MGMT 100 (2)

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MGMT 100 (2)
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MGMT 100 (2)
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  1. Entrepreneur
    • An individual who notices opportunities and takes responsibilities for mobilising the resources necessary to produce new and improved goods and services.
    • (Jones,2000)
  2. Richard Cantillon
    (1680s – May 1734)
    • Essai
    • Contribution- conception of entrepreneur as a risk-bearer.
  3. The Individual Characteristics of an Entrepreneur (5)
    • Risking-taking.
    • >not big risk takers, take calculated risks 
    • >Minimise and manage risks involved
    • "protecting the down side" Richard Branson 
    • Need for High Achievement
    • >a excessive desire for taking personal responsibility for problem solving and setting and reaching goals.
    • >desire to make things happen
    • >not deterred by any failure but just keep trying until they succeed.
    • A Desire for Independence
    • >being their own boss in situations which allow they can take responsibility for their own decisions and achievements.
    • >often have difficulty in delegating responsibility
    • Internal Locus of Control
    • The degree to which people believe that their lives are in their own control 
    • Often expressed in self confidence
    • Tolerance for Ambiguity
    • work well in this type of environment – possibly because it offers challenge and excitement and offers more opportunity that the more traditional business environment
  4. Unique Nature of Indigenous Entrepreneurs (3)
    • Communalism rather than individuality
    • Reciprocity (giving in return for receiving)Rather than acquisitiveness (desire to acquire)
    • Social gain rather than financial profit
  5. The Entrepreneurial Process (points)
    • > current emphasis of researchers studying entrepreneurs is on behavioural issues rather than personality characteristics.
    • > understanding the entrepreneurial process would define the entrepreneur far more effectively than would an understanding of the individual
  6. The Entrepreneurial Process
    • SOURCE: BYGRAVES,1989
    • Innovation, Triggering Event, Implementation, Growth
  7. Bygraves Process Model (5)
    • >Innovation – this is the creation of ideas for new products and services, or the devising better ways of doing existing things (Note: This is simply the ‘idea creation’ stage)
    • >Trigger Event(s) – are things that cause or allow the entrepreneur to test, prototype or trial their idea(s).
    • >Implementation – the actual commercialisation of the business idea. i.e. start and run a business; or make the changes to products, services or processes in an existing business.
    • >Growth- expanding the business. i.e. after the initial start-up and survival, what is needed to grow
  8. Entrepreneurship Perspectives
    Perspective 1: Entrepreneurs are not essential to economic growth

    Perspective 2: Entrepreneurs are vital to economic growth
  9. Perspective 1: Entrepreneurs are not essential to economic growth
    ▫ Neo-classical economist usually takes the view that economic growth does not depend on entrepreneurs. In fact entrepreneurs are only a product of more fundamental economic causes.

    ▫ If Governments create economic conditions that are favourable then entrepreneurs will emerge and economic growth will result, however if economic conditions are not favourable then entrepreneurs will not emerge and the economy will stagnate.
  10. • Perspective 2: Entrepreneurs are vital to economic growth
    According to this school of thought, those nations that have a large number of people with entrepreneurial characteristics will economically outperform those nations that do not have such individuals.

    The entrepreneur can be viewed as the catalyst that provides the spark for economic growth.
  11. Competitive advantage
    means operating in a successful way that is difficult for competitors to imitate.
  12. Sustainable competitive advantage
    is consistently dealing with market and environmental forces better than competitors.
  13. Strategy
    • a comprehensive action plan
    • – providing long-term direction and guiding resource utilisation to accomplish organisational goals, with sustainable competitive advantage

    – ‘A pattern in a stream of decisions’ (Mintzberg)
  14. Strategic intent:
    focusing all organisational energies on a unifying and compelling goal
  15. Strategy formulation
    Involves assessing: existing strategies, the organisation and its environment

    Then developing new strategies and strategic plans capable of delivering future competitive advantage.

    • Alvin Toffler identified the concept of waves of change
  16. The waves of change
    1st wave of change was the agricultural revolution in the 18th and 19thcenturies.

    2nd wave Industrial Revolution which required substantial increases in agricultural output to feed the growing industrial cities. It is rooted in materialism and epitomised by individuality, competition and profit making. Rational decision-making.

    3rd wave marks growing concern for sustainability, interconnectedness of individuals and corporations. Advanced communication links workers and functions, conservation, sanctity of life, cooperation, personal growth, self-fulfilment, less material wealth concerns and more dignity, integrity and inner harmony.
  17. Strategic Management Process
    • Strategy Formulation 
    • > Identify and analyse (mission, objectives and strategies) 
    • > Analyse external and internal environments
    • >Revise mission and objectives and select new strategies. 

    • Strategy Implementation 
    • > Implement Strategies
    • > Evaluate results

  18. Mission Statement
    • A unique broad declaration of the basic purpose and scope of the organisation that distinguishes it from others
    •  
    • Statement of rational for existence, shared goals, core values and existence. 
    • One lined banners are common.
  19. Analysis of mission
    Good mission statements identify: (4)
    • 1. Customers (what market are we in?)
    • 2. Products and/or services (what do we produce?)
    • 3. Location (where do we operate?)
    • 4. Underlying philosophy (what kind of difference do we want to make in the world?)

    Important test: How well does it serve its stakeholders?
  20. External Stakeholders in relation to mission statement
    • Employees
    • Communities
    • Shareholders
    • Customers
    • Suppliers
  21. objectives
    >Direct activities towards key and specific performance results.

    >Shorter term targets against which actual performance can be measured
  22. Analysis of organisational resources and capabilities
    • Strengths and Weaknesses
    • Identifying core competencies:
    • – Technology
    • – Human resources
    • – Manufacturing approaches
    • – Management talent
    • – Financial strength

    • Opportunities and Threats
    • Assessment of actual and future environmental conditions:
    • – Macroenvironment
    • – Industry environment.
  23. Three levels of strategy in the strategic management process
    • 1) Corporate Strategy: What business are we in?
    • • Sets long-term direction for the total enterprise
    • 2) Business Strategy: How do we compete in each of our major businesses?
    • • Identifies how a division or strategic business unit will compete in its product or service domain
    • 3) Functional Strategy: How do we best support each of our business strategies?
    • • Guides activities within one specific area of operations
    • • How can we best use resources (human, research, development) to implement our business strategy?
  24. Porter’s generic strategies model
    (How are strategies formulated?) Example 1
    • Generic strategies for gaining competitive advantage:
    • – Differentiation strategy
    • – Cost leadership strategy
    • – Focused differentiation strategy
    • – Focused cost leadership strategy

    • Use of this model helps to answer questions on whether an industry is attractive to compete in. And how can we best compete for customers in this industry? To Porter, business-level strategic decisions are driven by market scope: how wide or narrow is your market target? Competitive advantage: how will you compete for customers? Being unique? Inexpensive?
    • Focused differentiation or focused cost leadership: where organisations pursue a special segment of the market with the objective to serve that market better than anyone else.

  25. How are strategies formulated? Example 2
    Product life cycle
    A series of stages that a product or service goes through during the life of its marketability

    • • Stages of the life cycle:
    • – Introduction
    • – Growth
    • – Maturity
    • – Decline
  26. Product Life Cycle Strategies
    Introduction and growth stages
    • – Use differentiation and prospector strategies
    • (e.g. advertising and gaining a market presence)
  27. Product Life Cycle Strategies
    Maturity stage
    • – Uses focus and/or cost leadership strategies
    • – (e.g. keeping customers and production efficiencies)
  28. Product Life Cycle Strategies
    Decline stag
    • Uses defender or analysis strategies
    • – (do you use exit strategies or determine what went wrong and change it )
  29. Strategy Implementation
    • No strategy, no matter how well formulated, can achieve longer term success if it is not properly implemented
    • • Emphasis on:
    • – Excellence in management systems and practices
    • – Responsible corporate governance
    • – Strategic leadership

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