This is brought about by a false sense of security and invincibility because the business is going well. The traits used to help diagnose this problem are the need for control, sense of distrust, the desire for success, and external optimism. The chapter continues with a full-featured exploration of the ethical side of entrepreneurship. Ethics is a set of principles prescribing a behavioral code that explains right and wrong; it also may outline moral duty and obligations.
Because it is so difficult to define the term, it is helpful to look at ethics more as a process than as a static code. Entrepreneurs face many ethical decisions, especially during the early stages of their new ventures.
Decisions may be legal without being ethical, and vice versa. When making decisions that border on the unethical, entrepreneurs commonly rationalize their choices. Within this framework are four distinct types of managerial roles: nonrole, role failure, role distortion, and role assertion.
Some of them may be overlooked, and some may be sidestepped because the economic cost is too high. Despite the ever-present lack of clarity and direction in ethics, however, ethics will continue to be a major issue for entrepreneurs during the new century.
To establish ethical strategies, some corporations create codes of conduct. A code of conduct is a statement of ethical practices or guidelines to which an enterprise adheres. Codes are becoming more prevalent in organizations today, and they are proving to be more meaningful in their implementation. This chapter concludes with a model of entrepreneurial motivation, which depicts the important factors of expectation and outcome.
The Entrepreneurial Mind-Set Every person has the potential and free choice to pursue a career as an entrepreneur. What motivates people to make this choice is not fully understood. Entrepreneurial Cognition Cognition is used to refer to the mental functions, mental processes thoughts , and mental states of intelligent humans.
Entrepreneurial cognition is about understanding how entrepreneurs use simplifying mental models to piece together previously unconnected information that helps them to identify and invent new products or services, and to assemble the necessary resources to start and grow businesses. Metacognitive Perspective Metacognitive model of the entrepreneurial mind-set integrates the combined effects of entrepreneurial motivation and context, toward the development of metacognitive strategies applied to information processing within an entrepreneurial environment.
Starting a new business requires more than just an idea; it requires a special person, an entrepreneur, who combines sound judgment and planning with risk taking to ensure the success of his or her own business. It can also compensate for personal shortcomings. Simple problems bore them, unsolvable ones do not warrant their time. They believe that their accomplishments and setbacks are within their own control and influence and that they can affect the outcome of their actions.
When they decide to participate in a venture, they do so in a very calculated, carefully thought out manner. In many cases this vision develops over time as the individual begins to learn what the firm is and what it can become. Most successful entrepreneurs have highly qualified, well-motivated teams that help handle the growth and development of the venture. Dealing with Failure Entrepreneurs use failure as a learning experience.
They have a tolerance for failure. The most effective entrepreneurs are realistic enough to expect difficulties and failures. In adverse and difficult times, they will continue to look for opportunity. The Grief Recovery Process Grief is a negative emotional response to the loss of something important triggering behavioral, psychological, and physiological symptoms. The emotions generated by failure i. However, avoiding negative emotions is unlikely to be successful in the long-run Research indicates that entrepreneurs may recover more quickly from a failure if they oscillates between a loss and a restoration orientation.
The Entrepreneurial Experience The prevalent view of entrepreneurship in the literature is that entrepreneurs create ventures. Its narrow framing, however, neglects the complete process of entrepreneurship. The creation of sustainable enterprises involves three parallel, interactive phenomena: emergence of the opportunity, emergence of the venture, and emergence of the entrepreneur.
None are predetermined or fixed—they define and are defined by one another. The Dark Side of Entrepreneurship Certain negative factors that may envelop entrepreneurs and dominate their behavior. Although each of these factors has a positive aspect, it is important for entrepreneurs to understand their potential destructive side as well. A typology of entrepreneurial styles helps describe the risk-taking activity of entrepreneurs. In this model, financial risk is measured against the level of profit motive the desire for monetary gain or return from the venture.
Stress and the Entrepreneur To achieve their goals, entrepreneurs are willing to tolerate the effects of stress: back problems, indigestion, insomnia, or headaches.
Lacking the depth of resources, entrepreneurs must bear the cost of their mistakes while playing a multitude of roles, such as salesperson, recruiter, spokesperson, and negotiator. Simultaneous demands can lead to role overload. Entrepreneurs often work alone or with a small number of employees and therefore lack the support from colleagues. A basic personality structure, common to entrepreneurs and referred to as type A personality structure , describes people who are impatient, demanding, and overstrung.
Loneliness—Entrepreneurs are isolated from persons in whom they can confide. They tend not to participate in social activities unless there is some business benefit.
Immersion in Business—Most entrepreneurs are married to their business. They work long hours, leaving them with little or no time for civic recreation. People Problems—Most entrepreneurs experience frustration, disappointment, and aggravation in their experience with people. However, many entrepreneurs are never satisfied with their work no matter how well it is done. Networking—One way to relieve the loneliness of running a business is to share experiences by networking with other business owners.
Getting Away from It All—The best antidote could be a well-planned vacation. Communicating with Employees—Entrepreneurs are in close contact with employees and can readily assess the concerns of their staff.
Finding Satisfaction Outside the Company—Entrepreneurs need to get away from the business occasionally and become more passionate about life itself; they need to gain some new perspectives. Delegating—Entrepreneurs find delegation difficult because they think they have to be at the business all the time and be involved in all aspects of the operation.
Exercising Rigorously—Research demonstrates the value of exercise regimens on relieving the stress associated with entrepreneurs. The Entrepreneurial Ego Certain characteristics that usually propel entrepreneurs into success also, if exhibited in the extreme have destructive implications for entrepreneurs.
As there is no simple universal formula for solving ethical problems, entrepreneurs have to choose their own codes of conduct; the outcome of their choices makes them who they are.
Ethics represents a set of principles prescribing a behavioral code that explains what is good and right or bad and wrong. Ethics may outline moral duty and obligations. Legality provides societal standards but not definitive answers to ethical questions.
Because deciding what is good or right or bad and wrong is situational, instead of relying on a set of fixed ethical principles, entrepreneurs should an ethical process for making decisions. The Matter of Morality Requirements of law may overlap at times but do not duplicate the moral standards of society. Some laws have no moral content whatsoever. Some laws are morally unjust. Some moral standards have no legal basis.
Legal requirements tend to be negative, morality tends to be positive. Business decisions, in the context of entrepreneurial ethics are complex. Most ethical business decisions have personal implications.
Establishing a Strategy for Ethical Enterprise Entrepreneurs need to commit to an established strategy for ethical enterprise. Ethical Codes of Conduct A code of content is a statement of ethical practices or guidelines to which an enterprise adheres. Ethical Responsibility A strategy for ethical responsibility should encompass three major elements: ethical consciousness, ethical process and structure, and institutionalization.
Ethical Considerations of Corporate Entrepreneurs Recognize the fine line between resourcefulness and rule breaking. Recognize that unethical consequences that can result in organizations where there are barriers to innovation. Caring is a feminine alternative to the more traditional and masculine ethics based on rules and regulations. In attempting better to understand the driving forces within entrepreneurs, we can gain a more complete perspective if we take a psychological look at entrepreneurs and consider the entrepreneurial mind-set.
Part of that mind-set includes the package of mental processes that entrepreneurs possess, which include attention, remembering, producing and understanding language, solving problems, and making decisions. Entrepreneurial cognition refers to the knowledge structures that people use to make assessments, judgments, or decisions involving opportunity evaluation, venture creation, and growth.
This process is metacognitive. The process responsible for ultimately selecting a response i. Entrepreneurs have a tolerance for ambiguity, are calculated risk takers. What do these characteristics mean for any potential entrepreneur? Entrepreneurs face uncertainty compounded by constant changes that introduce ambiguity and stress into every aspect of the enterprise. A tolerance for ambiguity exists when the entrepreneur can deal with the various setbacks and changes that constantly confront him or her.
Successful entrepreneurs are not gamblers—they are calculated risk takers. They do everything possible to get the odds in their favor, and they often avoid taking unnecessary risks. These strategies include getting others to share inherent financial and business risks with them—for example, by persuading partners and investors to put up money, creditors to offer special terms, and suppliers to advance merchandise.
Entrepreneurial passion is a fundamental emotional experience for entrepreneurs. It is a discrete emotion that is quite intense being described as an underlying force that fuels our strongest emotions, or the intensity felt when engaging in activities that are of deep interest, or the energy that enables entrepreneurs to achieve peak performance.
Is it true that most successful entrepreneurs have failed at some point in their business careers? Entrepreneurs use failure as a learning experience; hence, they have a tolerance for failure. How should failure be dealt with by entrepreneurs?
As noted above, the most effective entrepreneurs are realistic enough to expect difficulties and failures. If they can deal effectively with any grief that emanates from the failure then they will not become disappointed, discouraged, or depressed by a setback or failure.
In this way entrepreneurs will believe that they learn more from their early failures to form the foundation of later successes. Research shows that an entrepreneur recovers more quickly from a failure if he or she oscillates between a loss and a restoration orientation. This oscillation means that the entrepreneur can gain the benefits of both orientations while minimize the costs of maintaining either for an extended period.
Be complete in your answer. Open Preview See a Problem? Details if other :. Thanks for telling us about the problem. Return to Book Page. Preview — Entrepreneurship by Robert A. Baron ,. Scott A. With solid theory and relevant examples, this thorough resource covers the entire process of building a business.
Seasoned instructors and entrepreneurial authorities, Professors Baron and Shane deliver a practical, applied process approach with a multidisciplinary perspective, drawing on knowledge from the studies of economics, psychology, and other areas. The book begins with recognizing opportunity and building a team, and then moves through assembling finances, the business plan, legal issues, marketing, growth, and exit strategies.
Rather than getting bogged down in excessive discussions of theory, Baron and Shane use real-world examples to illustrate how students can apply chapter concepts to their own business ventures. Thoroughly updated and revised based on student and professor feedback, the second edition adds a chapter on legal issues specific to entrepreneurs--including intellectual property considerations--and an appendix on key accounting principles entrepreneurs should know.
A new chapter on growth strategies for new ventures is coupled with a chapter on managing new ventures for growth. In addition, new boxed features shed light on common myths and misperceptions about entrepreneurship. The book is also packed with hands-on applications--including a case written specifically for each chapter--giving students experience putting text concepts into real-world action.
Get A Copy. Hardcover , pages. Published February 1st by Cengage Learning first published January 22nd More Details Original Title. Other Editions 6. Friend Reviews. To see what your friends thought of this book, please sign up. To ask other readers questions about Entrepreneurship , please sign up. Lists with This Book. This book is not yet featured on Listopia. Add this book to your favorite list ».
Community Reviews. Showing Average rating 3. These cases are not intended to illustrate either effective or ineffective handling of management situations.
In some cases the authors may have disguised certain names, locations, dates, and other identifying information to protect confidentiality. Most of the case studies are based on personal interviews, supplemented by secondary material such as industry reports. Where possible, we have provided links to relevant websites and to other useful sources to help anyone wishing to find out more about the individuals and organisations featured in the cases.
By combining it with readings and activities from Part One, you can begin to integrate your own direct experience e. Individual entrepreneurs often know a great deal about the specifics of their own enterprises and can also have a really sophisticated understanding of their own industry sector. However, their approach may not be as effective in another context. As Chapter 2 demonstrates, there is a wide variety of forms of entrepreneurial practice around the world, so there is a great deal to gain by broadening your perspective.
You can use entrepreneurship research to gain these additional insights. The remaining chapters focus on a different area of entrepreneurship research, explaining the approaches that researchers have adopted, highlighting key findings and drawing out the practical implications. The structure of Part Two is summarised in Table 1. Chapter 10 provides a more detailed introduction to the approach adopted. It has positive and negative impacts on economies, societies, and the natural environment.
For these reasons, it is well worth exploring entrepreneurship in greater depth, whether you are an existing or prospective entrepreneur, someone who engages with entrepreneurs, or simply someone who is interested in how the world works.
In order to avoid confusion it is important to: a recognise the different meanings that other people attribute to these terms; b make your own definitions and assumptions clear. It encourages readers to develop their own capacity for entrepreneurial learning and critical reflection.
The two-part structure, and features such as the new venture creation activity, critical incident cases, and further reading guides, pro- vide opportunities for you to integrate learning: a from your own experience; b from real-world entrepreneurs; and c from leading entrepreneurship researchers. How entrepreneurial do you think you are? Complete the questionnaire at one of the websites listed on the Online Resources, or one recommended by your tutor, and obtain the results of the assessment.
Do you think you can increase your capacity to act entrepreneurially by studying the subject in this way? Did these results affect your view? Conduct a quick online search for written accounts in which entrepreneurs talk about their experiences. You can use the following questions as a guide, but feel free to adapt them, or to add your own questions: a Why did you want to become an entrepreneur? Summarise your findings in the form of a 1, word report or a short presentation. Conduct a web search of your city, town or region to identify: a five successful entrepreneurial ventures, including a mix of social and commercial enter- prises; b five organisations encouraging or supporting entrepreneurship and enterprise-related activities, including commercial, public sector, and voluntary sector providers.
Prepare a table, with summary information on each organisa- tion, including their history and objectives. Discussion topics 1. Why am I studying entrepreneurship? Spend a few minutes thinking through your reasons for studying entrepreneur- ship, then discuss with others. Is there a common pattern? Do you think your initial motivation might change as you study the subject further?
What does it take to be an entrepreneur? After completing your three lists, compare them and see if there are any differ- ences. How did you identify these requirements?
Recommended reading These readings address important topics in entrepreneurial practice and are rec- ommended for anyone wanting to build on the material covered in this chapter. Recommended readings have been selected from leading Sage journals and are freely available for readers of this textbook to download via the Online Resources. Zulfiqar, S. Asian Journal of Management Cases, 13, 2: 67— The case describes the entrepreneurial journey embarked upon by Sumaira who, through her passion, resilience, and creativity, turned a home- based small business into a full-fledged growing enterprise.
The case further examines the vision Sumaira had of expanding her business and taking it to the next level. Imas, J. By sharing the stories of barefoot entrepreneurs in deprived areas of Chile, Argentina, Zimbabwe, and Ghana, they challenge us to reconsider our existing ideas about entrepreneurship and how it should be explored.
London: ngo. Bannatyne, D. London: Orion. Branson, R. London: Virgin Books. Burrows, R. Abingdon: Routledge. Caan, J. London: Virgin. Casson, M. Oxford: Oxford University Press. Cope, J. International Journal of Entrepreneurial Behaviour and Research 6, 3: — Corbett, A. Entrepreneurship: Theory and Practice 29, 4: — Della-Guista, M.
Casson et al. Drucker, P. New York: Times Books. Dyson, J. New York: Texere. Grimson, L. London: Capstone. Organization, 19, 5: — Jones P. Kirby, D. Levie, J. London: Department for Education and Employment. Mumford, A. London: Gower.
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