Entrepreneurs, Managers, and Employees

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Entrepreneurs, Managers, and Employees
Chapter Three
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Chapter 3Entrepreneurs, Managers, and Employees

• Describe the nature of entrepreneurship and the
  kinds of entrepreneurial opportunities that can
  increase the profitability of business.
• Identify the process of creative destruction and
  how it leads to the emergence of new companies,
  the decline of established companies, raises
  societys standard of living.
• Appreciate agency - the problems in aligning the
  interests of a manager with those of a companys
  owners.

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Chapter 3Entrepreneurs, Managers, and Employees

• Distinguish the three different levels of
  managers and understand the different roles they
  perform to increase efficiency, effectiveness,
  and profitability.
• Differentiate two main approaches employees can
  take to performing their roles in a company and
  the way their performance affects their long term
  career prospects.

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Chapter 3Entrepreneurs, Managers, and Employees

• Globalization of the marketplace has heightened
  the complexity and competition in business today
• Entrepreneurs, Managers and employees are being
  pressured to use resources more efficiently and
  effectively and become more productive than their
  competitors

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Chapter 3Entrepreneurs, Managers, and Employees

• Entrepreneur
• The person providing to the enterprise
• The spirit, energy, expertise, and insight
• That seizes business opportunities
• And satisfies the customers needs
• At a profit

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Chapter 3Entrepreneurs, Managers, and Employees

• These opportunities are
• commercial
• occupational
• organizational

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Chapter 3Entrepreneurs, Managers, and Employees

• If you behave as an entrepreneur and take
  advantage of occupational opportunities, this
  will be a major determinant of your future
  ability to build human capital and personal wealth

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Chapter 3Entrepreneurs, Managers, and Employees

• Commercial entrepreneurism
• New product e.g., creating sweet taro chips
• New process to make or supply product e.g.,
  aquaculture salmon farms in Kona
• Improving an existing product e.g., breeding
  more disease resistant papayas
• A first- mover advantage may be thought of as not
  necessarily the best product on the market but
  the first on the market
• Competitors then develop me-too products.
• Evaluate Pringles a first-mover or me-too
  product? Why?

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Chapter 3Entrepreneurs, Managers, and Employees

• Intrapreneurship
• The entrepreneurial activity that takes place
  inside an established company
• G. Pinchot said "Intrapreneurs are employees who
  behave like entrepreneurs on behalf of the
  company. They are the visionaries who act
• They are the hands-on drivers of a specific
  innovation within an organization.

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Chapter 3Entrepreneurs, Managers, and Employees

• Entrepreneurs are
• intrinsically motivated and driven by personal or
  inner motives
• not extrinsically motivated and not driven by
  money or personal wealth

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Chapter 3Entrepreneurs, Managers, and Employees

• Entrepreneurs may be guilty of creative
  destruction
• drive old, inefficient companies out of business
• with new, more efficient business commerce,
  occupations, and organizations
• Isnt this capitalism?

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Chapter 3Entrepreneurs, Managers, and Employees

• As the business grows, the entrepreneur needs to
  delegate give up decision-making authority over
  work activities to other people called managers
• Managers, coordinate and control to achieve a goal

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Chapter 3Entrepreneurs, Managers, and Employees

• Top managers are provided with extremely high
  financial rewards
• High pay
• Bonuses
• Stock options the right to buy company stock at
  a fixed price in the future

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Chapter 3Entrepreneurs, Managers, and Employees

• Public stock corporations usually have a board of
  directors to protect the stockholders interests
  they hire the CEO
• The chief executive officer (CEO) reports
  directly to the Board
• The CEO creates a hierarchy of managers
• top, middle and first-level managers or
  supervisors
• This hierarchy is usually illustrated as a
  triangle because of the number of managers in
  each level

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Chapter 3Entrepreneurs, Managers, and Employees

• Other dimensions of managers include their
• business functional expertise and
• need to be both effective and efficient

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Chapter 3Entrepreneurs, Managers, and Employees

• Business Functions
• Production
• Distribution
• Finance
• Personnel
• Most businesses are structured and managed in a
  similar functional model

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Chapter 3Entrepreneurs, Managers, and Employees
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Chapter 3Entrepreneurs, Managers, and Employees

• Management Functions
• Planning
• Leading
• Organizing
• Controlling resources
• Interrelated functions within the management
  process

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Chapter 3Entrepreneurs, Managers, and Employees
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Chapter 3Entrepreneurs, Managers, and Employees

• Management Functions
• Planning is choosing the business model and
  allocating resources and selecting goals

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Chapter 3Entrepreneurs, Managers, and Employees

• Management Functions
• Organizing is creating task, culture and
  reporting relationships to coordinate and
  motivate individuals to achieve firms goals

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Chapter 3Entrepreneurs, Managers, and Employees

• Management Functions
• Leading is creating a vision using power,
  influence, and persuasion for individuals to
  follow

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Chapter 3Entrepreneurs, Managers, and Employees

• Management Functions
• Controlling is evaluating the accomplishment of
  planned goals and adjusting as needed

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Chapter 3Entrepreneurs, Managers, and Employees

• Effectiveness vs. Efficiency
• Effectiveness is doing the right thing
• focuses on task
• Efficiency is doing things right
• focuses on resource
• Evaluate the value, importance and significance
  of effectiveness and efficiency -- 299.00 ?

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Chapter 3Entrepreneurs, Managers, and Employees

• Effectiveness vs. Efficiency
• A high level of efficiency and effectiveness
  facilitates high profitability
• Low efficiency and low effectiveness leads to
  bankruptcy

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Chapter 3Entrepreneurs, Managers, and Employees

• Employees, not decision makers, perform a role or
  a set of tasks within a specific job in the
  organization

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Chapter 3Entrepreneurs, Managers, and Employees

• Performing job tasks more efficiently and
  effectively or going to the next step will help
  you to build human capital
• You are investing in yourself and your increasing
  capital will give you the opportunity to build
  personal wealth
• This extra effort is the first step in managing
  your career

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Chapter 3Entrepreneurs, Managers, and Employees

• Education is the most important way you can build
  your human capital, wealth and well being
• Searching for the right occupation is challenging
• If you send out 100 resumes, you may get as many
  as five interviews

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Chapter 3Entrepreneurs, Managers, and Employees

• There is a very specific work culture or climate
  with any given organization
• Thus, employers tend to look for similar work
  styles, values, and norms in their employees and
  tend to hire within these characteristics
• You need to recognize this culture or firm fit
  in order to increase your attractiveness to the
  company in the initial interview

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Chapter 3Entrepreneurs, Managers, and Employees

• Five Career Stages
• Preparation for work
• Organizational
• Early career
• Mid-career
• Late career

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Chapter 3Entrepreneurs, Managers, and Employees

• How well you manage the challenges involved at
  each stage determine your long-term prosperity
  and well-being
• Evaluate Switching Careers video as an employee
  and relate to it also as a Manager