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CHAPTER NINETEEN
Entrepreneurship
CHAPTER SUMMARY
This chapter discusses the role of entrepreneurship in management and its implications
for behavior in organizations. Entrepreneurship involves taking the risk of starting and
managing a business to make a profit. People become entrepreneurs for various
reasons; though successful entrepreneurs have a high need for achievement, good
interpersonal and communication skills, and sound managerial skills and technological
knowledge. Companies started by entrepreneurs and small-business owners make
significant contributions to the U.S. and global economies. The desire to be one’s own
boss cuts across all age, gender, and ethnic lines.
LEARNING OUTCOMES
19.1 Overview of Entrepreneurship
1. What are some different types of entrepreneurship?
Entrepreneurship is the creation of something valuable. Social entrepreneurship
involves creating innovative solutions to immediate social and/or environmental
problems and mobilizing resources to achieve social transformation. Corporate
entrepreneurship involves the creation of new products, processes, and ventures
within existing large organizations. Family entrepreneurship involves a business
that is owned and managed by multiple family members, usually for more than
one generation. Serial or habitual entrepreneurship refers to individuals who
start several businesses, simultaneously or one after another. Lifestyle
entrepreneurship involves a venture to suit a personal lifestyle and not for the
sole purpose of making profit. High-technology entrepreneurship involves
ventures in the information, communication, and technology space.
19.2 Characteristics of Successful Entrepreneurs
2. What characteristics lead individuals to become entrepreneurs?
Most entrepreneurs are ambitious, independent, self-confident, risk-taking,
visionary, creative, energetic, passionate, and committed. Entrepreneurial
individuals are often competitive, with a need to achieve, and are self-starters
who prefer to lead. Compared to the average population, entrepreneurs are
, Organizational Behavior
more decisive and confident in their abilities, and they choose moderate risk
where they can affect outcomes. Entrepreneurs spot and act on trends, often
producing innovative product designs, marketing strategies, and managerial
solutions. Entrepreneurs are able and willing to work hard, and are attached to
the work and the outcomes, so much that they are willing to make personal
sacrifices to achieve their goals.
19.3 Business Model Canvas
3. How can the business model canvas help us to describe and assess a
business model?
A business model provides an explanation of how an organization creates,
delivers, and captures value. The business model canvas achieves this goal by
describing four main areas of any venture—customers, offering, infrastructure,
and financial viability—through nine building blocks that describe and assess a
business model. Customer segments are categories of customers that have
common characteristics. The value proposition is the reason that customers
choose one option over another when deciding what to buy. Channels bring the
value proposition to the customers through communication, distribution, and
sales. Companies need to maintain relationships with their customers to acquire
and retain customers and boost sales. There are two general types of revenue
stream: revenues from one-time customers and revenues from ongoing
payments. Any business needs resources—physical, financial, intellectual, and/or
human—to function and provide their products or services to their customers.
Key activities are the critical tasks that a company does to succeed and operate
successfully. Companies build partnerships to optimize their business, reduce
risk, or gain resources. All businesses incur costs through operation, whether
fixed or variable.
19.4 New Venture Financing
4. How do entrepreneurs finance their new business ideas?
Bootstrapping is attempting to found and build a company from personal
finances or from the operating revenues of the new company. Entrepreneurs can
access debt capital, which is borrowed money that must be repaid by a future
date, and equity capital, which is the owner’s investment in the company and
does not have a specific date for repayment. Crowdfunding is the process of
raising new venture funds from a large “crowd” audience, typically virtually from
the Internet.
19.5 Design Thinking
5. How can entrepreneurs leverage design thinking to solve complex
problems and navigate uncertain environments?
May 12, 2019 2
must be attributed to OpenStax, Rice University and any changes must be noted.
CHAPTER NINETEEN
Entrepreneurship
CHAPTER SUMMARY
This chapter discusses the role of entrepreneurship in management and its implications
for behavior in organizations. Entrepreneurship involves taking the risk of starting and
managing a business to make a profit. People become entrepreneurs for various
reasons; though successful entrepreneurs have a high need for achievement, good
interpersonal and communication skills, and sound managerial skills and technological
knowledge. Companies started by entrepreneurs and small-business owners make
significant contributions to the U.S. and global economies. The desire to be one’s own
boss cuts across all age, gender, and ethnic lines.
LEARNING OUTCOMES
19.1 Overview of Entrepreneurship
1. What are some different types of entrepreneurship?
Entrepreneurship is the creation of something valuable. Social entrepreneurship
involves creating innovative solutions to immediate social and/or environmental
problems and mobilizing resources to achieve social transformation. Corporate
entrepreneurship involves the creation of new products, processes, and ventures
within existing large organizations. Family entrepreneurship involves a business
that is owned and managed by multiple family members, usually for more than
one generation. Serial or habitual entrepreneurship refers to individuals who
start several businesses, simultaneously or one after another. Lifestyle
entrepreneurship involves a venture to suit a personal lifestyle and not for the
sole purpose of making profit. High-technology entrepreneurship involves
ventures in the information, communication, and technology space.
19.2 Characteristics of Successful Entrepreneurs
2. What characteristics lead individuals to become entrepreneurs?
Most entrepreneurs are ambitious, independent, self-confident, risk-taking,
visionary, creative, energetic, passionate, and committed. Entrepreneurial
individuals are often competitive, with a need to achieve, and are self-starters
who prefer to lead. Compared to the average population, entrepreneurs are
, Organizational Behavior
more decisive and confident in their abilities, and they choose moderate risk
where they can affect outcomes. Entrepreneurs spot and act on trends, often
producing innovative product designs, marketing strategies, and managerial
solutions. Entrepreneurs are able and willing to work hard, and are attached to
the work and the outcomes, so much that they are willing to make personal
sacrifices to achieve their goals.
19.3 Business Model Canvas
3. How can the business model canvas help us to describe and assess a
business model?
A business model provides an explanation of how an organization creates,
delivers, and captures value. The business model canvas achieves this goal by
describing four main areas of any venture—customers, offering, infrastructure,
and financial viability—through nine building blocks that describe and assess a
business model. Customer segments are categories of customers that have
common characteristics. The value proposition is the reason that customers
choose one option over another when deciding what to buy. Channels bring the
value proposition to the customers through communication, distribution, and
sales. Companies need to maintain relationships with their customers to acquire
and retain customers and boost sales. There are two general types of revenue
stream: revenues from one-time customers and revenues from ongoing
payments. Any business needs resources—physical, financial, intellectual, and/or
human—to function and provide their products or services to their customers.
Key activities are the critical tasks that a company does to succeed and operate
successfully. Companies build partnerships to optimize their business, reduce
risk, or gain resources. All businesses incur costs through operation, whether
fixed or variable.
19.4 New Venture Financing
4. How do entrepreneurs finance their new business ideas?
Bootstrapping is attempting to found and build a company from personal
finances or from the operating revenues of the new company. Entrepreneurs can
access debt capital, which is borrowed money that must be repaid by a future
date, and equity capital, which is the owner’s investment in the company and
does not have a specific date for repayment. Crowdfunding is the process of
raising new venture funds from a large “crowd” audience, typically virtually from
the Internet.
19.5 Design Thinking
5. How can entrepreneurs leverage design thinking to solve complex
problems and navigate uncertain environments?
May 12, 2019 2
