Module 2 Entrepreneurial Management

MODULE 2 ENTREPRENEURIAL MANAGEMENT Learning Outcomes: At the end of this module, the students will be able to: 1. Define Entrepreneurial Management. 2. Determine the distinctions between Entrepreneur and Manager 3. Differentiate Entrepreneur and Manager of a Large Organization 4. Distinguish Entrepreneurial Management and Corporate Management 5. Discuss the seven stages in the Entrepreneurial Life Cycle PRE TEST: I. TRUE or FALSE. Read the statement below, then write T if it is TRUE, and F, if it is FALSE. ____________ 1. Entrepreneurial Management means venturing into new business only ___________ 2. An entrepreneur IS always induced to involve in fraudulent behavior whereas a manger is not ___________ 3. A manager works hard but his income is not tied up to his performance ___________ 4. The classic is the traditional entrepreneurial management style ___________ 5. Classic style tends to delegate some of the tasks of the entrepreneur ___________ 6. Classic is considered one of the best ways in running the business ___________ 7. The Craftsmen's style is considered by many entrepreneurs because they are concerned about the quality of their products being produced. ___________ 8. Craftsman is like the Coordinator's style. ___________ 9. At work the worst case scenario is getting fired. ___________ 10. The worst case scenario for entrepreneur is losing his home, personal credit, and lifestyle, as well as the destruction of family relationships. ___________ 11. Craftsmen's style maximizes the control of their business. ___________ 12. Single leader style may have the hard time to grow the business they are having. ___________ 13. Gestation is the pre-start analysis of business. ___________ 14. A good entrepreneur can easily determine if the business is attractive or not even without the benefits of research. ___________ 15. An entrepreneur should have a strong interest in the business he will pursue.

II. IDENTIFICATION . Read the following questions, and identify what is being asked. 1. If the valuation of your business comes in lower than expected, it's important to have a plan to remain with the business a few years longer to maximize cash flow and increase value before selling. 2. Establishing goal liabilities that include the cost of necessities such as food, clothes and health care. 3. These liabilities include discretionary expenses such as travel, entertainment and dining. 4. He said, "Choose a job you love and you will never have to work a day of your life." 5. This period is literally the "pre-start" analysis. A person must understand and decide if he is ready for entrepreneurship. 6. When an entrepreneur deals with faults and failures, how will a manager deals with failures? 7. He works as per the guidelines laid down by the entrepreneur. 8. At this stage, the entrepreneur needs to choose a particular high-growth strategy. 9. It is the practice of taking entrepreneurial knowledge and utilizing it for increasing the effectiveness of new business venturing as well as small- and medium-sized businesses. 10. According to this theory, entry plays a re equilibrating function and represents "a transition toward the equilibrium. Learning Focus: A. Define Entrepreneurial Management B. Distinctions between Entrepreneur and Manager C. Entrepreneur vs. Manager of a Large Organization D. Entrepreneurial Management vs. Corporate Management E. The seven Stages in the Entrepreneurial Life Cycle Defining Entrepreneurial Management: Peter Drucker remarked that for the existing large company, the controlling word in the phrase "entrepreneurial management" is "entrepreneurial." In any new business venture, the controlling word is "management." Therefore, for the purposes of our discussions we lean toward "management" as a discipline for entrepreneurs. We define entrepreneurial management as the practice of taking entrepreneurial knowledge and utilizing it for increasing the effectiveness of new business venturing as well as small- and medium-sized businesses. The heart of entrepreneurial management is continually vital management issues: A. Define Entrepreneurial Management

1. What is this venture about? (mission and values statement) 2. Where should it go? (goals and objectives) 3. How will it get there? (growth strategy) 4. What does it need to get there? (people and resources) 5. What structure is best? (organizational capabilities) 6. How much money does it need and when? (financing strategy) 7. How will it recognize the final destination? (vision of success) The terms Entrepreneur and Manager are considered one and the same. But the two terms have different meanings. The following are some of the differences between a manager and an entrepreneur. The main reason for an entrepreneur to start a business enterprise is because he comprehends the venture for his individual satisfaction and has personal stake in it whereas a manager provides his services in an enterprise established by someone. An entrepreneur and a manager differ in their standing, an entrepreneur is the owner of the organization and he bears all the risk and uncertainties involved in running an organization where as a manager is an employee and does not accept any risk. An entrepreneur and a manager differ in their objectives. Entrepreneur's objective is to innovate and create and he acts as an agent of change where as a manager's objective is to supervise and create routines. He implements the entrepreneur's plans and ideas. An entrepreneur is faced with more income uncertainties as his income is contingent on the performance of the firm where as a manager's compensation is less dependent on the performance of the organization. An entrepreneur is not induced to involve in fraudulent behavior whereas a manager does. A manager may cheat by not working hard because his income is not tied up to the performance of the organization. Entrepreneur is required to have certain qualifications and qualities like high accomplishment motive, innovative thinking, forethought, risk-bearing ability etc. Conversely it's mandatory for a manager to be educated in the fields of management theories and practices. An entrepreneur deals with faults and failures as a part of learning experience whereas a manager makes every effort to avoid mistakes and he postpones failure. "An entrepreneur could be a manager but a manager cannot be an entrepreneur." B. Distinctions between Entrepreneur and Manager