Chapter 20: Entrepreneurial Motives and Characteristics

Characteristics of Entrepreneur: ________________________________

 Innovative (creative to form new ideas) ________________________________
 Risk taker (mindset to accept the uncertainty of future)
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 Commitment and self-motivation ( continuing even in great stress)
 Self-determination (keeping control over the business and changes) ________________________________
 Judgment (ability to gather information and take advice to take decision) ________________________________
 Perseverance (capability to survive during bad phases and setbacks)
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 Initiative takers (being proactive)
 Multi skilled (ability to do number of tasks including: record keeping, ________________________________
promoting business, recruiting etc.) ________________________________
 Leadership skills: (ability to encourage people to work and motivate them,
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Style: Democratic/ autocratic and laizze fair)
 Confidence ( not getting discouraged by failure and overcome the setbacks) ________________________________
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Skills required by entrepreneurs: ________________________________
a. Organising: ability to choose the appropriate resources and combine them
together profitably to produce products at a price the consumer is willing to ________________________________
pay. Organizing and coordinating resources to set up and run business venture. ________________________________
Includes: planning, scheduling, instructing, prioritizing, system setup, ________________________________
monitoring, time management and meeting deadlines. If not met need to “fire-
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fight” means resolving the conflicts.
b. Financial management: Budgeting, predicting and monitoring cash flow, ________________________________
recording and updating financial transactions, arranging loans, analysing ________________________________
financial information, collecting debts etc.
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c. Communication: with internal and external stakeholder. Selecting and
implementing effective and fast communication system that need to be ________________________________
followed by the entire organization. Also focusing on developing the ________________________________
communication skill that can help to easily and effectively convey the
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instruction without harming the relationship with the parties. Able to write:
letters, emails, memos. ________________________________
d. Managing people/Human Resource management: Ensure relevant number of ________________________________
workers with relevant skills are available. Being able to become a motivating, ________________________________
inspiring and effective leader. Includes: manpower analysis, recruitment,
selection, identifying need for training and motivation. Also being able to ________________________________
direct the people towards the goals of the business. ________________________________
e. Decision making: able to solve problem and take decision according to the ________________________________
demand of the situation by analysing and evaluating the information gathered
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by observation and suggestion from other.
f. Negotiating: being calm and confident while developing logical argument and ________________________________
also being positive towards compromise if it is beneficial while negotiating so ________________________________
that solution can be taken which is accepted/ agreed by both the parties.
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 g. IT Skills: setting up a filing system to store documents, communicating via IT ________________________________
(email/ messengers), using different types of software to: record ________________________________
information/data, design document (invoice, job description etc.)/ making
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presentation to inform the client about different proposals or ideas/ design
products, setting up business website, using social media to build PR. ________________________________
h. Marketing: so that the products meet the consumers’ needs in terms of product, ________________________________
price, place and promotion (4 Ps)
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i. Objectives: making sure that aims and targets of business are met in a planned
way with appropriate strategies used ________________________________
j. Coordination: All the functional departments work together to achieve ________________________________
corporate objectives (finance, marketing, operations, HRM)
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Reasons to setup business:
a. Financial motives: Profit making ________________________________
i. Profit maximization: Earning maximum profit possible at a given period of ________________________________
time especially if the RnD cost is very high than to cover it up quickly ________________________________
ii. Profit satisficing: Earning enough profit that can support the requirement of the
owner ________________________________
b. Non-financial motives: ________________________________
i. Ethical stance: Setting up a business on the basis of one’s moral beliefs ________________________________
ii. Social enterprise: A social enterprise is a business with mainly social
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objectives that reinvests most of its profits into benefiting society rather than
maximizing return to owners. ________________________________
The features of Social enterprises: ________________________________
a. Are set up to make a difference to society with a clear social/ environmental
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mission
b. Need to make a surplus or profit by all ethical means to survive as they do not ________________________________
rely on donations as charities do ________________________________
c. Reinvest profit for social purpose
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d. Operate in a range of size and structures
They must have a business structure that is different from the normal ________________________________
partnership, or joint stock companies, because of their social motive, so the use ________________________________
of profit, and the trading of products or services might be different from that of ________________________________
the other normal enterprises that have a profit motive.
Examples include cooperatives, community enterprises and non-profit ________________________________
organizations. These: Provide employment for drug addicts and recovering ________________________________
them, Increase employment for women, Recycle furniture to low income ________________________________
households, Improve local environment by clearing litter and lands
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Triple Bottom Line: (Objectives of Social Enterprise)
The ‘triple bottom line’ approach goes beyond the traditional measures of ________________________________
profits, return on investment, and shareholder value. TBL offers much more ________________________________
socially responsible and valuable business performance taking into account the
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welfare of the community. It includes economic, social and environmental
dimensions – profits, people and the planet. ________________________________
1. Economic (Profit): make profits to reinvest back into the business and the ________________________________
 local / national economy as well as to shareholders. ________________________________
2. Social (People): provide jobs or local support to disadvantaged sections of ________________________________
the community
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3. Environmental (Planet): protect the environment and manage the business in
an environmentally sustainable way ________________________________
iii. Independence: Setting up business to run on one’s accord and being able to ________________________________
make all the decisions rather than working under others
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iv. Working from home: Setting up work at home for one’s own convenience. The
benefits are: a) the time and expenses of travelling can be saved and b) ________________________________
Enjoying flexibility as they can work on their preferred time. ________________________________
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Impact of enterprise on a country’s economy: ________________________________

i. Employment creation by setting up a new business, more jobs are created ________________________________
directly into the business and indirectly by encouraging ancillary or supporting ________________________________
businesses to form.
ii. Economic Growth: GDP (Gross Domestic Product) increases as the demand ________________________________
increases due to improved living standard of the population. It also increases ________________________________
tax revenue of the government due to increased output and consumption. ________________________________
iii. Firms’ survival and growth will benefit economy as the surviving businesses
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become very important to the economy since they are likely to employ large
number of workers and may take place of declining businesses that struggle to ________________________________
survive due to changes in consumer choices and technology. ________________________________
iv. Innovation and technological changes as new business tend to be more
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innovative and creative, they are more likely to bring in new and updated
technologies to the country which can make the country more advanced and ________________________________
competitive in the international market. ________________________________
v. Exports bring more currency reserve to the country. Therefore, it can improve
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the value of the nation’s exports and competitiveness
vi. Personal development helps an individual towards self-actualization. ________________________________
Therefore, it can help them to utilize their skills properly and motivate to ________________________________
become successful. ________________________________
vii. Increased Social Cohesion: People of the society will be more willing to
cooperate with each other in order to survive and prosper. ________________________________
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