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About this book

This book provides an overview of the theory, practice and context of entrepreneurship and innovation at both the industry and firm level. It provides a foundation of ideas and understandings designed to shape the reader’s thinking and behaviour to better appreciate the role of innovation and entrepreneurship in modern economies, and to recognise their own abilities in this regard. The book is aimed at students studying advanced levels of entrepreneurship, innovation and related fields as well as practitioners (for example, managers, business owners).

As entrepreneurship and innovation are largely indivisible elements and cannot be adequately understood if studied separately, the book provides the reader with an overview of these elements and how they combine to create new value in the market. This edition is updated with recent international research, including research and examples from Europe, the US, and the Asia-Pacific region.

Table of Contents

Frontmatter

1. Work Book: Entrepreneurship as a Social and Economic Process

Abstract
This chapter has examined the nature of entrepreneurship and innovation, providing definitions for both and placing them into context. Note that entrepreneurship is a major driver of employment and economic growth throughout the world. Entrepreneurship operates at the individual, organisational and environmental level, and is a process associated with self-evaluation, opportunity recognition, the active management of resources, and the capacity to reassess and change. Unlike managers, the entrepreneur is willing to assume the risk associated with ownership of a venture, but also enjoys the rewards of success. Innovation is an integral part of entrepreneurship and involves either product or process innovations that can be incremental, synthetic or discontinuous in nature. Innovation is a major source of competitiveness for firms and is essential to success in modern economies.
Tim Mazzarol, Sophie Reboud

2. Work Book: The Entrepreneur

Abstract
This chapter provides an overview of the characteristics that influence the entrepreneur and shape their behaviour. The factors influencing entrepreneurship are found both internally and externally to the individual, comprising a combination of personality traits and environmental influences. Entrepreneurs are typically characterised by strong achievement drive, high levels of creativity, a desire for autonomy, a willingness to take calculated risks, and an internal locus of control. These are key enterprising tendencies that are inherent in all people regardless of their background, age, ethnicity or personality. Entrepreneurs are not born; rather, they interact with their environment to apply their enterprise tendencies into entrepreneurial activities. Entrepreneurial motivation is triggered by the individual’s entrepreneurial orientation, personal goals and the opportunities available to them in their environment.
Tim Mazzarol, Sophie Reboud

3. Work Book: The Entrepreneurial Process

Abstract
This chapter has examined the entrepreneurial process which is comprised of three distinct stages: (i) opportunity recognition, (ii) marshalling resources, and (iii) developing capability. The screening of opportunities is a key part of the entrepreneurial process, and the reason why some people identify opportunities better than others may be due to their having access to better information channels and the cognitive abilities to assess and value them.
Tim Mazzarol, Sophie Reboud

4. Work Book: Entrepreneurship and Innovation in Large Firms

Abstract
This chapter provides an overview of the concept of intrapreneurship or internal corporate venturing which suggests that managers within large organisations can behave like entrepreneurs. The ability of large organisations to generate innovations is contingent on their ability to encourage entrepreneurial behaviour among their employees. Intrapreneuring is contingent upon an alignment between the individual’s ability to undertake entrepreneurial activities, and also the organisation’s characteristics. Innovative organisations need a strong market orientation, innovative leadership, non-linear strategic planning, flexible structures and a supportive culture. The structure and culture should be aligned to ensure that innovation can be fostered through freedom and creativity, but also implemented through efficient production and distribution. Intrapreneurship can be risky for managers who need to behave as if they are risking their own money. Encouraging entrepreneurial behaviour within large organisations requires attention to be given to human resource management (HRM) systems with appropriate rewards, resources, management support, organisational structure and a risk tolerant culture.
Tim Mazzarol, Sophie Reboud

5. Work Book: Innovation in Small Firms

Abstract
This chapter has provided an overview of the small business sector and the nature of small business management. Small firms are a major source of employment and economic growth throughout the world and provide a management environment that is very different from that found in large organisations. A problem in understanding the small business sector is the lack of agreed definitions as to what an SME is. Most SMEs lack the resources of large firms and are dependent on one or two key owner-managers for their long-term survival. Small firms are typically less formal that their large counterparts, and are run more for lifestyle than for growth by their owners. Entrepreneurs can own a small business, but not all small business owners are entrepreneurs. Most small business owners are oriented toward lifestyle and task management rather than risk taking, innovation and growth. Small businesses are often undercapitalised and their owners lack management skills.
Tim Mazzarol, Sophie Reboud

6. Work Book: Adoption and Diffusion of Innovation

Abstract
This chapter examines the process of adoption and diffusion of innovation. It suggests that innovation is driven by three paradigms, focusing respectively on: the individual creative genius, the technology-push of systematic scientific inquiry, and market-pull. While the creation of innovative new ideas and technologies is an important goal for business, there is no value in innovation without commercialisation which is frequently fraught with challenges. The diffusion of innovation is a social process that involves inventors being imitated by adopters. Their decision to adopt – or not to adopt – is influenced by a combination of rational attitudes and subjective norms that can be shaped by peer group influence. Word of mouth can play a key role in the diffusion process as early adopters provide recommendations and role models for laggards. Successful commercialisation requires the innovation to be adopted by customers and to diffuse into markets. Customers will not always accept new ideas. They usually need to be assured that the innovation: can be integrated with their existing systems, is able to produce genuine benefits, is easy to use, and is also being accepted by others. It can take many years for a new innovation to gain acceptance in markets. Good technology development must also be accompanied by good market and business development.
Tim Mazzarol, Sophie Reboud

7. Work Book: Planning, Business Models and Strategy

Abstract
Planning should not be confused with clarity of vision. This chapter examines the relationship between an entrepreneur’s vision and the need to generate a formal business plan. It suggests that a formal business plan is no guarantee for success and that, while planning is important, too much attention can be paid to business plans at the expense of having a clear vision for the business. The business plan is often viewed as a complex document, but it is really a mechanism for helping the entrepreneur systematically communicate their vision to others – either to raise money, secure contracts or organise the work of employees. Of more strategic importance is the ability to create a clear vision for the future.
Tim Mazzarol, Sophie Reboud

8. Work Book: Risk Management in Innovation

Abstract
This chapter examines the issue of how to manage risk in the process of innovation. By its very nature, innovation is inherently risky. The more radical and disruptive the innovation, the more uncertainty and potential risk is created. However, the management of risk remains an important issue for any manager or organisation seeking to engage in the commercialisation of innovation.
Tim Mazzarol, Sophie Reboud

9. Work Book: Disruptive Innovations and the Commercialisation of Technology

Abstract
This chapter examines the role of innovation as a key economic driver and the nature of radical or disruptive innovations as a major source of new technological products and processes. It examines the theory and practice of strategic management of innovation, and the generation of innovation value through the adoption of a Blue Ocean strategy. Technological innovation involves significant improvements in product or process performance and generally has a higher level of risk associated with it. Historically, technology has played an important role in the success of entrepreneurs, but in recent decades it has accelerated in its importance.
Tim Mazzarol, Sophie Reboud

10. Work Book: Screening Opportunities and Assessing Markets

Abstract
This chapter examines the process of screening opportunities for new product development (NPD), and the importance of undertaking detailed market assessments of the customers’ needs and wants. It discusses the use of a range techniques and associated concepts including voice of customer, quality function deployment (QFD), Kano analysis, CAGE modelling, customer archetyping, product concept development, and product-technology road mapping. The chapter also provides an overview of how this screening and market assessment process can be undertaken with reference to many of the concepts covered in Chaps. 7, 8 and 9.
Tim Mazzarol, Sophie Reboud

11. Work Book: Team Building, Company Leadership and Strategic Alliances

Abstract
This chapter provides an overview of some of the elements associated with team building and leadership with entrepreneurial companies. The importance of assembling a well-balanced management team with a complimentary range of skills is highlighted. This management team should be supported by a competent management board made up of individuals who compliment the executive management team and assist in providing strategic guidance. In establishing a board of governance, care should be taken to get a good cross-section of members who can work together, and to avoid individuals who might wish to pursue narrow interests, interfere too much with the operational management, or see board membership as a ‘second job’.
Tim Mazzarol, Sophie Reboud

12. Work Book: Financing the Venture

Abstract
This chapter has provided an overview of the financing process for entrepreneurial firms. For these types of businesses, there is likely to be an equity finance gap due to a lack of available risk capital. Sources of financing can include banks, financing firms, insurance companies and trade creditors that provide debt financing against either tangible assets or cash flow.
Tim Mazzarol, Sophie Reboud

13. Work Book: Intellectual Property Management

Abstract
This chapter has provided an overview of the nature of IP and how it is protected and valued. A key issue in successful commercialisation of innovation is the identification, ownership and protection of creative output and proprietary knowledge. IP can be formally registered (e.g. patents, trademarks) or automatically assigned upon creation (e.g. copyright). The formal registration of IP provides the recognition of rights, but does not of itself provide legal protection. An IP strategy needs to be created that serves to protect IP and foster its development from intellectual capital, through intellectual assets to IP. It is important to register IP assets within a business via an IP portfolio, to place a valuation on these, and to make strategic decisions as to whether to proceed with their commercialisation or not. Commercialisation is a high risk and costly process, and having a formal approach to its management as illustrated by the IDD framework can be beneficial.
Tim Mazzarol, Sophie Reboud

14. Work Book: Social Innovation and Enterprise

Abstract
This chapter has provided an overview of the concepts of social entrepreneurship and innovation. It has highlighted the fact that social entrepreneurs use the same skills and behaviours of traditional entrepreneurs, but for a social rather than an economic purpose. The social entrepreneur can be found in a wide range of environments that can include non-profit and voluntary organisations through to for-profit organisations. Social entrepreneurship seeks to build a social value proposition that draws together people and capital to exploit opportunities for social capital building. Social entrepreneurship and innovation are new and emerging concepts that remain poorly defined. However, since the 1990s there has been a growing recognition of the importance of the social economy and the social enterprise. The ‘third way’ was a reaction to the ‘economic rationalism’ that became prominent in the 1980s. An important form of social enterprise is the co-operative. This type of business model has been in operation for centuries, and the principles of the Rochdale Society founded in 1844 remain the basis for the global co-operative enterprise movement that encompasses some of the largest business organisations in the world. Co-operatives offer economic and social benefits to their members and can be found in a wide range of industries. They play an important role in regional and community development. However, co-operatives suffer from some generic problems associated with their collective ownership rights, and recent trends have seen the formation of a new generation co-operative business model designed to alleviate some of these problems. The theory of community-based enterprise (CBE) suggests that, where a community is suffering economic or social stress but has a tradition of collective problem-solving and sufficient social capital willing to become involved and provide the necessary critical mass, a CBE can form. It will be based on available community skills, have a range of goals, and succeed if there is sufficient community participation.
Tim Mazzarol, Sophie Reboud

Backmatter

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