Summary Business Studies Chapter 5 (General Management)

CHAPTER 5
GENERAL MANAGEMENT
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ENTREPRENEURSHIP AND INTRAPRENEURSHIP
Entrepreneur Intrapreneur
• Is the person who combines the • Often known as an “inside
three factors of production entrepreneur”. Works within a
(capital, labour and raw materials) business and uses entrepreneurial
in order to start a new business qualities combined with the
venture businesses resources to transform
• Sees an opportunity in the market innovative ideas into profit
and he/she assumes the risk of • Does not operate at Top
starting a new business by Management level, but will often
investing his/her capital in order to implement new and profitable
make a profit ideas within the department with
• When the entrepreneur starts the the approval of his/her manager
business, they will usually operate
at top management level




ENTREPRENEURIAL QUALITIES, CHARACTERISTICS AND
SKILLS
• The ability to identify an opportunity with potential and to then pursue the
opportunity
• The entrepreneur has to understand the target market and he/she continuously
needs to scan the internal and external environment
• The entrepreneur has to know who the customers (LSM) are
• An entrepreneur is an opportunist
• Starting a new business is hard work and takes commitment and perseverance
• Creativity and innovation are often requirements
• The ability to prepare and to implement a plan to achieve goals is very important
• Must have the ability to obtain and coordinate the required resources
• Without leadership qualities, the entrepreneur is not likely to achieve success
• The ability to evaluate achievements and progress
• Able to make quick decisions about opportunities as they arise
• The ability to communicate clearly and accurately is crucial
• An entrepreneur is personally motivated and often prefers to work on his/her own
at the very least be in charge of what is going on

, LEADERSHIP VS. MANAGEMENT
• A manager is appointed in a position of authority which enables him
to insist on people doing as he/she instructs
• A leader has the expertise to make people aware of the advantages of
pursuing a certain course of action
Manager Leader
Maintains systems Develops new methods to do things
Focuses on systems and structure Focuses on people
Relies on control Inspires trust
Accepts the status quo Challenges the status quo


MANAGEMENT
MANAGEMENT STYLES
Democratic (Everyone’s input)
Allows subordinates to provide input and participate in the decision-making process.
Sometimes referred to as the participative leadership style. The advantage is that it
usually ensures “buy-in” in commitment. The disadvantage could be that it may lead to
slowed decision making.

Autocratic (President)
Seldom allows for input from subordinates and makes all decisions. The disadvantage
of an autocratic style is that employees often have a low morale as they feel
undervalued by the manager

Laissez-faire (Garfield)
Believes that he/she should not interfere in the process of carrying out a task. This
management style may yield excellent results, if there is a highly-skilled workforce,
motivated to perform optimally

Transactional (Give and take)
Can be described as an approach of “give and take”. The problem with this style is that
as soon as employees regard the reward is insufficient, they become demotivated
which often results in labour unrest

Transformational (Teamwork)
The transformational leader is charismatic by nature. He/she will motivate employees
by helping them to understand the meaning of their work. This type of leader places
emphasis on teamwork and “why they matter”. This builds confidence and trust
between employees and management

Situational (All leadership styles)
Combination of all of the above styles. Adapt to a situation with a necessary style.