Everything you need to pass the Global Entrepreneurship & Business exam on the University of Twente!
This document contains a summary of the book 'Entrepreneurship in Theory & Practice' and also the part about finance, risks and internationalization as explained in the lectures.
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Global Entrepreneurship and Business Pre-master cours, Book chapters: 1 t/m 5 + 7,8,9
Global Entrepreneurship and Business Pre-master cours, Book chapters: 1 t/m 5 + 7,8,9 and Lectures 1 t/m 5
SUMMARY Global Entrepreneurship & Business (GEB) pre-master Business Administration
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Universiteit Twente (UT)
Pre-Master Business Administration
Global Entrepreneurship & Business (202000261)
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Global Entrepreneurship and Business
Premaster Business Administration – University of Twente (2021)
Summary of book: Entrepreneurship in Theory & Practice (second edition)
Plus the UT Lectures.
Chapter 1: What is entrepreneurship? (Lecture 1)
Entrepreneurship is studied within many different disciplines (economics, psychology,
sociology, management etc.), there is not one single definition.
The book describes four traditions within entrepreneurship:
- Economic tradition
o The entrepreneur’s function is to compensate for discrepancies between
supply and demand by buying something cheaply and selling it again at as
high a price as possible.
o The entrepreneur is an innovator who, by combining existing things, generates
new opportunities and organizations in the economy, he is the main source of
development in the economy
o Schumpeter: creative destruction. Destroying the market equilibrium by
creating new opportunities and thus a new demand.
- Social-psychological tradition
o Studies into the psychological perspective, are entrepreneurs born or made?
o It is not possible to identify the entrepreneur’s personality in the crowd.
- Emergence tradition
o Defining entrepreneurship as a process of organizational formation, building of
new structures.
o Focuses on the activities of the entrepreneur during the creation of a new
organization.
o Creation perspective
- Opportunity tradition
o Entrepreneurship is the discovery, evaluation and exploitation of opportunities
o Discovery of opportunities. The opposite of emergence tradition.
o Entrepreneurship involves innovation, creativity, creation of new targets.
Chapter 2: Who is the entrepreneur? (Lecture 2)
Chapter 2 states that the individual particularly plays a decisive role during the early start-up
phase, when the new opportunity must stand up to testing.
The distinct mark of an individual or group maybe are even more important for the
entrepreneurial success than the opportunities and situation in a given industry.
Types of entrepreneurs
- Novice : No entrepreneurial experience;
- Habitual: A person with previous entrepreneurial experience;
- Serial: A person who is constantly establishing and selling organizations;
- Portfolio: A person who owns several organizations simultaneously;
- Hybrid: A person who is self-employed and employed at the same time;
- Nascent: A person who is in the process of considering the establishment of a new
organization;
- Intrapreneur: A person acting entrepreneurially within an existing organization.
1
,Born perspective
This perspective believes that you are born with the right traits, that you are an entrepreneur
since you were born. This distinguishes the entrepreneur from the ‘ordinary’ people. It might
even be fixed in your genes. Once an entrepreneur, always an entrepreneur, created through
internal factors.
An entrepreneur is a special individual that:
- Desires to establish a private kingdom;
- Has a will to conquer;
- Has a joy of creating.
The traits of this special individual, the entrepreneur, are:
- Willing to take risks;
- Need to perform;
- Independent, autonomy;
- Aggressive leader;
- Innovative;
- Intelligent;
- Creative.
Made perspective
Entrepreneurship is not shaped only by birth, but also by early childhood factors and
demographic factors. Such as birth order, entrepreneurial parents, work experience,
education. The entrepreneur is created through external factors, it is a process.
Gartner’s contingency theory: the entrepreneur is made by interaction of the components
According to Shane (2003) there are thee specific characteristics of entrepreneurs. These
characteristics could be acquired during life.
- They are more optimistic in impulse processing;
- Have more willingness to generalize on small samples; able to take big decisions
despite a lack of information;
- Trust their intuition more than others.
People can have multiple identities: they are not only an entrepreneur, but also father, soccer
player, student, etc. This is all important for forming and developing yourself as an individual.
Fayolle (2003) journey towards entrepreneurship:
1. The individual is not aware of entrepreneurship;
2. Stimulation into individuals interest and desire for entrepreneurship;
3. Developing entrepreneurial intentions;
4. Decision to act as an entrepreneur;
5. Results of action.
2
, Ayzen (1991) Theory of planned behaviour
Reflects the process of intention prior to action. The theory suggest that action presupposes
a conscious intention to carry out the action. Three important variables:
- Perceived behavioural control
o How difficult or simple the individual perceives the entrepreneurial project;
- Subjective norms
o The extent to which individuals perceive a social pressure to perform or not
perform the entrepreneurial action;
- Attitude towards behaviour
o The degree to which individuals will choose the entrepreneurial action, rather
than another action.
The more the individual experiences behavioural control, the greater the respect awarded to
the action by society.
Chapter 3: the emergence of opportunities (lecture 2)
Chapter 3 is about the paradox: are opportunities discovered or created?
Criteria for evaluation of opportunities
An opportunity is an idea that is evaluated as being able to create value for others and a
market can be realized. Criteria for evaluation:
- Anchored
o Should be bound to a product, service or experience that creates value for
others;
- Attractive
o People are willing to pay for the value that represents the idea;
- At the right time and place
o The environment is mature enough to receive the entrepreneur and his idea;
- Capable of being done
o The opportunity is practically feasible. The entrepreneur has access to the
resources that are needed.
Types of opportunities
Schumpeter (1934) vs. Kirzner (1973).
- Schumpeterian opportunities:
o Opportunities emerge through new combinations of existing resources.
o Existing knowledge is recombined
o E.g. rolling kitchen ladder for painters so they do not have to step off the
ladder often.
- Kirznerian opportunities:
o Is there a potential value in the market that has not yet optimally been used by
others?
o ‘Hole in the market’
o E.g. building a bridge over a ditch.
3
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