Principles of Management IIB (Entrepreneurship) by ProfessorBurgerQueen
Chapter 5: The Nexus Between The Individual And The
Environment
Opportunity and Change
- Opportunities are seen from 2 broad perspectives:
a. Opportunities exist because people have different information.;
b. Entrepreneurial opportunities come from an external change
- Peter Drucker: Unexpected events may spur opportunities and threats;
- Changes creates new opportunities but also imposes threats;
- Opportunities originate from a need to produce new products, replace outdated
products, service new demands, and service the customer in a different way;
- In order to capitalise on such changing and shifting conditions, individuals will be
more likely to identify and exploit opportunities to the degree to which they consider
the following:
- The availability and amount of information they can access;
- The change must satisfy all relevant needs;
- The factors that promote change;
- The magnitude thereof – whether it should be radical or marginal;
- Timing – when to change (delays can be costly;
- Mitigation of negative impacts of change
- Several factors have emerged which have influenced the growth opportunities and
subsequently entrepreneurial ventures:
- Growth in the service sector
- Entrepreneurship is the new management paradigm
- Information technology
- Subcontracting
- Unemployment
- NGOs and social ventures
- Environmentalism
, Principles of Management IIB (Entrepreneurship) by ProfessorBurgerQueen
Entrepreneurs and Opportunities
- Signal detection theory (SDT)
- Successful entrepreneurs have a more realistic view of the risks involved and
their chances of obtaining success;
- They are strongly motivated to avoid false alarms and the dangers of wasting
their time, effort and resources pursuing opportunities that don’t really exist;
- “How do we decide whether there really is anything out there to notice”
- Signal detection theory suggests that in situations in which individuals attempt
to determine whether stimulus is present or absent - four possibilities exist:
Actual Presence of Opportunity?
Yes No
Yes Hit False Alarm
Opportunity is present and Opportunity is not present,
recognised but is judged to be
No Miss Correct Rejection
Opportunity is present, but Opportunity is not present
is not judged to be and is judged to not be
Regulatory focus theory (RFT)
- This theory suggests that in regulating their own behaviour to achieve desired ends,
individuals adopt one (1) of two (2) contrasting perspectives:
1. A promotion focus, in which their primary goal is attaining positive outcome,
or
2. A prevention focus, in which their primary goal is avoiding negative outcomes.
- The implication of RFT suggests it may be possible that overall, entrepreneurs who
are successful at identifying valuable opportunities adopt a mixture of perspectives.
Chapter 5: The Nexus Between The Individual And The
Environment
Opportunity and Change
- Opportunities are seen from 2 broad perspectives:
a. Opportunities exist because people have different information.;
b. Entrepreneurial opportunities come from an external change
- Peter Drucker: Unexpected events may spur opportunities and threats;
- Changes creates new opportunities but also imposes threats;
- Opportunities originate from a need to produce new products, replace outdated
products, service new demands, and service the customer in a different way;
- In order to capitalise on such changing and shifting conditions, individuals will be
more likely to identify and exploit opportunities to the degree to which they consider
the following:
- The availability and amount of information they can access;
- The change must satisfy all relevant needs;
- The factors that promote change;
- The magnitude thereof – whether it should be radical or marginal;
- Timing – when to change (delays can be costly;
- Mitigation of negative impacts of change
- Several factors have emerged which have influenced the growth opportunities and
subsequently entrepreneurial ventures:
- Growth in the service sector
- Entrepreneurship is the new management paradigm
- Information technology
- Subcontracting
- Unemployment
- NGOs and social ventures
- Environmentalism
, Principles of Management IIB (Entrepreneurship) by ProfessorBurgerQueen
Entrepreneurs and Opportunities
- Signal detection theory (SDT)
- Successful entrepreneurs have a more realistic view of the risks involved and
their chances of obtaining success;
- They are strongly motivated to avoid false alarms and the dangers of wasting
their time, effort and resources pursuing opportunities that don’t really exist;
- “How do we decide whether there really is anything out there to notice”
- Signal detection theory suggests that in situations in which individuals attempt
to determine whether stimulus is present or absent - four possibilities exist:
Actual Presence of Opportunity?
Yes No
Yes Hit False Alarm
Opportunity is present and Opportunity is not present,
recognised but is judged to be
No Miss Correct Rejection
Opportunity is present, but Opportunity is not present
is not judged to be and is judged to not be
Regulatory focus theory (RFT)
- This theory suggests that in regulating their own behaviour to achieve desired ends,
individuals adopt one (1) of two (2) contrasting perspectives:
1. A promotion focus, in which their primary goal is attaining positive outcome,
or
2. A prevention focus, in which their primary goal is avoiding negative outcomes.
- The implication of RFT suggests it may be possible that overall, entrepreneurs who
are successful at identifying valuable opportunities adopt a mixture of perspectives.
