Entrepreneurship

Entrepreneurship Assembling the Team: Acquiring and Utilizing Essential Human Capital 5

“Two are better than one;…if they fall, the one will lift up his fellow: but woe to him that is alone when he falleth, for he hath not another to help him up.” --Hebrew Bible

Forming Founding Team • Choose cofounders wisely • Secure help from outsiders • Develop strong working relationships

Human Resources • Knowledge • Skills • Talents • Abilities • Social capital • Of co-founders and early employees are key to success

Success of Founding Team • Prior experience in industry • Prior experience as entrepreneur • Broad social networks • Broad range of knowledge and special skills • Communication • Social competence

Personal Characteristics of Founding Team Members • Conscientiousness • Agreeableness • Openness to experience • Extraversion • Emotional stability

Added Resources • Board of Directors • Key employees • Advisers • Investors • Consultants • Government programs

On balance, the benefits of increasing the number of employees outweigh the costs. New ventures that start with more employees have a greater chance of surviving. Profitability is positively related to size. Is Bigger Better?

Advantages Reduced fixed costs Flexibility Secure specialized knowledge Disadvantages Lack commitment and motivation Carry information to competitors Temporary Employees

Temporary or Permanent? Flexibility and speed of acquiring new sets of knowledge Temporary employees Commitment and retention Permanent employees

Three factors are crucial in developing strong working relationships among the team: Clear initial assignment of roles Careful attention to perceived fairness Effective communication Founding Team Relationships

The set of behaviors that individuals occupying specific positions within a group are expected to perform, and the authority or jurisdiction they will wield. Divide responsibilities and authority according to expertise and knowledge. Roles

The tendency to attribute successful outcomes largely to internal causes, but unsuccessful ones largely to external causes Often leads people to conclude that they have not been treated fairly Self-Serving Bias

Perceived Unfairness Self-serving bias Friction and conflict Feelings of perceived unfairness

Constructive Is considerate Doesn’t threaten Is timely Doesn’t blame Is specific Focuses on performance Offers concrete suggestions for improvement Destructive Is harsh Contains threats Is not timely Blames Is not specific Focuses on recipient Offers no concrete ideas for improvement Effective Communication

Stress Management Emotional reactions Life events Cognitive appraisal Stress Physiological states

Demands of job Juggling roles Responsible for others Stressors

Physical illness Lower productivity Desk rage Burnout Dangerous Effects of Stress

Physical tactics Healthy diet Exercise Stress Management

Behavioral tactics Reduce excessive worrying Incompatible reaction procedure Relaxation techniques Step back from stressful situations Stress Management

Entrepreneurship