SBE Lect 5_ Part 7: ch7 Global entrepreneurship Monitor (Causal or…
SBE Lect 5_ Part 7: ch7 Global entrepreneurship Monitor
1. How do individuals go about creating a business?
Emerging organisations have four ‘properties’ (Katz & Gartner)
– resources (e.g. workers, finance) have to be identified, collected, assembled and put to use
– the creation of deliberate psychological (e.g., telling family or friends) or official (e.g., registering a business) boundaries
– those seeking to set up a new business have to form some intentions towards setting up their business
– transactions (e.g. sales) have to occur
see slide 22/26 for table with examples for each
Causal or effectual process?
- some chefs follow a recipe (means) to cook a meal (ends)
- Others go into their cupboard and investigate what ingredients (means) they have. They then imagine what the meal should look like (effects) before cooking the meal (ends).
‘...organising a new venture is not a patterned or linear process but rather is simultaneous, messy and iterative’
SEE SLIDE 23/26
Effectuation: 5 core principles
Implications for teaching entrepreneurship
Entrepreneur does not focus on possible profits, but on the possible losses and how they can minimize those losses
Entrepreneurs cooperate with parties they can trust. These parties can limit the affordable loss by giving pre-commitment
Bird in Hand
: Entrepreneur does not start with a given goal, but with the tools he or she has
Surprises are not necessarily seen as something bad, but as opportunities to find new markets
In this stage, all the previous principles are put together. The future cannot be predicted, but entrepreneurs can control some of the factors which determine the future
Cyclical: Diminishing role for the business plan (e.g., at ECE)
What actually triggers nascents to start a business?
Nascents most similar to actual entrepreneurs
Actual start ups of measurable economic significance
Social context and framework conditions important for start-up and survival
How do individuals go about creating a business?
Develop: Intentionality, Resources, Boundary, Exchange
How many individuals are involved?
People do business not businesses
Not all nascents will become an entrepreneur (dreamers, but learning)