FUNDAMENTALS OF ENTREPRENEURSHIP (ETR300/ENT300)

MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

Entrepreneurship Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

Learning Outcomes By the end of the session, students should be able to: Explain and demonstrate the key entrepreneurial motivation and Explain and demonstrate competencies of successful entrepreneurs

Entrepreneurship Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

Entrepreneurial Motivation
What make people responsive to opportunity? What drive them to entrepreneurship? Answering these question entail the examination of entrepreneurial motivation Motivation is defined as a drive that cause a person to take some goal oriented action

Entrepreneurship Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

Entrepreneurial Motivation Motivational theories are based on the idea that behavior is essentially purposeful and directed towards the attainment of certain goal

Thus entrepreneurial motivation is viewed as the willingness of an entrepreneur to sustain his or her entrepreneurial behavior

Entrepreneurship Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

Entrepreneurial Motivation Motivation theorists have pointed out that at least three general categories of social motives as important determinant of human behavior:

The need for achievement (n Ach)

The need for Power (n Pow) The need for affiliation (n Aff)

Entrepreneurship Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

Entrepreneurial Motivation
The need for achievement (n Ach) Achievement motive - drive to do well, strive for excellence and overcome challenges and obstacles in the pursuit of goal The need for Power (n Pow) Power motive - drive to control, influence and to have impact on others and change the situations The need for affiliation (n Aff) Affiliation motive - drive to establish, maintain or renew affective relationship with others
Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES 6

Entrepreneurial Motivation

All three motives may exist together in a person

But one usually more dominant than the other motives for most of the individuals actions

Entrepreneurship Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

High need for achievement (high n Ach) High need for achievement (high n Ach) has been identified as the critical motive that influence for most of venture creation and entrepreneurship Individual with high need for achievement found in most good business founder Need for achievement also known as urge to improve

Entrepreneurship Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

High need for power (high n Pow)

Individual with High need for power (high n Pow) normally seek position of leadership They potentially to be good managers, executive or supervisors.

Entrepreneurship Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

High need for affiliation (n Aff)

High need for affiliation (n Aff) has mostly been associated with individual whose desire in life is to establish, maintain or renew affective relationship with others They potentially to be good social workers As an entrepreneur the need for affiliation to certain extent may contribute to the drive for maintaining effective business networking

Entrepreneurship Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

10

Common characteristics associated with achievement oriented entrepreneurs Drive to achieve

Internally driven self starter with strong desire to: To compete with others To excel with self imposed standard To pursue and attain challenging goal

Entrepreneurship Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

11

Common characteristics associated with achievement oriented entrepreneurs

Calculated risk taking High achiever tend to take moderated or calculated risk Examining the situation and determine how to increase the chance of winning a business situation They make their effort to get the odds in their favor They do not take unnecessary risks
Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES 12

Common characteristics associated with achievement oriented entrepreneurs

Internal locus of control They belief that success or failure is determined by their own effort They belief in themselves They do not belief that success or failure of their ventures were determined by fate or luck This behavior is consistent with self confidence and desire to take personal responsibility
Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES 13

Common characteristics associated with achievement oriented entrepreneurs

Tolerance for failure High achievers take failure as a learning experience Do not easily become disappointed, distress or discouraged by any setback or difficulties faced in the mist of business competition Many successful entrepreneurs belief that they learn more from their earlier failure than from their earlier success
Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 2 : Entrepreneurial Motivation And Competencies 14

Common characteristics associated with achievement oriented entrepreneurs

Seeking Feedback They have strong desire to actively seek and used feed back to know how well they are doing and how to improve their performance Most successful entrepreneurs are quick learners

Entrepreneurship Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

15

Common characteristics associated with achievement oriented entrepreneurs

Integrity and reliability

Integrity and reliability help to build and sustain trust and confidence This helps to endure the relationship between entrepreneurs, partners, customers, suppliers and stakeholders

Entrepreneurship Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

16

Competence motivation
Besides the three social motives, a successful entrepreneur should also have the competence motivation Competence motivation is a drive to do high quality work

Entrepreneurship Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

17

Competence motivation
Competence motivated entrepreneur seek mastery in job or tasks that they are undertaking, develop problem solving skill and strive to be innovative In general they tend to perform good work because the inner satisfaction they feel and esteem they gain from others due to their competence
Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES 18

PERSONAL ENTREPRENEURIAL COMPETENCIES (PECs) The term "ENTREPRENEURIAL COMPETENCIES" refers to the key characteristics that should be possessed by successful entrepreneurs in order to perform entrepreneurial functions effectively

Entrepreneurship Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

19

Entrepreneurial Competencies McClelland and McBer (1985)

1. Initiative The entrepreneur should be able to take actions that go beyond his job requirements and to act faster. He is always ahead of others and able to become a leader in the field of business Examples Does things before being asked or compelled by the situation. Acts to extend the business into new areas, products or services
Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES 20

Entrepreneurial Competencies McClelland and McBer (1985)

2. Sees and acts on opportunities An entrepreneur always looks for and takes action on opportunities Examples Sees and acts on new business opportunities Seizes unusual opportunities to obtain financing, equipment, land, work space or assistance

Entrepreneurship Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

21

Entrepreneurial Competencies McClelland and McBer (1985)

3. Persistence An entrepreneur is able to make repeated efforts or to take different actions to overcome an obstacle that get in the way of reaching goals

Examples
Takes repeated or different actions to overcome an obstacle Takes action in the face of a significant obstacle

Entrepreneurship Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

22

Entrepreneurial Competencies McClelland and McBer (1985)

4. Information Seeking
An entrepreneur is able to take action on how to seek information to help achieve business objectives or clarify business problems
Examples

Does personal research on how to provide a product or service Consults experts or experienced persons to get relevant information Seeks information or asks questions to clarify a client's or a supplier's need Personally undertakes market research, analysis or investigation Uses contacts or information networks to obtain useful information
Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES 23

Entrepreneurial Competencies McClelland and McBer (1985)

5. Concern for High Quality of Work An entrepreneur acts to do things that meet certain standards of excellence which gives him greater satisfaction

Examples
States a desire to produce or sell a top or better quality product or service Compares own work or own company's work favorably to that of others
Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES 24

Entrepreneurial Competencies
McClelland and McBer (1985)

6. Commitment to Work Contract An entrepreneur places the highest priority on getting a job completed. Examples Makes personal sacrifice or expends extraordinary effort to complete a job Accepts full responsibility for problems in completing a job for customers Pitches in with workers or works in their place to get the job done Expresses a concern for satisfying the customer
Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES 25

Entrepreneurial Competencies
McClelland and McBer (1985)

7. Efficiency Orientation A successful entrepreneur always finds ways to do things faster or with fewer resources or at a lower cost. Examples Looks for or finds ways to do things faster or at less cost Uses information or business tools to improve efficiency Expresses concern about costs vs. benefits of some improvement, change, or course of action

Entrepreneurship Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

26

Entrepreneurial Competencies
McClelland and McBer (1985)

8. Systematic Planning An entrepreneur develops and uses logical, step-bystep plans to reach goals. Examples
Plans by breaking a large task down into sub-tasks Develops plans that anticipate obstacles Evaluate alternatives Takes a logical and systematic approach to activities
ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES 27

Entrepreneurship Dept, FBM (2009)

Entrepreneurial Competencies McClelland and McBer (1985)

9. Problem Solving Successful entrepreneur identifies new and potentially unique ideas to achieve his goals. Example
Switches to an alternative strategy to reach a goal Generates new ideas or innovative solutions

Entrepreneurship Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

28

Entrepreneurial Competencies McClelland and McBer (1985)

10. Self-Confidence A successful entrepreneur has a strong belief in self and own abilities. Examples Expresses confidence in own ability to complete a task or meet a challenge Sticks with own judgement in the face of opposition or early lack of success

Entrepreneurship Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

29

Entrepreneurial Competencies McClelland and McBer (1985)

11. Assertiveness An entrepreneur confronts problems and issues with others directly. Examples Confronts problems with others directly Tells others what they have to do Reprimands or disciplines those failing to perform as expected

Entrepreneur Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

30

Entrepreneurial Competencies McClelland and McBer (1985)

12. Persuasion An entrepreneur can successfully persuade or influence others for mobilizing resources, obtaining inputs, organizing productions and selling his products or services. Examples

Convinces someone to buy a product or service Convinces someone to provide financing Convinces someone to do something else that he would like that person to do Asserts own competence, reliability, or other personal or company qualities Asserts strong confidence in own company's products or services

Entrepreneur Dept, FBM (2009)

ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES

31

Entrepreneurial Competencies McClelland and McBer (1985)

13. Use of Influence Strategies An entrepreneur is able to make use of influential people to reach his business goals. Examples Acts to develop business contracts Uses influential people as agents to accomplish own objectives Selectively limits the information given to others Uses a strategy to influence or persuade others
ETR/ENT300 MODULE 2 : ENTREPRENEURIAL MOTIVATION AND COMPETENCIES 32

Entrepreneur Dept, FBM (2009)

END OF MODULE 2