Tuesday, 28 January 2014

OEM 303 : INTRODUCTION TO PROJECT MANAGEMENT AND ENTREPRENEURSHIP IN EDUCATION----THE OPEN UNIVERSITY OF TANZANIA.

Entrepreneurship education.

INTRODUCTION:

Entrepreneurship education seeks to provide students with the knowledge, skills and motivation to encourage entrepreneurial success in a variety of settings.
Variations of entrepreneurship education are offered at all levels of schooling from primary or secondary schools through graduate university programs.[1][2]

Objectives

What makes entrepreneurship education distinctive is its focus on realization of opportunity, where management education is focused on the best way to operate existing hierarchies. Both approaches share an interest in achieving "profit" in some form (which in non-profit organizations or government can take the form of increased services or decreased cost or increased responsiveness to the customer/citizen/client).
Entrepreneurship education can be oriented towards different ways of realizing opportunities:

Classifications

  • Agriculture and mining businesses produce raw material, such as plants or minerals.
  • Financial businesses include banks and other companies that generate profits through investment and management of capital.
  • Information businesses generate profits primarily from the sale of intellectual property and include movie studios, publishers and internet and software companies.
  • Manufacturers produce products, from raw materials or from component parts, then sell their products at a profit. Companies that make tangible goods such as cars, clothing or pipes are considered manufacturers.
  • Real estate businesses sell, rent, and develop properties including land, residential homes, and other buildings.
  • Retailers and distributors act as middlemen and get goods produced by manufacturers to the intended consumers, and make their profits by marking up their price. Most stores and catalog companies are distributors or retailers.
  • Service businesses offer intangible goods or services and typically charge for labor or other services provided to government, consumers, or other businesses. Interior decorators, consulting firms and even entertainers are service businesses.
  • Transportation businesses deliver goods and individuals to their destinations for a fee.
  • Utilities produce public services such as electricity or sewage treatment, usually under a government charter.

Management

Main article: Management
The efficient and effective operation of a business, and study of this subject, is called management. The major branches of management are financial management, marketing management, human resource management, strategic management, production management, operations management, service management and information technology management.[citation needed]
Owners may administer their businesses themselves, or employ of managers to do this for them. Whether they are owners or employees, managers administer three primary components of the business' value: its financial resources, capital or tangible resources, and human resources. These resources are administered in at least five functional areas: legal contracting, manufacturing or service production, marketing, accounting, financing, and human resources.[citation needed]

Restructuring state enterprises

In recent decades, various states modeled some of their assets and enterprises after business enterprises. In 2003, for example, the People's Republic of China modeled 80% of its state-owned enterprises on a company-type management system.[2] Many state institutions and enterprises in China and Russia have transformed into joint-stock companies, with part of their shares being listed on public stock markets.
Business process management (BPM) is a holistic management approach focused on aligning all aspects of an organization with the wants and needs of clients. It promotes business effectiveness and efficiency while striving for innovation, flexibility, and integration with technology. BPM attempts to improve processes continuously. It can therefore be described as a "process optimization process." It is argued that BPM enables organizations to be more efficient, more effective and more capable of change than a functionally focused, traditional hierarchical management approach.[who?]

Organization and government regulation

See also: Theory of the firm
Most legal jurisdictions specify the forms of ownership that a business can take, creating a body of commercial law for each type.
The major factors affecting how a business is organized are usually:
  • The size and scope of the business firm and its structure, management, and ownership, broadly analyzed in the theory of the firm. Generally a smaller business is more flexible, while larger businesses, or those with wider ownership or more formal structures, will usually tend to be organized as corporations or (less often) partnerships. In addition, a business that wishes to raise money on a stock market or to be owned by a wide range of people will often be required to adopt a specific legal form to do so.
  • The sector and country. Private profit-making businesses are different from government-owned bodies. In some countries, certain businesses are legally obliged to be organized in certain ways.
  • Limited Liability Companies (LLC), limited liability partnerships, and other specific types of business organization protect their owners or shareholders from business failure by doing business under a separate legal entity with certain legal protections. In contrast, unincorporated businesses or persons working on their own are usually not so protected.
  • Tax advantages. Different structures are treated differently in tax law, and may have advantages for this reason.
  • Disclosure and compliance requirements. Different business structures may be required to make less or more information public (or report it to relevant authorities), and may be bound to comply with different rules and regulations.
Many businesses are operated through a separate entity such as a corporation or a partnership (either formed with or without limited liability). Most legal jurisdictions allow people to organize such an entity by filing certain charter documents with the relevant Secretary of State or equivalent and complying with certain other ongoing obligations. The relationships and legal rights of shareholders, limited partners, or members are governed partly by the charter documents and partly by the law of the jurisdiction where the entity is organized. Generally speaking, shareholders in a corporation, limited partners in a limited partnership, and members in a limited liability company are shielded from personal liability for the debts and obligations of the entity, which is legally treated as a separate "person". This means that unless there is misconduct, the owner's own possessions are strongly protected in law if the business does not succeed.
Where two or more individuals own a business together but have failed to organize a more specialized form of vehicle, they will be treated as a general partnership. The terms of a partnership are partly governed by a partnership agreement if one is created, and partly by the law of the jurisdiction where the partnership is located. No paperwork or filing is necessary to create a partnership, and without an agreement, the relationships and legal rights of the partners will be entirely governed by the law of the jurisdiction where the partnership is located.
A single person who owns and runs a business is commonly known as a sole proprietor, whether that person owns it directly or through a formally organized entity.
A few relevant factors to consider in deciding how to operate a business include:
  1. General partners in a partnership (other than a limited liability partnership), plus anyone who personally owns and operates a business without creating a separate legal entity, are personally liable for the debts and obligations of the business.
  2. Generally, corporations are required to pay tax just like "real" people. In some tax systems, this can give rise to so-called double taxation, because first the corporation pays tax on the profit, and then when the corporation distributes its profits to its owners, individuals have to include dividends in their income when they complete their personal tax returns, at which point a second layer of income tax is imposed.
  3. In most countries, there are laws which treat small corporations differently than large ones. They may be exempt from certain legal filing requirements or labor laws, have simplified procedures in specialized areas, and have simplified, advantageous, or slightly different tax treatment.
  4. "Going public" through a process known as an initial public offering (IPO) means that part of the business will be owned by members of the public. This requires organization as a distinct entity, and compliance with a tighter set of laws and procedures. Most public entities are corporations that have sold shares, but increasingly there are also public LLCs that sell units (sometimes also called shares), and other more exotic entities as well, such as, for example, real estate investment trusts in the USA, and unit trusts in the UK. A general partnership cannot "go public."

Commercial law

Main article: Commercial law

Offices in the Los Angeles Downtown Financial District
A very detailed and well-established body of rules that evolved over a very long period of time applies to commercial transactions. The need to regulate trade and commerce and resolve business disputes helped shape the creation of law and courts. The Code of Hammurabi dates back to about 1772 BC for example, and contains provisions that relate, among other matters, to shipping costs and dealings between merchants and brokers.[3] The word "corporation" derives from the Latin corpus, meaning body, and the Maurya Empire in Iron-Age India accorded legal rights to business entities.[4]
In many countries it is difficult to compile all the laws that can affect a business into a single reference source. Laws can govern treatment of labour and employee relations, worker protection and safety, discrimination on the basis of age, gender, disability, race, and in some jurisdictions, sexual orientation, and the minimum wage, as well as unions, worker compensation, and working hours and leave.
Some specialized businesses may also require licenses, either due to laws governing entry into certain trades, occupations or professions, that require special education, or to raise revenue for local governments. Professions that require special licenses include law, medicine, piloting aircraft, selling liquor, radio broadcasting, selling investment securities, selling used cars, and roofing. Local jurisdictions may also require special licenses and taxes just to operate a business.
Some businesses are subject to ongoing special regulation, for example, public utilities, investment securities, banking, insurance, broadcasting, aviation, and health care providers. Environmental regulations are also very complex and can affect many businesses.

Capital


Mexican Stock Exchange in Paseo de la Reforma, Mexico City
When businesses need to raise money (called capital), they sometimes offer securities for sale.
Capital may be raised through private means, by an initial public offering or IPO on a stock exchange, or in other ways.
Major stock exchanges include the Shanghai Stock Exchange, Singapore Exchange, Hong Kong Stock Exchange, New York Stock Exchange and Nasdaq (USA), the London Stock Exchange (UK), the Tokyo Stock Exchange (Japan), and Bombay Stock Exchange (India). Most countries with capital markets have at least one.
Businesses that have gone public are subject to regulations concerning their internal governance, such as how executive officers' compensation is determined, and when and how information is disclosed to shareholders and to the public. In the United States, these regulations are primarily implemented and enforced by the United States Securities and Exchange Commission (SEC). Other Western nations have comparable regulatory bodies. The regulations are implemented and enforced by the China Securities Regulation Commission (CSRC) in China. In Singapore, the regulation authority is the Monetary Authority of Singapore (MAS), and in Hong Kong, it is the Securities and Futures Commission (SFC).
The proliferation and increasing complexity of the laws governing business have forced increasing specialization in corporate law. It is not unheard of for certain kinds of corporate transactions to require a team of five to ten attorneys due to sprawling regulation. Commercial law spans general corporate law, employment and labor law, health-care law, securities law, mergers and acquisitions, tax law, employee benefit plans, food and drug regulation, intellectual property law on copyrights, patents, trademarks and such, telecommunications law, and more.
Other types of capital sourcing includes crowd sourcing on the internet, venture capital, bank loans and debentures.

Intellectual property

Businesses often have important "intellectual property" that needs protection from competitors for the company to stay profitable. This could require patents, copyrights, trademarks or preservation of trade secrets. Most businesses have names, logos and similar branding techniques that could benefit from trademarking. Patents and copyrights in the United States are largely governed by federal law, while trade secrets and trademarking are mostly a matter of state law. Because of the nature of intellectual property, a business needs protection in every jurisdiction in which they are concerned about competitors. Many countries are signatories to international treaties concerning intellectual property, and thus companies registered in these countries are subject to national laws bound by these treaties. In order to protect trade secrets, companies may require employees to sign non-compete clauses which will impose limitations on an employee's interactions with stakeholders, and competitors.

Entrepreneurship


From Wikipedia, the free encyclopedia

  (Redirected from Entrepreneur)

For the magazine, see Entrepreneur (magazine).

Left to right, Eric Schmidt, Sergey Brin and Larry Page of Google, which is sometimes cited as an example of entrepreneurship and disruptive innovation.
In political economics, entrepreneurship is a process of identifying and starting a business venture, sourcing and organizing the required resources and taking both the risks and rewards associated with the venture.


Background


In 2012, Ambassador-at-Large for Global Women's Issues Melanne Verveer greeted participants in an African Women's Entrepreneurship Program at the State Department in Washington, D.C.
"Entrepreneurship" may result in new organizations or revitalize mature organizations in response to a perceived business opportunity. A new business started by an entrepreneur is referred to as a startup company. In recent years, the term has been extended to include social and political forms of entrepreneurial activity.[according to whom?]
Entrepreneurship within a firm or large organization has been referred to as intra-preneurship and may include corporate ventures where large entities spin off subsidiary organizations.[1]
According to Paul Reynolds, an entrepreneurship scholar[clarification needed] who created the Global Entrepreneurship Monitor, "by the time they reach their retirement years, half of all working men in the United States probably have a period of self-employment of one or more years; one in four may have engaged in self-employment for six or more years. Participating in a new business creation is a common activity among U.S. workers over the course of their careers."[2] In recent years entrepreneurship has been documented by scholars such as David Audretsch as a major driver of economic growth in both the United States and Western Europe. "As well, entrepreneurship may be defined as the pursuit of opportunity without regard to resources currently controlled (Stevenson,1983)"[3]
Entrepreneurial activities differ substantially depending on the type of organization and creativity involved. Entrepreneurship ranges in scale from solo projects, and even just part-time projects, to major undertakings that create many job opportunities. Many "high value" entrepreneurial ventures seek venture capital or angel funding (seed money) in order to raise capital for building the business. Angel investors generally seek annualized returns of 20–30% and more, as well as extensive involvement in the business.[4] Many organizations exist to support would-be entrepreneurs including specialized government agencies, business incubators, science parks, and some NGOs. More recently, the term entrepreneurship has been extended to include conceptualizations of entrepreneurship as a specific mindset (see also entrepreneurial mindset) resulting in entrepreneurial initiatives e.g. in the form of social entrepreneurship, political entrepreneurship, or knowledge entrepreneurship.
Since 2008, an annual "Global Entrepreneurship Week" has been announced, with the aim of "exposing people to the benefits of entrepreneurship" and getting them to "participate in entrepreneurial-related activities"[who?].

History of entrepreneurship

Etymology and historical usage

First used in 1723, today the term entrepreneur implies qualities of leadership, initiative and innovation in manufacturing, delivery, and/or services. Economist Robert Reich has called team-building, leadership and management ability essential qualities for the entrepreneur.[5] The successful companies of the future, he has said, will be those that offer a new model for working relationships based on collaboration and mutual value.[6]
The entrepreneur is a factor in microeconomics, and the study of entrepreneurship reaches back to the work in the late 17th and early 18th centuries of Richard Cantillon and Adam Smith, which was foundational to classical economics.
In the 20th century, entrepreneurship was studied by Joseph Schumpeter in the 1930s and other Austrian economists such as Carl Menger, Ludwig von Mises and Friedrich von Hayek. The term "entrepreneurship" was coined around the 1920s, while the loan from French of the word entrepreneur itself dates to the 1850s. It became something of a buzzword beginning about 2010, in the context of disputes which have erupted surrounding the wake of the Great Recession.[clarification needed]

What is an entrepreneur

Entrepreneur (Listeni/ˌɒntrəprəˈnɜr/), is a loanword from French. It is defined as an individual who organizes or operates a business or businesses. Credit for coining the term entrepreneur generally goes to the French economist Jean-Baptiste Say, but in fact the Irish-French economist Richard Cantillon defined it first[7] in his Essai sur la Nature du Commerce en Général, or Essay on the Nature of Trade in General, a book William Stanley Jevons considered the "cradle of political economy"[8] Say and Cantillon used the term differently, however. Cantillon biographer Anthony Breer notes that Cantillon saw the entrepreneur as a risk-taker while Say considered the entrepreneur a "planner".[9]
Cantillon defined the term as a person who pays a certain price for a product and resells it at an uncertain price: "making decisions about obtaining and using the resources while consequently admitting the risk of enterprise." The word first appeared in the French dictionary entitled "Dictionnaire Universel de Commerce" compiled by Jacques des Bruslons and published in 1723.[10]

A Chronological List of the Definition of 'Entrepreneur'
  • 1734: Richard Cantillon: Entrepreneurs are non-fixed income earners who pay known costs of production but earn uncertain incomes,[11]
  • 1803: Jean-Baptiste Say: An entrepreneur is an economic agent who unites all means of production- land of one, the labour of another and the capital of yet another and thus produces a product. By selling the product in the market he pays rent of land, wages to labour, interest on capital and what remains is his profit. He shifts economic resources out of an area of lower and into an area of higher productivity and greater yield.[citation needed]
  • 1934: Schumpeter: Entrepreneurs are innovators who use a process of shattering the status quo of the existing products and services, to set up new products, new services.[citation needed]
  • 1961: David McClelland: An entrepreneur is a person with a high need for achievement [N-Ach]. He is energetic and a moderate risk taker.[citation needed]
  • 1964: Peter Drucker: An entrepreneur searches for change, responds to it and exploits opportunities. Innovation is a specific tool of an entrepreneur hence an effective entrepreneur converts a source into a resource.[citation needed]
  • 1971: Kilby: Emphasizes the role of an imitator entrepreneur who does not innovate but imitates technologies innovated by others. Are very important in developing economies.[citation needed]
  • 1975: Albert Shapero: Entrepreneurs take initiative, accept risk of failure and have an internal locus of control.[citation needed]
  • 2013: Ronald May: An Entrepreneur is someone who commercializes his or her innovation.
The appellation today implies a bootstrap operation and some degree of both innovation and financial risk.

Entrepreneur types

Differences in entrepreneurial organizations and the heterogeneity in their founders' behaviors can be traced back to the founder's identity. Fauchart and Gruber have utilized social identity theory to illustrate that individual entrepreneurs can be identified as one of three main types: Darwinians, Communitarians and Missionaries. These types of entrepreneurs not only diverge in fundamental ways in terms of their self-views and their social motivations in entrepreneurship, but also engage fairly differently in new firm creation.[12]

Influences and entrepreneurial behavior


British entrepreneur Karren Brady has an estimated net worth of £82 million[13]
The entrepreneur is commonly seen as an innovator — a generator of new ideas and business processes.[14] Management skill and strong team building abilities are often perceived as essential leadership attributes for successful entrepreneurs.[15] Political economist Robert Reich considers leadership, management ability, and team-building to be essential qualities of an entrepreneur.[16][17]

Schumpeter on Entrepreneurship

According to Schumpeter, an entrepreneur is willing and able to convert a new idea or invention into a successful innovation.[18] Entrepreneurship employs what Schumpeter called "the gale of creative destruction" to replace in whole or in part inferior offerings across markets and industries, simultaneously creating new products and new business models. Thus, creative destruction is largely responsible for the dynamism of industry and long-term economic growth. The idea that entrepreneurship leads to economic growth is an interpretation of the residual in endogenous growth theory[clarification needed] and as such is hotly debated in academic economics. An alternate description posited by Israel Kirzner suggests that the majority of innovations may be much more incremental improvements such as the replacement of paper with plastic in the construction of a drinking straw.
For Schumpeter, entrepreneurship resulted in new industries but also in new combinations of currently existing inputs. Schumpeter's initial example of this was the combination of a steam engine and then current wagon making technologies to produce the horseless carriage. In this case the innovation, the car, was transformational but did not require the development of a new technology, merely the application of existing technologies in a novel manner. It did not immediately replace the horsedrawn carriage, but in time, incremental improvements which reduced the cost and improved the technology led to the complete practical replacement of beast drawn vehicles in modern transportation. Despite Schumpeter's early 20th-century contributions, traditional microeconomic theory did not formally consider the entrepreneur in its theoretical frameworks (instead assuming that resources would find each other through a price system). In this treatment the entrepreneur was an implied but unspecified actor, but it is consistent with the concept of the entrepreneur being the agent of x-efficiency.
Different scholars have described entrepreneurs as, among other things, bearing risk. For Schumpeter, the entrepreneur did not bear risk: the capitalist did.

Knight and Drucker


Dell Women's Entrepreneur Network event in New York City, May 2013
For Frank H. Knight[19] (1921) and Peter Drucker (1970), entrepreneurship is about taking risk. The behavior of the entrepreneur reflects a kind of person willing to put his or her career and financial security on the line and take risks in the name of an idea, spending much time as well as capital on an uncertain venture.
Knight classified three types of uncertainty.
  • Risk, which is measurable statistically (such as the probability of drawing a red color ball from a jar containing 5 red balls and 5 white balls).
  • Ambiguity, which is hard to measure statistically (such as the probability of drawing a red ball from a jar containing 5 red balls but with an unknown number of white balls).
  • True Uncertainty or Knightian Uncertainty, which is impossible to estimate or predict statistically (such as the probability of drawing a red ball from a jar whose number of red balls is unknown as well as the number of other colored balls.
The acts of entrepreneurship are often associated with true uncertainty, particularly when it involves bringing something really novel to the world, whose market never exists. However, even if a market already exists, there is no guarantee that a market exists for a particular new player in the cola category.
The place of the disharmony-creating and idiosyncratic entrepreneur in traditional economic theory (which describes many efficiency-based ratios assuming uniform outputs) presents theoretic quandaries. William Baumol has added greatly to this area of economic theory and was recently honored for it at the 2006 annual meeting of the American Economic Association.[20]

The individuals-opportunities nexus

The contemporary study of entrepreneurship is significantly defined by the agenda-setting article of Shane and Venkataraman in 2000 named The Promise of Entrepreneurship as a Field of Research. According to Shane and Venkataraman, entrepreneurship comprises two phenomena "enterprising individuals" and "entrepreneurial opportunities", and researchers should study the nature of the individuals who respond to these opportunities when others do not, the opportunities themselves and the nexus between individuals and opportunities.

Psychological make-up of the entrepreneur

Studies show that the psychological propensities for male and female entrepreneurs are more similar than different. Empirical studies suggest that male entrepreneurs possess strong negotiating skills and consensus-forming abilities.[citation needed]
Jesper Sørensen,[21] Professor of Organizational Behavior at Stanford Graduate School of Business, wrote that significant influences on an individual's decision to become an entrepreneur are workplace peers and the social composition of the workplace. Sørensen discovered a correlation between working with former entrepreneurs and how often these individuals become entrepreneurs themselves, compared to those who did not work with entrepreneurs.[22] The social composition of the workplace can influence entrepreneurism in workplace peers by proving a possibility for success, causing a “He can do it, why can’t I?” attitude. As Sørensen stated, “When you meet others who have gone out on their own, it doesn’t seem that crazy.”[23]
Innovative entrepreneurs may be more likely to experience what psychologist, Mihaly Csikszentmihalyi calls flow. Flow occurs when the outside world disappears in the face of a vibrant inner motivation to do something. Csikszentmihalyi suggests that breakthrough innovations occur at the hands of individuals experiencing flow. They become so enthralled with the ideas in their heads that they cannot help but follow them.[24] Similarly, other research has concluded that a strong internal motivation is a vital ingredient for breakthrough innovation.[25] Flow may also be compared to Maria Montessori’s concept of normalization, a state which includes a child’s capacity for joyful and lengthy periods of intense concentration.[26] Csikszentmihalyi himself acknowledges that Montessori’s prepared environment offers children opportunities to achieve flow.[27] Thus quality and type of early education may have some influence on entrepreneurial capability.

Innate ability vs. public perception

The ability of entrepreneurs to innovate relates to innate traits, including extroversion and a proclivity for risk-taking.[citation needed] According to Joseph Schumpeter, the capabilities of innovating, introducing new technologies, increasing efficiency and productivity, or generating new products or services, are characteristic qualities of entrepreneurs.[citation needed] Also, many scholars maintain that entrepreneurship is a matter of genes, and that it is not everyone who can be an entrepreneur.[28]
It has, however, been argued that entrepreneurs are not that distinctive; and that it is essentially poor conceptualizations of "non-entrepreneurs" that maintain laudatory portraits of "entrepreneurs".[29][30]

Financial Bootstrapping

Financial bootstrapping is a term used to cover different methods for avoiding using the financial resources of external investors. Bootstrapping can be defined as “a collection of methods used to minimize the amount of outside debt and equity financing needed from banks and investors”.[31] The use of private credit card debt is the most known form of bootstrapping, but a wide variety of methods are available for entrepreneurs. While bootstrapping involves a risk for the founders, the absence of any other stakeholder gives the founders more freedom to develop the company. Many successful companies including Dell Computers and Facebook were founded this way.
There are different types of bootstrapping:

External financing

Many businesses need more capital than can be provided by the owners themselves, and in this case, a range of options is available including:
Some of these sources provide not only funds, but also financial oversight, accountability for carrying out tasks and meeting milestones, and in some cases business contacts and experience – in many cases in return for an equity stake.

List of entrepreneurs


From Wikipedia, the free encyclopedia
A list of entrepreneurs by century. An entrepreneur is an owner or manager of a business enterprise who makes money through risk and/or initiative.[1] This list includes notable entrepreneurs.
This is an incomplete list, which may never be able to satisfy particular standards for completeness. You can help by expanding it with reliably sourced entries.


18th century entrepreneurs

19th century entrepreneurs

20th century entrepreneurs

21st century entrepreneurs

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