Part I

The Entrepreneurial Mind-Set

in the 21st Century

Chapter 1
Entrepreneurship:
Evolutionary
Development—
Revolutionary Impact

PowerPoint Presentation by Charlie Cook

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a

publicly accessible website, in whole or in part.
 Entrepreneurs—Breakthrough Innovators
• Entrepreneurs
➢ Recognize opportunities where
others see chaos, contradiction,
or confusion
➢ Are aggressive catalysts for
change within the marketplace
➢ Challenge the unknown and
continuously create
breakthroughs for the future

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 Kinds of Entrepreneur

• Seniorpreneur
• Copreneur
• Biopreneur

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 Three main Types of Entrepreneur

• Business entrepreneurs
• Social entrepreneurs
• Small-business owners

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 Entrepreneurs versus
Small Business Owners: A Distinction
• Small Businesses Owners
➢ Manage their businesses by expecting
stable sales, profits, and growth
• Entrepreneurs
➢ Focus their efforts on innovation,
profitability and sustainable growth

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 Entrepreneurship: A Mind-Set
• Entrepreneurship is more than
the mere creation of business:
➢ Seeking opportunities
➢ Taking risks beyond security
➢ Having the tenacity to push
an idea through to reality

• Entrepreneurship is an integrated
concept that permeates an individual’s
business in an innovative manner.

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 The Evolution of Entrepreneurship
• Entrepreneur is derived from the French
entreprendre, meaning “to undertake.”
➢ The entrepreneur is one who undertakes to organize,
manage, and assume the risks of a business.

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 Avoiding Folklore:
The Myths of Entrepreneurship
• Myth 1: Entrepreneurs Are Doers, Not Thinkers

• Myth 2: Entrepreneurs Are Born, Not Made

• Myth 3: Entrepreneurs Are Always Inventors

• Myth 4: Entrepreneurs Are Academic and Social Misfits

• Myth 5: Entrepreneurs Must Fit the Profile

• Myth 6: All Entrepreneurs Need Is Money

• Myth 7: All Entrepreneurs Need Is Luck

• Myth 8: Entrepreneurship Is Unstructured and Chaotic

• Myth 9: Most Entrepreneurial Initiatives Fail

• Myth 10: Entrepreneurs Are Extreme Risk Takers

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1–11
 The Impact of Gazelles
• A “Gazelle”
➢
A business establishment with at least
20% sales growth in each year for five
years, starting with a base of at least
$100,000 in annual sales.
• Gazelles as leaders in innovation:
➢ Are responsible for 55% of innovations
in 362 different industries and 95% of
radical innovations.
➢ Produce twice as many product
innovations per employee as do larger
firms.
➢ Obtain more patents per sales dollar
than do larger firms.
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1–30
 Part I
The Entrepreneurial Mind-Set
in the 21st Century

Chapter 1
The Entrepreneurial
Mind-Set in Individuals:
Cognition and Ethics

PowerPoint Presentation by Charlie Cook

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated,
in whole or in part, except for use as permitted in a license distributed with a certain product
or service or otherwise on a password-protected website for classroom use.
 The Entrepreneurial Mind-Set
• Entrepreneurial Mind-Set
➢ Describes the most common characteristics
associated with successful entrepreneurs as well as
the elements associated with the “dark side” of
entrepreneurship.
• Who Are Entrepreneurs?
➢ Independent individuals, intensely committed and
determined to persevere, who work very hard.
➢ They are confident optimists who strive for integrity.
➢ They burn with the competitive desire to excel and use
failure as a learning tool.

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license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2–44
 Entrepreneurial Cognition

Social Cognition Entrepreneurial

Cognition
Theory Cognition

The mental functions, Posits that knowledge The knowledge

processes (thoughts), structures (mental structures that people
and states of intelligent models of cognitions) can use to make
humans—attention, be ordered to optimize assessments, judgments,
remembering, producing personal effectiveness or decisions involving
and understanding within given situations. opportunity evaluation,
language, solving venture creation, and
problems, and making growth.
decisions.

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Characteristics of the Entrepreneurial Mind-Set
• Determination and • Calculated risk taking
perseverance • High energy level
• Drive to achieve • Creativity and
• Opportunity orientation innovativeness
• Initiative and responsibility • Vision
• Persistent problem solving • Passion
• Seeking feedback • Independence
• Internal locus of control • Team building
• Tolerance for ambiguity

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 The Dark Side of Entrepreneurship
• The Entrepreneur’s Confrontation with Risk
➢ Financial risk versus profit (return) motive varies in
entrepreneurs’ desire for wealth.
➢ Career risk—loss of employment security
➢ Family and social risk—competing commitments of
work and family
➢ Psychic risk—psychological impact of failure on the
well-being of entrepreneurs

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 Stress and the Entrepreneur
• Entrepreneurial Stress
➢ The extent to which entrepreneurs’ work demands
and expectations exceed their abilities to perform as
venture initiators, they are likely to experience stress.

• Sources of Entrepreneurial Stress

➢ Loneliness
➢ Immersion in business
➢ People problems
➢ Need to achieve

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 Dealing with Stress

Networking

Exercising Getting away

rigorously from it all

Communicating
Delegating
with employees

Finding satisfaction
outside the company

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 Entrepreneurial Ethics
• Ethics
➢ Provides the basic rules or parameters for conducting
any activity in an “acceptable” manner.
➢ Represents a set of principles prescribing a behavioral
code of what is good and right or bad and wrong
➢ Defines “situational” moral duty and obligations.
• Sources of Ethical Dilemmas
➢ Moral principles that govern an entrepreneur’s
behavior.

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 2.2 Classifying Decisions Using a Conceptual Framework

Source: Verne E. Henderson, “The Ethical Side of Enterprise,” Sloan Management Review (Spring 1982): 42.
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American Express, a financial services company, found that smokers were
costing the company $5,000–$6,000 more per year than nonsmokers.
With medical costs rising 10 percent–15 percent per year, the board of
directors wants to discuss whether the company should refuse to hire
smokers.

Nationwide, about 6,000 companies refuse to hire smokers. Costs are

driving the trend not to hire smokers. According to the CDC, a smoker will
have 50 percent higher absenteeism and, when present, will work 39
fewer minutes per day because of smoke breaks, which leads to 1,817 lost
hours of annual productivity. A smoker will have higher accident rates,
cause $1,000 a year in property damage (from cigarette burns and smoke
damage), and will cost up to $5,000 more a year for annual insurance
premiums.
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 Entrepreneurial Ethics (cont’d)
• Ethical rationalizations used to justify
questionable conduct involve believing that the
activity:
➢ Is not “really” illegal or immoral.
➢ Is in the individual’s or the firm’s best interest.
➢ Will never be found out.
➢ Helps the firm so the firm will condone it.

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 “Always Do the Right Thing”
• Reasons for management to adhere to a high
moral code:
➢ It is good business because unethical practices have
a corrosive effect not only on the firm itself, but on free
markets and free trade which are fundamental to the
survival of the free enterprise system.
➢ Improving the moral climate of the firm will eventually
win back the public’s confidence in the firm.

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
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