking tendencies Ability to work with others to achieve goals The Entrepreneur’s Social Network The Entrepreneur’s Social Network Social network: The social environment in which entrepreneurs build their ventures by gaining support, knowledge, and access to distribution channels. The entrepreneur’s social network varies from time to time depending on the different phases of the venture’s life. The Entrepreneur’s Social Network The Entrepreneur’s Social Network (cont.) Phases of venture development from this perspective: Phase 1: The motivation phase Phase 2: The planning phase Phase 3: The establishment phase Entrepreneurs need capital, skills, knowledge, and labor to start new ventures. Social capital: The networks of contacts that help bring about success are the entrepreneur’s social capital. Social network has several characteristics. • Size • Positioning The Entrepreneur’s Social Network The Entrepreneur’s Social Network (cont.) Some of the social relationships are single stranded Other relationships known as multiplex ties play multiple roles in the network There is a significant difference in social network size between phases 1 and 2. Social capital is used differentially throughout the phases of venture development. Entrepreneurial Cognitions Entrepreneurial Cognitions Entrepreneurs routinely exhibit a range of cognitive skills Cognition and cognitive psychology are concerned with the study of individual memory, perception, thinking, and information processing. Entrepreneurs use mental models to simplify and piece together previously unconnected information. Cognitive biases: Perceptive tendencies among entrepreneurs that enable them to make complex decisions despite incomplete information. Entrepreneurs display distinct cognitive biases in decision environments characterized by uncertainty and complexity. Yet, it is often these biases that enable entrepreneurs to take action despite incomplete information. Entrepreneurial Cognitions (cont.) Entrepreneurial Cognitions (cont.) The are a variety of cognitive tendencies among entrepreneurs at the planning phase of a new venture. Overconfidence Belief in the law of small numbers Planning fallacy The illusion of control Reasoning by analogy Minimizing Risks on Biased Cognitions Use active versus passive searching Personal versus impersonal information External versus internal sources Entrepreneurial Attitudes Entrepreneurial Attitudes Conation refers to the connection of knowledge and affect to behavior and is associated with the issue of “why.” Conation is closely associated with the concept of volition and has been referred to as Emotional Intelligence, or EI Volition is defined as the use of will or the freedom to make choices about what to do. Entrepreneurial Attitudes (cont.) Entrepreneurial Attitudes (cont.) Daniel Goleman suggests that a person’s emotional abilities may be at least partially genetically determined. Goleman presents a fivestep program for people to improve their emotional skills: Decide who you want to be Determine who you are now Develop a path from where you are to where you want to be Determine how to make changes permanent Find out who can help you get where you want to go Entrepreneurial Attitudes (cont.) Entrepreneurial Attitudes (cont.) Human beings have an emotional style of putting thought into action. Kathy Kolbe identifies four action, or conative modes: Fact finder tendency to probe, refine, and simplify Follow through tendency to organize, reform, and adapt Quick start tendency to improvise, revise, and stabilize Implementer Tendency to construct, renovate, and envision Entrepreneurial Attitudes (cont.) Entrepreneurial Attitudes (cont.) Maslow’s hierarchy of needs is one of the most well known approaches. Maslow’s hierarchy of needs can be divided into five basic categories: physiological, safety, social, esteem, and selfactualization. A second aspect of conation is visualizing your goals and dreams, and then acting on them A third aspect is the exercise of volition, or people’s freedom to choose and control their thoughts and behavior. A fourth aspect of the direction component of conation is the setting of goals for the directions that have been chosen. Entrepreneurial Attitudes (cont.) Entrepreneurial Attitudes (cont.) Scholars have identified three types of goals: Mastery goals Performance goals Social goals Entrepreneurial Attitudes (cont.) Entrepreneurial Attitudes (cont.) YerkesDodson law states that moderate amounts of difficulty lead to optimal performance. Goals must be difficult but attainable. The emotional state of an individual can influence the goals that are set. Individuals with increased levels of self efficacy set higher goals. A fifth aspect of successful selfdirection is the development of plans that can turn visions and goals into reality. Two processes can be employed: backwards planning and task analysis. Entrepreneurial Attitudes (cont.) Entrepreneurial Attitudes (cont.) To be successful, backwards planning must be accompanied by a task analysis that will identify the skills and knowledge required to learn or perform a specific task. Entrepreneurial attitudes can be cultivated over time, but each person has certain innate tendencies toward each of the attitudes we have discussed. The entrepreneur must learn not to fight against natural tendencies but rather to recognize them and to compensate for them wherever possible. Successful entrepreneurs leverage their strengths and find ways to compensate for their weaknesses. ...
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- Spring '11
- Psychology, entrepreneurial attitudes