BUSINESS MANAGEMENT

& ENTREPRENEURSHIP
Issa J. Edward, MBA
Department of Applied Sciences
The Malawi Institute of Technology
Malawi University of Science and Technology
 BUSINESS MANAGEMENT AND
ENTREPRENEURSHIP – BMEN 320

SESSION 1

THE ENTREPRENEURSHIP CHALLENGE

 BUSINESS MANAGEMENT & ENTREPRENEURSHIP
Learning outcome

• Participants should be able to:

1. Explain the forces that are driving the need and growth of small businesses and
entrepreneurship

2. Describe the important role that entrepreneurs and small businesses play in the
economies of modern countries

3. Identify some of the opportunities for small businesses

4. Appreciate why more and more people are opting to own and run their own
businesses than work for big companies?
 BUSINESS MANAGEMENT & ENTREPRENEURSHIP
The World of the Entrepreneur

“The green shoots of entrepreneurship give an economy its vitality. They give rise to
new products and services, fresh applications for existing products and services,
and new ways of doing business. Entrepreneurship stirs up the existing economic
order and prunes out the dead wood. Established companies that fail to adapt to
the changes cease to be competitive in the marketplace and go out of business.”

William Bygrave
Babson College
 BUSINESS MANAGEMENT & ENTREPRENEURSHIP
The World of the Entrepreneur: The Hard Facts

• Around the world, growing numbers of people are realizing their dreams of owning and
operating their own businesses.
• Entrepreneurship continues to thrive in nearly every corner of the world.
• Globally, one in eight adults is actively engaged in launching a business.
• Research by the Kauffman Foundation shows that in the United States alone,
entrepreneurs launch 550,000 businesses each month: More than fifteen hundred new
businesses are born every hour of every working day in the United States.
• With amazing vigour, these business have introduced innovative products and services,
pushed back technological frontiers, created new jobs, opened foreign markets, and, in
the process, provided their founders with opportunity to do what they enjoy most.
• This entrepreneurial activity is the most significant economic development in recent
business history.
 BUSINESS MANAGEMENT & ENTREPRENEURSHIP
The World of the Entrepreneur: The Hard Facts

George Bernard Shaw

“The people who get on in this world, are the people who get up and look for the
circumstances they want. If they cannot find them, they make them”
Jerome Katz, professor of management, St. Louis University
“Twenty years ago students who dared to say they wanted to start their own companies
would be sent for counselling. Today entrepreneurship is the fastest-growing course of
study on campuses nationwide.”
“Small businesses have been at the core of our economy’s growth over the last few
years,” says Winslow Sergeant, chief counsel of the U.S. Small Business Administration’s
Office of Advocacy.
The small business lesson
“There are no short cuts” in life or business. Just because you can visualize where you
want to be, does not mean that you can get there without paying dues.
 THE WORLD OF THE ENTREPRENEUR

So, what is really driving this entrepreneurial trend in

different economies across the globe ?

What is driving the entrepreneurial boom and activity

across the globe?

What is really feeding the entrepreneurial fire ?

 Behind the Entrepreneurial Boom
The major trends
• Structural shift from manufacturing (large firm dominated) to services (small firm
dominated) -The service sector accounts for 82.5 percent of the jobs and 79.7 percent
of the private sector gross domestic product (GDP) in the United States – service
businesses have relatively low start-up costs and hence very popular among
entrepreneurs
• Restructuring by large firms – focus on core activities, sub-contract non-core activities
and lay offs are the order of the day
• Technology advancements
• There is increased scientific discoveries exploited by small firms
• Production and IT technologies have reduced the role of economies of scale
• Low cost and access to communications technology (‘the great equaliser’): access
to information, distribution (‘the long tail’)
 Behind the Entrepreneurial Boom
The major trends
• Consumer choice are changing – there is now reaction against mass produced products
and services: increased individualism, demand for authenticity, natural products (e.g. real
ale beer) – Growth in personal, flexible, tailor-made services and growth in market niches
• Deregulation of markets has increased : e.g. in airlines, telecoms, media
• Increased availability of finance – venture capital
• Increased availability of support, advice and education -Colleges and universities have
discovered that entrepreneurship is an extremely popular course of study.
• Entrepreneurs as heroes – USA has raised them to hero status and has held out their
accomplishments as models to follow – Bill Gates, Steve Jobs, Oprah Winfrey are to
entrepreneurs Michael Phelps, and Tom Brady are to sports.
• International opportunities -No longer are small businesses limited to pursuing customers
within their own borders.
 Behind the Entrepreneurial Boom
The major trends
• Possible Growth In Virtual Commerce – internet and cloud computing
The impact of the coronavirus will likely remain and challenge traditional methods of
conducting business. With new restrictions and impediments to face-to-face transactions, it is
likely that virtual commerce will assume a bigger role
• Independent lifestyle –
In the USA - casualty of the downsizing is the long standing notion of job security in large
organisation. Generation X (born between 1965 and 1981) and Generation Y (1982 to 1995)
no longer see launching a new business as a risky career path. They have seen it all – parents
and grand parents being laid off after so many years of service. They prefer to control their
own destinies by building own businesses
 Behind the Entrepreneurial Boom
The New Age
• The world is benefiting from the surge of new entrepreneurship.
• There has never been a better time to practice the art and science of entrepreneurship.
• We are living in a new millennium where, the ideas, talents, skills, and knowledge that promote
entrepreneurship are evident in people all around the globe, but especially in today’s
generation.
• Long political dynasties, venerable institutions and hundred-year old business models are all at
risk.
• In the past decades, competitive conditions favoured large companies with their hierarchies and
layers of management; But today, with the pace of change constantly accelerating, it is the fleet-
footed, agile, small companies that have the competitive advantage.
• These nimble competitors can dart into and out of niche markets as they emerge and recede,
they can move faster to exploit market opportunities, and they can use modern technology to
create, within a matter of weeks or months, products and services that once took years and all
the resources a giant corporation could muster.
 Behind the Entrepreneurial Boom
The New Age

• The most important question for any organization today is: are we changing as fast as the
world around us?
• For most organizations the answer is NO.
• In industry after industry it is the insurgents and not the incumbents ,who have been riding
the waves of change. – Its Google and not Microsoft; its Hyundai and not Chrysler. Its Apple
and not Nokia.
• And closer home its Chipiku and not PTC, where is Press ?
• A new age has been ushered in where “small is beautiful”
• Within a matter of weeks or months, small and nimble competitors can dart into and out of
niche markets as they emerge and recede, they can move faster to exploit market
opportunities, and they can use modern technology to create products and services that
once took years and all the resources a giant corporation could muster
 Behind the Entrepreneurial Boom
The New Age
• Howard Stevenson, Harvard’s chaired professor of entrepreneurship, says,

• “Why is it so easy [for small companies] to compete against giant corporations?

Because while they [the giants] are studying the consequences, [entrepreneurs]
are changing the world.”

• The pendulum has tipped in favour of small, entrepreneurial companies

What does all this mean for us”

 OPPORTUNITIES FOR ENTREPRENEURS

• This new age of uncertainty has powerful implications for all organizations.
• But for entrepreneurs change presents opportunities – and these changes have meant small
entrepreneurial firms have flourished
• It is the small firms that have pioneered innovation in computers, the internet and mobile technologies,
creating new markets for these innovations.
• It is small firms that have been at the forefront of developing mobile applications, or apps, because the
costs of doing so are low but the gains from selling to a global market can be enormous
• As customers increasingly expect firms to address their particular needs, market niches are becoming
slimmer and markets more competitive – and these are better served by smaller firms that can get
close to their customers
• Periods of high unemployment and redundancies, decreasing wages and increased demand for more
family time, have all pushed many people into self-employment - people now see self-employment as
more attractive and more secure than employment. in an age of uncertainty people seek to control as
many aspects of their economic security as possible
• Entrepreneurship has become something that society, governments and organizations of all sizes and
forms wish to encourage and promote .
The Power and Importance of Small Business
and Entrepreneurship
 The Power and Importance of Small
Businesses and Entrepreneurship

“The viability of small and medium-sized firms is

greater than that of large firms. Not only do they
bring prosperity to the people but also play a
fundamental role in driving the economy “
Hima Bindu Kota, 2018
 The Power and Importance of Small
Businesses and Entrepreneurship
• Small businesses, start-ups and entrepreneurs are some of the most important influencers of economic growth
because, in any economy, they represent more than 90 per cent of all employers and create 60 to 80 per cent of
all new jobs, annually.
• Small businesses create job opportunities and drive the country’s economic growth in smaller geographic areas
• Small businesses also operate locally and this gives them a strong preference for hiring local people.
• They add to the national income - entrepreneurial ventures help generate new wealth and they are the
backbone of the economies throughout the world, increasing in number in most countries, as is their share of
employment. Almost 99.9% of enterprises in the EU are SMEs. They generated 67.1% of employment and 57.6%
of GDP or manufacturing value added (Eurostat, 2008).
• They create social change - through offering unique goods and services, entrepreneurs break away from
tradition and reduce dependence on obsolete systems and technologies.
• Small companies also are incubators of new ideas, products, and services. Small firms create 16 times more
patents per employee than large companies. Many important inventions trace their roots to an entrepreneur,
including the zipper, laser, brassiere, escalator, light bulb, personal computer, automatic transmission, air
conditioning, and FM radio.
• Community Development Entrepreneurs regularly nurture ventures by other like-minded individuals – they also
invest in community projects and provide financial support to local charities – e.g. Bill Gates Foundation.
 CONCLUSION AND REFLECTIONS
• We are now living in the new age of uncertainties and the old world order has
changed and continues to change.
• Commercial opportunities remain but competition is now as much about survival as
growth. And, as global competition continues to increase, sources of competitive
advantage are proving increasingly difficult to sustain over any period of time. So
much so that it is the ability to create new sources of competitive advantage quickly,
again and again, that is proving to be the only sustainable source of real competitive
advantage.
• Today countless innovative business models are emerging. Entirely new industries
are forming as old ones crumble. - Upstarts are challenging the old guard, some of
whom are struggling feverishly to reinvent themselves.
• And what does this mean for us?
 CONCLUSION AND REFLECTIONS
• For entrepreneurs these changes presents opportunities – and these changes have
meant small entrepreneurial firms have flourished.
• Today, the viability of small and medium-sized firms is greater than that of large
firms. Not only do they bring prosperity to the people but also play a fundamental
role in driving the economy (Hima Bindu Kota, 2018).
• Small firms and entrepreneurs are the backbone of the economies throughout the
world, increasing in number in most countries, as is their share of employment.
• Today the world is benefiting from the surge of new entrepreneurship and people
no longer see launching a new business as a risky career path. They have seen it all –
parents and grand parents being laid off after so many years of service. They prefer
to control their own destinies by building own businesses.
• The entrepreneurial age has arrived. A new age has been ushered in where “small is
beautiful”
• Are you ready for the challenge?