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Eng lesson 1 onb 2_a02_2011

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Thuso Sebeke
Thuso Sebeke

This document provides information about a Business Management lecture. It includes details about the lecturer such as name, contact information and consultation hours. It also outlines important dates for assessments including module tests, Edulink tests and the exam. Assessment breakdown is provided showing the weighting of each assessment. Other information mentioned includes class attendance, participation, presentations, class representatives, and minor irritations. The first lecture will cover chapters 1 and 2 on the nature and development of entrepreneurship and the entrepreneur. It defines an entrepreneur and discusses where entrepreneurship originated from an economic and behavioral perspective. Different types of entrepreneurs and barriers faced by women and emerging entrepreneurs are also summarized.

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By PresenterMedia.com Business Management 2A 24 M a r c h 2011
Lecturer Mrs C Jasson Department Of Business Management Office: D-Ring 532 Tel: (011) 559-4432 Consulting Hours: Mondays 10:00 tot 11:00 Wednesdays 11h00 tot 13h00 Thursdays 13:00 tot 15:00 Or per appointment
Important arrangements ONB 2A 02 Module test: 4 May or 12 May (Thursday) 16:00 17:00 Venue: DLab [Chapters 1 6] (= 40 % of module mark) Continuous assessment: 2 Edulink tests (= 10% of module mark) Test 1: 11-15 April (Chapters 1 4) Test 2: 26 30 May (Chapters 7 9) Exam: Tuesday 31 Mei 14h00 17h00
Other important information 1 Class attendance
2 Participation Other important information
Class test 0% Edulink test 5% Edulink test 5% Module test 40% Exam 50% Other important information 3 Tests
Other important information 4 Presentation
Other important information 5 Class reps
Cell phones Punctuality Bladder control University policy Language & grammar Neat appearance Preparation Other important information 6 Minor irritations! Test tip! One each day!
Lecture 1 Chapter 1 The nature & development of entrepreneurship Chapter 2 The entrepreneur
Definition of an entrepreneur
An entrepreneur is a person who sees an opportunity in the market, gathers resources and creates and grows a business venture to satisfy these needs. He/she takes the risk of the venture and is rewarded with profit if it succeeds.
Why does a country need entrepreneurs? Economic development can be derived from the entrepreneurial activity in a country Economic growth Employment creation Wealth creation Skills are needed in SA; Young, qualified entrepreneurs;
Where does Entrepreneurship come from? Entrepreneurship developed first from the economist Richard Cantillon (1680 1734) introduced the term entrepreneur Derived from the French word entreprendre which means to undertake Cantillon defined the entrepreneur as one who buys at certain prices and sells at uncertain prices, thereby undertaking a risk in exchange for a potential profit;
Jean Baptiste Say (1767 1832) defines an entrepreneur as someone who uses knowledge, judgment, management capabilities , leadership & technical abilities, to move existing economic resources from areas of low productivity to areas of higher productivity. Where does Entrepreneurship come from? In the process he associates the entrepreneur with innovation he views entrepreneurs as change agents [Say = father of entrepreneurship]
Where does Entrepreneurship come from? Joseph Schumpeter (1883 1950) really launched the field of entrepreneurship by associating it with innovation His main contribution to economic studies was his theory of business cycles
Schumpeter: The essence of entrepreneurship lies in the perception and exploration of new opportunities in the realm of businessit always has to do with bringing about a different use of national resources in that they are withdrawn from their traditional employ and subjected to new combinations
Where does Entrepreneurship come from? Schumpeter stated that entrepreneurs undertook five types of innovations: The introduction of a new good or quality of good The introduction of a new method of production The opening of a new market The utilisation of new sources of supply for raw materials or intermediate goods The carrying out of some new organisational form of the industry The economists (1700 1950) were mainly interested in understanding the role played by the entrepreneur as the motor of the economic system (What the entrepreneurs do)
Where does Entrepreneurship come from? The Behaviourists (psychologists, psychoanalysts, sociologists and other specialists of human behaviour)[1960 1980, goal was to define entrepreneurs and their characteristics] Max Weber viewed entrepreneurs as innovators, independent people whose role as business leaders conveyed a source of formal authority David McClelland (1971) defined the entrepreneur as someone who exercised control over production that is not just for his personal consumption (need for achievement)
Where does Entrepreneurship come from? Since the 1980s the field of entrepreneurship started to explode Management Sciences perspective Publication of the first-ever encyclopedia First major annual conference dedicated to this field (Babson conference) [focused on what entrepreneurs do] From 1985s Social perspective focused on what support is needed by entrepreneurs
Where does Entrepreneurship come from? Entrepreneurial perspective [1990 onwards] Focus on what is entrepreneurial activities and what competencies are required to perform them] Does not look at only the individual entrepreneurial behaviour but also the more complex forces of entrepreneurship Entreprenology (Fillion) = a comprehensive multidisciplinary understanding of the entire entrepreneurial process
Research trends Period Topics Authors What do they do? (1700-1950) Economic Cantillon, Say, Schumpeter Who are they? (60s- 80s) Behaviourists Weber, McClelland, Rotter, De Vries What do they do? (80s) Management sciences Drucker, Mintzberg What support do they need? (mid 80s) Sociologists Gartner, Welsh, Bygrave, Reynold Competencies Entrepreneurs Timmons, Vesper, Brockhaus
Many diverse meanings over the years; We need a comprehensive understanding of the process; Overall we can define it as a field of study about the entrepreneur; Entrepreneurship is an applied research field; However we have not yet studied the behaviour of entrepreneurs well; Entreprenology (Fillion) The study of the behaviour of the entrepreneur
The theory behind entreprenology Behaviourists Flexible models; Multi-dimensional Multi-disciplinary Economists Innovation; Drive development;
ENTREPRENEUR Starts & runs his own business; Object: to make a profit; Innovative behaviour; Employs time, effort, resources, & takes risks; Reward required: success, financial & personal satisfaction The act of being an entrepreneur; More than just starting a business; The emergence & growth of new businesses; Causes changes in the economy; Process of identifying unmet needs, allocate resources, and create value for self and society. ENTREPRENEURSHIP Entrepreneur & Entrepreneurship
SMALL BUSINESS Limited growth potential; Stabilizes at some point; Object: personal goals/security; Limited innovative behaviour; Focus on delivery/client service; Certain benefits to remaining small; Criteria: National Small Business Act 26 of 2003 (Amended) Main objective: growth & profit; Innovation; Venture into new territory; Real creators of employment; Greater growth potential; Listing on JSE or international markets; ENTREPRENEURAL VENTURE Venture VS Small Business
An entrepreneurial orientation Entrepreneurial Orientation Value system Culture Experience Entry of entrepreneurs Acquired abilities Inherent abilities Results of entrepreneurship Products/services Cooperative environment External support Supportive environment Finance Laws Training
3 domainsEntrepreneurship Management Leadership Discovery Exploitation
Success factors of entrepreneurs Creativity Innovation Perseverance Relationships Positive attitude Leadership Commitment
Succes factors of managers Planning Competitors KnowledgeMarket Insight Focus KYC
Opportunity Business Plan Resources? Start Manage Entrepreneurial process
Change agents; See opportunities others dont; Create wealth; Their roles? Challenges? Survivalist? Emerging entrepreneur? Opportunities for Entrepreneurship? Necessity of Entrepreneurship? Focus on Entrepreneurs
Economic actors the creators & drivers of business; SA problem: low growth, unemployment & poverty; Living standard depends on customer satisfaction levels; Advances prosperity of small communities & country; 1/18 adults in SA are entrepreneurs too low; Drive to increase the number of entrepreneurs A catalyst for economic activity
Entrepreneurs at various levels of entrepreneurial sophistication Basic survivalist No economic independence; little involvement with other entrepreneurs (individualism) Entrepreneurial activities: isolated from markets; unaware of own potential; illiterate; few income- generating activities Pre-entrepreneurs Follows the groups initiatives (collectivism) Entrepreneurial activities: welfare-orientated; not expected to be self-sustaining; needs training in entrepreneurial competency Subsistence entrepreneurs Self-employed, independent income generation; temporary market stall or stand Entrepreneurial activities: inexperienced in business management needs general support in technical and management skills Micro-entrepreneurs 0 to 9 employees; operating license from local authority, fixed workshop Entrepreneurial activities: difficult to get loans from banks. Assistance projects focus on credit rather than training and technical assistance Small-scale entrepreneurs 10 to 49 employees Entrepreneurial activities: qualifies for bank loan; well educated
Background of entrepreneurs Family Frequently parents were entrepreneurs, but not in SA Education The biggest barrier overcome by tertiary education Personal values High values high success rate Age In their 20s-30s usually worked beforehand Work experience Opportunities spotted during employment
Characteristics of entrepreneurs Passion Locus of control Need for independence Need for achievement Risk taking and uncertainty Creativity and innovation Determination and persistence
Role models & support systems Social; Personal; Extended; Other Benefits: Joint: Marketing; Buying of raw material; Tendering Sharing: Intelligence; Containers; Supplier info; Mentor services;
Push/pull factors Independence Achievement Recognition Personal development Personal wealth Unemployment Job insecurity Disagreement with boss Bad fit with organization Out of options Opportunity Necessity E
Why do small business fail? Finance: Banks dont want the risk; Few MFIs Bad business plans Markets: Follow others; No marketing; No info on consumer demands Technology: Competitive advantage; NRF, SABS have SMME development programs People: Manage employee attitudes; Build team spirit; Life-long learning; Be a role model; Challenges
Eng lesson 1 onb 2_a02_2011
Women & emerging entrepreneurs >40-80< of SA workforce is in the informal sector & most are women; Economic role of women has evolved; Adverse conditions: Overworked, uneducated, denied finance, facing discrimination, tradition Education, skills & mindset determine entry into formal market
Types of women entrepreneurs Traditional Innovative Domestic Radical Attachment to traditional gender roles Attachmenttoentrepreneurialideas
Barriers women entrepreneurs face Limited start up funds; No support structures & networks; Work-life balance; Socio-cultural attitudes; Discrimination & bias; Lack of/inappropriate education & training; Surviving male domination Life skills (confidence, communication etc)
Male VS female entrepreneurs Characteristics Male Female Starting Laid the foundation women must follow Latecomers uninformed & unaware that they can conduct business Type Manufacturing/construction. In 21st Century - diversified Service related, eg. Coffee shops, hairdressing, training Relationships Short term orientated- focus on results! Strong relationship focus with eg. banks, suppliers etc Funding Barrier if too little collateral Worse barrier & source of discrimination Support Friends, spouse, business partners Spouse, associations, family, networks
New labels for entrepreneurship Emerging entrepreneurship Previously disadvantaged groups Survivalist and micro enterprises (informal sector) Propensity to create employment or grow is limited by a lack of skills, knowledge and resources Not recognised by the mainstream businesses Denied basic inputs needed to develop their businesses = the typical street vendors Opportunity and necessity entrepreneurship Youth entrepreneurship Umsobomvu Youth Fund
Technopreneurs Use technological innovations & translate such technology into successful produces or services. Amazon.com; Dell Computers
Social entrepreneurs Recognizes a social problem & uses entrepreneurial principles to organize, create & manage a venture to achieve social change Muhammad Yunus Founder of Grameen Bank
Tourism entrepreneurs
A South African term coined by Dr Blade Nzimande used to describe government officials or politicians who uses their powers & influence to secure government tenders & contracts Tenderpreneur
Homework & preparation And Test Tip!

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Eng lesson 1 onb 2_a02_2011

  • 2. Lecturer Mrs C Jasson Department Of Business Management Office: D-Ring 532 Tel: (011) 559-4432 Consulting Hours: Mondays 10:00 tot 11:00 Wednesdays 11h00 tot 13h00 Thursdays 13:00 tot 15:00 Or per appointment
  • 3. Important arrangements ONB 2A 02 Module test: 4 May or 12 May (Thursday) 16:00 17:00 Venue: DLab [Chapters 1 6] (= 40 % of module mark) Continuous assessment: 2 Edulink tests (= 10% of module mark) Test 1: 11-15 April (Chapters 1 4) Test 2: 26 30 May (Chapters 7 9) Exam: Tuesday 31 Mei 14h00 17h00
  • 4. Other important information 1 Class attendance
  • 6. Class test 0% Edulink test 5% Edulink test 5% Module test 40% Exam 50% Other important information 3 Tests
  • 9. Cell phones Punctuality Bladder control University policy Language & grammar Neat appearance Preparation Other important information 6 Minor irritations! Test tip! One each day!
  • 10. Lecture 1 Chapter 1 The nature & development of entrepreneurship Chapter 2 The entrepreneur
  • 11. Definition of an entrepreneur
  • 12. An entrepreneur is a person who sees an opportunity in the market, gathers resources and creates and grows a business venture to satisfy these needs. He/she takes the risk of the venture and is rewarded with profit if it succeeds.
  • 13. Why does a country need entrepreneurs? Economic development can be derived from the entrepreneurial activity in a country Economic growth Employment creation Wealth creation Skills are needed in SA; Young, qualified entrepreneurs;
  • 14. Where does Entrepreneurship come from? Entrepreneurship developed first from the economist Richard Cantillon (1680 1734) introduced the term entrepreneur Derived from the French word entreprendre which means to undertake Cantillon defined the entrepreneur as one who buys at certain prices and sells at uncertain prices, thereby undertaking a risk in exchange for a potential profit;
  • 15. Jean Baptiste Say (1767 1832) defines an entrepreneur as someone who uses knowledge, judgment, management capabilities , leadership & technical abilities, to move existing economic resources from areas of low productivity to areas of higher productivity. Where does Entrepreneurship come from? In the process he associates the entrepreneur with innovation he views entrepreneurs as change agents [Say = father of entrepreneurship]
  • 16. Where does Entrepreneurship come from? Joseph Schumpeter (1883 1950) really launched the field of entrepreneurship by associating it with innovation His main contribution to economic studies was his theory of business cycles
  • 17. Schumpeter: The essence of entrepreneurship lies in the perception and exploration of new opportunities in the realm of businessit always has to do with bringing about a different use of national resources in that they are withdrawn from their traditional employ and subjected to new combinations
  • 18. Where does Entrepreneurship come from? Schumpeter stated that entrepreneurs undertook five types of innovations: The introduction of a new good or quality of good The introduction of a new method of production The opening of a new market The utilisation of new sources of supply for raw materials or intermediate goods The carrying out of some new organisational form of the industry The economists (1700 1950) were mainly interested in understanding the role played by the entrepreneur as the motor of the economic system (What the entrepreneurs do)
  • 19. Where does Entrepreneurship come from? The Behaviourists (psychologists, psychoanalysts, sociologists and other specialists of human behaviour)[1960 1980, goal was to define entrepreneurs and their characteristics] Max Weber viewed entrepreneurs as innovators, independent people whose role as business leaders conveyed a source of formal authority David McClelland (1971) defined the entrepreneur as someone who exercised control over production that is not just for his personal consumption (need for achievement)
  • 20. Where does Entrepreneurship come from? Since the 1980s the field of entrepreneurship started to explode Management Sciences perspective Publication of the first-ever encyclopedia First major annual conference dedicated to this field (Babson conference) [focused on what entrepreneurs do] From 1985s Social perspective focused on what support is needed by entrepreneurs
  • 21. Where does Entrepreneurship come from? Entrepreneurial perspective [1990 onwards] Focus on what is entrepreneurial activities and what competencies are required to perform them] Does not look at only the individual entrepreneurial behaviour but also the more complex forces of entrepreneurship Entreprenology (Fillion) = a comprehensive multidisciplinary understanding of the entire entrepreneurial process
  • 22. Research trends Period Topics Authors What do they do? (1700-1950) Economic Cantillon, Say, Schumpeter Who are they? (60s- 80s) Behaviourists Weber, McClelland, Rotter, De Vries What do they do? (80s) Management sciences Drucker, Mintzberg What support do they need? (mid 80s) Sociologists Gartner, Welsh, Bygrave, Reynold Competencies Entrepreneurs Timmons, Vesper, Brockhaus
  • 23. Many diverse meanings over the years; We need a comprehensive understanding of the process; Overall we can define it as a field of study about the entrepreneur; Entrepreneurship is an applied research field; However we have not yet studied the behaviour of entrepreneurs well; Entreprenology (Fillion) The study of the behaviour of the entrepreneur
  • 24. The theory behind entreprenology Behaviourists Flexible models; Multi-dimensional Multi-disciplinary Economists Innovation; Drive development;
  • 25. ENTREPRENEUR Starts & runs his own business; Object: to make a profit; Innovative behaviour; Employs time, effort, resources, & takes risks; Reward required: success, financial & personal satisfaction The act of being an entrepreneur; More than just starting a business; The emergence & growth of new businesses; Causes changes in the economy; Process of identifying unmet needs, allocate resources, and create value for self and society. ENTREPRENEURSHIP Entrepreneur & Entrepreneurship
  • 26. SMALL BUSINESS Limited growth potential; Stabilizes at some point; Object: personal goals/security; Limited innovative behaviour; Focus on delivery/client service; Certain benefits to remaining small; Criteria: National Small Business Act 26 of 2003 (Amended) Main objective: growth & profit; Innovation; Venture into new territory; Real creators of employment; Greater growth potential; Listing on JSE or international markets; ENTREPRENEURAL VENTURE Venture VS Small Business
  • 27. An entrepreneurial orientation Entrepreneurial Orientation Value system Culture Experience Entry of entrepreneurs Acquired abilities Inherent abilities Results of entrepreneurship Products/services Cooperative environment External support Supportive environment Finance Laws Training
  • 29. Success factors of entrepreneurs Creativity Innovation Perseverance Relationships Positive attitude Leadership Commitment
  • 30. Succes factors of managers Planning Competitors KnowledgeMarket Insight Focus KYC
  • 32. Change agents; See opportunities others dont; Create wealth; Their roles? Challenges? Survivalist? Emerging entrepreneur? Opportunities for Entrepreneurship? Necessity of Entrepreneurship? Focus on Entrepreneurs
  • 33. Economic actors the creators & drivers of business; SA problem: low growth, unemployment & poverty; Living standard depends on customer satisfaction levels; Advances prosperity of small communities & country; 1/18 adults in SA are entrepreneurs too low; Drive to increase the number of entrepreneurs A catalyst for economic activity
  • 34. Entrepreneurs at various levels of entrepreneurial sophistication Basic survivalist No economic independence; little involvement with other entrepreneurs (individualism) Entrepreneurial activities: isolated from markets; unaware of own potential; illiterate; few income- generating activities Pre-entrepreneurs Follows the groups initiatives (collectivism) Entrepreneurial activities: welfare-orientated; not expected to be self-sustaining; needs training in entrepreneurial competency Subsistence entrepreneurs Self-employed, independent income generation; temporary market stall or stand Entrepreneurial activities: inexperienced in business management needs general support in technical and management skills Micro-entrepreneurs 0 to 9 employees; operating license from local authority, fixed workshop Entrepreneurial activities: difficult to get loans from banks. Assistance projects focus on credit rather than training and technical assistance Small-scale entrepreneurs 10 to 49 employees Entrepreneurial activities: qualifies for bank loan; well educated
  • 35. Background of entrepreneurs Family Frequently parents were entrepreneurs, but not in SA Education The biggest barrier overcome by tertiary education Personal values High values high success rate Age In their 20s-30s usually worked beforehand Work experience Opportunities spotted during employment
  • 36. Characteristics of entrepreneurs Passion Locus of control Need for independence Need for achievement Risk taking and uncertainty Creativity and innovation Determination and persistence
  • 37. Role models & support systems Social; Personal; Extended; Other Benefits: Joint: Marketing; Buying of raw material; Tendering Sharing: Intelligence; Containers; Supplier info; Mentor services;
  • 38. Push/pull factors Independence Achievement Recognition Personal development Personal wealth Unemployment Job insecurity Disagreement with boss Bad fit with organization Out of options Opportunity Necessity E
  • 39. Why do small business fail? Finance: Banks dont want the risk; Few MFIs Bad business plans Markets: Follow others; No marketing; No info on consumer demands Technology: Competitive advantage; NRF, SABS have SMME development programs People: Manage employee attitudes; Build team spirit; Life-long learning; Be a role model; Challenges
  • 41. Women & emerging entrepreneurs >40-80< of SA workforce is in the informal sector & most are women; Economic role of women has evolved; Adverse conditions: Overworked, uneducated, denied finance, facing discrimination, tradition Education, skills & mindset determine entry into formal market
  • 42. Types of women entrepreneurs Traditional Innovative Domestic Radical Attachment to traditional gender roles Attachmenttoentrepreneurialideas
  • 43. Barriers women entrepreneurs face Limited start up funds; No support structures & networks; Work-life balance; Socio-cultural attitudes; Discrimination & bias; Lack of/inappropriate education & training; Surviving male domination Life skills (confidence, communication etc)
  • 44. Male VS female entrepreneurs Characteristics Male Female Starting Laid the foundation women must follow Latecomers uninformed & unaware that they can conduct business Type Manufacturing/construction. In 21st Century - diversified Service related, eg. Coffee shops, hairdressing, training Relationships Short term orientated- focus on results! Strong relationship focus with eg. banks, suppliers etc Funding Barrier if too little collateral Worse barrier & source of discrimination Support Friends, spouse, business partners Spouse, associations, family, networks
  • 45. New labels for entrepreneurship Emerging entrepreneurship Previously disadvantaged groups Survivalist and micro enterprises (informal sector) Propensity to create employment or grow is limited by a lack of skills, knowledge and resources Not recognised by the mainstream businesses Denied basic inputs needed to develop their businesses = the typical street vendors Opportunity and necessity entrepreneurship Youth entrepreneurship Umsobomvu Youth Fund
  • 46. Technopreneurs Use technological innovations & translate such technology into successful produces or services. Amazon.com; Dell Computers
  • 47. Social entrepreneurs Recognizes a social problem & uses entrepreneurial principles to organize, create & manage a venture to achieve social change Muhammad Yunus Founder of Grameen Bank
  • 49. A South African term coined by Dr Blade Nzimande used to describe government officials or politicians who uses their powers & influence to secure government tenders & contracts Tenderpreneur