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GST 204 ENTERPRENUERSHIP AND INNOVATION

Entrepreneurship has universal definition like other disciplines

False
The word entrepreneurship is derived from the French word entreprendre

Entrepreneurship indicates an act in which the individual attempt or undertake an act of some sort

The word entreprendre is derived from French language

Putari (2006) observes that scholars had not been in agreement in their definitions of entrepreneurship
and chronicled the definitions of entrepreneurship by various scholars

Cantillon (circa 1730) views entrepreneurship as: “selfemployment of any sort”

In__________, Joseph Schumpeter equated entrepreneurship with the concept of innovation and
applied it to a business context, while emphasizing the combination of resources

1934
Penrose (1963) views entrepreneurship as the activity that involves identifying opportunities within the
economic system

Leibenstein (1968, 1979) perceives entrepreneurship as involving "activities necessary to create or carry
on an enterprise where not all markets are well established or clearly defined and/or in which relevant
parts of the production function are not completely known”

Gartner (1988) conceives entrepreneurship as the creation of new organizations Okpara (2000) defines
___________ as the willingness and ability of an individual to seek out investment opportunities in an

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environment and be able to establish and run an enterprise successfully based on the identifiable
opportunities

Entrepreneurship
Nwachukwu (1990) regards __________ as a process of seeing and evaluating business opportunities,
gathering the necessary resources to take advantage of them and initiate appropriate action to ensure
success

Entrepreneurship
____________ refers to all the processes and activities involved in establishing, nurturing, and sustaining
a business enterprise

Entrepreneurship
In____________, Putari (2006) asserted that the entrepreneur is the agent "who unites all means of
production and who finds in the value of the products”

1816
____________ views entrepreneurs as individuals who attempt to predict and act upon change within
markets

Knight (1921)
Schumpeter (1934) conceives the entrepreneur as the innovator who implements change within
markets through the carrying out of new combinations such as introduction of new techniques of
production, reorganization of an industry and innovation

Schumpeter (1934) argues that the entrepreneur is an innovator, one that introduces new
technologies into the workplace or market, increasing efficiency, productivity or generating new
products or services

Cantillon (1730) conceptualized the entrepreneur as: the "agent who buys means of production at
certain prices in order to combine them" into a new product

Entrepreneur and Entrepreneurship have been a point of interest to economics as early as __________

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1755
An Entrepreneur was variously translated into English as follows
• Merchant
• Adventurer
• Employer

James Stuart Mill popularized the precise meaning of the term “undertaker of a project” in England

According to the sociologist, social sanctions, cultural values and role expectations are responsible
for the emergence of entrepreneurship

The ___________ sees an entrepreneur as someone who is being driven by certain forces that are
mainly internal, personal attributes and traits

Psychologist
According to McClelland, it is the high need for achievement which drives people towards
entrepreneurial activities
The word "Entrepreneur" is derived from the French verb 'entrepredre'. It means 'to undertake'.

In the early ________ century the Frenchmen who organized and led military expeditions were referred
to as 'Entrepreneurs'

16th
In the early __________ century French economist Richard Cantillon used the term entrepreneur to
business

18th
According to J.B. Say, An entrepreneur is the 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

An Entrepreneur is an organizer who combines various factors of production to produce a socially viable
product

An entrepreneur can be regarded as a person who has the initiative skill and motivation to set up a
business or enterprise of his own and who always looks for high achievements

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According to Joseph Schumpeter, an entrepreneur in an advanced economy is an individual who

introduces something new in the economy, a method of production not yet tested by experience in the
branch of manufacturing concerned

According to Cantillon, An entrepreneur is the agent who buys factors of production at certain prices in
order to combine them into a product with a view to selling it at uncertain prices in future

The person who bears risk, unites various factors of production; to exploit the perceived opportunities in
order to evoke demand, create wealth and employment is known as an entrepreneur

Pinson (2010) visualized the entrepreneur as a person who starts a business to follow a vision, to
make money, to be the master of his/her own soul (both financially and spiritually) and is an "educated"
risk taker

Murphy (2010) conceives an entrepreneur as a person who is dynamic and continues to seek
opportunities and/or different methods of operation and will do whatever it takes to be successful in
business

Envick and Langford (2000) define an entrepreneur as someone who owns and operates his/her
own business

Bagby (1998) sees an entrepreneur as a person that utilizes the opportunity of instability, turbulence,
lack to produce something new or modifies an existing one for profit motive

The main characteristics of an Entrepreneur

• Passion and Motivation

• Not Afraid to Take Risks
• Self-belief
• Hard Work and Disciplined Dedication
• Adaptable and Flexible
• Product and Market Knowledge

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 Strong Money Management

Effective Planning (Not Over-Planning) Skills

• The Right Connections

According to Jones, George and Hill (2000), an intrapreneur is a manager, scientist, or researcher who
works inside an existing organization and notices opportunities for product improvements and is
responsible for managing the product development process

The central difference between entrepreneurs and intrapreneurs is the setting in which they work

An intrapreneur is an inside entrepreneur, or an entrepreneur within a large firm, who uses

entrepreneurial skills without incurring the risks associated with those activities

The following are the characteristics of Entrepreneur

• Motivation
• Risk Tolerance
• Vision
• Mental ability and Creativity
• Clear Objectives
• Good Communication Skills
• Human Skills
• Technical skills

The entrepreneur is a visionary

True/False

Successful entrepreneurs have the creative ability to recognize and pursue opportunities

Intrapreneurs can be identified through many traits, including all of these

EXCEPT _____

• passion
• creativity
curiosity shyness

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Businesses that want to support intrapreneurship can do so in all of the following ways EXCEPT:

• Asking for employees' thoughts and opinions

• Creating a process for hearing and developing new ideas
• Encouraging the development of new ideas

Fostering a culture where employees are afraid to speak up

Features of Economic Theory of Entrepreneurship

• Entrepreneurship and economic growth take place when the economic conditions are favorable
• Economic incentives are the main motivations for entrepreneurial activities
• Economic incentives include taxation policy, industrial policy, sources of finance and raw material,
infrastructure availability, investment and marketing opportunities, access to information about
market conditions, technology etc

Economic factors that encourage or discourage entrepreneurship include:

• Taxation policy
• Industrial policy
• Easy availability of raw materials
• Easy access to finance on favorable terms
• Access to information about market conditions
• Availability of technology and infrastructure
• Marketing opportunities

The theory which describes the role of the entrepreneur in the context of production and distribution of
goods in a competitive marketplace is known as Classical Theory

The economic school is subdivided into the following

classical school

Neo-classical
• Austrian process market

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Schumpeter (1934) described entrepreneurship as a driver of market-based systems

The economic school of entrepreneurship considers the relationship between economic conditions
and incentives in order to arrive at a risk-reward equation that informs a determination on whether or
not to pursue a potential venture

The following are regarded as psychological theories

• Personality trait
• Need for achievement
• Locus of control
• Psychodynamic model
• Risk taking propensity

Personality trait is defined as stable qualities that a person shows in most situations

Personality traits are the enduring inborn qualities or potentials of the individual that naturally
make him/her an entrepreneur

The need for achievement theory was propounded by McClelland (1961)

McClelland (1961) propounded the need for achievement theory

The need for achievement theory has been criticized as a result of the following

• The theory is contradictory and has limited evidence

• It has no direction for causality
• The theory is more applicable to the western culture where personal achievement is more
appreciated as compared to other culture
• It is limited only to business people while other people also show that behaviour

Locus of control was first introduced by Julian Rotter in the 1950s

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Rotter (1966) refers to Locus of Control as an individual„s perception about the underlying main
causes of events in his/her life

Entrepreneur„s success comes from his/her own abilities and also support from outside

The theory which states that there is a degree to which one believes that he/she is in control of one„s
destiny is called Locus of control

The two types of Locus of control are internal or external locus of control The model called

Psycho-dynamic Model was propounded by Kets de Vries

To be a good entrepreneur you must be:

• Patient
• Flexible
• Skilled

All correct
People who are more likely to accept risk and taking chances are more likely of being selfemployed than
those who do not take risk
True/False

The social network focuses on building social relationships and bonds that promote trust and not
opportunism

The sociological theory of entrepreneurship embraces social culture as a driving force of

entrepreneurship

An ethnic origin of a person is said to influence the choice between paid employment and self-
employment as well as performance in self-employment

Every profession has its _________________

Culture
Culture refers to attitudes and values which in the case of entrepreneurship may be linked with
autonomy, creativity and sense of responsibility (soft skills)

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The fundamental mechanism of principles linking to a specific community that builds the progression of
distinct personality uniqueness and motivates people in the culture to utilize in behaviours which are
not noticeable in different societies is known as Culture

In-group Collectivism measures the degree to which individuals express pride, loyalty and
cohesiveness in their groups and families

Humane orientation is the degree to which societies encourage and reward individuals for being
fair, altruistic, friendly, generous, caring, and being kind to others

The degree to which members of a society expect and agree that power should be unequally distributed
is measured by Power distance

Performance orientation refers to the extent to which a society encourages and rewards its
members for performance improvement and excellence

Future orientation addresses the degree to which individuals engage in futureoriented behaviours
such as planning, investing in the future, and delaying gratification

Uncertainty is a conceptual cornerstone in the theory of entrepreneurship (Knight, 1921; McMullen &
Shepherd, 2006)

According to David Mc Clelland (1961), an entrepreneur is a dynamic person who takes calculated
risks

A psychologist‟s point of view may be that: an entrepreneur is someone who feels the need to
accomplish something, to realize his/her potential or to become his own boss

Culture can be defined as the mix of norms, values and beliefs that are shared by a particular
community be it a business community, a cultural (or ethnic) community, a country, or a geographical
region

The following are elements of Entrepreneurship Culture

• People and empowerment focused

• Value creation through innovation and change
• Attention to the basics
• Hands-on management
• Doing the right thing
• Freedom to grow and to fail
• Commitment and personal responsibility
• Emphasis on the future and a sense of urgency

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These are the components of culture

• Values
• Rules of Conduct
• Vocabulary
• Methodology
• Rituals
• Myths and Stories

According to Fortin (2003), entrepreneurial culture can be rooted in a society through four main
avenues:

• The family
• Education
• Existing business organizations
• Local and national authorities and leader

The Nigerian entrepreneur Aliko Dangote was born in 1957

Aliko Dangote created the Dangote Group and is considered to be one of the richest men in Africa

The Dangote group is a big organization that is into export, import, manufacturing, real estate and
philanthropy. Some of the products it deals with are: spaghetti, macaroni, sugar, salt, rice textile
materials

An entrepreneur called Chidi Anyaegbu is regarded as „King‟ of the transport industry

Chidi Anyaegbu founded the Chisco Transport Limited which is one of the biggest in the Nigerian
transport industry

The Chisco group is into variety of businesses such as: oil and gas, finance, hospitality, real estate, import
and export. Apart from this he has also

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contributed tremendously to the development of the nation through various philanthropic activities

Chris Ejiofor is an entrepreneur in the importation and marketing of car or auto batteries

Bello-Osagie Hakeem was born in _____________

Lagos
Bello-Osagie father was a professional Gynecologist and his mother was a Nurse

Hussan Okoya was born in Lagos Island on June 8, ___________

1935
Hussan Okoya father Hussan Okoya Thomas, was one of the people who established CFAO in Nigeria
Hussan Okoya mother Alhaja Suwebat Okoya-Thomas was a renowned trader

Slok Group of Companies belongs to which entrepreneur?

Orji Uzoh Kalu

Mike Adenuga Junior is an entrepreneur born in 1953

Mike Adenuga owns the Equatorial Trust Bank and created one of the main telecommunications
companies in Nigeria (Globacom)

Obateru Akinruntan comes from the Royal family in __________State

Ondo
Obateru Akinruntan created the Obat Oil and Petroleum Limited in 1981

Paul Okafor established Elbe Pharma an organization that deals with the importation and marketing
of pharmaceutical products

Razaq Okoya created the Eleganza industries

Uche Ohafia is a notable Nigerian entrepreneur in the shipping industry who created the Trans-
Atlantic Shipping Agency Limited

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A Nigerian social entrepreneur who focuses on the development of tourism in Africa is Cletus
Olebune

Durojaiye Isaac is the social entrepreneur with the slogan “Shit business is Good Business”

In__________, Durojaiye Isaac established the DMT Mobile Toilets in Lagos

1999
Gabriel Uriel Ogunjimi is a social entrepreneur in the area of information technology and
established the Landmark Internship International, organization

Joachim Ezeji Ezeji in the year 2000 he established the Rural Africa Water Development Project
(RAWDP)

Rochas Okorocha founded the Rochas Foundation which is concerned with helping Nigerian
children to become self-sufficient thereby breaking the cycle of poverty in the nation (Osalor, 2010)

Head of State General Abdul salaam Abubakar increased workers‟ salaries and reversed it again after a
few months in the year___________

1998
A mixed economy is midway between a free market economy and a pure planned economy

Entrepreneurship is the process of innovation and establishing new businesses conditions in

hazardous conditions through discovering opportunities and utilization of resources

Today entrepreneurship is considered as the economic driving engine for developed and developing
countries

The following are entrepreneurial challenges that may affect the success of an entrepreneur

• Lack of supportive governmental regulations

• Shortage of funds and resources
• Employee related difficulties
• Severe market entry regulations
• Lack of entrepreneurship opportunities

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 • Perception of society
• Educational barriers
• Lack of adequate entrepreneurship training
• Lack of industry experience
• Disgust for risk

The concept „environment‟ literally means the surroundings, internal, intermediate and external
objects, influences or circumstances under which someone or something exists

The environment of the business exhibits the following conditions and characteristics

• Stable Condition
• Dynamism

The internal environmental factors refer to those factors over which the entrepreneur has control, at
least in the short run; this is why it is also called the controllable environment of the business

This is the inherent capacity or ability of an organization to use its strengths, and overcome its
weaknesses in order to exploit opportunities and face threats in its external environment is known as
Organizational capability

Organizational behaviour is the manifestation of the various forces and influences operating in
the internal environment of an organization. Strengths are inherent capabilities that give strategic
advantage

Distinctive competence is the specific ability possessed by a particular organization that

distinguishes it from others

The National Directorate of Employment (NDE) was established by the Federal

Government of Nigeria in November, 1986

The Federal Government in ________ established Industrial Development

Centres (ADC) located in Oshogbo, Owerri and Zaria

1964

FIRO stands for Federal Institute of Industrial Research

The external environmental factors refer to those factors over which the entrepreneur has no control
but have tremendous impact on the survival of the business; this is why it is also called the
uncontrollable environment of the business

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Opportunities are favourable conditions in the business‟ environment which enable it to consolidate
and strengthen its position

The major environmental factors are the following

• Demographic factors
• Political/Legal Factors
• Natural Environment
• Economic Factors
• Competitive Environment

The external environmental variables are the following

• Political/Legal Factors
• Economic Factors
• Social
• Geographical Factor
• Technological Factor

Opportunity exploitation refers to activities conducted in order to gain economic returns from
the discovery of a potential entrepreneurial opportunity

The decision to act upon a perceived opportunity and the associated behaviours aimed at realizing the
value of the opportunity is referred to as Opportunity exploitation

Four ways to identify more business opportunities

• Listen to your potential clients and past leads

• Listen to your customers
• Look at your competitors
• Look at industry trends and insights

The environmental barriers in business are these

• Physical barriers
• Attitude barriers
• Assistance barriers
• Policy barriers
• Work and School Barriers

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Creativity is the ability to bring something new into existence

According to Holt (1992), the creative process comprises the following

• Idea germination
• Preparation
• Incubation
• Illumination
• Verification

In the creative process, when the idea surfaces as a realistic creation Illumination occurs

An idea once illuminated in the mind of an individual still has little meaning until verified as
____________and useful

Realistic
According to Adams (2005), the following are critical to individual creativity:
• Knowledge
• Thinking
• Personal motivation
• Environment

Innovation can be defined as the specific instrument of entrepreneurs, the means by which they
exploit change as an opportunity for a different business or a different service

According to Knight (1997) and Kreiser, Marino and Weaver (2002) in Scheepers (2007), innovativeness
refers to the capability, capacity and willingness of an enterprise to support creativity and
experimentation to solve recurring customer problems

For a firm to be innovative, it needs to have a free-wheeling, “boundary less” brainstorming culture to
engender creative ideas (Khandwalla and Mehta, 2004)

The different forms of Innovations

• Incremental Innovation
• Modular Innovation
• Architectural Innovation

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 • Radical Innovation
• Disruptive Innovation

Modular Innovation changes the core design of one or more components but does not change the
entire product architecture

Radical Innovation brings about a new dominant design and consequently, a new set of core
design concepts embodied in components that are linked together in a new architecture

According to Holt (1992), the creative process comprises the following five stages as shown below:
• Idea germination
• Preparation
• Incubation
• Illumination
• Verification

Subconscious assimilation of information fantasizing is known as Incubation Conscious search for

knowledge rationalization is called Preparation

The seeding stage of new idea recognition is referred to as Idea Germination

Recognition of idea as being feasible realization is called Illumination

Application or test to prove idea has value validation is known as Verification

Factors that encourage creativity include these

• Knowledge of noble idea generation
• Thinking
• Personal motivation
• Environment
• Determination to be unique

Innovation is the outcome of the firm‟s effective development and use of new technologies and/or
knowledge about market opportunities

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A patent is an exclusive right granted for an invention, which is a product or a process that provides a
new way of doing something, or offers a new technical solution to a problem

Trademark rights are granted for _____________years

– 20

Entrepreneurship is an employment strategy that can lead to economic selfsufficiency for people

A technology that is found very useful in a particular environment may be less useful in another
environment
True/False

Technological environment refers to the state of science and technology in the country and
related aspects such as rate of technological progress, institutional arrangements for development and
application of new technology According to J.K. Galbraith, the systematic application of scientific or
other organized knowledge to practical tasks is called technology

A technological process is a means to make and improve products and services

Documentation started through means of __________

Writing
Innovation is the process of translating an idea or invention into a good or service that creates value or
for which customers will pay

Disruptive innovation is also known as stealth innovation

The most common form of innovation is Incremental Innovation

The innovation theory was first advocated by Joseph Schumpeter in____________

1934
A dynamic theory of entrepreneurship was first advocated by Schumpeter (1949)

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Schumpeter is the first major theorist to put the human agent at the centre of the process of
economic development

An inventor is concerned with his technical work of invention whereas an entrepreneur converts the
technical work into economic performance Important sources of funding for innovation activities
include:
• Personal funds
• Government grants
• Family and friends
• Debt
• Equity
• Business angels
• Venture capital
• Crowd funding

Innovative financing refers to a range of non-traditional mechanisms to raise additional funds for
development aid through innovative projects such as micro-contributions, taxes, public-private
partnerships and market-based financial transactions

_______________is an unavoidable fact of successful businesses

Growth
A family-owned business may be defined as any business in which two or more family members are
involved and the majority of ownership or control lies within a family

The oldest form of business organization is called Family-owned businesses

Organizational culture is an important strategic resource that family firms can use to gain a competitive
advantage

Succession planning involves deciding who will lead the company in the next generation

Women entrepreneur may be defined as a woman or group of women who initiate, organize, and run a
business enterprise

Frederick Harbison (1956) has enumerated the following five functions of a woman entrepreneur:

• Exploration of the prospects of starting a new business enterprise

• Undertaking of risks and the handling of economic uncertainties involved in business

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 • Introduction of innovations or imitation of innovations
• Coordination, administration and control
• Supervision and leadership

Socio-economic development is the process of social and economic development in a society

The types of Social Entrepreneurship

• Community Project
• Non-profit Organization
• Co-operative
• Social Enterprise
• Social Purpose Business

The Importance of Social Entrepreneurship for Development

• Employment Development
• Innovation or New Goods and Services
• Social Capital
• Equity Promotion

Economic value is created by taking a resource or set of inputs, providing additional inputs or
processes that increase the value of those inputs, and thereby generate a product or service that has
greater market value at the next level of the value chain

Social Value is created when resources, inputs, processes or policies are combined to generate
improvements in the lives of individuals or society as a whole

Socio-economic value builds on the foundation of economic value creation by attempting to

quantify and incorporate certain elements of social value

The various opportunity through which a social entrepreneur can get fund

• Innovation in Practice
• Loan guarantees
• Quasi-equity debt
• Pooling
• Social impact bonds
• Making It Happen

Ways to identify more business opportunities

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 • Listen to your potential clients and past leads
• Listen to your customers
• Look at your competitors
• Look at industry trends and insights
The following are the sources of Business Ideas

• Personal Skills and Experience

• Franchises
• Mass Media
• Exhibitions
• Surveys

The focal point for a new business idea is the _______________

Customer
Brainstorming is a technique or creative problem-solving as well as for generating ideas

Reasons for generating business ideas:

• Business idea generation is a sine-qua-non (inevitable) for business

• Ideas are generated to respond to market needs
• Ideas are also generated to respond to changing fashions and requirements
• In order to stay ahead of competition
• To be in tune with latest technology so as to do things better
• In response to product life cycle
• In order to spread risk and allow for failure

Advantages of Environmental scanning

• Scanning the environment is better and safer method of assessing than jumping into the business
environment
• Environment scanning gives on-the-spot assessment of the immediate happenings in the
environment, instead of relying on stories
• It assists the entrepreneur to assess his personal strengths, weaknesses, opportunities, and
threats (SWOT) in the environment
• Scanning the environment assists the entrepreneur to observe business trends as they occur in
their natural manner

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 • It assists the entrepreneur to observe business treads in the locality and to see how those trends
would affect his business positively and negatively
Idea generation is a key component of the front end of the process, often called the fuzzy front end
and recognized as one of the highest leverage points for a company

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