Vanessa Ratten

Entrepreneurial
Business
Venturing
Digitalisation Trends
Entrepreneurial Business Venturing
Vanessa Ratten

Entrepreneurial Business
Venturing
Digitalisation Trends
Vanessa Ratten
La Trobe University
Bundoora, VIC, Australia

ISBN 978-981-97-1934-1 ISBN 978-981-97-1935-8 (eBook)

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Preface

Congratulations for having an interest in entrepreneurial business planning and

acknowledging that it is a unique area of business study. The journey of entrepreneur-
ship has many ups and downs with often events beyond your control affecting
outcomes. Economic changes in government policy and general consumer senti-
ment can affect entrepreneurship. This means the future of entrepreneurial business
venturing is full of opportunities but also risks. Most notably has been the COVID-
19 pandemic which changed the way business was done. Entrepreneurship can help
solve problems but also effectively initiate solutions. This enables society’s most
pressing topics to be potentially alleviated through entrepreneurship.
Entrepreneurial business venturing involves the application of creative thinking
to build business ideas. It is my belief that this is essential in the global economy.
It incorporates different types of business practices from environmental to social
issues. Entrepreneurship yields innovative solutions to socio-economic crises such
as pollution to economic inequality, thereby helping to solve social problems that
have resulted from growing inequality between rich and poor consumers.
Entrepreneurs often operate in time-sensitive environments in which responsive
action is required. This means acting on an idea when they sense an opportunity.
Timing is an important issue in entrepreneurial activity particularly in resource-
constrained environments. Entrepreneurs need to act based on the information they
have available, thereby using their intuition as a way of guiding their success. Not
all business ideas can be clearly discussed as sometimes non-verbal clues also influ-
ence business decisions. Thus, whilst some can ‘talk’ entrepreneurship, it is more
important to ‘do’ entrepreneurship, thereby prioritising action over convoluted and
messy ideas.
Entrepreneurs use creative approaches to try out new ideas in a way that has not
been done before. This can include using non-traditional resources in novel ways
or changing the design of a product. This involves some degree of experimentation
in terms of what does and does not work. Entrepreneurs have a heightened sense of
creativity in positively looking at opportunities. This helps them pursue new courses
of action.

v
vi Preface

The topic of entrepreneurial business venturing has captured the interest of many
people around the world resulting in many asking the question: What makes a busi-
ness venture entrepreneurial? Is it the ideas or the way it is conducted? It can be a
result of one reason or a combination of many different reasons. There has been a
surge in the entrepreneurial consciousness of business entities around the world as
they stress the words innovation and entrepreneurship in their mission and vision
statements. This helps them identify as an entrepreneurial business that is willing to
continuously improve.
This textbook has broad international relevance due to the way entrepreneur-
ship crosses cultural and geographic boundaries. This textbook focuses on different
perspectives about the nature of entrepreneurial business ventures utilising both
theory and practice. Different stakeholder perspectives from businesses, non-profit
entities, entrepreneurs and the community are considered. This provides an additional
way to explain the phenomena of entrepreneurial business planning.

A Unique Entrepreneurial Approach to Understanding

Business Venturing

This book takes the approach that to really succeed in the global marketplace, an
entrepreneurial approach is required. Within the book the practice of entrepreneurial
business planning is discussed by blending the perspectives of different stake-
holders. This means there is no specific right course of action regarding how to
be entrepreneurial in business planning. Rather it depends on the interests of the
entrepreneur or business and the available time and resources. This means making
the reader think in a holistic way about possibilities, thereby emphasising creative
thinking and positive futuristic ideas. This approach is novel as it combines different
stakeholder perspectives that can include a range of businesses from small local
stores to large global entities. This involves utilising examples from business that
encourages deeper thinking and an ability to think outside the box.
Each chapter has company examples with website addresses that provide informa-
tion on real-life situations. This means the book continuously flows from one topic to
the next thereby building a holistic view of entrepreneurial business venturing. The
emphasis in each chapter is on understanding digitalisation trends in entrepreneurship
that have influenced business venturing. This is useful in understanding the complete
process of entrepreneurship from the configuration of an idea to its successful
implementation in the marketplace.

Bundoora, Australia Vanessa Ratten

Acknowledgements

This book is dedicated to my mum, Kaye Ratten, who passed away before this
book was published. When I was young my family and I took many trips to Ballina
in Northern New South Wales from our home in Melbourne. The drive took two
days and we normally stopped over in Dubbo. This was before I started travelling
overseas so I think it was from these early experiences travelling in Australia that
I grew to love travelling. After just coming back from Italy I realised that I tend to
compare international travel distances with Australia. In Australia the travel distance
from Melbourne to another capital city such as Sydney or Adelaide is about 8 hours
driving so I assumed in Italy that major cities were this far apart but in reality they
are an hour or shorter distance! Also, the train system in Europe between cities is
excellent but in Australia we tend to fly between cities. Anyway, I thank my mum
for all the help she gave me. Thank you.
Writing and publishing a book is a long process. It takes a while to come up with
an idea for a book then to clearly think about what each chapter should contain. This
process is made somewhat easier when there is a sense of excitement about the book
and a want to write it. Thus, I am grateful for having this opportunity to express my
research into entrepreneurship. I think it is important to write books in order to record
in written format research. With books we have the ability to spread information in
a timely and succinct way.

vii
List of Case Studies

Kikkoman
Silicon Valley Bank
JK Rowling
Ralph Lauren
Tradie
Lanolips
Tom’s of Maine
Three Threes
Gucci
Ecco Group
Nvidia
Marvell
Chick-fil-A
Alcolado Glacial
Evian
Montblanc
Godiva
Slinky
Colleen Hoover
Pinterest
Maggie Beer
Hoyts
Roll’d
Docusign
Mattel
South Melbourne Market
Sumol + Compal
Pomora
Nuseed

ix
Contents

1 Entrepreneurial Business Planning: An Overview . . . . . . . . . . . . . . . . . 1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Learning Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
What Is Entrepreneurship? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
What Is Entrepreneurial Business Planning? . . . . . . . . . . . . . . . . . . . . . . . . . 3
Entrepreneurial Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Personality Characteristics of Entrepreneurs . . . . . . . . . . . . . . . . . . . . . . . . . 6
Rogue Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Organisational Behaviour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Positive Organisational Behaviour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Organisational Identity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Isomorphism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Diversity in Organisations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Discussion Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Learning Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Web Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Reading Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2 Digital Social Entrepreneurship and Service Innovation . . . . . . . . . . . . 19
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Learning Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Digital Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Social Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Service Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Service Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Frugal Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Ethical Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

xi
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Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Discussion Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Learning Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Web Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Reading Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3 Innovation and Entrepreneurial Ecosystems . . . . . . . . . . . . . . . . . . . . . . 33
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Learning Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Innovation Ecosystems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Gaming Innovation Ecosystems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Entrepreneurial Ecosystems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Main Elements of an Entrepreneurial Ecosystem . . . . . . . . . . . . . . . . . . . . . 38
Institutional Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Formal Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Resource Endowments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Physical Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Talent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Intermediaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Entrepreneurship Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Productive Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Analog Entrepreneurial Ecosystems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Sustainable Entrepreneurial Ecosystems . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Discussion Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Learning Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Web Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Reading Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4 Artificial Intelligence and Entrepreneurial Business Planning . . . . . . 49
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Learning Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Artificial Intelligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Types of Intelligence in International Business . . . . . . . . . . . . . . . . . . . . . . . 53
Cultural Intelligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Social Intelligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Contents xiii

Emotional Intelligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Virtual Reality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Augmented Reality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Metaverse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Discussion Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Learning Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Web Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Reading Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
5 Resilience, Risk and Uncertainty in Entrepreneurial Business
Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Learning Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Resilience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Industry Uncertainties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Firm Uncertainties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Coping Mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Discussion Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Learning Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Web Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Reading Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
6 Marketing and Entrepreneurial Business Planning . . . . . . . . . . . . . . . . 77
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Learning Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
The Importance of Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
7Ps of Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Product Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Place Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Price Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Promotion Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Process Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Physical Environment Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
People Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
How to Market Your Idea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Marketing Analytics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Digital Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Social Media . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Social Media Influencers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
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Self-Branding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Discussion Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Learning Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Web Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Reading Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
7 Entrepreneurial Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Learning Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Types of Leaders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Charismatic Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Situational Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Democratic Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Distributed Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Middle Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Discussion Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Learning Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Web Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Reading Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
8 Corporate Social Responsibility and Sustainable
Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Learning Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Corporate Social Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Sustainable Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
United Nations Sustainable Development Goals . . . . . . . . . . . . . . . . . . . . . 112
Protected Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Circular Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
Discussion Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
Learning Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Web Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Reading Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Chapter 1
Entrepreneurial Business Planning:
An Overview

Introduction

To be successful in the marketplace entrepreneurship should be planned in terms of

timelines, resource requirements and future needs. Planning is an essential part of any
kind of entrepreneurial activity as it enables a step-by-step progress report to be made
that enables changes to be implemented. In this chapter, the role of entrepreneurial
business planning in society is discussed that includes a focus on entrepreneurial
opportunities. The role of personality in entrepreneurs is highlighted as well as the
way organisational behaviour and identity develops in the marketplace.

Learning Objectives

1. To understand why it is important to plan for entrepreneurship and the need for
action plans to be developed based on financial and social objectives.
2. To understand personality traits of entrepreneurs and how businesses can create
short-, medium- and long-term plans.
3. To examine the role of organisational behaviour in entrepreneurial organisations.

What Is Entrepreneurship?

Entrepreneurship as a business concept is relatively recent topic although it has

been evident in business for a long time (Sharma & Chrisman, 1999). The reason for
increased interest in entrepreneurship is due to the realisation that new and novel ideas
are needed in business (Ratten, 2023). This was made evident during the COVID-19
crisis when quick and rapid adjustments to a digital environment were made.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2024 1
V. Ratten, Entrepreneurial Business Venturing,
https://doi.org/10.1007/978-981-97-1935-8_1
2 1 Entrepreneurial Business Planning: An Overview

There has been a change in the way entrepreneurs are viewed in society as previ-
ously they were considered risk takers and bad for society. This changed to a realisa-
tion that they were needed in order for society to progress (Hansen et al., 2011). The
term entrepreneurship generally is now viewed in a positive way due to its association
with innovation and economic growth (Howorth et al., 2005). New information about
entrepreneurship is continually learnt in society, which means whilst there is much
interest in the topic of entrepreneurship, there are still gaps in our understanding
about how it occurs (Gubbins et al., 2020). Many people consider self-employed
individuals as entrepreneurs or small business owners. However, entrepreneurship
goes beyond a single definition or categorisation as it is a mindset (Tan et al., 2005).
Moreover, some people who consider themselves an entrepreneur might not fit into
traditional definitions (Ratten & Jones, 2018).
Business success can depend on obtaining new market knowledge that leads to
a better competitive advantage in the marketplace (Allen, 2019). To be successful
means reacting quickly to new opportunities in an intelligent way. This can involve
strategic thinking about possibilities in terms of positive and negative outcomes.
In addition, strategy is important in any business but particularly for those in
hypercompetitive environments.
In order to be successful, it is necessary to focus on intended and emergent initia-
tives. Intended initiatives are planned and normally known in advance. This makes
their implementation easier to manage as they can be considered in advance. Emer-
gent initiatives are those that come to light based on new information being obtained.
This makes them more difficult to analyse due to their complexity.
In order to assess any form of business initiative the senior managers and owners
of a business should be involved. This includes the people overseeing the overall
strategy of a business. This can mean board of directors, managing directors and
others with a stake holding in the business. Financial and non-financial resources
need to be analysed in terms of understanding whether the initiatives make sense.
Resources in a financial form can include assets such as buildings as well as cash. In
a non-financial form resources include knowledge and capabilities that people within
a business have based on experience and expertise. This intangible type of resource
can be hard to value but can come in handy in competitive environments. This is due
to knowledge being power and enabling an individual or individuals to be influential
in a business success. Central to the idea of organisational knowledge is the idea of
dynamic capabilities, which involves the ideas and competences a business has that
they can utilise in the marketplace.
The field of entrepreneurship’s initial focus was on small business management
and owner/managers (Bruyat & Julien, 2001). Initial research highlighted the way
entrepreneurs saw and acted on opportunities before others did. This work helped
to inform our understanding of entrepreneurship and how it differs to manage-
ment (Bygrave & Hofer, 1992). Some entrepreneurs are more successful than other
entrepreneurs and the reasons for this difference from a sense of persistence to being
lucky. Entrepreneurs persist over time in terms of chasing a dream, which means
their determination and passion help to fulfil goals (Drnovšek et al., 2010). Luck is
also important as being in the right place at the right time can contribute to their
What Is Entrepreneurial Business Planning? 3

success. Luck as a topic means different things depending on the context. In some
situations, luck can be part of the strategy formulation process.

Opening Discussion Question

Do you agree or disagree with the suggestion that all types of entrepreneurship should
be planned? In your thinking consider the role of industry, geographic and personality
differences amongst entrepreneurs.

What Is Entrepreneurial Business Planning?

Entrepreneurship involves the use of innovation, risk taking and proactive thinking.
It is a mindset and willingness to think outside the box (Prince et al., 2021). Not
all planning is entrepreneurial as it can be reactive and routine in nature (Gartner,
1989). However, to make a difference to society business planning should be done in
an entrepreneurial way (Nambisan, 2017). This means engaging with the marketplace
through innovative ideas that meet customer expectations.
Business leaders now more than ever need to create a unique experience. Business
can involve any kind of profit-orientated activity that includes some kind of exchange
(Maldonado-Bautista et al., 2023). This means the emphasis is on meeting demand by
exchanging a service or product for a fee. A rationalist strategy involves a purposeful
approach to business that tries to take out the emotions. This means analysing the
environment based on set principles and ideas. By doing so the market is described
based on observable characteristics that can be measured. When different potential
courses of action are being considered it can be helpful to take a rationalist strategy
approach.
There are some misconceptions about entrepreneurship in terms of it needing to
be technology-based, new and originating from a multinational or large business
(Kobia & Sikalieh, 2010). Sometimes this occurs but entrepreneurship can occur
in any shape and form. Therefore, entrepreneurship is an all-inclusive word that
covers aspects that go beyond the business context. Business managers must be
entrepreneurial in how they manage and assign tasks. Entrepreneurship is a complex
word and can be difficult to define, which means it requires more focus and attention
due to its usefulness in business decisions (Lee-Gosselin & Grise, 1990).

Kikkoman
www.kikkoman.com.au
Kikkoman is a company famous and well known for its soy sauce products. It
initially started when the Mogi and Takanashi families began soy sauce production in
Japan. Their soy sauce is the official sauce for the Japanese imperial household and
4 1 Entrepreneurial Business Planning: An Overview

regarded as a high-quality product. The name of the company is based on the word
‘kikko’ which means tortoise shell in Japanese. Tortoises are a symbol of longevity
and relate to the company’s idea of being a long-term and enduring product. The other
part of the company’s name ‘man’ represents 10,000 indicating the long-term need for
usage of the product. On each Kikkoman product is a hexagonal logo with the Chinese
character for 10,000 inside it. This symbol is Kikkoman’s brand image and is well
regarded in the marketplace
There is a Kikkoman soy sauce museum located in Chiba, Japan. At the museum
visitors can learn about the history of soy sauce as well as information about how to
use soy sauce. Soy sauce has a long history and is considered a fermented seasoning
distinctive in Japanese culture. Kikkoman soy sauce began in Noda which is in the
Chiba prefecture in Japan. Noda is a region known for its production of soy beans so
was well suited to manufacture soy sauce.
After World War II when many military personnel located in Japan had become
familiar with soy sauce, there was a growth in exports of the product. In 1957 the
company opened its first overseas sales location in the United States. This helped the
product gain popularity in the marketplace as well as obtain a first mover advantage
as a soy sauce producer in the marketplace. In 1972 the first overseas production plant
was built in the United States. Kikkoman now has eight overseas production plants as
well as three production plants located in Japan.
One of the most famous Kikkoman products is its tabletop dispenser. It is a small
glass dispenser with a red top that initially entered the market in 1961. It was designed
as an easy to use product that could be placed on a table. Prior to its introduction the
company normally made big bottles that were difficult to use. The easy to use dispenser
was designed with functionality in mind. This included an ergonomically stable design
that was distinctive. In 2018 the tabletop dispenser obtained a three-dimensional trade-
mark that recognised its innovative design. It obtained a three-dimensional trademark
without the brand name on the product. Other food and beverage products that have the
same kind of three-dimensional trademarks are Coca Cola’s contour bottle designed
to fit in a person’s hand as well as Yakult’s drink bottle known for its unusual shape.
Discussion Questions
1. What kind of international strategy does Kikkoman have with regard to its corporate
ventures?
2. What kind of innovative products has Kikkoman developed?
3. What new food products or services would you suggest Kikkoman focus its
corporate ventures on?

Entrepreneurial Opportunities

The key objective for most entrepreneurs is to find a market gap and purse it (Kao,
1993). This is sometimes referred to as an opportunity as it has not yet been properly
capitalised on in the marketplace. An entrepreneurial opportunity is a specific type
of opportunity as it involves some kind of innovation (Gartner, 1990). This means
it differs to normal forms of opportunities as it is driven by a business need. Some
opportunities are discovered whilst others are created by the circumstances.
Entrepreneurial Opportunities 5

An opportunity in a general sense can be considered as something discovered

whether that be an idea, product or process. The nature of an opportunity means it
involves a sense of realisation about possibilities. This means it differs from a normal
occurrence as there is something exciting in its meaning. Opportunities are created
by human minds so the way they are perceived is based on individual behaviour. Each
opportunity found by an entrepreneur can be analysed from a personal perspective.
This means not all opportunities will be considered the same as they are based on
the experiences of the person.

Group Activity
In groups of 2–5 people discuss how the perception of entrepreneurs has changed over
the past 20 years. Consider whether entrepreneurs were previously thought of as rebels
and whether this view has changed in light of the dot.com entrepreneurs and emphasis
on entrepreneurship. Discuss why this change has taken place and the reasons for it.

Entrepreneurship in the past used to be solely associated with new venture or

value creation but this has changed with differing types of entrepreneurship entering
the marketplace. As a consequence, entrepreneurship does not have to equate with
value as it can also involve destructive behaviour. For this reason, it can be helpful
to reconsider entrepreneurship from an innovation and risk-taking perspective. This
means focusing on entrepreneurial action in terms of changing something.
Conventional entrepreneurship is action that is perceived by others to involve
innovation and risk. This means it complies with local beliefs and customs regarding
entrepreneurship. Unconventional entrepreneurship is innovative action that is not
normally conducted and outside the norm. This implies it has not yet been tested and
is still in its infancy stage. Although many forms of unconventional entrepreneur-
ship such as digital entrepreneurship are now considered conventional forms of
entrepreneurship.

Silicon Valley Bank

https://www.svb.com/
Silicon Valley Bank collapsed in 2023. There was a run on the bank that led to
many people withdrawing their money. The reason for its demise is debatable as some
suggest it was due to quick interest rate rises due to rising inflation levels whilst others
suggest it was due to financial mismanagement. Some people have argued that it was
due to the withdrawal of the Dodd-Frank banking legislation requiring specific credit
requirements. The Dodd-Frank banking legislation was introduced after the Global
Financial Crisis of 2008 and meant that banks had to undergo a yearly Federal Reserve
stress test and continue to have specific capital levels.
On March 10, 2023, financial regulators shut the bank and seized its remaining
deposits. It is the largest bank failure in the United States since the 2008 Global Finan-
cial Crisis. In the United States deposits up to $250,000 are insured meaning that the
Federal Reserve covers this money if something happens to the bank.
6 1 Entrepreneurial Business Planning: An Overview

Silicon Valley Bank focused on venture capitalists and startups located in Silicon
Valley. This may have meant they took on too much risk by focusing on startups that
were not financially viable. Along with lending money, Silicon Valley Bank provided
investment and startup advice.
Discussion Questions
1. What impact on corporate venture funding will the collapse of Silicon Valley Bank
have?
2. Do you think Silicon Valley Bank was too focused on technology ventures and
should be focused on other industry segments?

Personality Characteristics of Entrepreneurs

Entrepreneurs tend to have different personality traits to others due to their interest
in developing new business ideas. These traits have been described as unusual but
are common amongst a group of people that is to say what is considered as different
to some can be considered as normal to others. Therefore, care needs to be taken
when describing what kind of person an entrepreneur tends to be.
Most entrepreneurs are inclined to have a high level of enthusiasm for what they
are doing. This helps them to feel excited and passionate about the road ahead for
them in terms of what needs to be done and how to get there. It can be difficult being
an entrepreneur as others may not have the same knowledge or information about the
business idea. This can make it hard to explain to others what the business idea is and
why it is a good idea. Entrepreneurs need to have a sense of forthrightness to explain
their ideas. This means discussing with the appropriate people what they want to do
and why it is needed. It can help if an entrepreneur has some kind of experience in
business but this is not always needed. Having contacts in terms of knowing the right
people to help can increase the possibility of a business venture growing. To do this
some flexibility is needed as the initial idea may need to be revised.

Individual Activity
Think about a new business venture you would like to start. Do research about how to
establish a business in your area in terms of registering the tradename and establishing
a market presence. Consider what demographics you will target and pricing for the
products or services.

There is a debate surrounding some personality characteristics of entrepreneurs

such as being introverted or extroverted. The stereotype is that an entrepreneur is loud
and confident in public speaking but this is not always true. Entrepreneurs can be quiet
and shy but still be effective at business. Other characteristics such as being conser-
vative may relate to the type of business an entrepreneur is involved in. Conservative
Rogue Entrepreneurship 7

entrepreneurs tend to be in industries that are well established such as the manu-
facturing rather than newer and emerging industries like the technology industry.
Moreover, conservative entrepreneurs tend to be more risk adverse and cautious
regarding financial outlays. This ensures they do not lose money if an investment
does not work out. This conservative approach though can be risky as a strategy as
good and beneficial opportunities may be overlooked. Therefore, the context in terms
of the existing business environment needs to be examined.

J.K. Rowling
J.K. Rowling is the author of the Harry Potter book series that were first published in
1997. The books were adapted into a movie that then followed with eight films based
on the Harry Potter books. There are a number of toy and other merchandise sold that
relates to characters in the books. The Harry Potter books are amongst the highest sold
books in the world and have been translated into other languages. J.K. Rowling also
publishes novels for adults including the Casual Vacancy and the Cuckoo’s Calling
which are written under the pseudonym Robert Galbraith.

Rogue Entrepreneurship

Rogue entrepreneurship is defined as “entrepreneurial activity where the core busi-

ness idea violates established or expert consensus” (McBride et al., 2023: 1). Often
entrepreneurship comes from a continual flow of new knowledge entering the market-
place that makes novel ideas a business reality. Therefore, entrepreneurship can be
considered as conforming when it complies with existing conditions. McBride et al.
(2023: 2) state that conforming ventures “conform to the prevailing professional
assessment about their viability”. Entrepreneurship can also come from spontaneous
thoughts or radical ideas that challenge existing practices. Ideas that go against
conventional practices can be considered rogue. They are rogue when they initially
enter the market but as others learn about the idea they are no longer considered
rogue. This means ideas can be surprising to others who do not know much about
them. To the person proposing the idea they can be reasonable and practical due to
their own knowledge. To others it may take some time to become accustomed to the
idea. Thus, it can be suggested that ideas considered crazy are actually good ideas
but just not yet available in the marketplace. Once prevailing wisdom changes the
idea becomes common knowledge.
Many good ideas are based on uncertain outcomes as they need to be tried in the
marketplace. Through trial and error the ideas are improved upon or tested to see if
they work. This helps to refine how the idea actually fits in with existing business
practices. Some ideas are based on implausible claims and the timing of the idea may
be an issue. For example, inventors drew diagrams of machines and flying apparatus
8 1 Entrepreneurial Business Planning: An Overview

before they could actually be made. They had an idea and could describe the idea
but could not make the idea in a feasible way.

Ralph Lauren
www.ralphlauren.com
Ralph Lauren is a clothing brand known for its polo shirts. It was started in 1967
when Ralph Lauren began a neckwear line that included wide handmade ties. In 1968
he debuted his first men’s collection that was followed in 1970 with the opening of a
Ralph Lauren store in Bloomingdales. In 1971 the first standalone store was opened
and the embroidered pony included on clothes. In 1972 the polo shirt was introduced
that has since become an iconic clothing item and the first full women’s collection was
launched. In 1974 Ralph Lauren designed a pink suit for the actor Robert Redford who
played Jay Gatsby in the Great Gatsby movie. In 1977 the actress Diane Keaton wore
Ralph Lauren clothes in the film Annie Hall. In 1978 a perfume line called ‘Polo for
Men’ with a green bottle was introduced. In 1981 the first store in London outside the
United States was opened. In 1983 a home collection was introduced that included
bedding and rugs. In 1995 a paint line was started that included distinct colours. In
1997 the company became publicly listed on the New York Stock Exchange. In 1999
a restaurant next to the Chicago store was opened. In 2000 the polo.com website was
started that enabled more digital commerce and marketing of the company. In 2006
the company became the official outfitter for the tennis tournament Wimbledon in the
United Kingdom further solidifying its presence in the sports area. This was followed
in 2008 by becoming an official outfitter of Team USA for the Olympics which fuelled
the increase of sports-related clothing by Ralph Lauren.
Discussion Questions
1. How did Ralph Lauren expand his company?
2. What new business ventures would you recommend Ralph Lauren being and why?

Organisational Behaviour

Organisations are defined as “groups of people, working independently, and

providing specialised contributions towards a common end or purpose” (Barnhill
et al., 2021: 13). More businesses and government entities are described as organi-
sations due to the way they behave in the marketplace. Effective managers need to
implement the right kind of policies in an organisation to make sure they work
properly. The topic of organisational behaviour evolved from discussions about
how to structure business entities in terms of people management. Every organi-
sation is different in some way, but many share the same characteristics in terms
of needing people to work collaboratively in a business setting. Organisations can
include governing agencies and local entities that have a number of people working
within them.
An organisation is made up of different people who are assigned specific tasks. If
a person leaves an organisation they are normally replaced by another. This means
Positive Organisational Behaviour 9

that an organisation continues over time despite a change in its membership. Thus,
an organisation achieves its goals regardless of the alternative in human capital. In
an organisation labour is divided amongst a number of employees. This enables
specialised tasks to be conducted in an efficient way. Organisations tend to be
structured based on certain tasks such as administration, finance, marketing, human
resources, technology, procurement and supply chain. The exact structure of each
organisation will differ depending on the industry. For service type firms, the struc-
ture tends to be based on knowledge dissemination but for manufacturing firms it is
based on production output.

In Class Debate Question

Divide the class into two groups and have a spokesperson for each group. In one group
do research and provide reasons why entrepreneurs are born and the other group should
disagree with this and say why they can be based on context and life conditions.

Organisational behaviour refers to how people in an organisation behave and act.

It is important to know why people do certain things in an organisational context as it
can influence performance. Many of the attitudes employees and employers have are
based on their interaction with others. Actions are influenced by organisational as well
as social contexts. This means how a person thinks and feels is based on their reaction
to a specific situation. These feelings can remain the same or change over time.
During the COVID-19 pandemic many employees were fearful of the health, social
and economic effects of the crisis. This was due to people working with others and
being at risk for contracting the virus or alternatively feeling socially isolated due to
working from home. The social effects meant that whilst virtual communication was
possible it was not the same as face-to-face interaction. Moreover, due to the ongoing
and unknown length of the pandemic people were uncertain about the economic
consequences.

Classroom Activity
In class on poster paper divide the paper into four sections and in each write down the
main characteristics of an entrepreneur in terms of their personality.

Positive Organisational Behaviour

Positive organisational behaviour is defined as “the study and application of positively

orientated human resource strengths and psychological capacities” (Luthans, 2002:
59). In today’s competitive environment organisations need to continually manage
performance improvement. This means effectively assigning tasks and processes
10 1 Entrepreneurial Business Planning: An Overview

based on need. It is important to measure performance in order to evaluate growth.

Taking a positive perspective to organisational behaviour involves focusing on func-
tionality. This means assessing each organisation based on its internal processes
and engagement with stakeholders. Barnhill et al. (2021: 5) conceptualise positive
organisational behaviour as “positive personal capabilities in order to improve the
experience of the employee and simultaneously supporting the organisation”. An
individual’s psychological capital can influence their behaviour in an organisation.
This is due to having the confidence to act on advice based on the context. In order
to succeed in the marketplace individuals in organisations need to have the self-
efficacy to take on complex tasks. This will help an organisation compete. Psycho-
logical capital involves people having the strength to carry on in times of hardship.
This was particularly relevant during the COVID-19 pandemic due to the uncertainty
surrounding the crisis. By being resilient it enables a person to persevere and make
a difference. This is important in overcoming hurdles in the market they might face,
thereby bouncing back after facing obstacles in order to be successful.

Tradie
www.tradie.com
Tradie is a clothing, beauty and drinks company that was founded by Ben Good-
fellow in 2010. It is well known in Australia for its branded underwear that includes
the words ‘Tradie’. It had a different kind of marketing to other underwear compa-
nies as it focused on the tradie market that included tradespeople such as plumbers,
electricians and other people employed in a trade. Thus, it differed from other brands
that focused on professional people or certain age groups and this may be a reason
for its popularity. Tradie is an Australian abbreviation for tradespeople and can be an
endearing term depending on how it is used. Other companies such as McDonalds in
Australia use an abbreviated word ‘Maccas’ in their advertising in order to appeal more
to Australian consumers. In Australian culture words are commonly abbreviated. Types
of trades can include bricklayers, construction labourers, carpenters, crane operators,
pipe layer, painter and welder. A tradie has a specialised skill that is often the result of
hands on training.
Most tradies have not gone to university but have learnt their skills through on the
job training. Some have vocational trading or other kind of certificates associated with
learning specific knowledge. Tradie is an Australian family-owned business that has
diversified into a range of clothing products such as workwear, outerwear, footwear,
socks, hats and beanies, swimwear and sleepwear. They sell beauty products including
everyday products such as sunscreen, moisturiser and body wash. They have branched
out to sell sport drinks and beer under the Tradie label. They are the official hydration
partner of Melbourne Storm football club. Their drinks have names such as chippy
lemon lime, you beaut burst, bonza blackcurrant and bricky berry that align with
Australian names for products. They sell accessories such as watches, wallets, belts,
gloves, tools, coolers, stationery, paint, sunglasses and bags.
Discussion Questions
1. Do you think it was innovative to name the company ‘Tradie’? What role did this
play in the success of the company?
Organisational Identity 11

2. Why did the company expand from being predominately known for underwear
into other types of products?
3. What new products or services would you suggest Tradie go into?

Organisational Identity

Organisations try to differentiate themselves from other organisations in order to

compete in the global marketplace. This gives them a competitive advantage and
enables them to develop their brand image. Barnhill et al. (2021: 17) define organisa-
tional identity as “the organizational members perceptions of “who” the organization
is and “how” the organization is different from other organizations”. The who refers
to the image or brand an organisation has in the marketplace. This can be derived
from its market standing in terms of being viewed as a niche leader or alternatively
by the type of products or services it produces. The how refers to the processes
or marketing it uses to differentiate itself. This can include offering personalised
services to price reductions. Each organisation will have defining characteristics that
play a role in its identity. An organisations culture plays a key role in its identity.
This includes its history and connection to a local area. Culture can mean different
things depending on the context but often refers to how things are done. This means
its mission in the market in terms of what it hopes to achieve.
An organisation’s identity is an important part of its overall market strategy. This
means a well-performing organisation will focus on achieving its objectives through
its market strategy. Managers and employees in an organisation play a role in shaping
its identity. When an organisation faces confronting times its members help to ensure
it stays on the right path. This means pivoting to new market needs or finding new
sources of revenue.

Internet Exercise
On the web research the history of an entrepreneur of your choice. If you do not have
a specific entrepreneur in mind then google specific types of entrepreneurs to see the
results, e.g. ‘sport entrepreneur’, ‘food entrepreneur’, ‘digital entrepreneur’. Type into
the search query on google the entrepreneurs’ name and their business ventures.
12 1 Entrepreneurial Business Planning: An Overview

Isomorphism

Isomorphism is defined as “how organisations tend to appear or behave similarly in

order to achieve and preserve legitimacy” (Barnhill et al., 2021: 10). Institutional
legitimacy is important in society due to rules and regulations governing organi-
sational behaviour. The success of an organisation can be dependent on how it is
viewed in society. This means organisations that are considered more legitimate are
likely to be more highly valued. This influences how much they can charge for their
products and services.
Legitimacy is defined as “generalized perception or assumption that the actions of
an entity are desirable, proper or appropriate within some socially constructed system
of norms, values, beliefs and definitions” (Suchman, 1995: 574). The legitimacy of
an organisation changes over time due to altering societal views. This means that
organisations seek to be legitimate based on the expectations of society. In order
for society to function based on expected codes of conduct, organisations need to
be legitimate. Sometimes organisations will seek approval from other members of
society to be seen as legitimate. Most people will want to do business with a legitimate
business due to regulations in place. This means organisations will need to behave
in a certain way based on expectations. This behaviour can be continually adjusted
and refined based on societal changes.

Diversity in Organisations

Diversity in organisations refers to having people from different backgrounds and

cultures working in the business. Increasingly diversity is being encouraged as a way
of ensuring alternative viewpoints are heard. This includes people from a science,
business, economics and technology background having their say about the future
of an organisation. People think differently based on their education and experience.
Usually people with a science and engineering background tend to focus on maths
such as statistics and probabilities when making decisions. This means they tend to
rely more on data rather than observation that is more prevalent with people from
a management background. People from a social sciences background usually rely
more on feelings and intuitions. Therefore, in an organisation it can be helpful to
obtain diverse viewpoints as a way of building a better understanding of what is
happening.

Application Activities
Interview an entrepreneur in your local area and ask them questions about how they have
managed their business ventures. Try to also find out information about the entrepreneur
from other sources including their business network.
Conclusion 13

There are different types of diversity in an organisation that can include skill sets,
ethnicity, gender, sexual orientation, family life and geographic position. There-
fore, there are numerous ways to analyse and understand diversity. Skillsets include
having people with different skills working in an organisation. This can include
book keepers, accountants, marketers, managers, scientists, engineers and artists.
Depending on the type of organisation, the skillset might be orientated towards a
specific skill. For example, technology firms are more likely to have more people
with an information technology background whereas retail companies are likely to
have more designers and sales assistants. Ethnicity refers to people in an organisa-
tion coming from different ethnic groups. This can link to religion and other aspects
related to ethnicity including spirituality and the diaspora. Increasingly organisa-
tions are making available their ethnic backgrounds of their employees as a way to
show their diversity. This can encourage more collaboration with other companies in
terms of language and location similarities. Gender diversity refers to having people
from different genders in the workforce. Although there has been a trend towards
gender neutrality or genderless organisations that emphasis merit rather than biolog-
ical differences. There has been some controversy with the way gender is portrayed
in organisations by binary denominations (e.g. male, female) rather than emphasising
gender as a fluid concept. Lesbian, gay, bisexual, trans and queer people also influ-
ence the way gender is considered in an organisation and this might be impacted by
the location of an organisation. Related to this is sexual orientation of people in an
organisation. There has been increased freedom in recent years to openness around
the concept of sexual orientation although this can still be taboo in some contexts.
This is due to people having certain stereotypes around the role sexual orientation
plays in the performance of a person in the workplace. Family life refers to whether
a person is single, in a partnership and in a family. The concept of family is rapidly
changing based on societal needs and expectations. In the past a family was defined
in a biological way in terms of relationships but now it can refer to non-biological
relationships that infer an emotional bond. Geographic position of organisations in
terms of production and office facilities can be considered as a form of diversity.
This is due to regional and urban areas having different kinds of work/life balance.
Moreover location in terms of being near the sea or mountains can also have different
kinds of effects on organisational productivity.

Conclusion

This chapter has examined the reasons why entrepreneurs need to plan their ventures.
Not all ventures are planned in a systematic way as it may take time for a business
idea to gain traction in the marketplace. For this reason, it is useful to plan ideas
around a concept or thought then develop them further as required. The motivations
for entrepreneurial business planning were stated that included highlighting both
14 1 Entrepreneurial Business Planning: An Overview

financial and social reason for entrepreneurship. The chapter provided case studies,
discussion questions and ideas about how to develop an entrepreneurial business
plan.

Discussion Questions

1. Why has there recently been more interest in entrepreneurship?

2. What is entrepreneurial business planning?
3. What are some personality characteristics of entrepreneurs?

Learning Outcomes

1. Entrepreneurial business planning is important as a way to strategically think

about current and future objectives.
2. Entrepreneurs tend to have specific personality traits such as being inquisitive,
assertive and risk taking.
3. Organisational behaviour that fosters creativity and innovation is likely to lead
to increased levels of entrepreneurial behaviour.

Multiple Choice Questions

1. Dynamic capabilities are best described as

(a) an internationalisation process
(b) the ideas and competences a business has that they can utilise in the
marketplace
(c) a way to increase revenues
(d) none of the above
2. Luck can be explained as
(a) being in the right place at the right time
(b) a way to grow markets
(c) a focus on competitiveness
(d) none of the above
3. Which of the following words best describes entrepreneurship?
(a) innovation
(b) risk taking
(c) proactive thinking
(d) all of the above
Web Resources 15

4. A rationalist strategy involves

(a) using emotions to make decisions
(b) focusing on intuition in decision making
(c) a purposeful approach to a business that tries to take out the emotions
(d) none of the above
5. An opportunity involves
(a) some kind of innovation
(b) a process of discovery
(c) a sense of realisation about possibilities
(d) all of the above

Answers: 1b, 2a, 3d, 4c, 5d

Web Resources

https://www.business.qld.gov.au/running-business/planning/writing-plan
This website provides advice about how to write a business plan. It has up to date
and useful information about the importance of planning for businesses particularly
in terms of dealing with crises such as the COVID-19 pandemic and economic events.
https://business.gov.au/planning/business-plans/develop-your-business-plan
This website has a business plan template in which you can download and use
to write your own business plan. This is helpful in structuring a business plan and
making sure it includes all the required information. By doing so it stresses the need
to include financial information about forecasting and scenario planning in terms of
how the business will develop in the future.
https://business.vic.gov.au/business-information/business-planning-tool
This website helps entrepreneurs who have an existing business or are planning to
develop a new business. There is a business planning tool that enables entrepreneurs
to track and manage their resources. This is helpful in managing staff and improving
cashflow to make sure the business is efficient.
https://www.shopify.com/
Shopify is a website that enables you to build your own business. This means
you can set up a business online in order to sell products and services to the global
marketplace.
https://tim.blog/podcast/
The Tim Ferriss Show is a podcast that includes information about business and
interviews. He is the author of the 4 hour Workweek that suggests that efficient people
only need to work four hours per week. The podcast includes innovative articles and
entrepreneurial ideas.
16 1 Entrepreneurial Business Planning: An Overview

Reading Resources

Amit, R., & Zott, C. (2020). Business Model Innovation Strategy: Transformational
Concepts and Tools for Entrepreneurial Leaders. Wiley.
This book discusses the role of entrepreneurial business planning from a business
model innovation perspective. This includes discussion about how entrepreneur-
ship derives from innovation and the role of leaders in the process. The book is
helpful in explaining how to transform organisations from focusing on innovation
and entrepreneurial business planning.
Ratten, V., & Jones, P. (Eds.). (2018). Transformational Entrepreneurship.
Routledge.
This book stresses how entrepreneurial business planning can be transforma-
tional in nature when it produces societal benefits. Thus, providing positive financial
outcomes as well as societal benefits. This means taking a different kind of approach
as to how innovative and risk-taking business ventures can develop.
Grant, A. (2021). Think Again: The Power of Knowing What You Don’t Know.
WH Allen.
This book discusses how critical rethinking can be used in business management.
This means questioning current beliefs as a way to progress business ideas. People
tend to be more comfortable with current thinking processes so it can take some
time for them to readjust to new behaviour. The book highlights how it is important
to be aware of new developments as the world is constantly changing. This enables
business leaders to reimagine their beliefs in order to be more progressive.
Ratten, V., Jones, P., Braga, V., & Marques, C. S. (2019). Sustainable
Entrepreneurship: The Role of Collaboration in the Global Economy, Springer.
This edited book focuses on entrepreneurial business planning from a sustain-
ability perspective. Each chapter in the book is written by a leading expert in
the field and the book provides a way to gain a holistic understanding about how
entrepreneurship occurs from a strategic point of view.

References

Allen, J. P. (2019). Digital entrepreneurship. Routledge.

Barnhill, C. R., Smith, N. L., & Oja, B. D. (2021). Organizational behavior in sport management:
An applied approach to understanding people and groups. Springer Nature.
Bruyat, C., & Julien, P. A. (2001). Defining the field of research in entrepreneurship. Journal of
Business Venturing, 16(2), 165–180.
Bygrave, W. D., & Hofer, C. W. (1992). Theorizing about entrepreneurship. Entrepreneurship
Theory and Practice, 16(2), 13–22.
Drnovšek, M., Wincent, J., & Cardon, M. S. (2010). Entrepreneurial self-efficacy and business
start-up: Developing a multi-dimensional definition. International Journal of Entrepreneurial
Behavior & Research, 16(4), 329–348.
Gartner, W. B. (1989). Some suggestions for research on entrepreneurial traits and characteristics.
Entrepreneurship Theory and Practice, 14(1), 27–38.
References 17

Gartner, W. B. (1990). What are we talking about when we talk about entrepreneurship? Journal of
Business Venturing, 5(1), 15–28.
Gubbins, M., Harrington, D., & Hines, P. (2020). Social support for academic entrepreneurship:
Definition and conceptual framework. Journal of Management Development, 39(5), 619–643.
Hansen, D. J., Shrader, R., & Monllor, J. (2011). Defragmenting definitions of entrepreneurial
opportunity. Journal of Small Business Management, 49(2), 283–304.
Howorth, C., Tempest, S., & Coupland, C. (2005). Rethinking entrepreneurship methodology and
definitions of the entrepreneur. Journal of Small Business and Enterprise Development, 12(1),
24–40.
Kao, R. W. (1993). Defining entrepreneurship: Past, present and? Creativity and Innovation
Management, 2(1), 69–70.
Kobia, M., & Sikalieh, D. (2010). Towards a search for the meaning of entrepreneurship. Journal
of European Industrial Training, 34(2), 110–127.
Lee-Gosselin, H., & Grise, J. (1990). Are women owner-managers challenging our definitions of
entrepreneurship? An in-depth survey. Journal of Business Ethics, 9, 423–433.
Luthans, F. (2002). The need for and meaning of positive organizational behavior. Journal of
Organizational Behavior, 23(6), 695–706.
Maldonado-Bautista, I., Klein, P. G., & Artz, K. W. (2023). The role of political values and ideologies
of entrepreneurs and financiers. Entrepreneurship Theory and Practice, 47(1), 172–205.
McBride, R., Packard, M. D., & Clark, B. B. (2023). Rogue entrepreneurship. Entrepreneurship
Theory and Practice, 48, 10422587221135764.
Nambisan, S. (2017). Digital entrepreneurship: Toward a digital technology perspective of
entrepreneurship. Entrepreneurship Theory and Practice, 41(6), 1029–1055.
Prince, S., Chapman, S., & Cassey, P. (2021). The definition of entrepreneurship: Is it less complex
than we think? International Journal of Entrepreneurial Behavior & Research, 27(9), 26–47.
Ratten, V. (2023). Entrepreneurship: Definitions, opportunities, challenges, and future directions.
Global Business and Organizational Excellence, 42, 79–90.
Ratten, V., & Jones, P. (2018). Transformational entrepreneurship: An overview (pp. 1–17).
Routledge.
Sharma, P., & Chrisman, J. J. (1999). Toward a reconciliation of the definitional issues in the field
of corporate entrepreneurship. Entrepreneurship Theory and Practice, 23(3), 11–28.
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Management Review, 20(3), 571–610.
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Altruism and entrepreneurship. The International Entrepreneurship and Management Journal,
1, 353–365.

Further Readings

Audretsch, D. (2012). Entrepreneurship research. Management Decision, 50(5), 755–764.

Prince, S., Chapman, S., & Cassey, P. (2021). The definition of entrepreneurship: Is it less complex
than we think? International Journal of Entrepreneurial Behavior & Research, 27(9), 26–47.
Roundy, P. T. (2019). “It takes a village” to support entrepreneurship: Intersecting economic and
community dynamics in small town entrepreneurial ecosystems. International Entrepreneurship
and Management Journal, 15(4), 1443–1475.
Chapter 2
Digital Social Entrepreneurship
and Service Innovation

Introduction

This chapter will discuss the reasons why entrepreneurial thinking is needed in
business by focusing on digital social entrepreneurship. This means emphasising
how markets and industries constantly change and adapt to new market conditions
through innovation. A focus is placed on understanding why entrepreneurial thinking
will help increase business performance. This is a useful way of understanding how
context in terms of how social entrepreneurship and service management influences
entrepreneurship.

Learning Objectives

1. To understand why different kinds of thinking are needed in business by focusing

on social entrepreneurship.
2. To be able to develop critical thinking skills related to social entrepreneurship.
3. To highlight the alternative ways of solving a problem by focusing on service
innovation and management.

Entrepreneurship

Various definitions and ways of understanding entrepreneurship have been proposed

by researchers. Each definition emphasises different factors that are consid-
ered important in understanding entrepreneurship. As a consequence, the way
entrepreneurship is defined differs by author and context. Entrepreneurship and an
entrepreneur are different terms with entrepreneurship meaning the activity asso-
ciated with the process and an entrepreneur being the person who engages in

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2024 19
V. Ratten, Entrepreneurial Business Venturing,
https://doi.org/10.1007/978-981-97-1935-8_2
20 2 Digital Social Entrepreneurship and Service Innovation

entrepreneurship. An early view of an entrepreneur is noted by Knight (1921: Iix)

who stated the role is “to improve knowledge especially foresight, and bear the inci-
dence of its limitations”. Thus, some definitions focus on foresight and the ability
to think about future business opportunities whereas others focus on the coordina-
tion function. For example, Casson (1982: 20) defined an entrepreneur as “someone
who specialises in taking judgmental decisions about the coordination of scarce
resources”. Most definitions of an entrepreneur highlight a specific aspect of the
business function of doing something that is risk taking or futuristic in nature.
An entrepreneur engages in entrepreneurship which is the action associated with
the business activity. To define entrepreneurship involves considering the different
tasks an individual does that makes them an entrepreneur. Cuervo et al. (2007: 3)
define entrepreneurship as “the identification and assessment of opportunities, the
decision to exploit them oneself or sell them, efforts to obtain resources and the
development of the strategy and organization of the new business project”. Some
definitions of entrepreneurship focus more on a specific activity such as new venture
creation. For example, Reynolds et al. (1999: 3) defines entrepreneurship as “any
attempt at new business or new venture creation, such as self-employment, a new
business organization, or the expansion of an existing business, by an individual, a
team of individuals, or an established business”. This means there are a variety of
ways to define and conceptualise entrepreneurship, with each differing in approach
and meaning.

Group Activity
In groups of 3–5 people brainstorm different words that are associated with
entrepreneurship such as risk taking, transformational leadership and vision builder.
Try to write down 20–30 words then discuss what are the top 3 words associated with
entrepreneurship.

Digital Entrepreneurship

Digital entrepreneurship is a different form of entrepreneurship that has been popu-

larised due to the number of new businesses conducted through online mecha-
nisms. Productive entrepreneurs aim to grow their business quickly by engaging
in digital entrepreneurship. This includes using multi-purpose digital technologies
that can increase the scope of their business activities. In order to expand a business,
entrepreneurs need to experiment with new ideas, thereby learning how to increase
revenues by incorporating new products or customers.
Digital entrepreneurship is a unique form of entrepreneurship that involves the
use of digital technologies. The world has been changed by the increased usage
of digital technology in society. This has resulted in new business ventures and a
Digital Entrepreneurship 21

need for additional services. As a consequence, businesses are focusing on digital

innovations as a way to outcompete others. This is creating exciting areas of new
business activity. There has been an emphasis on the digital and knowledge economy
in recent years. This is due to the increase in digital-based businesses that rely on
online transactions. Entrepreneurs can start a business more quickly due to the help
of digital technology. This has increased the global reach for many businesses as they
can sell their products online. At the same time digital technology has resulted in
the need for businesses to invest in security and privacy issues. This means there are
both advantages and disadvantages to digital technology that need to be considered.
Digital entrepreneurship is a new form of entrepreneurship that has rapidly gained
popularity in the entrepreneurship literature and in practice. The reason for this is due
to the increased usage of digital technology in people’s lives. Books, photos and other
material are now available in a digital format making it easier to store and transfer. In
the past physical versions of material were available but new technology has made
it possible to change to digital formats. The ease of utilising digital technology via
computing devices has led to increased economic efficiencies. It is now cheaper and
easier to download digital material thereby broadening access.
In the past there were different names for digital entrepreneurship including tech-
nology and internet entrepreneurship. In addition, e-entrepreneurship that referred
to electronic forms of entrepreneurship was commonly referred to in the literature.
Originally the focus in the entrepreneurship literature was on e-entrepreneurship due
to the increase in electronic and mobile commerce. This was due to the newness
of electronic commerce in the marketplace and introduction of mobile commerce
technologies.

Lanolips
https://lanolips.com.au/
Lanolips is a company that uses lanolin in beauty products. Lanolin is sourced
from Australian sheep farmers as it naturally occurs in sheep’s wool. The company
was started by Kirsten Carriol who wanted a product to soothe dry skin and lips. The
company sells a range of lip balms, hand creams as well as other beauty products.
The products are based on natural ingredients with lanolin the key ingredient. Lanolin
has been used in other products but the name of Lanolips refers to it. The company’s
products are sold at a number of stores including Sephora and Nordstrom as well as
online. The company is Australian owned and based in Sydney.
The founder grew up on her grandparent’s sheep farm in Australia and notices that
sheep shearers had unusually soft hands from the lanolin in the wool. Her inspira-
tion for the company came from trying to soften dry skin and lips. Some of the most
popular products from the company include ‘The original 101 ointment multipurpose
superbalm’, ‘Golden dry skin miracle salve’, ‘101 ointment multi-balm peach’, ‘Rose
and lanolin hand cream intense’ and ‘101 dry skin super cream multipurpose for face
and body’. The company advertises that lanolin is a safer alternative to petroleum-
based balms. Some of the company’s sustainability initiatives include using more
environmentally friendly materials in packaging and product design. This includes
22 2 Digital Social Entrepreneurship and Service Innovation

their glossy balm tubes being made from 80% sugarcane bioplastic and using reduced
foil on packaging.
Discussion Questions
1. What is the role of sustainability in Lanolip’s success?
2. What is the role of using natural ingredients in Lanolip’s marketing?

References
https://www.vogue.com.au/beauty/vogue-loves/lanolips-founder-kirsten-carriol-
was-inspired-by-her-childhood-holidays/news-story/2dbd090e76f7603151016c06
55480efd
https://www.dailytelegraph.com.au/newslocal/lanolips-founder-kirsten-carrioll-
reveals-the-health-scare-that-changed-everything/news-story/31a8539ded477d8
bdb9bee9abb7c96e9
https://thegracetales.com/kirsten-carriol-on-building-lanolips-the-australian-bea
uty-brand-taking-over-the-globe/

Social Entrepreneurship

Social entrepreneurship is a fluid concept that changes over time based on soci-
etal conditions. Generally, it refers to non-profit or civic activity that has a business
component. This means it is contextually relevant and based on cultural and societal
conditions. The way social entrepreneurship is viewed in society can be partly deter-
mined by geographic and political conditions. Geographically due to most developed
countries emphasising altruistic and community behaviour of profit-oriented compa-
nies. Countries with a high net worth have the ability to emphasise social behaviour
of corporations due to an emphasis on corporate social responsibility. Developing
countries still emphasise social entrepreneurship but in different ways depending on
the moral obligations of citizens. This means incorporating ethical and environmental
initiatives in business endeavours is important.
Social entrepreneurship has become popular due to an ideological shift in society
to social causes. This means capitalism and financial goals are still prioritised
but there is a growing recognition about community obligations. Thus, as social
entrepreneurship incorporates business policy, economic and political goals, it is
emphasised in different segments of society. Initially entrepreneurship was consid-
ered a purely commercial objective but as the field progressed new forms of
entrepreneurship such as social entrepreneurship emerged. This has meant there
are multiple ways of defining and conceptualising entrepreneurship based on the
context. Social entrepreneurship is focused on lessening or solving social problems
that are often caused by other types of entrepreneurship.
Defining social entrepreneurship is problematic due to the varied ways the term
is used in society. The nature of social entrepreneurship has multiple and sometimes
conflicting goals of acting in an altruistic way that conveys some degree of busi-
ness outcome. This duality of goals means the nature of social entrepreneurship is
complex.
Social Entrepreneurship 23

Individual Activity
Write down 10 different types of entrepreneurship and then rank them in terms of
importance in the global economy.

Collective social entrepreneurship involves innovatively utilising the community

to solve a social goal. This means it is collective driven and relies on interaction
in the business environment. By doing so it focuses on alliances, partnerships and
collaboration on social projects. Jørgensen et al. (2021: 3) suggest that collective
social entrepreneurship “may leverage existing organizational forms such as cooper-
ative models, cross-sectional collaboration and the resources of social movements”.
Cooperative models refer to interaction amongst a range of people for a business
purpose. They are often used in farming or the retail industry because of economy
of scale reasons. Cross-sectional collaboration involves entities in different sectors
working together. This can result in better outcomes due to the invested interest in
the end result. The resources of social movements refer to causes or interest such
as sustainability being incorporated into social entrepreneurship. This may include
sustainability initiatives aimed at reducing pollution or focus on social equity prior-
ities such as increased literacy rates. Thus, there are many different forms of collec-
tive social entrepreneurship but all have the common goal of collaboration amongst
diverse entities for social purposes.
Social entrepreneurs normally face some kind of risk when establishing their
business due to uncertainty regarding market interest. They are different from social
activities who focus on a specific cause and social service providers who offer help
for those in need as they focus on business activities. This means there is some kind
of buying and selling for a social reason. Abu-Saifan (2012) suggested that social
entrepreneurs are mission driven by acting in an entrepreneurial way for financial
gain. This means social entrepreneurs focus on creating value by identifying a social
need in society.
Social entrepreneurs pursue market needs related to neglected problems. This
means compared to a for-profit entrepreneur they seek to provide sustainable solu-
tions by empowering others. Often this involves a stakeholder approach with input
from other businesses, consumers, governments and partners. Social innovation is
a special form of innovation as it centres on societal benefit. This means it focuses
on improving current practices through new social inventions. This can include new
ways of doing things that are different to the current practices. Social innovation
helps to ensure the continuity of a business’s competitive advantage by facilitating
improvements. This can include new ideas about business activities. Social innova-
tion focuses on satisfying basic human needs that ensure a better quality of life. This
can include increasing the social participation of marginalised groups of society.
24 2 Digital Social Entrepreneurship and Service Innovation

Discussion Question
During the COVID-19 crisis what kind of social entrepreneurial thinking occurred and
why was this important?

Service Innovation

Service innovation can be categorised into three main categories: assimilation, demar-
cation and synthesis (Coombs & Miles, 2000). The assimilation perspective focuses
on how technological innovation influences service innovation. This is due to self-
service technologies and automation becoming more popular in the marketplace. The
idea behind the assimilation perspective is that service firms utilise innovation that
was originally developed in other sectors (Witell et al., 2016). This means they rely
on others for the change that occurs in a service context. The demarcation perspec-
tive relies on the idea that service innovation in itself is an innovation and developed
specifically for the service context. This means it recognises the intangible nature of
a service. As many technology services are innovative there is a need to understand
their development process. The synthesis perspective involves more of a holistic
understanding about service innovation, thereby enabling different types of service
innovation from an educational to knowledge point of view to be included.
Service firms have grown over the last decade with the move to a knowledge-based
economy. Internet services and platforms such as Amazon, YouTube and Netflix
are responsible for much of this growth. Service innovation creates positive value
for customers through improved offerings. Much of the early conceptualisations
of service innovation derive from the idea that economic development arises from
innovation. Snyder et al. (2016: 2402) state that innovation is a “separate activity
through which inventions are carried out in the market for a commercial purpose”.
This conceptualisation links with the idea that innovation has a business connotation
and infers some kind of money making activity. One of the most famous scholars
of innovation Schumpeter (1934: 66) defines it generally as “carrying out of new
combinations”. This holistic view provides a good way to capture the broad intention
of innovation meaning positive change. Toivonen and Tuominen (2009) suggest that
service innovation can be carried out in a practical way by providing benefits to users
and can be replicated. This means it is a continual process that occurs over a long
time period. Toivonen and Tuominen (2009: 893) define service innovation as “a
new service or such a renewal of an existing service which is put into practice and
which provides benefit to the organisation that has developed it”. Service innovation
can occur in a range of settings including new marketing practices, organisational
relations or through stakeholder engagement. To be classified as service innovation
it should involve alterations in the competences applied between a provider and
customer. It is based on how and why the service is performed in the market. Thus,
Service Management 25

the provider and receiver should be considered in terms of their characteristics. The
provider can be an individual or company based depending on the complexity. More
technical providers will likely be internet based with less complex providers being
people orientated.

Classroom Activity
In class brainstorm a new social venture that will help to solve a social problem. Develop
goals for the business and consider how it can be established.

Service Management

Services are intangible transactions that can occur in a frequent or infrequent manner.
They can include online transactions, listening to podcasts and educational programs.
Services can be consumed at the individual or business level. At the individual level
it refers to transactions with other individuals such as the use of self-service tech-
nology or using sport facilities. At the business level it means the purchase of a
service by a commercial entity. Service experiences can vary from good to bad
depending on the context. Good service experiences refer to expectations meeting
the demand and value for money. Bad service experiences include inconvenient hours
and complicated processes.
Services are increasingly dominating the global economy and are an important
contributor to world trade. They can be defined broadly as an activity performed by
another person. Usually this involves a monetary transfer from one person to another.
The result of this service is not always obvious as it can be personalised. Most
services involve an exchange of money and time to complete. Services can involve a
specific skill or form of labour. People-oriented services focus on human-to-human
interaction such as that occurring in hairstyling or beauty treatments. Repair services
involve maintaining or fixing a product. Educational services involve the transmitting
of information and knowledge. Normally this involves mental stimulation and the
processing of information.

Tom’s of Maine
Tom’s of Maine is a personal care products company that focuses on using natural ingre-
dients in its products. It was started by Tom and Kate Chappel who moved to Maine.
The company started in 1970 and in 1975 they introduced the first natural toothpaste
in the United States. They have a recyclable toothpaste tube that is innovative in terms
of its technology. They were amongst the first beauty care product company to focus
on recyclable packaging. Their company has paid volunteering time for employees to
encourage them to give back to their communities. The company donates 10% of their
26 2 Digital Social Entrepreneurship and Service Innovation

profits to charity organisations that signals their focus on social responsibility. In 2006
the company became part of Colgate Palmolive.

Discussion Questions
1. What role does name play in the success of Tom’s of Maine in terms of including
one of the company founders’ first name (Tom) and location (Maine)?
2. What is the role of employee volunteering in Tom’s of Maine’s reputation in the
marketplace?
3. Why does Tom’s of Maine donate some of its products to charities?
References
https://www.tomsofmaine.com/the-backstory
https://www.sfgate.com/business/article/The-world-according-to-Tom-s-of-
Maine-236076.php
https://www.prnewswire.com/news-releases/new-toms-of-maine-packaging-
fuses-retro-look-with-modern-day-activism-301292642.html

Frugal Innovation

Frugal innovation has also been referred to as jugaad or resource-constrained innova-

tion due to the way it uses limited resources for innovation purposes. Prabhu (2017:
1) defines frugal innovation as “doing more with less for more”. Due to the COVID-
19 pandemic limiting resources, there has been a resurgence in interest on frugal
innovation. It acknowledges that people can and will innovate with what they have
available. Frugal innovations can be considered empathetic innovation as they think
about the reason for the idea then try to make something in line with its philosophy.

In Class Debate Question

Divide the class into two groups with one group developing a rationale why more
emphasis should be placed on financial gain in social entrepreneurship and the other
why more emphasis should be emphasised on social good in society.

The idea that innovation only involves high-technology ideas has changed with
the realisation that it can include low technology or no technology-based ideas. This
means innovation does not have to be complex but can involve a simple change. Frugal
innovation has been referred to as reverse innovation due to the way people innovate
by unpicking an existing product in order to make it in a cheaper way. Reverse
innovation means thinking about how to replicate an innovation using different kinds
Ethical Culture 27

of material (Govindarajan & Trimble, 2012). This often occurs in times of necessity
when people want the innovation but are not able or willing to pay for it.
To be successful in the marketplace most companies need to innovate. The core
product or service might continue to be the same so the innovation can occur in
different ways such as through packaging or design. For example, Birkenstock shoes
have been around for a long time but the colour and designs on the shoes have
changed. This includes expanding the shoe colour from the traditional colours of
blue and black to fluorescent colours and patterns. Moreover, the innovation can
involve the use of recyclable shoe boxes that can be used for other purpose.

Internet Exercise
On the internet type in the word ‘social entrepreneurship’ and see what the results
are. Then try different combinations based on specific topics or industries, e.g.
‘social entrepreneurship and sport’, ‘social entrepreneurship and fashion’, ‘social
entrepreneurship and music’.

Ethical Culture

Roy, Newman, Round and Bhattacharya (2023: 3) define ethical culture as “a subset
of organizational culture that reflects the shared values, norms and beliefs about
what constitutes appropriate behaviour shaping ethical or unethical decision-making
in an organizational context”. An ethical culture is reflected in the code of ethics
that exist in an organisation. This involves the shared meanings around appropriate
behaviour and what is right and/or wrong. Roy et al. (2023: 4) define ethical virtues
as “characteristics that an individual or organisation must possess to excel morally”.
Formal forms of entrepreneurship follow a specific procedure and comply with rules
and regulations. Informal entrepreneurship in contrast is adaptive and flexible based
on need. In low economic community’s informal entrepreneurship offers a way to
earn a living. Doussard et al. (2023) classify barefoot entrepreneurs as those living
in poverty and do not have the necessary income to survive. Barefoot entrepreneurs
do what they can based on their circumstances. This means selling things at their
disposal that in other contexts might not be considered as entrepreneurship. They
develop business skills to barter and negotiate with buyers.

Application Activities
Interview a social entrepreneur in your local area and ask them questions about why
they decided to become a social entrepreneur and what they think about the meaning
of social entrepreneurship.
28 2 Digital Social Entrepreneurship and Service Innovation

Three Threes
www.threethrees.com.au
Three Threes is a family run Australian business that was started by Michael
McAlpine that is now managed by the fourth generation of the McAlpine family.
It was established in 1919 and the company’s logo has ‘since 1919’ above the wording
‘Three Threes’ and the numbers 333 underneath. They make a range of food products
including condiments, sauces and pickles. Originally the company sold jams and chut-
neys from their home before the business moved to a factory in Sydney. In 1955 the
company built a new plant at Lidcombe in Sydney, where the company is still located.
New manufacturing methods and techniques were introduced enabling the company
to scale up its operation. This included apple sauce and mint jelly, which can be added
to a range of food. One of their most popular products is the ‘Sandwich Spreadable
Mustard Pickles’ that is added to sandwiches. In 2001 a new product called ‘Might-
mite’ that is an Australian made yeast extract spread was introduced as a competitor to
Vegemite. This was due to Vegemite being made by an overseas company but predom-
inately being popular in Australia. In 2010 a range of premium sauces including BBQ,
tomato and mushroom were launched. This further diversified the range of products
the company made.
The company holds SQF (safe, quality, food) certification that includes an interna-
tionally recognised system for the way food is produced. Three Threes is a signatory
to the Australian packaging covenant organisation that tries to utilise more sustain-
able and environmentally friendly packaging materials. They have a gluten-free range
that includes stuffed olives and gherkins. Their McAlpine signature range includes
Australian pickles.
Discussion Questions
1. Why has Three Threes remained a family managed company?
2. What is the role of family in the success of Three Threes?
3. What kind of new products would you recommend Three Threes introduce into
the marketplace?

Conclusion

This chapter has stated the reasons why entrepreneurial thinking is needed in business
by highlighting the role of social entrepreneurship and social innovation. Recent
crises such as the COVID-19 pandemic have made businesses realise that they need
to plan for unforeseen things that can occur in a sporadic and ad hoc way. The chapter
discussed how turbulent marketplaces that involve changes in the way products and
services are developed are becoming more common, therefore, emphasising the need
to think differently to what current competitors in the marketplace are doing.
Multiple Choice Questions 29

Discussion Questions

1. How is social entrepreneurship different to other kinds of entrepreneurship?

2. Why is collective social entrepreneurship important in society?
3. How is social innovation different to other types of innovation?

Learning Outcomes

1. Social entrepreneurship is a popular form of entrepreneurship that considers

economic and social consequences of business activity.
2. Social innovation focuses on solving societal problems through creative action.
3. Frugal innovation is a way to make innovations using less resources.

Multiple Choice Questions

1. Entrepreneurship can be defined as

(a) any attempt at new business or new venture creation
(b) the expansion of an existing business
(c) starting new businesses
(d) all of the above
2. Social entrepreneurship is best described as
(a) for-profit activities
(b) non-profit or civic activity that has a business component
(c) financial business ventures
(d) none of the above
3. Social entrepreneurship has become popular because of
(a) an ideological shift in society to social causes
(b) there is a growing recognition about community obligations
(c) more emphasis on non-profit activities
(d) all of the above
4. Collective social entrepreneurship leverages what kinds of organisational forms?
(a) cooperative models
(b) cross-sectional collaboration
(c) the resources of social movements
(d) all of the above
5. Social innovation is best described as
(a) improving current practices through new social inventions
30 2 Digital Social Entrepreneurship and Service Innovation

(b) focusing on financial gain

(c) using technological inventions
(d) none of the above

Answers 1d, 2b, 3d, 4d, 5a

Web Resources

https://www.ashoka.org/en-us
Ashoka is an organisation that has a website devoted to positive change making in
society. There is an emphasis on social entrepreneurship on the website that includes
stories about how to get involved with the organisation. They have a diversity and
equity initiative that tries to encourage engagement with social issues.
https://www.socialtraders.com.au/
The Social Traders website tries to encourage businesses to utilise social enter-
prises. This involves providing information about social enterprises in terms of their
services and cost. There are business and government members of social enterprises
on the website including a number of certified social enterprises.
https://skoll.org/
The Skoll Foundation was founded in 1999 in order to encourage sustainability
through social initiatives. It focuses on championing social entrepreneurs by investing
in their growth and development. This means connecting people who are interested
in social change through entrepreneurial endeavours. The goal of the foundation is
to progress solutions to global problems that are affecting society.
https://www.sustainability.vic.gov.au/
Sustainability Victoria is a website that aims to provide information about how
to integrate sustainability initiatives in society. This includes providing research,
data and insights on sustainability. Information about energy efficiency and reducing
emissions is stated that provides guidelines to businesses and consumers. This helps
in gathering information about recycling and reducing waste initiatives. The purpose
of the organisation is to transition Victoria to a circular economy in which waste is
reused. This means emphasising lower levels of pollution and land waste through
net-zero emission initiatives. There is also a focus on trying to provide a climate
resilient economy due to the impact of droughts, floods and cyclones on society.
https://www.pwc.com.au/
Price Waterhouse Coopers (PWC) is a network of firms that are active in the
global marketplace. They solve important societal problems by engaging in research
and practice. People in the organisation provide advice and tax services to a range of
clients. There is information about different industries including banking and capital
markets, entertainment and media as well as real estate. Insights on current affairs
issues are provided on the websites as well as publications.
https://www.weforum.org
The World Economic Forum provides current articles about areas of interest that
can include information on entrepreneurial thinking. The website continually updates
its content to focus on specific issues that relate to the global community.
Reading Resources 31

https://www.usasbe.org/
The United States Association for Small Business and Entrepreneurship is
a community that provides information about small business and entrepreneur-
ship matters. Its website included advice about teaching, practice and scholarship
regarding small business and entrepreneurship.
https://www.entrepreneur.com/
This website provides information about growing and starting a business. It
includes newsworthy articles related to business and startups. Its content is context
specific and provides practical advice.
www.theconversation.com
The Conversation is a website that publishes short articles by academics on a range
of topics including art, books, ideas, business, the economy, education, environment,
energy, health, politics, science and technology. Each article is in a condensed format
with web links to other relevant associated content included in the article.
https://www.nesta.org.uk/
Nesta is the United Kingdom’s innovation agency that focuses on social goals.
This means its emphasis in on positive social change through innovation.
https://brenebrown.com/podcast-show/unlocking-us/
The ‘Unlocking us’ podcast series focuses on emotional topics that emphasise
human interaction in society. Examples of podcasts include Bono from U2 talking
about songs of surrender and burnout.

Reading Resources

Butler, D. (2007). Business Planning: A Guide to Business Start-Up. Routledge.

This book provides information about the structure of a business plan in terms of
sources of finance and marketing. It includes a discussion on premises requirements
as well as recruiting staff. This is helpful in obtaining knowledge about identifying
resources to open a business.
Osiyevskyy, O., Sinha, K. K., Sarkar, S., & Dewald, J. (2023). Thriving on adver-
sity: Entrepreneurial thinking in times of crisis. Journal of Business Strategy, 44(1),
21–29.
This article includes managerial advice about how to thrive in times of adversity.
This includes information about entrepreneurial thinking in terms of managerial
decision making and resource conversation. Crises like the COVID-19 pandemic are
discussed in terms of entrepreneurial thinking.
Pirhadi, H., Soleimanof, S., & Feyzbakhsh, A. (2023). Unpacking entrepreneurial
alertness: How character matters for entrepreneurial thinking. Journal of Small
Business Management, 61(1), 155–186.
This article discusses the role of personal character in terms of achieving societal
benefits. This means focusing on entrepreneurial thinking in terms of skills such
as critical thinking and being alert to new market opportunities. This is helpful in
32 2 Digital Social Entrepreneurship and Service Innovation

obtaining information about how entrepreneurs need to continually scan and search
the environment for market needs.

References

Abu-Saifan, S. (2012). Social entrepreneurship: Definition and boundaries. Technology Innovation

Management Review, 2(2), 22–27.
Casson, M. (1982). The entrepreneur: An economic theory. Rowman & Littlefield.
Coombs, R., & Miles, I. (2000). Innovation, measurement and services: the new problematique. In
Innovation systems in the service economy: Measurement and case study analysis (pp. 85–103).
Boston, MA: Springer US.
Cuervo, Á., Ribeiro, D., & Roig, S. (2007). Entrepreneurship: concepts, theory and perspective.
Introduction. In Entrepreneurship: Concepts, theory and perspective (pp. 1–20). Springer Berlin
Heidelberg.
Doussard, C., Billion, J., Renouf, J., & Bureau, S. (2023). Barefoot entrepreneurs trapped in
liminal spaces: The case of homeless youths in New York City. Entrepreneurship & Regional
Development, 35(9–10), 938–955.
Govindarajan, V., & Trimble, C. (2012). Reverse innovation: A global growth strategy that could
pre-empt disruption at home. Strategy & Leadership, 40(5), 5–11.
Jørgensen, M. T., Hansen, A. V., Sørensen, F., Fuglsang, L., Sundbo, J., & Jensen, J. F. (2021).
Collective tourism social entrepreneurship: A means for community mobilization and social
transformation. Annals of Tourism Research, 88, 103171.
Knight, F. H. (1921). Risk, uncertainty and profit. Houghton Mifflin.
Prabhu, J. (2017). Frugal innovation: Doing more with less for more. Philosophical Transactions of
the Royal Society A: Mathematical, Physical and Engineering Sciences, 375(2095), 20160372.
Reynolds, P. D., Hay, M., & Camp, S. M. (1999). Global entrepreneurship monitor. Kansas City,
Missouri: Kauffman Center for Entrepreneurial Leadership.
Roy, A., Newman, A., Round, H., & Bhattacharya, S. (2023). Ethical culture in organizations: A
review and agenda for future research. Business Ethics Quarterly, 1–42.
Schumpeter, J.A., The theory of economic development. An inquiry into profits, capital, credit,
interest, and the business cycle. Cambridge: Harvard University Press; 1934. (Reprint 1983:
Transaction Publishers (first published in 1911 in German)
Snyder, H., Witell, L., Gustafsson, A., Fombelle, P., & Kristensson, P. (2016). Identifying categories
of service innovation: A review and synthesis of the literature. Journal of Business Research,
69(7), 2401–2408.
Toivonen, M., & Tuominen, T. (2009). Emergence of innovations in services. The Service Industries
Journal, 29(7), 887–902.
Witell, L., Snyder, H., Gustafsson, A., Fombelle, P., & Kristensson, P. (2016). Defining service
innovation: A review and synthesis. Journal of Business Research, 69(8), 2863–2872.

Further Readings

Certo, S. T., & Miller, T. (2008). Social entrepreneurship: Key issues and concepts. Business
Horizons, 51(4), 267–271.
Haugh, H. (2005). A research agenda for social entrepreneurship. Social Enterprise Journal, 1(1),
1–12.
Saebi, T., Foss, N. J., & Linder, S. (2019). Social entrepreneurship research: Past achievements and
future promises. Journal of Management, 45(1), 70–95.
Chapter 3
Innovation and Entrepreneurial
Ecosystems

Introduction

Digital entrepreneurship is one of the most talked about forms of entrepreneur-

ship due to its emphasis on digital technology but it requires an innovative
ecosystem environment in order to proceed. The rapid advances made in mobile
and electronic commerce have necessitated digital forms of entrepreneurship. This
chapter will explain the different reasons for utilising an ecosystem approach
to understand entrepreneurship. This includes focusing on innovation as well as
entrepreneurial ecosystems, thereby highlighting the critical way digitalisation has
changed entrepreneurship practices through specific types such as analog and
sustainable ecosystems.

Learning Objectives

1. To understand how digitalisation has changed the entrepreneurial landscape by

necessitating entrepreneurial ecosystems.
2. To highlight the need to incorporate digital forms of business activity into
innovation ecosystems.
3. To understand how the pace of digitalisation quickened during the COVID-19
pandemic by focusing of emerging types of entrepreneurial ecosystems.

Innovation Ecosystems

Innovation ecosystems can be defined as “the evolving set of actors, activities and
artifacts and the institutions and relations, including complementary and substitute
relations, that are important for the innovative performance of an actor or population

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2024 33
V. Ratten, Entrepreneurial Business Venturing,
https://doi.org/10.1007/978-981-97-1935-8_3
34 3 Innovation and Entrepreneurial Ecosystems

of actors” (Granstrand & Holgersson, 2020: 90). This lengthy definition acknowl-
edges that there are different entities in society that contribute to how innovation
develops. This means the ecosystem is constantly adapting and evolving based on
changing needs. Ecosystem as a concept has two components: eco and system. The
eco part focuses on the ecological environment in terms of it changing based on inno-
vation climate. This means it can have good, bad or neutral conditions depending on
the atmosphere. The climate can be somewhat predicted based on analysing changes
but often it is subject to fluctuations. This means there is a degree of uncertainty in
terms of how it evolves. The system component refers to the collective functioning
of the environment. This means it has many different interactions that are constantly
changing. A system has a set of relationships that transforms inputs into outputs with
each part of a system having different components that facilitate activities. Thus,
innovation ecosystems as a concept change based on current prevailing conditions.
Innovation ecosystems are viewed by many policymakers as a way to stimulate
economic cooperation in an area. They focus on the co-evolution of actors in an area
through mutual cooperation. There are complex relationships between entities in an
innovation ecosystem due to the exchanging of ideas that may lead to new business
ventures. Information is communicated as a way of identifying market trends. This
enables high growth areas to be identified and pursued. By jointly evaluating ideas
entities can implement innovation policies and proceed with value co-creation.
Value co-creation involves the joint creation of value by a group of entities. It
implies that it is a process that requires the entities need to be actively engaged
in the process through collaboration. It is a reciprocal process that relies on joint
activities. Innovation ecosystems can occur continually or be finite in length due to
disruptions occurring in the marketplace. It is natural that ecosystems evolve over
time and diversify their members. Some will overcome environmental constraints
and become stronger.

Group Activity
In a group of 3–5 people draw an innovation ecosystem and include pictures or symbols
about the interrelationships.

In an innovation ecosystem there is a sense of interdependence regarding proac-

tively fostering new innovation. The evolving nature of an innovation ecosystem can
accelerate innovation. This is due to the ability to create new or more efficient innova-
tions. The key objective of an innovation ecosystem is to co-create value. This means
capturing the potential usefulness of an innovation. Ecosystems are boundaryless and
hard to define. They are a useful way to understand the innovation environment that is
strategically relevant. The open nature of an ecosystem means that entities can come
and go based on need. Walrave et al. (2018: 104) define an innovation ecosystem as
“interdependent actors who combine specialised yet complementary resources and/
or capabilities in seeking to (a) co-create and deliver an overarching value proposition
Innovation Ecosystems 35

to end-users and (2) appropriate gains received in the process”. This definition high-
lights how innovation ecosystems are characterised through an ego-centric approach
that emphasises power relations. This means one entity might yield more power
because of their size, type of business or political structure. However, there are co-
creative relationships that influence the nature of an innovation ecosystem to make
it less ego-centric. This is due to interrelated relationships instead of one-on-one
relationships being emphasised.
In most cases innovation ecosystems will involve multiple entities with varying
degrees of power. Sometimes one focal organisation or institution may be at the heart
of an innovation ecosystem. This means they coordinate relationships and act as a
hub. The key firm in an innovation ecosystem acts like an orchestrator in terms of
telling others what to do. This is useful in coordinating activity and making sure
there is collaboration.
Innovation ecosystems do not necessarily involve collaborative innovation as it
may be competitive. However, there is some form of reciprocation that can be positive
in terms of obtaining information or negative as it leads to a loss of market share.
This is reflected in Klimas and Czakon (2022: 6) defining an innovation ecosystem as
a “cooperation environment surrounding the innovation activities of its co-evolving
actors, organized across co-innovation processes, and resulting in co-creation of
new value delivered through innovation”. This definition emphasises the co-creation
process existing within an innovation ecosystem.

Gucci
www.gucci.com
Gucci is a fashion company known for its high-end products. Recently a movie titled
‘House of Gucci’ was made that shown attention on the company. The movie stars the
actors Lady Gaga and Adam Driver. The movie has highlighted the cultural role Gucci
and other fashion houses have played in society. The company was started in 1921 by
Guccio Gucci after who the company is named. Guccio Gucci worked as a bellboy at
London’s Savoy Hotel, which influenced the creation of travel accessories made by the
company. In the 1960s a bag was named the Jackie after Jacqueline Kennedy and this
was followed by the Flora scarf designed for Princess Grace of Monaco. The company
began in Florence in northern Italy in a country well known for fashion and family
companies. Initially Gucci focused on travel products that were made predominately
for the leisure market. Guccio Gucci’s sons began working for the company ensuring it
continued as a family-run company. Initially the company had retail stores in Florence
where the company started and in Italy’s capital city of Rome. Further stores opened in
other countries as the company expanded its business overseas. In 1975 Gucci started
to focus on the perfume market with a fragrance called Gucci No 1. In 1989 almost
half of Gucci was bought by a Investcorp, which led to less family involvement in the
company. In 1994 Tom Ford was named the company’s creative director which led to a
shift in the company’s fashion strategy. In the 1990s investor Francois Pinault became
a major shareholder. In the 2020s the company has made more of an effort to focus on
environmental and sustainability issues.
36 3 Innovation and Entrepreneurial Ecosystems

Discussion Questions
1. What has been the role of family in the success of Gucci?
2. How important do you think the role of heritage is in Gucci’s reputation?
3. How has Gucci innovated its products over the years?
4. What kind of digital marketing does Gucci do?
5. What is the role of country of origin in terms of being an Italian company in Gucci’s
success?
References
https://www.instyle.com/fashion/history-of-gucci
https://time.com/6122130/house-of-gucci-true-story/
https://wwd.com/fashion-news/designer-luxury/house-of-gucci-maurizio-gucci-
tom-ford-patrizia-reggiani-history-timeline-1234813497/, last visited 3rd October
2022

Gaming Innovation Ecosystems

Klimas and Czakon (2022: 5) define a gaming innovation ecosystem as “non-

egocentric innovation ecosystems operating around many actors, none of which is
a leader, focal firm or ecosystem orchestrator”. They are different to other types
of innovation ecosystems due to the non-existence of a dominant firm. This means
they are more egalitarian and open to new types of entities from firms to non-profits
being engaged with the innovation. Thus, they are dynamic structures subject to
change based on the innovation idea being pursued. They involve co-evolving enti-
ties that can grow depending on the success of the innovation. By focusing on video
games, they require different kinds of inputs from creative design to financial help.
Normally the players and gamers involved share a passion for a gaming idea. The
entities involved can include game developers and distributors as well as gaming
companies (Granstrand & Holgersson, 2020).
To facilitate the process of entrepreneurship knowledge needs to be acquired.
This means translating knowledge into something of value. This means obtaining
information from different sources that provide ideas for new business ventures.
Knowledge can be obtained in a deliberate or unplanned way. Deliberately obtaining
knowledge involves taking a course or reading a book with the intent of obtaining
knowledge. This normally occurs when a person wants to find out more about a
certain topic. Unplanned knowledge acquisition occurs when a person learns about
something in an unintended way. This can occur via a conversation or by watching
a video. Both deliberate and unplanned knowledge acquisition can lead to positive
or negative results. The positive results mean more information is obtained that
can result in better insights. The negative results refer to an outcome that has an
unintended consequence.
Knowledge can be acquired by individuals or by people working in a team. Not
all knowledge can be obtained by one person so it can be helpful for a group of
Entrepreneurial Ecosystems 37

people to obtain knowledge. This enables different viewpoints about the information
to be utilised. Knowledge is a social process and often occurs through interaction.
People communicate knowledge and act as information carriers. When people talk
to each other they are constantly sharing information. This information can be in
the public domain and common knowledge but when shared in a social setting can
convey a different meaning. This is due to people tending to listen more to others in
their social circle. Therefore, the knowledge shared is combined and extended with
other information.

Individual Activity
Do some research on gaming innovation ecosystems that exist based on Nintendo
business systems and then draw a diagram about the interactions.

Entrepreneurial Ecosystems

Roundy (2022: 111) states “entrepreneurial activity does not occur in a vacuum but
depends on networks of interacting agents and systems of material, social and cultural
forces”. An ecosystem is a way to understand how interconnected systems of actors
are embedded in society. Different kinds of actors including consumers, firms and
government entities interact for business purposes. The literature on entrepreneurial
ecosystems recognises that regions and locations play a role in entrepreneurial
activity. This means acknowledging the role of people and firms but also communi-
ties and society. The ecosystem component of an entrepreneurial ecosystem is based
on the natural environment, which is prone to change. This means ecologists and
scientists are continually studying how areas grow, wither and/or recover over time.
There are different entities in an ecosystem changing the environment. This means
there is a sense of interdependence in a habitat based on interactions. It is important
that people studying entrepreneurship go beyond the common conventions and seek
new understandings. This means going outside their comfort zone to seek alternative
viewpoints. This enables the entrepreneurship field to evolve.
Hwang and Horowitt (2012) used the analogy of a rainforest to describe innovation
ecosystems. This is useful as it offers a way to bridge the innovation, entrepreneurship
and ecosystem literature. O’Connor and Audretsch (2023) take a forest ecosystem
perspective as they consider forests cover more types of environmental condi-
tions. This is due to the climate and vegetation differing in a similar way to an
entrepreneurial ecosystem having various components.
As entrepreneurship is considered a good business activity there is now more
interest in its quality in terms of usefulness in society. This means there can be a
lot of entrepreneurship occurring but it is important that it provides a benefit and
advances society. Whilst it is useful to have high growth entrepreneurship that is
38 3 Innovation and Entrepreneurial Ecosystems

evident in new and emerging technologies, there still needs to be low technology
forms of entrepreneurship. This is due to small firms also providing benefits to
communities in terms of economic growth and employment. Often the quantity of
entrepreneurship is through many small firms or solo entrepreneurs being active in a
region. The entrepreneurship literature calls this type of entrepreneurship productive
as it progresses the economy.

Classroom Activity
In class brainstorm different types of ecosystems (e.g. innovation, entrepreneurial,
sustainable) and then come up with examples of each.

Entrepreneurial ecosystems focus on the systems view of economic activity rather

than the individualistic perspective of entrepreneurship. Initially the stereotype of an
entrepreneur was that they were heroes and extroverts and had a sociable person-
ality. There is now an acknowledgement in society that there are different forms
of entrepreneurship. The broader view of entrepreneurship enables cultural and
social factors to be incorporated into definitions of entrepreneurship. This helps
in highlighting the role of politics, markets, institutions and other factors in influ-
encing entrepreneurship. In order to develop an entrepreneurial idea, there normally
needs to be some kind of engagement with others. This enables ideas to be commer-
cialised and internationalised. Both the public and private sectors are important to
entrepreneurship but often the private sector is emphasised. This is due to many
entrepreneurs owning their own firms. However, more recently there has been an
emphasis on the public sector in terms of non-profits and other entities being involved
in entrepreneurship.
To facilitate the entrepreneurial process there needs to be the appropriate infras-
tructure. This can include policies or economic variables that help entrepreneurs
succeed. Supportive public policies in terms of incentives for starting a business or
keeping a business in an area can encourage entrepreneurship. An entrepreneurial
ecosystem exists due to the complex interaction between components. This means
there are different environmental dimensions including a physical or digital compo-
nent that make them possible.

Main Elements of an Entrepreneurial Ecosystem

The main elements of an entrepreneurial ecosystem are institutional arrangements

(formal institutions, culture, networks), resource endowments (physical infrastruc-
ture, demand, intermediaries, talent, knowledge, leadership and finance) and outputs
(productive entrepreneurship) (Stam & Van de Ven, 2021). The entrepreneurial
ecosystem incorporates the resource endowments and institutional arrangements that
are interrelated. This means each component is useful in facilitating entrepreneurship.
Main Elements of an Entrepreneurial Ecosystem 39

Institutional Arrangements

Institutional arrangements in an entrepreneurial ecosystem help regulate the market-

place. This is important in ensuring people play by the rules. Both formal and informal
institutional structures are important. Formal institutions are entities like regulators
and tax authorities that are required in order that businesses function in a proper
manner. They are known entities and are needed to ensure transaction take place in
a smooth way. Informal institutions are not easily identifiable but are often associ-
ated with industry associations. This means they help the market function and form
part of the cultural context. Within the formal and informal institutions there will be
networks in existence that facilitate the sharing of information.

In Class Debate Question

Divide the class into two groups with one group arguing that entrepreneurial forms of
ecosystems are the best and the other suggesting that innovative forms of ecosystems
are preferred.

Formal Institutions

Formal institutions are in existence so that procedures are followed in the proper
manner. This enables people and entities to conduct business in the appropriate
way. They provide the general regulatory framework about what is and what is not
acceptable conduct. This means they are a governance structure. These institutions
are accountable and should be transparent in terms of conduct. This lessens the
potential harmfulness associated with corruption and abuse of power. Typical format
institutions include education entities such as universities, schools and technical
colleges.
Other types of formal institutions include stock exchanges and banking authorities.
They help to reduce uncertainty around market action. In addition, they coordinate
collective action to ensure entities work together. They are important in ensuring the
traditions and customers that are evident in society are adhered to. Over time there
are certain moral values and ethical beliefs that are expected. This enables them to
govern human behaviour.

Culture

Culture is the values and behaviours people exhibit in society. Each region and
location has their own culture because of its history and traditions. It is important
40 3 Innovation and Entrepreneurial Ecosystems

to recognise the right way to conduct business based on cultural expectations. Some
cultures will place more emphasis on face-to-face interaction whilst others still prefer
email communication. This means an entrepreneurial ecosystem will evolve based
on cultural conditions.

Networks

Networks are reflected in the interaction amongst entities that can be sporadic or
continual in nature. Some networks work better than others due to the emphasis
on sharing information that is useful for business. Not all networks are the same
as they operate based on the interest and need of members. Networks facilitate the
exchange of knowledge which is useful for business. Networks can be formal and
have a definite list of members or informal in nature and are not planned. The ties
between network members can be strong in terms of frequent interaction or weak
when there is infrequent interaction. However, what is important is not the frequency
of the interaction but the nature of information exchanged.

Resource Endowments

Physical Infrastructure

Physical infrastructure is actual tangible assets that enable business activity. This
includes transportation routes such as roads, railways and seaports. The infrastructure
should be easy to use and reasonably priced to ensure efficient transportation methods
are available. The time taken to travel from one place to another can affect the pricing
of goods. Therefore, it is important to consider whether infrastructure is up to date
and technologically advanced. In addition, the effort required to use the infrastructure
such as ease of access and location is important.

Demand

Demand involves assessing how much others want a certain product or service.
Some products will be highly sought after due to consumer interest whilst other
products might take time to gain market acceptance. In addition, the demand might
be influenced by the price or availability of a product.
Main Elements of an Entrepreneurial Ecosystem 41

Leadership

Leadership involves the ability of others to convince them to do certain things. This
can include funding projects or manufacturing certain types of goods. Leaders can
be influential in determining what kinds of businesses are located in an area and the
strategic direction taken.

Talent

Talent involves the skills and abilities of people. This can include language ability,
scientific knowledge and academic qualifications. Typically, people have different
kinds of talent that influences where and how they work. For manual labour the talent
might be physically based but for technological labour it might be more intellectual.

Finance

Finance in the form of monetary funds is important for entrepreneurship. The avail-
ability of finance is important in terms of funding new projects. Venture capital can
fund new projects based on emerging technology needs or potential market appli-
cations. Different types of finance from private equity, loans and crowdfunding are
needed to suit various market requirements.

Knowledge

Knowledge in the form of ideas and information is necessary for entrepreneurship. It

is a source of entrepreneurial opportunities and leads to new business ventures. There
are various forms of knowledge including explicit, which is codified or written and
tacit that is spoken and unwritten. It is useful to have knowledge intensive industries
in an area as they facilitate flow on benefits and knowledge spillovers.

Intermediaries

Intermediaries provide goods and services to other businesses. They are needed for
economic activity and facilitate the smooth running of business ventures. The location
of intermediaries close to other businesses is important in ensuring materials are
available when needed.
42 3 Innovation and Entrepreneurial Ecosystems

Entrepreneurship Outputs

Productive Entrepreneurship

An entrepreneurial ecosystem should produce positive benefits to society in the form

of increased outputs and/or societal gain. Value creation is a key component of
entrepreneurship and is required for productive growth. High-quality entrepreneur-
ship normally involves businesses that value add to society. This tends to refer to high-
technology businesses but can also include low technology businesses that produce
good outputs.

ECCO Group
www.enter.ecco.com/en/history
In 1962 the founders of ECCO Birte and Karl Toosbuy published an advertisement
in the Jyllands-Posten to request people to contact them about opening up a new shoe
company. A number of people responded and by 1963 the new shoe company officially
began its operations. One of the first shoes produced was called the Venus which was a
shoe with a pointy toe and thin heels. In the 1960s synthetic fabrics revolutionised the
shoe industry and started to replace leather-made shoes. In 1978 the ECCO Joke was
launched that was a moccasin-style shoe made with soft material. The ECCO Joke had
the logo moulded onto the sole and thus made an imprint on the sand when worn. In the
early 1980s the ECCO soft shoe was launched and utilised new technology that enabled
the soles of shoes to be directly sprayed onto the upper materials of shoes. In 1996 the
company started to produce golf shoes. In 2003 a production facility was established in
China which coincided with many shoe companies relocating their production facilities
to China. In 2012 a new high heel called the Sculptured 65 which is a 65 mm high
heel was launched. The new shoe was designed for all day wear and comfort. In 2013
a new shoe called the Mind was launched and is a variation of a moccasin-style shoe.
Discussion Questions
1. What kind of new shoe innovations did ECCO develop?
2. What kind of internationalisation strategies has ECCO engaged in?
3. What kind of new shoe innovations would you recommend ECCO develop?

Analog Entrepreneurial Ecosystems

There are different kinds of ecosystems such as digital that are based on digital
technologies. This type of ecosystem is a way to understand the role of mobile and
electronic commerce on entrepreneurship. Analog entrepreneurial ecosystems are
defined as “the system of interconnected actors, products and forces that supports
the pursuit of opportunities focused on analog technologies when digital alternatives
are dominant” (Roundy, 2022: 112). Analog technologies existed before digital tech-
nologies but have had a resurgence in society. They include film cameras, cassette
Sustainable Entrepreneurial Ecosystems 43

tapes and vinyl records. Previously these types of technologies were thought of as
becoming obsolete in society but there has been a trend towards using them. The
popularity of analog products such as mechanical rather than digital watches can be
viewed in a nostalgic or fashion way. This means they are considered fashionable
and a way to connect to the past. In addition, due to security and privacy reasons,
analog products such as typewriters are becoming popular.
Entrepreneurs often use teams as a way to develop projects. This is important
especially when there are international members of teams and interaction through
digital communication is required. Building a good team takes time as the right
members are needed. Normally a team has a clear purpose and reason for formation.
This means having a mutual understanding of the task. Active teamwork is required
in terms of sharing and disseminating information. This means facilitating open
discussion amongst team members. Teams that respect each individual member’s
opinions are likely to function better. Increasingly teams are result driven in terms of
having clear goals in place. This enables them to monitor performance and promote
the accountability of each team member. There are some key principles that help to
make a good team: The first is to simplify the process to make it easy for each team
member to know what they are supposed to do. This can involve going back to the
original analog technology to see what can be updated. The second is to add any
additional features that would encourage a growth in market share. The third is to
do good marketing about the analog technology and why it is useful for consumers.
This will help obtain interest in the product and encourage marketing efforts.

Internet Exercise
On the internet try typing in different key words such as ‘high intensity entrepreneur-
ship’, ‘entrepreneurial region’ and other words that are associated with entrepreneurial
ecosystems. Based on the results then analyse the websites associated with these areas
and businesses.

Sustainable Entrepreneurial Ecosystems

Sustainable entrepreneurial ecosystems are defined as “an interconnected group of

actors in a local geographic community do sustainable development through the
support and facilitation of new sustainable ventures” (Cohen, 2006: 3). Sustain-
able forms of entrepreneurial ecosystems are important as more emphasis in society
is being placed on sustainable business models. Business practices that empha-
sise the environmental and social goals are being prioritised. This helps address
socio-ecological needs such as decreasing waste and pollution levels. O’Shea et al.
(2021: 1098) conceptualise a sustainable entrepreneurial ecosystem as “a regional
development strategy with the objective of nurturing sustainable new ventures that
create social, environmental and economic value in a community”. Collaborative
44 3 Innovation and Entrepreneurial Ecosystems

efforts between for-profit, non-profit and hybrid entities regarding sustainability are
becoming important. This helps address grand challenges such as global warming
and poverty. An entrepreneurial ecosystem emphasises that entrepreneurship is a
collective effort and requires the contribution of others. This means the community
in terms of different stakeholders such as business, government and individuals is
important.

Application Activities
Interview a local business owner or manager and ask them what helps or hinders
entrepreneurship in their region.

Ideas flow in an ecosystem through the exchanging of ideas. This process requires
indirect and direct communication. Entrepreneurial opportunities are created by
recognising a need in the marketplace. This means an opportunity is derived from
recognising market gaps. Entrepreneurial opportunities continually exist in the
marketplace due to changing market dynamics. This means entrepreneurial ecosys-
tems play a key role in pursuing opportunities and then scaling them up for further
development.
Opportunities are socially constructed and open to interpretation. This means they
emerge when individuals think there is a possibility they will be successful. For an
opportunity to progress there needs to be the right climate for it to grow. This means
entrepreneurs need to gather information about how the idea will work in practice.
Many ideas remain ideas unless they change format and become an opportunity. Each
opportunity is unique and is based on the willingness of an entrepreneur to pursue it.

Conclusion

This chapter has discussed the role of ecosystems in entrepreneurship and business
management. Different types of ecosystems including innovation, entrepreneurial,
sustainable, gaming and analog were explained. This helps to understand why
different entities within an ecosystem including individuals, businesses and govern-
ment providers are needed to create a good business climate. Specific attributes
of an entrepreneurial ecosystem including resources, institutions and outputs were
highlighted that enable a better understanding of the dynamic business environment.

Discussion Questions

1. How do you differentiate innovation ecosystems from entrepreneurial ecosys-

tems?
Multiple Choice Questions 45

2. Why are gaming innovation ecosystems important in the global economy?

3. How do sustainable entrepreneurial ecosystems grow in society?

Learning Outcomes

1. To be able to analyse an entrepreneurial ecosystem.

2. To differentiate between different types of ecosystems.
3. To understand why sustainable entrepreneurial ecosystems are important in
society.

Multiple Choice Questions

1. What are the two main components of an ecosystem?

(a) eco and system
b) environment and systemic
c) electronic and system
d) none of the above
2. What kind of co-creation involves the joint creation of value by a group of entities?
(a) local
(b) global
(c) value
(d) none of the above
3. What kind of ecosystem best describes a network of interacting agents and
systems?
(a) entrepreneurial
(b) innovation
(c) gaming
(d) all of the above depending on the context
4. Institutional arrangements include
(a) formal institutions
(b) culture
(c) networks
(d) all of the above
5. Resource endowments in an entrepreneurial ecosystem include
(a) physical infrastructure, demand
(b) intermediaries, talent
(c) knowledge, leadership, finance
46 3 Innovation and Entrepreneurial Ecosystems

(d) all of the above

Answers: 1a, 2c, 3d, 4d, 5d

Web Resources

https://uplink.weforum.org/uplink/s/impact
Uplink was launched at the 2020 World Economic Forum annual meeting. Its aim
is to promote positive change through entrepreneurial action. This means focusing on
building an innovation ecosystem where entrepreneurs can flourish. On the webpage
there is information about innovation challenges and top innovators. This means the
webpage is a good resource source for those interested in entrepreneurship.
https://onlinelibrary.wiley.com/journal/15405885
The Journal of Product Innovation Management is a highly regarded journal that
publishes a range of papers related to product innovation. The website is a source of
information for those wanting current and up to date information about innovation
topics. This includes articles from the consumer, firm and policy perspective thereby
enabling a better understanding of the diversity of innovation.
https://mixergy.com/
Mixergy is a website that includes a number of interviews and courses related to
entrepreneurship. There are a number of different contributors on the website that
constantly upload content on topics such as startups and marketing.
https://ssir.org/#
Stanford Social Innovation Review is a website that has a range of resources on
social innovation. This includes podcasts, webinars, books, videos and a newsletter.
There is an online magazine that publishes articles on social innovation. In addition,
there is information on advocacy, collaboration, design thinking, impact investing
and philanthropy, thereby providing a holistic overview of the different topic areas
related to social innovation.
https://www.uschamber.com/co/start/startup/what-is-social-entrepreneurship
The United States Chamber of Commerce website on social entrepreneurship
provides an explanation of social entrepreneurship in terms of how to start and run
a social business. Information on how to start your own business is provided that
includes examples of business ideas. There is advice on how to attract and retain
customers in terms of increasing a firm’s performance. Also included is advice from
entrepreneurs and industry leaders. This is helpful in terms of explaining the process
of launching a business and insider strategies regarding startups.

Reading Resources

Dickinson, G., & Murphy, K. (2007). Ecosystems. Routledge.

References 47

This book takes an ecology perspective to ecosystems by focusing on the context

of environmental science. It discusses the role of biogeography in terms of under-
standing the nature of ecosystems and how they work. This includes analysing the role
of issues such as disturbance and success in building an entrepreneurial ecosystem.
This enables different types of ecosystems to be highlighted. The role of humans on
global environmental change is also stated.
Spigel, B. (2020). Entrepreneurial ecosystems: Theory, practice and futures.
Edward Elgar.
This book focuses on examining why entrepreneurial ecosystems matter and how
they develop. The theory on entrepreneurial ecosystems is stated from a cultural,
economic and sociology point of view. The actors and factors required for an
entrepreneurial ecosystem are stated with the main processes explained.
Hwang, V., & Horowitt, G. (2012). The rainforest: The secret to building the next
Silicon Valley. Regenwald.
This book stresses the ecological thinking around place-based innovation ecosys-
tems. They discuss the role of human networks in building innovation capacity.
By suggesting that a rainforest metaphor can be used to understand innovation
ecosystems they discuss the key roles in society that produce innovation.
Feld, B. (2012). Startup communities: Building an entrepreneurial ecosystem in
your city. Wiley.
This book provides a practical approach to building an entrepreneurial ecosystem.
It suggests strategies for how to encourage businesses to start in a city. Insights on
how connections can be utilised to increase entrepreneurship are stated.
Lilly, R. (2019). Ecosystem hacking: How to help entrepreneurs and grow your
local economy faster than ever. Florida Boston Publishing Group.
This book suggests that an ecosystem can be built faster by utilising a seek,
synergise, support, streamline and share framework. It highlights how ecosystems
are necessary in local economies and provide a way to encourage collaboration. This
includes ideas about how communities of practice regarding entrepreneurship are
required to facilitate entrepreneurial ecosystems.

References

Cohen, B. (2006). Sustainable valley entrepreneurial ecosystems. Business Strategy and the
Environment, 15(1), 1–14.
Granstrand, O., & Holgersson, M. (2020). Innovation ecosystems: A conceptual review and a new
definition. Technovation, 90, 102098.
Hwang, V. W., & Horowitt, G. (2012). The rainforest: The secret to building the next Silicon Valley.
Regenwald.
Klimas, P., & Czakon, W. (2022). Gaming innovation ecosystem: Actors, roles and co-innovation
processes. Review of Managerial Science, 16(7), 2213–2259.
O’Connor, A., & Audretsch, D. (2023). Regional entrepreneurial ecosystems: Learning from forest
ecosystems. Small Business Economics, 60(3), 1051–1079.
O’Shea, G., Farny, S., & Hakala, H. (2021). The buzz before business: A design science study of a
sustainable entrepreneurial ecosystem. Small Business Economics, 56, 1097–1120.
48 3 Innovation and Entrepreneurial Ecosystems

Roundy, P. T. (2022). Technology rewind: The emergence of the analog entrepreneurial ecosystem.
Journal of General Management, 47(2), 111–125.
Stam, E., & Van de Ven, A. (2021). Entrepreneurial ecosystem elements. Small Business Economics,
56, 809–832.
Walrave, B., Talmar, M., Podoynitsyna, K. S., Romme, A. G. L., & Verbong, G. P. (2018). A
multi-level perspective on innovation ecosystems for path-breaking innovation. Technological
Forecasting and Social Change, 136, 103–113.

Further Reading

Audretsch, D. B., Rocha, H., Aggarwal, S., & Bramanti, A. (2024). Do entrepreneurial ecosystems
foster sustainable development? International Entrepreneurship and Management Journal, 20,
1–37.
Ingole, N., & Sohani, S. S. (2024). Concurrent interplay of entrepreneurs–intermediaries–stake-
holders in emerging economies at different phases of entrepreneurial process. Journal of Social
Entrepreneurship, 1–21.
Jones, P., & Ratten, V. (2021). Knowledge spillovers and entrepreneurial ecosystems. Knowledge
Management Research & Practice, 19(1), 1–7.
Ratten, V. (2020). Entrepreneurial ecosystems. Thunderbird International Business Review, 62(5),
447–455.
Ratten, V. (2021). Sport entrepreneurial ecosystems and knowledge spillovers. Knowledge Manage-
ment Research & Practice, 19(1), 43–52.
Chapter 4
Artificial Intelligence
and Entrepreneurial Business Planning

Introduction

Artificial intelligence as a topic has blossomed in recent years due to advances in

technology making it a reality for business. Part of the interest in artificial intelligence
is due to the novel tasks it can do that incorporate different levels of intelligence.
The aim of this chapter is to discuss how entrepreneurial business planning can
be done through artificial intelligence. This involves focusing on different types of
intelligence including social, emotional and cultural to understand implications for
business.

Learning Objectives

1. To understand how artificial intelligence can be used by businesses.

2. To consider the positives and negatives associated with artificial intelligence.
3. To obtain knowledge about the metaverse, virtual reality and augmented reality.

Artificial Intelligence

During the last few years there has been tremendous advances in artificial intelligence
that have shifted the emphasis from digital technologies to artificial intelligence-
enabled technologies. Colapinto et al. (2023: 15) state that artificial intelligence
“attempts to create machines that act rationally in response to their environment”.
This general definition of artificial intelligence focuses on the use of a machine to
conduct cognitive functions typically associated with humans. The surge in interest
in artificial intelligence is not limited to academia but also practice with an increased
rate of patents associated with artificial intelligence technology. An increased number

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2024 49
V. Ratten, Entrepreneurial Business Venturing,
https://doi.org/10.1007/978-981-97-1935-8_4
50 4 Artificial Intelligence and Entrepreneurial Business Planning

of inventions relate to artificial intelligence with the most popular relating to human–
computer interaction.
Artificial intelligence is offering businesses new opportunities by identifying new
trends and assistance with current systems. Artificial intelligence-driven services
are changing the way firms interact with customers and enabling businesses to be
innovative. Whilst there are many benefits from artificial intelligence some firms
are hesitant about its usage. This is due to artificial intelligence changing the way
things are done and requiring new thinking. All industries and geographic locations
have been touched by artificial intelligence in some way. Furthermore, firms and
governments are investing in developing further artificial intelligence capabilities in
order to improve lives.
Artificial intelligence has evolved from being a dreamlike and unrealistic concept
to a business reality. Much of this has been made possible thanks to new technological
innovations transforming the business environment. The most important transforma-
tions that have taken place relate to big data and computing speeds. This has made
more advanced technological processes possible in a relatively short time period. In
the past, artificial intelligence was discussed in relation to computer science and was
scientifically based. This has changed with the realisation that artificial intelligence
can help advance business practices. Firms need to consider artificial intelligence
due to its competitive advantages and ways it can increase overall performance.
Data-centric artificial intelligence is a way to understand how data is used in
computing intelligence in terms of analysing data to make decisions. It focuses on
how artificial intelligence techniques can make forecasts based on the input of data.
Human-centric artificial intelligence focuses on using human-like characteristics
through computing technology. It highlights how human abilities can be embedded
in technology. This enables artificial intelligence technologies to be used to support
rather than replacing humans. To do this explainable techniques regarding computing
processes are required.

Group Activity
In a group of 3–5 people discuss the advantages and disadvantages of artificial intel-
ligence. For each advantage or disadvantage consider different industry contexts and
what the implications are for businesses and how this will change the way they function
in the future.

Initially artificial intelligence was defined by the use of intelligent machines but
with the advent of digital technologies it has been redefined to include prediction
power based on data analysis. Until recently artificial intelligence was not used by
businesses in day-to-day activities. The perception of it by most people was that there
was a long way to go before it could be used in society. The lack of funding and
resources for artificial intelligence led to it languishing and not progressing in much
detail. There are many positive stories of artificial intelligence related to the ability to
do human tasks but there is some hesitation about its uncertainty in business applica-
tions. The proliferation of smartphones and the internet of things has influenced the
Artificial Intelligence 51

interest in artificial intelligence. In addition, artificial intelligence is used in many

financial and health transactions. It is suggested that in the future artificial intelli-
gence will exceed human intelligence. This means that business managers need to
weigh up the positive and negatives associated with artificial intelligence to see what
works best for them. Poole and Mackworth (2010: 3) define artificial intelligence
as “computational agents that act intelligently”. The emphasis on computational
in this definition recognises the need to incorporate computers into technological
innovations to make the artificial intelligence.
The main building blocks of artificial intelligence systems are inputs, processes
and outputs (Paschen et al., 2020). The inputs involve structured and unstructured data
being utilised as a source of knowledge. This data then influences the processes used
to create artificial intelligence. Pre-processes involve natural language understanding
and computer vision that are embedded in knowledge sources. The main processes
involve problem solving, reasoning and machine learning which each plays a role in
transforming the inputs into outputs. The main output is information that includes
natural language generation, image generation and robotics.
The main knowledge base in artificial intelligence is data. Structured data is in a set
format and typically is derived from certain tasks. This can include sales or internet
downloads. The advantage of structured data is that it is in a specific format making
it easier to understand. Due to increased computing capabilities, there is a lot of
structured data available in public and private formats. Therefore, real-time structured
data can be utilised to make quick decisions. Unstructured data is in an unorganised
format and harder to analyse. It is still useful but comes in a different format to
structured data. Sometimes businesses might have large amounts of unstructured data
that might need to be put into a specific format. Both structured and unstructured
data can come from different sources including audio and text files but is increasingly
being derived from social media. This means there are different ways to access them
to use data.

Individual Activity
Think of 3–5 movies that incorporate some form of artificial intelligence from the
characters, title or story line. Consider which movie you think has had the biggest
impact on how society views artificial intelligence and the role of human–computer
interaction.

Once data has been obtained it needs to be processed. Preprocessing of data

includes selecting the best or right data to analyse. This can be done via natural
language understanding that can analyse speech or written words. This data is then
analysed based on the context and use of emotive behaviour. Once data has been
selected it should be cleaned. This can be done with the help of computers in order to
understand its meaning. The sentiments expressed in the data are then transformed
into specific meanings.
Computer vision alters the data into recognisable outputs. It involves recognising
patterns or associations with the data. Specific software can be utilised to do this in
52 4 Artificial Intelligence and Entrepreneurial Business Planning

order to help understand the results. To process the data, it requires some form of
problem solving in order to understand what is needed from the data. This means
thinking about possibilities about what kind of problems can be solved through data
analysis. There may be a number of possible solutions, so the best solution is required.
Alternatively, there may be a general solution that fits in many contexts.
To solve problems about the data there should be some kind of reasoning. This can
include interpreting logical solutions derived from the data. Based on data observation
hypotheses can be proposed or new hypotheses then applied to the data. Machine
learning can be utilised as a way to pre-program rules for computers to base their
learning on. This can include utilising data to predict future scenarios.
Once the data has been processed it forms a knowledge base. This enables data to
be retrieved and new analysis to be conducted. Knowledge can be in different formats
including tacit or unwritten information as well as explicit or codified information.
Utilising knowledge in the right way and at the appropriate time is important. This
enables more learning to occur. After knowledge has been accumulated it needs to be
transferred into outputs. This can involve natural language generation that products
output. Images can be generated from the data that has been processed. In addi-
tion, robotics can be utilised as a way to incorporate information into technological
systems.

Nvidia
www.nvidia.com
Nvidia is an artificial intelligence company that is focused on utilising acceler-
ated computing. Some of their products include NVIDIA Omniverse which is a tool
to build metaverse situations that emphasise virtual collaboration and NVIDIA tech-
nology, which utilises science and internet communications to solve societal chal-
lenges. NVIDIA makes software and systems related to artificial intelligence as well
as providing artificial intelligence platforms. This technology can be used in a variety
of contexts including cybersecurity, video conferencing and medical imaging. NVIDIA
Isaac is a platform that is using robotics in a range of situations including manufacturing.
NVIDIA DRIVE is a platform that companies such as Mercedes Benz utilise in order
to help vehicles adapt, thereby helping to accelerate the use of artificial intelligence in
business as a form of learning.
Discussion Questions
1. What NVIDIA products are the most innovative and entrepreneurial?
2. What kind of new changes in society will be the result of artificial intelligence
technology?
Types of Intelligence in International Business 53

Types of Intelligence in International Business

In an international business context, there are different types of intelligence that are
used to facilitate business processes, which include cultural, social and emotional.
Each of these types of intelligence will now be discussed in terms of how they relate to
artificial intelligence, thereby linking more traditional and well-known intelligence
forms with newer and technological advanced intelligence. This helps to ascertain the
relevance of artificial intelligence to human intelligence when conducting business
across borders.

Cultural Intelligence

Cultural intelligence is a type of intelligence that enables a person to function in inter-

cultural settings. This capability differs amongst individuals based on their ability to
understand cultural conventions. Van Dyne et al. (2012: 297) define cultural intelli-
gence as “an individual’s capability to detect, assimilate, reason, and act on cultural
cues appropriately in situations characterized by cultural diversity”. It is especially
relevant in the global context when knowledge of different cultures is important in
business settings. A person can increase their cultural intelligence with education
and training. Intercultural experiences can help a person obtain knowledge about
other cultures. With increased internationalisation and ability to travel cross-borders,
cultural intelligence is becoming more needed. Some individuals are better able
to navigate culturally diverse situations due to a range of factors including their
personality and experience.
A person’s cultural intelligence changes over time based on whether they learn
and update their knowledge about other cultures. This means it is a malleable concept
that needs to be constantly revised based on cultural conditions. Sternberg (1986)
suggests that individual-level intelligence can be understood through metacognitive,
cognitive, motivational and cognitive components. The metacognitive and cognitive
components relate to the behavioural functions that an individual displays in society.
This means it is based on mental capabilities in terms of a person’s aptitude to
understand information. Motivation relates to the willingness of a person to learn and
change. This differs based on an individual’s ability to foresee change. Behavioural
intelligence relates to actual action derived from thoughts. This is based on the ability
to engage in verbal and non-verbal communication.
Whilst international business managers are aware of artificial intelligence, they
are still learning about its usage. Artificial intelligence-powered automation is used
across a business’s value chain from the supply of goods to its entrance in the market.
Retail companies are using it through business analytics applications to capture
more market share. In addition, advertising and marketing promotions with the help
of artificial intelligence are better able to target specific customers. This form of
customer intelligence then leads to increased loyalty rates.
54 4 Artificial Intelligence and Entrepreneurial Business Planning

Classroom Activity
In groups of 2–3 people develop a new business venture related to artificial intelligence.
This could be product or service based depending on the intended nature of the business
idea. Discuss how you would distribute and market the product. Consider existing
websites or stores to sell the idea. Answer the following questions: What type of
financing do you need? Do you want to keep or sell the business?

Social Intelligence

The study of intelligence has tended to focus on intellectual intelligence in terms of a

person’s ability to answer and respond to questions. More recently different types of
intelligence including emotional have gained popularity due to the way they encap-
sulate alternative understandings regarding intelligence. Social intelligence has three
main components: (1) decoding of social cues, (2) social performance effectiveness
and (3) social skill (Ford & Tisak, 1983). Decoding social cues means having the
ability to decipher what others are feeling in a social situation. This can be complex
depending on the context and intensity of emotions being displayed. Some social
cues such as the tone of voice are easier to read than other social cues such as body
language. Therefore, it is important to take into account both verbal and non-verbal
social cues. Social performance effectiveness involves measuring how well a person
fits into a social situation. Some people might be more comfortable in social situations
than others due to their personality.
Artificial intelligence is rapidly developing and will transform current business
practices. There has been an increase in spending on artificial intelligence due to
its highly complex and practical nature. Mariani et al. (2023) suggest that there are
technological, social and economic antecedents of artificial intelligence acceptance
related to innovation. Technological antecedents refer to big data, the internet of
things and digital platforms. Big data is now available due to increased computing
capabilities and tracking data. As many payments are made through electronic
commerce systems they can be recorded in terms of time and geographic location.
More people are using computers to communicate and store information thereby
accumulating large amounts of online information. Associated with the use of big data
are privacy and security concerns. This is due to data revealing personal details about
consumption and leisure habits. Data analytics is a way businesses and consumers
can mine big data in order to find out more information. Previously it was not possible
to know patterns and trends but with advances in data analytics this has now changed.
Many sectors of the global economy including the agricultural and education
industries will be supported by the introduction of artificial intelligence. Artificial
intelligence applications are advancing and include improving profitability as well
as the use of innovative technology. The topic of artificial intelligence has resulted
Types of Intelligence in International Business 55

from discussions on science fiction and technological innovation. It has interna-

tional applications due to the need to advance thinking around the use of information
technology in society. This means cultural conditions and societal thoughts around
popular culture have influenced artificial intelligence. Increasingly artificial intelli-
gence is performing tasks previously done by humans as it incorporates intelligence
systems. Chowdhury et al. (2023) suggest that the main types of intelligence systems
used in artificial intelligence are automated, assisted, augmented and autonomous.
Automated intelligence involves rule-based routines that respond to certain queries
and assisted intelligence means existing systems are utilised by machines to provide
information. Augmented intelligence refers to the use of additional services such as
the metaverse in developing the knowledge. Autonomous intelligence is defined as
that conducted completely by one machine or other kind of technological device.

In Class Debate Question

Split the class into different sides in terms of answering the question: Do you believe
humans will be replaced by artificial intelligence? For the yes side come up with a
number of points that are supported by research facts and statistics about the importance
of artificial intelligence in society. For the no side establish a number of points for why
you do not think humans will be replaced and provide examples that support your
points.

Emotional Intelligence

The topic of intelligence has remained popular over the years due to its relevance
in society. Salovey et al. (2002: 280) define emotional intelligence as “the ability to
perceive, appraise, and express emotion accurately; the ability to access and generate
feelings when they facilitate cognitive activities; the ability to understand affect-laden
information and make use of emotional language; and the ability to regulate emotions
to promote emotional and intellectual growth and well-being”. In this definition
there are four different types of ability including perception, access, understand
and regulate that are related to emotional intelligence. The perception of emotions
relates to appraising how emotions are influencing a person’s behaviour. This involves
analysing a person’s mood to understand how they are feeling. Some people are
better able to express verbally their emotions due to their use of language. However,
there can be a delay between an emotion being felt and it expressed in words. This
means often emotions take time to understand due to the information they contain.
Identifying the right words for an emotion can also be difficult. This means some
feelings might not be immediately transferable to a verbal format. In addition, some
people ignore their emotions as they consider them irrelevant.
56 4 Artificial Intelligence and Entrepreneurial Business Planning

Daniel Goleman’s (1995) book on emotional intelligence is viewed as one of the

seminal books on the topic that influenced further interest in different conceptualisa-
tions of intelligence. Salovey and Mayer (1990) suggest that emotional intelligence
comprises (1) appraisal and expression of emotions, (2) regulation of emotion and (3)
utilisation of emotions in solving problems. The first component relates to the ability
of a person to understand another’s feelings. This means analysing both verbal and
non-verbal communication in order to decipher its meaning. Verbal communication
can include emotional language that relates to how a person is feeling. Thus, a person
who is happy is likely to say positive words that are associated with their mental state.
Although not all communication is verbal, so it is helpful to read non-verbal cues
such as how a person is standing or the way they express their point of view. The
second category relates to how people control their emotions. This can be hard to do
when strong emotions are involved. Thus, it is important for a person to learn when is
the appropriate time to convey emotions. The third category involves the utilisation
of emotions, which concerns directing attention to how a person feels. Emotionally
intelligent people will be able to make use of their emotions in a positive way.
Emotional intelligence can be considered a form of social intelligence as emotions
tend to be social in nature (Mayer & Salovey, 1993). This means the relationship
between a person and the sociocultural environment determines their emotions. A
person will behave based on how they evaluate their environment. In challenging
situations, a person’s ability to handle the situation will be based on their emotional
intelligence.
A person’s ability to focus their attention and effort on a situation is evident in
their emotional intelligence. The aptitude of a person to regulate their emotions is
based on mindful investment of effort, thereby supporting adaptation as a way to
handle emotive situations in the environment. Being intelligent in an emotional way
means being able to use information derived from your own and other’s feelings to
guide future actions. It is important to be able to monitor a person’s emotions in
order to anticipate how they will behave. Emotions are part of human behaviour and
govern many social situations.
Emotions can be a source of information when used in the right way. People who
express their emotions accurately can transfer information to others. This helps in
distinguishing between honest and dishonest behaviour. Emotions based on feelings
can be redirected to other activities. This helps in prioritising tasks and enabling
emotions to facilitate decisions.

Marvell
www.marvell.com
Marvell is a technology company that produces semiconductors that are used in
security, storage and networking processes. It develops software based on digital
and cloud computing needs. The products and services the company provides enable
other companies to process data quickly. This is important in the use of energy data
Augmented Reality 57

applications that require innovative thinking. Marvell makes customised infrastruc-

ture including chiplet solutions. It is considered an industry leader in artificial intelli-
gence. Some of its networking products include Ethernet controllers, transimpedance
amplifiers and automotive designs.
Discussion Questions
1. Why does Marvel focus on different types of artificial intelligence applications
such as computing, networking, storage and custom solutions?
2. What new advanced silicon technologies should the company invest in?

Virtual Reality

The use of virtual worlds has been popular in the entertainment industry but only
recently transitioned into other industries. This is due to the benefits of engaging in
virtual worlds gained in the COVID-19 pandemic due to travel restrictions and social
distancing requirements. Virtual reality has received increased attention due to new
types of technological interaction making it affordable and easy to use. In order to be
considered as virtual reality it needs to involve a digital environment in which people
interact. This means it is an immersive experience based on a computer-generated
environment. There are various types of environments for virtual reality including
a cave system in which a platform surrounds a user. Other environments include
conventional personal computers that facilitate interactive systems. Many people
though use head-mounted display platforms or glasses in order to make it easier for
them to interact in the virtual world. Examples of head-mounted displays include
Sony PlayStation VR, Google Cardboard VR and Samsung Hear. These commercial
head-mounted displays provide a wide field of view thereby facilitating good inter-
action. In addition, they have high-resolution visual graphics. Virtual reality is used
in a range of settings including education, entertainment, medicine and military. In
the COVID-19 pandemic virtual reality was used to train people for health purposes.
In the education area, virtual reality can provide a safe environment in which to learn
new skills.

Augmented Reality

Augmented reality can be described as integrating digital information into the real
world. This means actual scenes are supplemented with digital information that
enables the viewer to obtain more knowledge. Showing data on screens or linking it
to websites offers time efficiency and ease of use. This enables value to consumers
who can look at an object and then process information about it in an intelligent way,
thereby blending the real-life scene with digital content. To do this people can use
their smart phones or wear smart glasses that offer this technology. Alternatively,
58 4 Artificial Intelligence and Entrepreneurial Business Planning

headsets that offer additional sensory information such as video and sound offer a
way for augmented reality to be viewed. Increasingly smart phones or tablets are
being used to explore a scene that then has links to website information.
Augmented reality utilises immersive technology, which involves digital experi-
ences that simulate different kinds of experiences. They can include interfaces that
make sounds or movements to mimic certain contexts, thereby stimulating the body’s
senses to invoke emotional responses. This can include auditory, motion or visual
realities. The virtual world is an environment in which people interact in a digital
format. It offers a way to represent real life but adds computer-generated experiences.
This means it is an immersive experience in which users via avatars or other objects
interact. It enables interaction in real time. The metaverse is an interconnected virtual
space. It offers shared experiences through the web and is updated based on need.
Augmented reality creates digital information formats based on real life. It uses
computer-generated technology to provide content in addition to real-world envi-
ronments. Virtual reality involves socially interactive digital environments. It uses
extension and immersive technologies to simulate experiences (Kozinets, 2022).
Often avatars are used in virtual reality to create an interactive virtual environment.
Mixed reality involves the use of different forms of reality such as augmented and
virtual. This means it utilises some form of virtual and physical reality to provide
a mixed experience. Extended reality is a general term for augmented, mixed and
virtual reality (Kozinets, 2022).

Internet Exercise
On the internet type the word ‘artificial intelligence’ and write down what the top news
articles, videos and websites are that emerge from your search.

Metaverse

The metaverse is a concept that has gained popularity for the way it integrates arti-
ficial intelligence. Barrera and Shah (2023: 1) state “the term ‘metaverse’ was first
introduced in 1992 in Neal Stephenson’s literary work, Snow Crush”. This meant it
initially was not considered as a realistic outcome but part of science fiction. This has
changed with advances in electronic and mobile commerce facilitating better inter-
action. Weking et al. (2023: 1) define the metaverse as “an immersive and persistent
digital infrastructure that hosts multiple virtual worlds”. It enables users to create and
share digital experiences. This includes exchanging information in an online context
through different enabling technologies.
A metaverse can be considered a digital universe that in a way replicates or mimics
the real word. Large corporations are investing resources into creating metaverses
as a way of engaging with consumers. The metaverse is being used also as a way to
Metaverse 59

train people in a safe way. Due to the COVID-19 pandemic increased numbers of
tourists utilised virtual worlds to experience new locations. This further accelerated
interest in the metaverse. Barrera and Shah (2023: 2) state that the metaverse can be
considered “from both narrow (e.g. single virtual worlds) and broad (e.g. hypercon-
nected and interoperable shared digital space blending physical and virtual realities)
perspectives”. Initially the metaverse was considered a virtual world that included
avatars but this view has changed with the advances in computing technology. This
view was reflected in early definitions in the 1990s’ emphasising avatars. Davis
et al. (2009: 90) state that the metaverse was “immersive three-dimensional worlds
in which people interact as avatars with each other and with software agents”. As
computing technologies advance in the 2000s the definition of a metaverse changed.
It became more common for it to be described as interconnected virtual worlds that
change based on individual preferences. Due to digital technology becoming more
widely accessible the metaverse became associated with digital interaction. This is
reflected in the emphasis on online communities that facilitate digital communi-
cation. The metaverse as a concept also changed to include both real and virtual
environments, thereby reflecting its hybrid nature and need to adapt to changing
technological environments.

Application Activities
Interview a local business owner and ask them how they think artificial intelligence
will affect their business.

The metaverse is expected to change the way business is conducted with the
use of more augmented and virtual reality. The expected growth of the metaverse
corresponds with the increased interest in artificial intelligence. The metaverse users
can transition from one world to another thereby creating a seamless experience.
Entrepreneurs can utilise the metaverse to create new experiences for customers
such as virtual shopping. This brings a sense of dynamism into business activity that
combines in-person and virtual experiences.
The metaverse is an immersive environment that emphasises the ability for users
to engage online. This means they participate virtually in a range of tasks including
doing games and role playing. The precursor to the metaverse was virtual reality but
the availability of new technologies means that more interactive online environments
are now possible. The metaverse is a subject of immense interest due to its potential
to generate new business models. Innovative startups are investing in the metaverse
in order to create wealth. In addition, established businesses are funding initiatives
aimed at gaining entry into this lucrative market. New value is being created through
the metaverse by enabling fresh approaches to interactive technology to be adopted.
Some of these approaches are unconventional but the perceived value is high. Thus,
customers are willing to pay for the value created by the metaverse.
In 2021 Facebook changed its name to Meta in order to rebrand itself as a
more virtual and interconnected company. Coinciding with this change was a rapid
60 4 Artificial Intelligence and Entrepreneurial Business Planning

increased interest in the metaverse and its role in artificial intelligence development.
There is no common definition of the metaverse as it changes over time based on
technological innovation. It is an idea that a virtual world can be made using avatars.
Due to more people using digital technology, it is likely that the metaverse will
increase in usage. This means that an interactive world will be more practical for
many people.
The concept of the metaverse is related to virtual reality but includes a digital
environment for interaction using avatars. This is due to the metaverse being a space
for digital activity to occur. Firms have been transforming their business practices to
digital processes with the help of disruptive technologies. The use of new technolo-
gies is needed in order to update offerings and remain competitive. Firms that do not
adopt disruptive technologies will be vulnerable to declining in importance in the
marketplace. The metaverse has revolutionised how people work in the virtual world
as it mimics real-life interaction. This enables a virtual ecosystem to evolve that
improves decision-making capabilities. Despite its usefulness some firms have been
slow to adopt the metaverse in their operations due to cost and security concerns.

Conclusion

This chapter has discussed the role of artificial intelligence in entrepreneurial business
planning thereby emphasising the way digital technology is becoming important
in society. Different types of intelligence such as social, cultural and emotional
were stated as a way to understand how artificial intelligence is a distinct form
of intelligence. The role of augmented and virtual reality was stated that helps to
understand the different forms of artificial intelligence that are being utilised in
business endeavours.

Discussion Questions

1. Why has there been a growth in new startups involving artificial intelligence?
2. What is the difference between data-centric and human-centric artificial intelli-
gence?
3. What are the main types of intelligence in international business?

Learning Outcomes

1. Artificial intelligence utilises human-like thinking in technology devices.

2. Cultural, social and emotional intelligence is important in international business.
Web Resources 61

3. Virtual reality, augmented reality and the metaverse are ways human–computer
interaction occurs through artificial intelligence.

Multiple Choice Questions

1. Artificial intelligence involves performing cognitive functions such as

(a) perceiving
(b) reasoning
(c) learning
(d) all of the above
2. Human-centric artificial intelligence focuses on what kind of characteristics
through computing technology?
(a) human
(b) technological
(c) social
(d) environment
3. The main building blocks of artificial intelligence are
(a) inputs
(b) processes
(c) outputs
(d) all of the above
4. What kind of data is in a set format and typically derived from certain tasks
(a) normal
(b) unstructured
(c) structured
(d) none of the above
5. What kind of data is in an unorganised format?
(a) unstructured
(b) structured
(c) all of the above
(d) none of the above

Answers: 1d, 2a, 3d, 4c, 5a

Web Resources

www.tensorflow.org
62 4 Artificial Intelligence and Entrepreneurial Business Planning

TensorFlow provides an open source machine learning tool. It utilises machine

learning for distributed training. It has add on features such as Ragged Tensors and
Tensor2Tensor that provide additional services. Tensor has a service called Model-
Garden that provides examples of machine learning models. It also has a repository
of datasets including ready to use ones based on a range of features such as common
sense reasoning, graphs and language modelling.
www.kaggle.com
Kaggle is a website that enables machine learners to test and obtain knowledge
about machine learning technologies. It has forums on a range of topics that enables
people to discuss issues. Practical courses are offered to train others in machine
learning. For developers there are competitions and open-sourced models whilst for
researchers there are open-sourced models.
www.machinelearningmastery.com
Machine Learning Mastery is a website that provides resources on machine
learning. It has quick start guides about how to understand algorithms, time series
forecasting and other topics. It has e-books on a range of topics as well as tutorials.
www.aidungeon.io/
AI Dungeon is an online adventure game that generates the story. The player can
direct the artificial intelligence to create the story based on individual preferences.
There are characters to choose from as well as scenarios to develop such as Sneed’s
maid, Pokémon trainer and the vampire twins. It is free to play but there is also
monthly subscription offers.
https://www.economist.com/
The Economist website provides up to date and timely information about
economics topics. This includes articles about interest rates, economic activity
and related business events that influence the global community. Its emphasis is
on monetary and fiscal implications but also includes information about social
economics.
https://www.inc-aus.com/
The focus of this website is on startups, growing, leading, innovation, technology
and money. This means it tends to highlight technological innovation and commer-
cialisation aspects of business in more detail, thereby enabling articles to be posted
about new business ventures.
https://www.bloomberg.com
This website focuses on market updates, technology and politics. On its website
it has different types of content depending on the geographic location, thereby
providing more specialised content that would relate to people’s location.

Reading Resources

Miller, C. (2022). Chip War: The fight for the world’s most critical technology.
Scribner.
References 63

This book discusses the role of microchip technology in geo-politics. Computer

chips are needed in a range of technology devices. They are highly sought after
electronic equipment and play a role in the development of a region. The book
details the history of the computer chip and its role in military and business.
Du Sautoy, M. (2019). The creativity code: Art and innovation in the age of A.I.
Harvard University.
This book discusses whether computers can be creative by using artificial intel-
ligence. This means progressing computers from a machine to be more creative
in thinking and design. The author suggests that by exploring new information
computers can be strategic. This means acting in an intellectual way.
Vlahos, J. (2019). Talk to me: How voice computing will transform the way we
live, work and think. Houghton Mifflin Harcourt.
This book focuses on voice computing that is becoming more popular in society. It
discusses how voice assistants are being integrated into new technology and changing
the way humans interact with each other. The role of conversational technology is
stated and provides an interesting read about potential artificial intelligence usages.
Shirley, S. (2012). Let it go: My extraordinary story. Penguin.
Stephanie Shirley is an entrepreneur who founded an information technology
company. She often called herself Steve in order to fit in the male-dominated infor-
mation technology world. The book discusses how she founded the software company
Freelance Programmers that was co-owned by staff.

References

Barrera, K., & Shah, D. (2023). Marketing in the metaverse: Conceptual understanding framework
and research agenda. Journal of Business Research, 155, 113420.
Chowdhury, S., Dey, P., Joel-Edgar, S., Bhattacharya, S., Rodriguez-Espindola, O., Abadie, A., &
Truong, L. (2023). Unlocking the value of artificial intelligence in human resource management
through AI capability framework. Human Resource Management Review, 33(1), 100899.
Colapinto, C., Ksantini, R., La Torre, D., Masri, H., & Repetto, M. (2023). Artificial intelligence and
machine learning: Definitions and applications. In Impact of artificial intelligence in business
and society (pp. 15–32). Routledge.
Davis, A., Murphy, J., Owens, D., Khazanchi, D., & Zigurs, I. (2009). Avatars, people, and virtual
worlds: Foundations for research in metaverses. Journal of the Association for Information
Systems, 10(2), 1.
Ford, M. E., & Tisak, M. S. (1983). A further search for social intelligence. Journal of Educational
Psychology, 75(2), 196.
Goleman, D. (1995). Emotional intelligence: Why it can matter more than IQ. Bantam Books.
Kozinets, R. V. (2022). Immersive netnography: a novel method for service experience research
in virtual reality, augmented reality and metaverse contexts. Journal of Service Management,
34(1), 100–125.
Mariani, M., Machado, I., & Nambisan, S. (2023). Types of innovation and artificial intelligence:
A systematic quantitative literature review and research agenda. Journal of Business Research,
155, 133364.
Mayer, J. D., & Salovey, P. (1993). The intelligence of emotional intelligence. Intelligence, 17(4),
433–442.
64 4 Artificial Intelligence and Entrepreneurial Business Planning

Paschen, U., Pitt, C., & Kietzmann, J. (2020). Artificial intelligence: Building blocks and an
innovation typology. Business Horizons, 63(2), 147–155.
Poole, D. L., & Mackworth, A. K. (2010). Artificial intelligence: Foundations of computational
agents. Cambridge University Press.
Salovey, P., & Mayer, J. D. (1990). Emotional intelligence. Imagination, Cognition and Personality,
9(3), 185–211.
Salovey, P., Woolery, A., & Mayer, J. D. (2002). Emotional intelligence: Conceptualization and
measurement. In G. J. O. Fletcher & M. S. Clark (Eds.), Blackwell handbook of social
psychology: Interpersonal Processes (pp. 279–307). Blackwell Publishing.
Sternberg, R. J. (1986). Intelligence, wisdom, and creativity: Three is better than one. Educational
Psychologist, 21(3), 175–190.
Van Dyne, L., Ang, S., Ng, K. Y., Rockstuhl, T., Tan, M. L., & Koh, C. (2012). Sub-dimensions of
the four factor model of cultural intelligence: Expanding the conceptualization and measurement
of cultural intelligence. Social and Personality Psychology Compass, 6(4), 295–313.
Weking, J., Desouza, K. C., Fielt, E., & Kowalkiewicz, M. (2023). Metaverse-enabled entrepreneur-
ship. Journal of Business Venturing Insights, 19, e00375.

Further Readings

Ratten, V. (2012). Entrepreneurial and ethical adoption behaviour of cloud computing. The Journal
of High Technology Management Research, 23(2), 155–164.
Ratten, V. (2024). Artificial intelligence, digital trends and globalization: Future research
trends. FIIB Business Review. 23197145231222774.
Ratten, V., & Jones, P. (2023). Generative artificial intelligence (ChatGPT): Implications for
management educators. The International Journal of Management Education, 21(3), 100857.
Chapter 5
Resilience, Risk and Uncertainty
in Entrepreneurial Business Ventures

Introduction

Being resilient is an important business skill that is critical in times of uncertainty and
change. This chapter focuses on how firms can deal with risky business environments
through adopting a positive and strategic mindset. The role of economic and social
uncertainty in business decisions is explained with the goal of developing a set of
resilient capabilities.

Learning Objectives

1. To understand how to build resilience.

2. To analyse different kinds of risk in the marketplace.
3. To obtain knowledge about different kinds of uncertainty in entrepreneurship.

Resilience

Businesses today operate within an uncertain global environment that is constantly

changing based on world events and technological innovations. The competitive-
ness existing between businesses means that there can be disruptions that change
performance. These disruptions can be foreseen or unknown depending on how they
are analysed. Natural disasters such as earthquakes and cyclones occur frequently
but human-made disasters in the form of financial events can have major implica-
tions. This can include financial or economic crises such as the 2008 global financial
crisis that resulted in a re-evaluation of many projects or societal crises such as
the COVID-19 pandemic and the United Kingdom’s withdrawal from the European
Union.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2024 65
V. Ratten, Entrepreneurial Business Venturing,
https://doi.org/10.1007/978-981-97-1935-8_5
66 5 Resilience, Risk and Uncertainty in Entrepreneurial Business Ventures

Firms need to be more resilient in order to adjust and respond to disturbances.

This enables them to learn from experience and improve their functions in the
future. As a concept, resilience can refer to a behaviour, capability or strategy. This
means it emphasises the ability to cope with uncertainty in terms of approaches
or performance. After firms face a challenge, they need to alter their processes.
Hillman and Guenther (2021) suggest that resilience can relate to change, events and
surprises. Change can include climate or environmental differences as well as social,
financial or political alterations. Events can include expected occurrences such as
droughts or festivals as well as terrorism. Surprises include leadership changes or
new technologies entering the marketplace.
Resilience is a source of long-term success for organisations that use it as a source
of competitive advantage. Duchek et al. (2020: 388) define organisational resilience
as “the ability to anticipate potential threats, to cope effectively with unexpected
events and to learn from these events in order to produce a dynamic capability that
is directed towards facilitating organisational change”. In unstable environments,
resilience is a coping mechanism and enables organisations to thrive. Resilience
normally refers to the ability to recover from adverse events that organisations faced
due to uncertainty in the business environment.
Resilience is a process that develops from one event to another. This means it is
complex and subject to the ability of an organisation to adapt. It involves multiple
iterations that occur through a number of stages including anticipation, coping and
adaptation (Duchek et al. 2020). Anticipating means the thinking that an event will
happen and waiting for it to occur. It is the time spent waiting for something to
happen. Some people will plan for the occurrence whilst others will take a wait-and-
see approach. By identifying potential risks and taking proactive steps, it can help to
minimise the effect. Some events cannot be anticipated and are surprises, but more
events can be anticipated. Thus, it means thinking about what is possible and putting
strategies in place to deal with them. By strategising it can help entities react in a good
way. Copying means dealing with the event in the best way. Thus, considering what
has occurred and what needs to be changed, solutions should be implemented in order
to fix the problem. Adaptation involves developing new capabilities or processes
based on the change. This can include restoring previous functionality so that things
work properly.

Chick-fil-A
www.chick-fil-a.com
Chick-fil-A is a restaurant predominately in the southern parts of the United States
that sells chicken-related products. It is a family-owned business that is closed on
Sundays unlike many other restaurants. The stores are closed on Sundays so workers
can have some rest and this practice continues despite other restaurants opening on
weekends. In the past, most stores were closed or operated on reduced hours on week-
ends. This changed in the 1990s and 2000s when shopping became more of a leisure
activity and shopping centres extended their hours on weekends and at nights. Most
Risk 67

Chick-fil-A stores open from 6 am to 10 pm with breakfast between 6am and 10.30
am and then both lunch and dinner being served from 10.30 am till 10 pm.
The company started in 1946 when the first store in Hapeville, Atlanta was opened.
In 1964 the original chicken sandwich containing chicken and pickles on a bun was
created. The chicken sandwich was based on a boneless chicken breast that was inno-
vative at the time. In 1984 the corporate headquarters in Atlanta started and in 1986
this was followed by the first standalone restaurant not in a shopping centre being
opened in Atlanta. In 1995 the marketing campaign stating ‘eat mor chickin’ began
that featured cows writing the message in reflection to the company selling chicken
products. The misspelling of the words ‘more’ and ‘chicken’ made the message more
powerful. In 1996 the company began sponsoring football games through the Chick-
fil-A Peach Bowl. As the company began in Atlanta, there was a historical linkage to
peaches through the Peach Bowl. In 2006 the company surpassed $2 billion in sales
which is a large amount for a family-owned company.
Discussion Questions
1. Do you think it is a good idea that Chick-fil-A closes on Sunday? Do you think this
would affect its financial performance and reputation in the marketplace? Do you
think closing on part of the weekend links with its values being a family business?
2. Why do you think the company was called Chick-fil-A? Do you think the logo and
name fit the company and make it stand out compared to the competition?
3. How do you think being a family business has influenced the company’s success?
Do you forecast the company to change from a family to a non-family structure or
be listed on the stock exchange in the future?

Risk

Businesses face a number of risks in their activities due to the uncertainty of the global
environment. Broadly defined risk refers to some kind of uncertainty or unanticipated
result. This means some outcomes cannot always be predicted due to changes in
costs, revenues and partnerships. Risks normally imply some degree of variation in
anticipated outcomes. This means outcomes cannot always be anticipated but can be
a subject to market fluctuation.
Stock market volatility and political changes can contribute to higher levels of
risk. A firm’s exposure to risk will be based on how they deal with uncertainty. Some
firms will have strategies in place for dealing with uncertainty whilst others will
take a wait-and-see approach. This means exposure to risk is based on a number
of interrelated factors that can include where a firm is located and their industry
structure. Unanticipated movements in finances through interest rate and/or exchange
rates can influence a firm’s strategy. This means firms can buy insurance to hedge
these risks.
The main environmental uncertainties related to risk are political, government
policy, macroeconomic, social and natural (Miller, 1992). Political uncertainties can
range in intensity from a complete change in government to a new leadership struc-
ture. Some of the drastic political uncertainties can derive from a war or conflict
68 5 Resilience, Risk and Uncertainty in Entrepreneurial Business Ventures

with another country or region. This is due to it often being an unknown length
and its impact unknown. Revolutions that overthrow democratically elected govern-
ments can cause uncertainty in a country. In addition, there can be other political
turmoil such as leadership alterations that can make others uncertain about a country’s
direction.

Group Activity
In a group of 3–5 people consider what the three most important risks are for business
and then develop strategies to overcome them.

Government policy uncertainties can include changing tariff rates, which might
influence export or import rates in an international market thereby causing trade
restrictions. Fiscal and monetary reforms in terms of taxes or spending might influ-
ence a country’s reputation in the international marketplace. The nationalisation or
change to state-controlled enterprises can cause uncertainty. This might be due to
increased levels of government regulation that create barriers for foreign investment.
Macroeconomic uncertainties can include changes in foreign exchange and
interest rates. When a country’s currency either devalues or appreciates quickly,
it can influence the terms of trade. This means prices change and this can cause
inflation or deflation. In addition, interest rate uncertainties that include a sharp drop
or increase means it is hard for businesses to plan for the future.
Social uncertainties involve changes in living conditions in a country. This can
lead to riots and social unrests unless managed in the right way. In terms of economic
depressions or recessions, the cost of living may change leading to unaffordability
problems. This can cause people to demonstrate or conduct interventions in order to
bring about change.
Natural uncertainties occur due to location and weather conditions. They can
include changes in rainfall or sunlight that influence growing conditions. Typhoons,
storms and hurricanes can occur at different times of the year, which influence fishing
and coastal activity. In addition, earthquakes or seismic changes can alter working
conditions. Other natural disasters include landslides, droughts and social changes.

Alcolado Glacial
www.alcoladoglacial.com
Alcolado Glacial is a liquid product sold in a bottle that is used to refresh, make
people feel better and to protect people’s health. As a refresher it is splashed onto
people’s skin in order to revitalise them. It is green in colour and when splashed it feels
like an icy blast. People use it to alleviate sinus problems and headaches. They also use
it for muscle tension relaxation, sunburn and insect bites. The bottle design features a
penguin holding the bottle with the words ‘splash up, cooldown, breathe again’. The
company started in 1948 when a pharmacist approached Curacao Laboratories and
sold them the idea. The product is unique as it is popular mostly in Curacao which is
Industry Uncertainties 69

a Dutch Caribbean Island. The product is an alcohol-based liquid that has a cooling
sensation when applied. The product is often needed in the hot climate on Curacao,
which is why the bottle features penguins on its design.
Discussion Questions
1. Why do you think the product originated in Curacao?
2. Do you think including a picture of a penguin on the bottle is a good idea? What
other pictures could be included on the bottle?
3. What other similar kind of products are sold around the world?

Industry Uncertainties

Industry uncertainties include input market, product market and competitive change
(Miller, 1992). Input market uncertainties include unknown quality standards
regarding raw materials. This can make it hard to make products that meet certain
quality standards. Shifts in the supply quantity needed to make products can alter
prices. This then leads to fluctuations in demand. Product market uncertainties involve
changes in what consumers want in terms of type of product and its ingredients or
materials used to make it. This can be caused by changes in the law or new regu-
lations. There can be safety issues imposed or societal trends such as a move to
healthier eating that cause the changes. As a consequence, substitute ingredients
such as no sugar inputs might be needed. If the change is fast, then there can be
a scarcity of goods. Competitive uncertainties involve new entrants taking market
share and pushing existing companies out of the market. This occurs when there are
product or process innovations such as self-service technology.

Evian
www.danone.com
www.evian.com
www.evianexperience.com
Evian is a bottled water brand that has a logo of mountains around its name on
its packaging. In 1789 a natural mineral water source was found in Evian-les-Bains
in France by the Marquis de Lessert. That then led to the bottling of water to be sold
that was named after the location of the bottling source. The water is originally rain
and snow that falls onto the French Alps. It is then naturally filtered and emerges at
the bottling source. The company sells a range of products including sparkling and
non-sparkling water.
Discussion Questions
1. How does Evian deal with uncertainty in the marketplace?
2. What kind of risk does Evian have to consider?
70 5 Resilience, Risk and Uncertainty in Entrepreneurial Business Ventures

Firm Uncertainties

Firm uncertainties involve operating, liability, R&D, credit and behavioural uncer-
tainty (Miller, 1992). Operating uncertainties can range in categories from labour,
input supply and production. Labour uncertainties involve uncertainty about whether
enough people can be hired for a job or if they have the right qualifications and
training. In some labour markets there may be a lot of competition for people due
to the location or amount of wages paid. This can lead to problems in managing
a business due to the inability to forecast the willingness of people to work. Other
issues regarding labour uncertainty include labour unrest such as strikes or discus-
sions around pay rates. This might mean there is a high turnover of staff as people
seek higher wages. Moreover, employee safety in the form of occupational health is
important, which means following certain regulations.
Input supply uncertainties relate to shortages around material needed to make
products. This occurred during the COVID-19 pandemic when there were supply
chain issues around microchips for computers that led to delays. Shipping issues can
also influence the supply of materials. Quality changes in terms of environmental
aspects such as being more sustainable might influence input supply. This may mean
a new way of producing a product that is required in order to comply with standards.
In addition, there may be restrictions around spare parts or secondhand product usage.

Individual Activity
Choose a firm in your area and list the uncertainties they are dealing with and then
rank them from most important to least important.

Production uncertainties include production factors that influence output rates.

This can include random issues such as machinery needing replacement that can
take time to readdress. If one part of the production system fails, then it can lead
to other delays. Liability uncertainties relate to whether a firm is responsible for
something. For example, poisoning or contamination issues related to a product or
service. This will vary based on where a firm is geographically located. Pollution is
another liability issue affecting firms that can be deliberate or accidental.
R&D uncertainty relates to unknown results from research and development activ-
ities. Often new products will undergo a lengthy test period in order to ascertain their
effectiveness. If at one stage of this period there are problems, then new products or
methods might be needed. The research process can be time- and cost-intensive so
it is important that it is done in the right way. Credit uncertainty involves issues with
financing. This can slow production rates or make investment difficult. The reason for
this can be due to a range of issues from reputational or brand name problems or hard-
ness in accessing appropriate credit rates. Behavioural uncertainty relates to issues
with how people behave in a firm. Depending on the situation some employees may
be happy or sad. This influences production rates and overall customer satisfaction
levels.
Firm Uncertainties 71

Classroom Activity
In class brainstorm with another member of your class about whether entrepreneurs
changed their business strategies in light of the COVID-19 pandemic.

Firms can respond to uncertainties in numerous ways but mainly through financial
risk and strategic management (Miller, 1992). Financial risk management involves
utilising insurance mechanisms that hedge currencies or monetary pressures. This
alleviates the firm’s concern of being over or under exposed to a specific financial
situation. Sometimes this involves forward or future’s contracts in order to hedge bets
over potential changes (Miller, 1992). Strategic management responses can range in
intensity from indirect or direct intervention. The main strategies firms utilise are
avoidance, control, cooperation, imitation and flexibility.
Avoidance is a strategy that seeks to limit a firm’s exposure to uncertainty. Not all
risks can be totally avoided so some other strategies might be needed. Firms can divest
from specific investments or types of businesses. This often occurs when there is some
kind of controversy about a product or service. Alternatively, the divestment can be
due to potential new entrants entering the marketplace making it less competitive. In
addition, obsolete technologies might make a market unprofitable. This means firms
will want to divest from markets when there are emerging technologies coming into
the marketplace. Alternatively, they can delay developing a new product or service
until they are more comfortable with the market dynamics. This can occur with
new products that are being adopted and might take some time to gain a large market
acceptance. By delaying market entry this can help a firm fix or improve their products
based on customer sentiment, thereby enabling the firm to offer an improved product.
A firm can avoid certain types of products that might hurt their reputation. This can
occur when a firm is listed in a socially responsible stock market index that relies on
firms being socially responsible.
Control is a strategy that firms utilise in order to have more say in the market direc-
tion. This occurs when a firm wants to invest in certain products or technologies. Firms
can control uncertainties by investing in vertical or horizontal integration. Vertical
integration can involve buying businesses that supply key ingredients or materials
needed to make other products. By owning these businesses other firms can control
hiring and recruitment practices. They can invest in new business developments that
are strategic in nature. Horizontal integration can include buying other firms that sell
the same or similar products. This can enable them to access more outlets that sell
their products, thereby decreasing the competition and at the same time increasing
the presence of their products in the marketplace.

In Class Debate Question

Divide the class into two groups with one group arguing that the COVID-19 pandemic
led to more innovation and the other group arguing that the COVID-19 pandemic led to
72 5 Resilience, Risk and Uncertainty in Entrepreneurial Business Ventures

decreased levels of innovation. Each group should research their argument and provide
examples and references to support their discussion.

Coping Mechanisms

When faced with adversity people cope in different ways. If they view the adversity in
a positive light, it can strengthen a person making them better able to cope with other
changes. However, if they consider the adversity as too difficult then it can overwhelm
them. The concept of coping is linked to resilience as they are similar in meaning.
Coping has a more psychological orientation as it is a mechanism people have to
adjust to change. It typically is discussed with regard to stress and other emotional
disorders. Whereas resilience is more associated with the positive abilities of a person
to rebound from adverse change.
People respond to problems or difficulties in different ways. This includes by
seeking help from others or through problem-solving techniques. Alternatively, they
can confront the problem through negotiation. The mechanism they use for coping
will depend on the type of problem and their personality.

Internet Exercise
On the internet type in the words ‘entrepreneurship failure’ and find out how
entrepreneurs cope with failure.

Coping mechanisms are influenced by the perception of the problem and its length.
Short-term problems are likely to be viewed as easily overcome whilst long-term
problems might be harder to solve. This means an individual will assess the nature
and magnitude of the problem. If it affects their wellbeing then coping mechanisms
are needed. If the problem results in a challenge, then an individual is likely to be
confident in overcoming it. When there is a loss associated with the problem then
some form of irreversible harm has occurred. This harm can be overcome depending
on what it is and why it occurred. If the loss involved resources then it may be
replaceable but some resources are specific and cannot be replaced.

Application Activities
Interview a local business person about how they deal with supply uncertainties and
how this affects their business.
Multiple Choice Questions 73

Conclusion

This chapter has focused on the way entrepreneurs build resilience in business
endeavours, which is an important skill that lowers potential risk factors. The role of
firm and industry uncertainties in an entrepreneur’s journey was explained, thereby
helping to understand how entrepreneurs cope with change and how it affects their
business ventures.

Discussion Questions

1. Why is resilience a useful skill for organisations?

2. How would you define risk?
3. What kind of product market uncertainties occur in the marketplace?

Learning Outcomes

1. To understand how to build resilience.

2. To focus on strategies to overcome potential risks.
3. To facilitate planning in the case of uncertainty.

Multiple Choice Questions

1. Natural disasters include

(a) earthquakes
(b) cyclones
(c) droughts
(d) all of the above
2. Organisational resilience is best described as
(a) the ability to anticipate potential threats
(b) to cope effectively with unexpected events
(c) the process of internationalisation
(d) a and b
3. What word describes some kind of uncertainty or unanticipated result?
(a) internationalisation
(b) risk
(c) growth
74 5 Resilience, Risk and Uncertainty in Entrepreneurial Business Ventures

(d) productivity
4. What kind of uncertainties occur due to location and weather conditions?
(a) firm
(b) natural
(c) unnatural
(d) all of the above
5. Input uncertainties include
(a) input market
(b) product market
(c) competitive change
(d) all of the above

Answers: 1d, 2d, 3b, 4b, 5d

Web Resources

https://www.psychologytoday.com/au/basics/resilience
This website provides information about specific terms about resilience including
definitions. Connected topics to resilience are included that help to gain a broader
understanding of its importance in society.
https://www.apa.org/topics/resilience/building-your-resilience
The American Psychological Association is a scientific organisation based in
the United States. Its website provides information about different topics related
to psychology including resilience. It aims to disseminate useful knowledge about
psychology.

Reading Resources

Greitens, E. (2016). Resilience: Hard-won wisdom for living a better life. Harper-
Collins.
This book discusses how people can overcome distractions in their life by engaging
in positive action. This means progressing through difficulties by focusing on the
future. This enables people to learn how to build resilience in their life by providing
useful tips.
Van Cuylenberg, H. (2019). The resilience project: Finding happiness through
gratitude, empathy and mindfulness. Ebury.
This book highlights how there are ways to promote a happy state of mind. This
includes engaging in fulfilling or enjoyment tasks such as listening to music. The
References 75

key steps to building a more contented life are stated as well as information about
how to have more compassion.
Branson, R. (2015). The virgin way-if it’s not fun, it’s not worth doing. Portfolio.
This book discusses how Richard Branson built the Virgin Group of companies.
The book details Richard Branson’s personal history and business ideas. He is most
well-known for his Virgin branded group of companies including Virgin Records,
Virgin Megastores and Virgin Atlantic Airways. As the title of the book suggests,
it is important to utilise your passion for business in entrepreneurial ways. This can
include naming business ventures with the same wording as Richard Branson has
done with his Virgin branded businesses.
Rhimes, S. (2016). Year of yes: How to dance it out, stand in the sun and be your
own.
Shonda Rhimes is the creator of a number of television shows such as Grey’s
Anatomy and Scandal. The title of the book refers to the author saying yes to things.
This means taking a positive approach to things in life. She suggests that you should
celebrate achievements as a way of rewarding yourself.
Clear, J. (2018). Atomic habits. Penguin Random House.
This book details how a person can stop bad habits by building good habits. This
can take time to do but these tiny changes then result in positive outcomes. Within
the book there are many ideas about how real change results from small alterations
in daily life. This includes information about people who have used tiny habits to
stay motivated. By doing so they are using psychology techniques that can make a
big difference to a person’s happiness. This then influences a person’s career and life
in a practical way.

References

Duchek, S., Raetze, S., & Scheuch, I. (2020). The role of diversity in organizational resilience: A
theoretical framework. Business Research, 13(2), 387–423.
Hillman, J., & Guenther, E. (2021). Organizational resilience: A valuable construct for management
research? International Journal of Management Reviews, 23, 7–44.
Miller, K. D. (1992). A framework for integrated risk management in international business. Journal
of International Business Studies, 23(2), 311–331.

Further Readings

Bullough, A., & Renko, M. (2013). Entrepreneurial resilience during challenging times. Business
Horizons, 56(3), 343–350.
Corner, P. D., Singh, S., & Pavlovich, K. (2017). Entrepreneurial resilience and venture failure.
International Small Business Journal, 35(6), 687–708.
Duchek, S. (2018). Entrepreneurial resilience: A biographical analysis of successful entrepreneurs.
International Entrepreneurship and Management Journal, 14(2), 429–455.
Chapter 6
Marketing and Entrepreneurial Business
Planning

Introduction

Marketing is an essential part of any entrepreneurial business plan due to the way
it influences performance aspects. It is important to have a marketing action plan
in place in order to consider different communication techniques. This chapter will
focus on how to conduct different types of marketing by highlighting the role of
analytics. In addition, it discusses digital marketing and the role of social media.

Learning Objectives

1. To be able to utilise the 4P’s to analyse a company’s marketing strategy.

2. To understand the reason for the 7P’s.
3. To gain knowledge about digital and social media marketing.

The Importance of Marketing

Marketing is essentially about communicating messages about a company, person or

entity to others. It involves focusing on key attributes that will encourage others to
buy products or services from it. It is an important way that companies build market
share and differentiate themselves from competitors in the marketplace. Traditional
marketing communications utilise print media, radio and television to communicate
information but more recent marketing communications have focused on social media
and other emerging technologies. Therefore, it is important to key up to date with
new ways messages can be disseminated in terms of marketing communications.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2024 77
V. Ratten, Entrepreneurial Business Venturing,
https://doi.org/10.1007/978-981-97-1935-8_6
78 6 Marketing and Entrepreneurial Business Planning

7Ps of Marketing

The original p’s of marketing referred to product, price, place and promotion. These
words all began with the letter p so are abbreviated to the p’s to make them easier
to remember. There is now more than 4 p’s as there is 7p’s in the service context
which includes the additional p’s of process, physical environment and people. Each
of these p’s will now be discussed.

Product Elements

Most marketing efforts focus on the quality attributes of a product. This includes its
size, style and other characteristics that make it unique in the marketplace. Customers
buy products for a number of reasons, but the main reason relates to the value for
money. This means products need to be made based on customer needs. In the
competitive global marketplace, brand names and the reputation of a company will
influence a product’s success. This means it is important in marketing to highlight a
product’s positive attributes.

Place Elements

The place refers to how a product or service is sold. Most products are still sold
through retail outlets but increasing numbers are sold via electronic commerce.
People can buy products in a planned way in terms of having an intention to buy
or in an unplanned way when it is not the main purpose of the outing. To increase
unplanned purchases retail outlets can place certain products near others to increase
their sales.
Timely delivery of products to consumers is important. This means effective
distribution and quick sales management techniques are needed. Consumers may be
willing to pay more to get a product quickly delivered. This means that customers
expect to obtain information about when and how a product will be delivered.

Price Elements

Price relates to how much it costs to buy a product or service. It symbolises a product’s
worth in the marketplace. Some products are priced highly due to the reputation of the
seller. This can make them premium products in the market and highly sought after.
Not all highly priced products are good quality as the price might be related to other
factors such as the availability of raw materials. This can make people pay whatever
7Ps of Marketing 79

price is dictated by the seller due to need. The price of a product can be rounded to
the closest dollar amount or be just below it depending on the marketing strategy.
Moreover, some sellers will price their products cheaply at some point because they
want to attract buyers. Some products might be tied to other products so the initial
product price can be lower so that buyers purchase related products.

Group Activity
In a group of 2–3 people pick a company then conduct a 4P analysis on it. As part of
your analysis, discuss which of the 4P’s are most important for the company.

Promotion Elements

Promotion is about how to publicise or promote a product. This can include making
the product in a certain style to attract buyers. The usefulness of a product should
be communicated to customers. This can include highlighting certain features that
are attractive. Firms have different ways they communicate with others about their
products in order to raise interest in them. This can include direct marketing that
actively engages with customers or social media websites that encourage interaction.
The best promotional tools for a firm will depend on the type of product and why it
is being promoted.

Process Elements

Process involves the journey that firms, customers and other stakeholders take in the
marketplace. This should be an efficient and smooth process but sometimes there will
be bumps along the way. This means it is important to incorporate steps or stages
in the process to make it more simple. The customer journey should be mapped out
from ‘start’ to ‘finish’. This enables each step to be addressed and improvements
made.

Individual Activity
Choose a company and conduct an analysis using the 7P’s. Rank from least important
to most important each of the 7P’s and discuss why you have chosen this ranking.
80 6 Marketing and Entrepreneurial Business Planning

Physical Environment Elements

Physical means the actual tangible ways marketing is used by firms. This can include
uniforms and objects at a firm to help improve its visibility in the market. Some forms
of physical evidence can be the smells from cooking or the use of aromatic oils. This
makes a more pleasurable experience for others. Digital information such as reviews
and testimonials can also be used.

People Elements

People are the humans who work at or are involved with a firm. They talk to customers
and process orders as well as doing other tasks. People are sometimes referred to as
human capital as they are the resources a firm depends on to survive. People have
different kinds of knowledge about products and customers that are invaluable. This
information can be used as a source of competitive advantage.

Montblanc
https://www.montblanc.com/
Montblanc is a company known for their quality pens. It was started in 1906 by
Albert Eberstein who was an engineer and Alfrend Nehemias who was a banker. In 1910
the company had registered the trademark Montblanc which is often included on the
pens. The logo of the company is a white rounded star that represents the mountain Mont
Blanc, which is amongst Europe’s highest mountains. The idea behind the company
was to make simple-to-use fountain pens. The company is most well-known for its
pens but also produces other products such as leather goods.
Montblanc pens are expensive compared to other pens but are made in a way that
they are not disposable items like other pens. This means each pen has a high level
of design. In 1919 the company opened its first store in Hamburg, Germany. At the
time pens were a necessity for many people in order to record thoughts on paper.
They were also a status symbol for people. The Meisterstuck pen was introduced in
1925 and moderations of the pen including cap bands were later introduced. In 1935 a
lifetime guarantee for the Meisterstuck pen was introduced that led to the pen’s global
reputation. In 1997 the company began making watches and in 2000 the Meisterstuck
sports watches collection was launched.
The nib of the pen is often made by hand and with gold or other valuable material.
Montblanc is known for creating luxury writing instruments that are designed to last
a long time. Unlike cheap disposable pens Montblanc pens are designed to be bought
for long-term usage. In the 1990s Montblanc began opening standalone retail stores
that increased their brand awareness in the marketplace.
Discussion Questions
1. What main innovations have contributed to Montblanc’s success?
2. What is the difference in Montblanc pens compared to other types of pens?
How to Market Your Idea 81

3. Why do you think diversification into other product segments is a good or bad
idea?
4. What new innovations would you suggest for the company?

How to Market Your Idea

Before beginning any type of marketing, you should think about why you are doing
certain types of activities and how much it will cost. This is due to initial excitement
then leading to realities about pricing and timelines for the marketing. To help take
the guesswork out of the marketing process, it helps to have a plan. This will improve
the chances of success for your marketing idea. Most marketing communications take
time to develop and require iterations in order to improve. Often good marketing takes
years of planning and is a staged process that incorporates a number of steps. This
includes building on previous marketing campaigns in order to increase customer
engagement. It is important to focus on your marketing idea and not trying to imitate
others who may have a different style. Therefore, success is a personal thing and
everyone will evaluate performance differently based on their values. It is helpful to
focus on a step-by-step process to marketing your idea. By doing each step at a time
it can make it easier to overcome hurdles and ultimately market well your idea.

Classroom Activity
Think about a new marketing idea then on poster size paper map out how you will
conduct each step of the marketing process from ideation to entry into the marketplace.

Step 1: Defining Your Marketing Idea

It is important to define in terms of being able to tell others what your marketing
idea is and why it is useful. Whilst you know why your idea is useful others might
not share the same view. Therefore, it helps to be able to verbalise or express in
words why your marketing idea will prove valuable. To do this you could rehearse
or talk to others about your idea. This can help to refine it but also improve it based
on feedback from others. Another way to do this is through a presentation that states
how the marketing idea will work in practice. Some questions you could ask others
about your idea are: what do you think? (in order to provide an open-ended discussion
question that can yield unexpected results) and can you think of a way to improve
this? (another open-ended question that asks the other person for their insights and
views).
Step 2: Research Existing Ideas
Once you have a marketing idea then you need to do some research about what
has and has not yet been done in the area. You could try to find examples of good
marketing ideas that lead to increased profitability of the firms involved. It is a good
idea to research similar and different firms to your own in order to get a broad market
82 6 Marketing and Entrepreneurial Business Planning

view. Sometimes ideas in other industry segments or geographical areas provide

useful information.
It is useful to get to know what works and does not work in marketing. This
includes thinking about what makes your idea special and unusual. By researching
marketing campaigns, you can find out if you need to continue with your idea or take
a new approach. It can be helpful to do both primary and secondary research on your
idea. Primary research means obtaining information directly from the source. This
can help in hearing from your own perspective about how things are done. Secondary
research involves analysing existing sources of information that have been collected
by others. It can save time and enables large amounts of data to be analysed.

In Class Debate Question

Divide the class into two groups with one group presenting an argument that marketing
is essential for business growth and the other suggesting that it is not needed

Step 3: Creating Your Marketing Plan

A marketing plan is a dynamic and changing way to understand what you hope
to achieve from the marketing activity. It should be updated over time as new ideas
emerge. It offers a way to plan for the future and to strengthen your idea. Normally
marketing plans will include a description about your idea and what you hope to
achieve. Then specific sections related to prime, promotion, place and distribution
are included. This should include a market analysis of key demographics and societal
issues. It is useful to include details about the segmentation strategy and future trends.
Information about the goals and associated measurable outcomes should be added.
This means specific and realistic outcomes need to be included. It can be helpful to
include financial details about how much you want to spend on the marketing idea.
Step 4: Choose Your Marketing Communication Medium
There are many different types of marketing communications ranging from tradi-
tional newspaper, television and radio to more technologically advanced mechanisms
such as digital and social media. You need to choose what type of marketing format
is most appropriate for your idea. At different stages of the marketing additional
marketing communication types can be added. This enables your message to be
disseminated to a wider audience.
Step 5: Plan Your Marketing Communications
After you have decided which marketing communications mechanism is best
suited, you then need to plan how it will occur. This means setting up your own
marketing program or hiring someone to do this for you. It can be helpful to use
a marketing program that includes software in order to track your progress. There
are marketing services who can organise your marketing plan. They can be accessed
online or through face-to-face meetings. Before starting your marketing, you should
think about costs in terms of estimating approximate prices. This is helpful as it can
take time before your marketing plan is successful. It is better to overestimate rather
than underestimate costs.
Marketing Analytics 83

Internet Exercise
Choose a company then research on the internet what kinds of social media and other
forms of marketing campaigns it has. Then compare its marketing strategy with other
companies.

Step 6: Funding Your Marketing Plan

To fund your marketing plan, you might devote a percentage of revenues to its
expenditure. Alternatively, you could seek financing from credit cards, savings or
other sources. There may be suppliers or partners that can help share expenses. By
allowing them to help you can form better bonds with others.

Godiva
www.godiva.com
www.godiva.chocolates.eu
Godiva is a chocolate company that started as a family business in Belgium. Initially
the company was called Chocolaterie Draps after the founder Joseph Draps but the name
was changed to Godiva. The name Godiva is derived from Lady Godiva who according
to legend rode through the streets in order to lower taxes. A picture of a horse with a
rider is included on each box of chocolates and on packaging. Godiva chocolates are
sold around the world and has production facilities in the United States and Europe.
Godiva chocolates are considered a premium and expensive type of chocolate. Some
of the most well-known types of Godiva chocolate is the Truffe original, which is a
dark chocolate mousse. In 1968 Godiva obtained a royal warrant from the Royal Court
of Belgium, which was good for its marketing. This ensured that the chocolate was
considered as high quality.
Discussion Questions
1. How does Godiva market itself differently to other chocolate companies?
2. What kind of new and innovative products has Godiva introduced into the
marketplace?

Marketing Analytics

Marketing analytics is a data-intensive task that is becoming more important in

understanding consumer behaviour. Wedel and Kannan (2016: 97) state that “data has
been called ‘the oil’ of the digital economy”. Data is constantly being captured from a
variety of sources including through online and face-to-face interactions. Businesses
have data about customers and suppliers that help them plan future activities. This
means data is a source of competitive intelligence. In the global business environment,
marketing analytics is a way to forecast customer needs. This helps in planning for
demand and offers a way to utilise data for positive purposes. Marketing analytics
can be understood from a what, where, who, when, how and so what perspective.
84 6 Marketing and Entrepreneurial Business Planning

The ‘what’ here refers to what is being used to conduct the marketing analytics
such as the source of the information. This can include social media engagement or
viewership rates. The ‘where’ means at which location the analytics is conducted.
This means the place such as a shopping centre or a website that provides access to
data. The ‘who’ means the person or organisation that made the decision to do the
marketing analytics. Here ‘when’ refers to the time period in which the marketing
analytics was conducted. The term ‘how’ is the technique or methodology that is
used to do the marketing analytics. The ‘so what’ is the implications or outcomes
from the marketing analytics.

Slinky
The slinky is a toy that was originally developed by the engineer Richard James by
accident. The slinkys were manufactured then sold for Christmas in 1945. The slinky
does not look like a toy but has become one due to the joy people receive from playing
with it. Richard James and his wife co-founded James Industries that produced slinky
toys. He received a patent for the slinky, which was important in his business success.
The slinky is made of metal wire that can change shape. This means there are many
things you can do with a slinky including throwing it as well as stretching it. It can also
be used for other tasks including holding material. In the 1995 movie the Toy Story
the slinky was featured which increased its sales. The slinky is a good example of a
simple toy that is easy to use but popular.
Discussion Questions
1. What is the role of viral marketing in Slinky’s success?
2. What kind of marketing helped Slinky gain popularity?
References
www.museumofplay.org/toys/slinky
www.smithsonianmag.com/innovation/accidential-invention-slinky-180973016/

Digital Marketing

Digital marketing is a type of marketing that integrates digital technology. It has

become more important since the internet and online commerce became popular. It
is similar to other forms of marketing except it focuses on digital content. Therefore,
it is normally faster and more efficient than print or television communications.
The internet plays a key role in consumer’s decision-making purchases as it offers
additional information about products and services.
Viral marketing is based on word-of-mouth marketing in terms of consumers
discussing an issue and it becoming popular in the marketplace. It is a form of referral
marketing as it relies on the advice of other people, thereby highlighting the role of
networking in consumer purchase decisions and reputational building. It is important
as consumers often rely on the advice of their social circle when making decisions.
Digital Marketing 85

This means person-to-person communication is a way they receive information. This

information is deemed more reliable and trustworthy because it comes from people
they know and trust. It enables individuals to pass on information they think is useful
for another person. Thus, it is a form of promotion as it encourages others to become
interested in a product. Depending on the way information is conveyed to others,
it can grow quickly and become a buzz topic. With social media the message can
be quickly transferred globally thereby increasing the visibility of the topic. For
the communication to be considered viral marketing it should be part of a firm’s
marketing strategy. This means it is planned and done in a way that provides benefits
to the firms involved. Thus, it is normally done in conjunction with other traditional
types of media such as print and radio. The goal of viral marketing is to pass on
good thoughts about a product or service. This means firms encourage it in order to
increase their reputation in the marketplace.

Colleen Hoover
www.colleenhoover.com
www.dailymail.co.uk/femail.article-11508777/Who-Colleen-Hoover-year-novels-
sold-copies-Bible.html
Colleen Hoover is an author of more than twenty books that focus mostly on
romance. Some of her most known books include ‘It Ends with Us’, ‘It Starts with
Us’, ‘Verity’, ‘Ugly Love’ and ‘Regretting You’. Many of her books have appeared on
the New York Times bestseller lists. In 2022 she sold more books than other famous
authors such as James Patterson. She initially self-published her novel titled ‘Slammed’
and did not have a publisher. She utilised Amazon’s self-publishing platform to publish
‘Slammed’. She then received a contract for a publisher for two more novels but her third
novel she self-published again. This was an entrepreneurial approach as normally most
authors publish their books through a publishing house. Her books become popular
through word of mouth instead of paid promotions. Her fans are called Cohorts and
help to promote her books. Many of her current books on bestseller list were published
years ago but only recently they have become popular. She publishes on a number
of themes including thrillers that show her diversity. She has contracts with multiple
publishers instead of relying on one publisher. She has a strong following on social
media due to her videos but also grew in popularity during the pandemic. In 2020
she made five of her e-books free to view. This increased her popularity and lead to
international recognition. It was also a clever way to increase brand name recognition.
Discussion Questions
1. What kind of promotions helped Colleen Hoover become successful?
2. What is the role of word-of-mouth marketing in Colleen Hoover’s success?
86 6 Marketing and Entrepreneurial Business Planning

Social Media

Social media is a way for people to easily engage with others regardless of geographic
location. It is one of the most important technological innovations due to the way it has
changed communication practices. People spend hours each day using various forms
of social media as a source of news. Social media can be defined as “a collection of
software-based digital technologies—usually presented as apps and websites—that
provide users with digital environments in which they can send and receive digital
content or information over some type of online social network” (Appel et al., 2020:
80). It is a type of media communication that occurs through interactive interaction
with other users. Thus, instead of involving linear communication it involves inter-
active interaction between the communicator and receiver. Meaning that it involves
some form of feedback that is normally evident on platforms through liking, sharing
or commenting on the posts.
Social media is a topic that covers information science, international business,
the mass media and public relations. Most view social media as a technology that
emphasises user-generated rather than sole company-generated content. This means
it contrasts with previous media forms such as newspapers and television in which
content is generated by a company. Social media is used by individuals and businesses
as a way to communicate information. It can be posted and updated quickly thereby
confirming its usefulness. The directionality of posts on social media can be circular
in that comments are taken into account in future posts. The mode in which people
interact on social media differs depending on their interest.

Application Activities
Go online and find free website builders. Then research different ways to build an
online profile through a website and other social media marketing platforms.

There is a lack of agreed-upon definition of social media as it changes with new

technologies emerging in the marketplace. This means it is based on the context and
intent of the user. Early definitions of social media focused more generally on online
communication due to the emphasis on web-based technology such as the internet
being popular. This meant the emphasis in social media conceptualisations was on
internet-based applications such as mobile and electronic commerce applications that
were just gaining traction. This is evident with Russo et al. (2008: 22) defining social
media as “those that facilitate online communication, networking, and/or collabora-
tion”. Social media builds on the philosophical underpinnings of the reason or the
internet in terms of people freely having access to all types of communication. This
means emphasising the sharing of information that decreases inequalities in society.
Previously information published in newspapers and other sources had to be bought
whilst the information on social media tends to be more freely available. In addi-
tion, social media means that individuals and businesses can directly communicate
Social Media Influencers 87

in an unprecedented way. This creates more direct communication between user and
receiver.
Social media is considered a label that refers to digital technologies that continu-
ally update. This means allowing people to connect and share content in an easy-to-do
manner. Social media requires some form of digital platform or information infras-
tructure. This enables content to be produced and distributed in an online way. Digital
content can take a variety of forms including photos and messages.

Pinterest
www.pinterest.com
Pinterest is an image-sharing website that enables people to save and share images.
The idea behind the website is that it is an online tool to save various types of information
such as photos and videos. It is similar to a virtual board but can be continually added
to and rearranged. As more people use computers and other online platforms, Pinterest
has become more popular. In the past people would cut items from magazines and then
past them into scrapbooks. This actually has gradually changed to an online format
as people have become more used to using computers and other online technology
platforms. On the website you can post ideas but also gather information from other
posts. This means it services as a source of inspiration for curating new content. People
have their own boards that provide a way to easily store and keep ideas. Based on recent
activity, people can find new ideas. There is a search bar that enables people to find
new information and look at other people’s profiles. Some pins have a link to a website
where people can buy items.
Discussion Questions
1. How is Pinterest different or similar to scrapbooking?
2. What new innovations do you think Pinterest should incorporate on its website?

Social Media Influencers

Social media influencers are people with online accounts who post stories or pictures
that others relate to. They gain online fame for their ability to reach others with
their online content. By establishing credibility on a specific subject, social media
influencers can persuade others to act based on their advice. Sometimes this skill
at recommending things to others is called influencer marketing. Anyone can be a
social media influencer if they have the right tools and message. The idea behind
being an influencer is that through peer-to-peer sharing, more people will interact
with the content. Thus, the initial target audience is expanded by followers sharing
the content with others.
Tips for being a social media influencer.
1. Be comfortable about who you are and what content you are posting. Authen-
ticity is encouraged in terms of personalising content based on your skills and
experience.
88 6 Marketing and Entrepreneurial Business Planning

2. Focus on the content that suits your personality and what you value in society.
It does not have to be the same as others but does need to reflect your personal
ideas.
3. Highlight the visuals in your posts. Colours, images and words are all important
in getting people to recognise your ideas.

Self-Branding

Self-branding is often referred to as personal branding as it focuses on highlighting

an individual’s skill set. Khamis (2017: 191) defines self-branding as “individuals
developing a distinctive public image for commercial gain and/or cultural capital”.
The idea behind self-branding is that a person benefits from having a unique skill
set. This means highlighting their distinctiveness and individualism. It is important
to have a positive attitude and be proactive in the competitive marketplace. This can
enable a person to project a memorable image that others remember.
Self-branding is a craft that requires time and dedication. This means individuals
need to have a strategy about what they are hoping to achieve. Individuals need to
think about what they want to be known for. This requires a person to promote their
best qualities. It is helpful to promote yourself through self-branding. Branding an
individual can be a complex task as everyone is different. Simple messages about a
person can help them standout. Khamis et al. (2017: 192) state, “the word ‘brand’ is
derived from the Old Norse word brandr, meaning ‘to burn’, and referred to the prac-
tice whereby livestock owners would burn a unique and differentiating symbol into
their animals’ skins”. Branding is an important marketing practice and has resulted
in individuals becoming better known. Its contemporary usage for individuals has
coincided with the growth in social media. More people have their own social media
accounts on Instagram, Twitter and other platforms. This enables them to quickly and
directly communicate with others. A brand is a way for others to know the quality
associated with the product. This helps in decision-making processes as people can
rely on a brand to deliver a certain outcome.
Some brands are viewed in a negative or positive light depending on the context.
Negative brand perception is derived from unfavourable word of mouth or online
comments. This can be intentional when a person has posted a comment in order
to seek attention or for an unintentional reason when a comment sparks debate and
controversy. Positive brand perception is typically derived from the quality of a
product or its reputation in the marketplace.

Maggie Beer
www.maggiebeer.com.au
Maggie Beer holdings is a food company that specialises in high-quality food. It is
named after the chef and cook Maggie Beer who is a well-known person in Australia
and overseas. There are three main brands in the company: Maggie Beer Products, Paris
Learning Outcomes 89

Creek Farms and Hampers & Gifts Australia. The company is based in the Barossa
valley which is located in South Australia and is well-known for its food products.
The company in recent years has acquired a number of other food companies
including B-d Farm, Paris Creek and Saint David Dairy. One of its key acquisitions
was Saint David Dairy but in 2022 it was acquired by another company. Some of the
products Maggie Beer sells include quince and rosemary glaze, saffron and lemon
vinaigrette and quince paste. Each of the products include the Maggie Beer name and
logo which is a picture of a bird.
The company originally was called Jumbuck Entertainment Limited started in 2004
with its focus being on communications. In 2014 the name changed to Primary Opinion
Limited and in 2016 expanded its investments to include the food and beverage sector
by acquiring a 48% stake in Maggie Beer Products. In 2019 the remaining 52% share in
Maggie Beer Products was acquired. Maggie Beer remained a director of the company
and a brand ambassador. In 2020 the company previously called the Longtable Group
changed its name to Maggie Beer Holdings. In 2021 the company acquired Hampers &
Gifts Australia.
Discussion Questions
1. What kind of personal branding does Maggie Beer do?
2. Why are some products named after a person in the food industry?

Conclusion

This chapter has discussed the importance of marketing for entrepreneurial busi-
ness planning. The 7P’s of marketing were stated that comprise the most useful
aspects of any marketing communications. Ways to write a marketing plan were
highlighted as well as the usefulness of digital marketing in advertising. The role of
social media and personal branding were explained as a way to understand newer
marketing technology communications.

Discussion Questions

1. What are the 7P’s of marketing?

2. Why is it important to market your idea?
3. What is marketing analytics and how is it used by businesses?

Learning Outcomes

1. To understand how to use the 4P’s to analyse a company’s marketing strategy.

2. To be able to know how to use the 7P’s.
3. To obtain knowledge about digital and social marketing practices.
90 6 Marketing and Entrepreneurial Business Planning

Multiple Choice Questions

1. The original 4P’s of marketing are

(a) primary, pin, promotion, price
(b) product, price, place, promotion
(c) pudding, psycho, plug, price
(d) none of the above
2. The additional p’s to make the 7p’s of marketing are
(a) process, physical, environment, people
(b) primary, price, plug
(c) promotion, product, price
(d) none of the above
3. What has been called ‘the oil’ of the digital economy?
(a) knowledge
(b) data
(c) internationalisation
(d) none of the above
4. What kind of marketing integrates digital technology?
(a) social marketing
(b) digital marketing
(c) international marketing
(d) none of the above
5. What kind of marketing is based on word-of-mouth marketing?
(a) viral marketing
(b) social marketing
(c) digital marketing
(d) none of the above

Answers: 1b, 2a, 3b, 4b, 5a

Web Resources

www.weebly.com
Weebly offers a way to create a free website builder using drag and drop features.
There are many themed designs to choose from and you can add text boxes.
www.godaddy.com
GoDaddy is a website builder that requires little technical skills and is rela-
tively easy to use. It is relatively cheap to use and offers additional features such
References 91

as SEO tools. It is one of the largest services platforms specifically designed for
entrepreneurs. It focuses on both digital and social media.
www.squarespace.com
Squarespace enables entrepreneurs to build an online store and increase their
brand through email marketing, SEO tools, creator tools and logo makers. They
have flexible designer templates as well as course to help entrepreneurs.
https://blog.asmartbear.com/
This is a blog based on different topics related to entrepreneurship. It includes
information about venture capitalists and unicorns. Its blog format makes it different
to other kind of websites and it is useful to read the thoughts and feelings of the
author regarding entrepreneurship topics.
https://hbr.org/
This website details information from Harvard Business Review. A range of arti-
cles on different topics related to business is found on the website. In addition, there
are podcasts about business to listen to as well as case studies that provide information
about new ideas.

Reading Resources

Amit, R., & Zott, C. (2020). Business model innovation strategy: Transformational
concepts and tools for entrepreneurial leaders. Wiley.
This book focuses on business model innovation from a strategy perspective.
It includes specific tools and guides designed to help managers implement new
ideas. This can encourage innovative solutions and scalable business models to be
developed.
Eyal, N. (2014). Hooked: How to build habit-forming products. Penguin.
This book focuses on how products influence behaviour based on practical
company insights. It discusses why certain products are attractive and what makes
people interested in them. It suggests that a four-hook model incorporating a trigger,
action, variable reward and investment are useful. The triggers are external and
internal factors that influence behaviour. External factors such as looking at a website
can influence internal triggers such as feeling happy. Action relates to what is actually
done in anticipation of something. Variable reward involves the benefit associated
with the behaviour whilst investment involves the effort taken in the behaviour.

References

Appel, G., Grewal, L., Hadi, R., & Stephen, A. T. (2020). The future of social media in marketing.
Journal of Marketing Science, 48, 79–95.
Khamis, S., Ang, L., & Welling, R. (2017). Self-branding, ‘micro-celebrity’ and the rise of social
media influencers. Celebrity Studies, 8(2), 191–208.
92 6 Marketing and Entrepreneurial Business Planning

Russo, A., Watkins, J., Kelly, L., & Chan, S. (2008). Participatory communication with social
media. Curator: The Museum Journal, 51(1), 21–31.
Wedel, M., & Kannan, P. K. (2016). Marketing analytics for data-rich environments. Journal of
Marketing, 80, 97–121.

Further Readings

Le, D., Nguyen, T. M., Quach, S., Thaichon, P., & Ratten, V. (2021). The development and current
trends of digital marketing and relationship marketing research. In Developing Digital Marketing
(pp. 1–18). Emerald Publishing Limited.
Nguyen, T. M., Le, D., Quach, S., Thaichon, P., & Ratten, V. (2021). The current trends and future
direction of digital and relationship marketing: A business perspective. In Developing Digital
Marketing: Relationship Perspectives (pp. 191–200). Emerald Publishing Limited.
Skålén, P., Cova, B., Gummerus, J., & Sihvonen, A. (2023). Marketing-as-practice: A framework
and research agenda for value-creating marketing activity. Marketing Theory, 23(2), 185–206.
Chapter 7
Entrepreneurial Leadership

Introduction

This chapter focuses on the role of entrepreneurial leadership in business success.

The way leadership is defined is explained and then different types of leadership are
discussed. This helps to understand the ways charismatic, situational, democratic
and distributed leadership apply in society.

Learning Objectives

1. To understand what leadership means in society.

2. To be able to differentiate different types of leadership styles.
3. To know how to apply leadership skills in an entrepreneurial business venture.

Leadership

Leadership exists within a situation based on who proposes action and their ability
to get others to follow their directions. Gardner (1990: 38) defines leadership as “the
accomplishment of group purpose; which is furthered not only by effective leaders
but also by innovators, entrepreneurs and thinkers; by the availability of resources;
by questions of value and social cohesion”. Horner (1997: 270) states “leadership is
typically defined by the traits, qualities and behaviours of a leader”. Leaders have
certain internal qualities that make them succeed. The key to being a leader is to have
empathy and to listen to others.
Leadership is based on how a person responds to an environment. Expectancy
theory suggests that people behave in a certain way based on the belief they will
obtain a certain outcome. It is based on the probability that a certain predetermined

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2024 93
V. Ratten, Entrepreneurial Business Venturing,
https://doi.org/10.1007/978-981-97-1935-8_7
94 7 Entrepreneurial Leadership

outcome will occur. This means they can influence actions by engaging in certain
behaviours. Goal-setting theory proposes that people focus on specific actions that
help them achieve their goals. They are motivated by the desire to achieve a certain
outcome. Transactional leadership theory suggests that leaders use their position
in an organisation to influence others. This means followers have to perform tasks
because of their duties. Transformational leadership theory suggests that there are
people who change substantially what is currently happening by implementing new
direction. They are more fully engaged in the whole process of change and normally
lead by example. This means they initiate change with the belief that drastic changes
will occur, thereby evolving as a leader based on how their followers change.

Group Activity
In a group of 3–5 people get each group member to say which leader they think has
had the most impact in society and why. Then discuss in the group which of the five
leaders chosen is overall the most effective.

Leaders interpret other people’s abilities in order to assess their potential. This
means being sensitive to the aspirations and values of others. Leaders motivate their
followers to do certain activities. There are numerous schools of thought to under-
stand leadership. The trait approach to leadership emphasises that certain types of
people because of their personality are better leaders. Different personality traits such
as intelligence, looks and sociability are deemed to influence leadership ability. Some
personality characteristics such as confidence, assertiveness and cooperativeness
might be more highly valued. The style of leadership focuses on how a leader behaves
in society. This means emphasising skills such as management and coordination.
To be a leader you need to have people who follow you because of your job,
position or influence in society. Leaders have an influence on how a firm performs
and their strategic direction in the global marketplace. This means learning how to
be a leader is a skill that is worth spending time on. Leaders are often scrutinised in
terms of how they manage others. This means they can be under pressure to perform
in a certain way and face obstacles in terms of trying to please everyone.

Individual Activity
Think about the people you have known and who has shown the most leadership.
Consider what kinds of personality traits and managing style they had that made them
a good leader.

Leaders are people who others look up to for support and advice. They often
lead by example and offer advice to others. Many leaders in times of need sacrifice
themselves for others. The sacrifice might be in the giving of resources such as time
or money or some form of demotion. In the COVID-19 pandemic leaders tended
Types of Leaders 95

to self-sacrifice in terms of working more or being paid less. This enabled their
organisation to continue to survive in times of hardship.

Hoyts
www.hoytsfood.com.au
Hoyts is an Australian family-owned company that makes herbs, sauces, spreads,
beans, legumes, essences, oils, pickles and vegetables. They sell dry herbs in sachets
and jars including basil leaves, bay leaves, cardamom pods, chilli powder, coriander
seed, curry powder, garlic powder, marjoram leaves, Moroccan seasoning, parsley
leaves and rosemary leaves. Their essence range includes almonds, banana, coconut,
lemon, oranges, raspberry and vanilla.
Discussion Questions
1. Why is Hoyts still an Australian-owned and a family company?
2. What kind of new products would you suggest Hoyts to make?
3. How can Hoyts internationalise their company?

Types of Leaders

There are different types of leaders but the main types are strong, stable, struggling
and failing. Strong leaders have very good people skills and are good at coordinating
tasks. They are able to communicate their vision to other people who respect them.
They are talented and able to pursue ideas with their subordinates. Stable leaders are
good leaders but are different to strong leaders due to their management style. This
means they succeed over a long time period in terms of managing others. They have
good people skills but are not likely to be creative. This means they are content with
the status quo. Most leaders who have been in their position for a long time period
could be categorised as stable leaders. They do not want to rock the boat by changing
the current conditions. This means they are content with how things are correctly
done and do not see a need to change. They nurture existing staff and realise their
limitations. This helps them coordinate tasks in the best possible way.
Struggling leaders are finding it hard to delegate tasks to others. They may not
have been in their position for a long time and are adjusting to their tasks. This means
they are unsure about their position in an organisation. They may be good negotiators
or good at other tasks but not so good at leading others. This makes them difficult to
deal with and to trust. It may be they are temporary and not permanent leaders. Thus,
they are in a process of transition in terms of delegating tasks. Additional help or
authority may be needed to manage others. Obtaining the right know-how can help
to convince others that they are leaders. If a leader changes their management style,
they can improve their position. A failing leader is a person who is not going well
and mismanaging others. They are considered as unskilled and do not project any
goodwill to others.
96 7 Entrepreneurial Leadership

Classroom Activity
In class form pairs and ask your partner what kind of leadership traits they have and
why.

Leaders need to continually reassess their marketing strategies in order to improve

their performance. This is due to market conditions varying and new competitors
emerging in the marketplace. To do this it helps to focus on learning strategies
by customising their leadership practices by differences in their spending power,
location, age, gender, lifestyle or some other factors.

Roll’d
www.rolld.com.au
Rolld is a Vietnamese food company that operates a number of franchised stores.
Its first store was opened in 2012 followed by stores in 2013 in Queensland and the
Australian Capital Territory. Stores were opened in 2014 in New South Wales and 2015
in Western Australia. The company mostly sells rice paper rolls but also other products.
Bao Hoang started the company with Ray Esquiries and Tin Ly. Some of the products
on the menu include bao steamed buns, soldiers rice paper rolls, pho noodle soup, banh
mi baguettes and goi viet salads. Each of the products tend to have a Vietnamese name
associated with the heritage and culture of the company.
On the company website (www.rolld.com.au/franchise) it lists five main reasons
for starting a Roll’d franchise:
1. We roll out fresh, healthy Vietnamese
2. Our food is easily transportable
3. Our model is scalable
4. We use innovative systems and processes
5. We have no major competitors
Each of these reasons focus on the company’s competitive advantage in the market-
place. Traditionally most fast food has been related to burger and chips or bakery type
products that are considered unhealthy. Roll’d offers more healthy fast food options
that have previously not been available in the marketplace. In addition, the interna-
tionalisation of food to include new cuisines has diversified the fast food industry.
Previously Vietnamese food was hard to obtain due to the lack of stores. Now this has
changed with more people eating Vietnamese food and realising that it can be a healthy
alternative to other foods.
Roll’d food can be bought then transported to other places. This makes it easier
to eat and allows people to take it home. New containers making soup and noodles
portable have further expanded the portability of Roll’d food. The model being scalable
refers to the food being sold in single or larger quantities. The company offers food for
catering as well as family packages. The innovative systems and processes refer to new
technology being used at the company. This includes the Roll’d app that enables people
to order online. The status of the order can be tracked online. The app enables people
to pay directly via the app, thereby enabling them to limit the in-person transaction
time. The company currently does not have any major competitors as there are few
Charismatic Leadership 97

Vietnamese fast food companies in the marketplace. However, this may change in the
future with new competitors entering the marketplace.
Discussion Questions
1. How has Roll’d led the marketplace in terms of making innovative products?
2. What kind of leadership lessons can be learnt from Roll’d?

Charismatic Leadership

Klein and House (1995: 183) describe charisma as “a fire, a fire that ignites followers
energy and commitment producing results above and beyond the call of duty”.
Charisma in a person enables them to influence the directions of others. It helps
them to increase interest in a topic by committing people to pursue their rhetoric.
There are three main elements of charisma: a spark, flammable material and oxygen
(Klein & House, 1995). The spark is the person who gets people interested in what
they are saying. They have an interesting personality that makes others treat them
differently. The flammable material is the followers who take an interest in the charis-
matic person. They do what they are told to and treat the charismatic person with
respect. This means they are differential and willing to be told what to do. Therefore,
they are open to being influenced by another person. The oxygen is the environment
that enables a charismatic person to gain control. Being in the right environment will
make it easier for a charismatic leader to gain followers.

In Class Debate Question

Divide the class into two groups with one group researching and suggesting that leaders
are born and the other group that leaders are made.

A leader is charismatic when they can communicate their desire to others and
can articulate their vision. This means they have certain ideological goals that are
discussed with others. By doing so they are different to other people because of their
intensity and high energy. Charismatic leaders tend to have followers who are looking
for meaning in their life. This makes them susceptible to what the charismatic leader
is saying. A charismatic leader needs followers who respect their psychological
assertions. Normally the followers of a charismatic leader have similar values and
identify with their leader’s moral stance.

Docusign
www.docusign.com/blog/nationalsigningday
Docusign is a company that enables people to sign documents online. The idea
behind Docusign was to provide an easy and efficient way for people to share and
98 7 Entrepreneurial Leadership

sign documents. Having quick access to documents is essential for business as well as
effective sharing mechanisms. Docusign enables a verified and secured way to share
documents. It was established in 2003 by Tom Gonser who wanted to start an online
document sharing service. Instead of the previous paper documents Docusign allows
for electronic signing. This provides a way to reduce error from loss of documents.
The electronic documents are legally binding and secure. The company also provides
a storage system so that all documents are kept in one place. Having an online system
in place means that others can see who has assessed and read the document. This
helps with establishing an audit trail. Moreover, the system enables the use of internet
addresses so that the computer used to access the document can be verified.
Discussion Questions
1. What is the role of timing in the success of Docusign?
2. What is the role of a company’s name in its performance?
3. What kind of innovative feature does Docusign have compared to other signing
companies?

Situational Leadership

Situational leadership is a practical way to understand how a person leads based on

the context. Blanchard and Hersey (1996) initially referred to situational leadership
as the life-cycle theory of leadership in order to understand how parents changed their
leadership style through a child’s life. This meant it emphasised how different kinds of
leadership emerge that depend on the environment. The idea of situational leadership
is that leadership is conducted with other people rather than using a hierarchical
style. Therefore, highlighting how a leader will be guided by how others behave.
This means observing feedback and listening to suggestions. This emphasises a
collaborative approach rather than one based on power.
The readiness of others to be lead is considered as a way to understand situational
objectives. In some situations, people might need more socio-emotional support that
will lead to a different style of leadership. In other contexts, more developmental
styles of leadership are required. The advantage of situational leadership is that
different kinds of advice can be given based on individual characteristics. This means
the personality and abilities of a person are taken into account. This enables better
direction and management of tasks. Each person will have their own competences
that will fit different kinds of tasks. Therefore, a manager’s style needs to change
depending on a person’s ability to do a task.
Avery and Ryan (2002) suggest that the main situational leadership styles are
directing, coaching, supporting and delegating. Directing involves advising others
on what to do and how to do things. It does not normally involve actual involvement
but rather suggestions on what should be done. Coaching is more like mentoring in
terms of providing advice. This means offering reassurance about the right kind of
action and suggestions about how to improve. Supporting means getting involved
Distributed Leadership 99

with tasks that need completion. This includes active participation in a way that helps
others. Delegating involves designating tasks to another person.
Part of being a situational leader involves directing and guiding others. This means
telling others about what is occurring and what they can do to help. By focusing
on a situation, a leader can persuade others about how to progress. This includes
explaining what is happening and why certain behaviours are required. To do this a
leader might participate in tasks or encourage others to be involved. Alternatively,
they can delegate problems to be solved and then monitor their progress.

Internet Exercise
On the internet research your favourite leader and find out what kind of social media
accounts they have and whether this influences their leadership style.

Democratic Leadership

Democratic leadership involves providing direction based on shared beliefs. This

means incorporating feedback from others by engaging in participation. The process
of democratic leadership is based on the idea that everyone should have an input
on what happens in society. By sharing leadership decisions, it promotes the idea of
equality.
Meaningful participation in decisions by others can facilitate better leadership.
This then enables moral purposes to be made based on ethical ideas. Democracy
involves respecting the beliefs of others regardless of their stance. It also involves
expecting others to provide input so that knowledge is disseminated to others.

Distributed Leadership

Distributed leadership means tapping into the thoughts of others by not emphasising
one person. This enables more ideas to be discussed and increases the flow of infor-
mation. By circulating ideas, it means more people can provide input into decisions.
The notion of distributed leadership is based on the continuous flow of information.
This is important in contexts where multiple people are involved. One or more people
can provide leadership that is then altered depending on performance. The leadership
decisions circulate to others who then progress the decisions.
100 7 Entrepreneurial Leadership

Application Activities
Interview a sport coach or art leader and ask them what makes them a leader.

Middle Managers

Middle managers are considered people who link the strategic decision-makers to the
operational management of an organisation. Top-level managers are those individuals
who focus on the future wellbeing of an organisation in terms of competitiveness.
This means they are orientated to changes that may influence how an organisation
is perceived in the marketplace. In order to be efficient in planning for the future,
top-level managers often utilise middle managers to help them implement their ideas.
Middle managers have been criticised due to questions around whether they are
really needed in an organisation. They have been equated with bureaucracy and
mismanagement. Despite these criticisms they have benefits including conducting
planning functions. This enables them to cultivate relationships with employees and
stakeholders, thereby freeing up the time top managers spend on other tasks. Middle
managers can champion specific initiatives by prioritising them in an organisation
and can contribute to productivity gains in an organisation due to the way they
coordinate activities. It is important that middle managers have different roles in an
organisation depending on their expected behaviours. This means they can command
others to perform specific actions, thereby playing both a decisional and informa-
tional role in an organisation. Middle managers act as leaders and figureheads in
terms of promoting certain behaviours. This enables them to inspire the way others
behave in an organisation, thereby helping to generate a positive climate in an organ-
isation based on good personal relationships. Middle managers play important inter-
personal functions by monitoring how an organisation develops in the marketplace.
This includes resolving problems before they occur and minimising conflict. They
synthesise information that is garnered from top managers.

Mattel
https://about.mattel.com/
Mattel is a toy company that includes brands such as Barbie, Hot Wheels, Fisher-
Price and UNO. On their website they state their purpose is “we empower the next
generation to explore the wonder of childhood and reach their full potential” (www.
corporate.mattel.com/about-us). They produce a number of different toys for various
age groups. The aim of their products is to create enjoyable experiences for children.
The company began in 1945 with a collaboration between Ruth and Elliot Handler and
Harold Matson. One of their first well-known products was the Uke-A-Doodle, which
was a musical instrument. In 1948 the company is incorporated. In 1950 the Magic 8
Discussion Questions 101

Ball was released; that was a black-coloured ball with the number 8 printed on it that
was kept inside a box with red packaging. In 1955 the company began advertising on
television that changed the way toy products were advertised. This happened around
the same time as many households began to by television sets for use at home. In
1957 the Xylophone was introduced into the marketplace as a musical instrument.
Its simple design made it a popular toy. In 1959 Barbie dolls started, being produced
after Ruth Handler observed her daughter playing with dolls. The Barbie doll was a
three-dimensional small-sized plastic doll that came with removable clothes and other
features. In 1960 Matel become a publicly traded company thereby enabling shares of
the company to be traded on the stock exchange. In 1960 a doll called Chatty Cathy
was introduced that could be wound up and talk. In 1961 the Chatter telephone toy was
introduced that was a plastic telephone with a cord and dialable numbers. In 1961 a male
Barbie called Ken was introduced and this was followed by the Barbie Dreamhouse
that included miniature-sized household items such as chairs and beds.
In 1969 small toy cars called Hot Wheels were introduced. In 1971 the card game
called UNO was introduced. It was created by Merle Robbins from Ohio in the United
States who liked to make card games. The original UNO card game was followed
by related new games such as UNO Stack. In 1982 the Masters of the Universe and
He Man action figures were introduced. In 1990 Mattel moved its headquarters to El
Segundo in California, the United States. In 1993 Mattel acquired Fisher-Price toys
that enlarged its toy product offerings. In 1997 Mattel acquired View Master which
was a product in which different scenes could be viewed through a device. In 2011
HIT Entertainment that had the licence for Thomas the Tank Engine was acquired. In
2014 Mattel acquired MEGA Brands that make mostly pre-school products. In 2019
HotWheels ID was launched that combined digital and physical car racing. In 2021
Mattel introduced a PlayBack system in which old toys were obtained in order to be
used for future products.
Discussion Questions
1. What kind of corporate social responsibility initiatives does Mattel have?
2. What is the role of philanthropic endeavours for Mattel?

Conclusion

This chapter has examined the role leaders play in the success of business ventures.
This is important for entrepreneurial business planning that seeks to take advantage
of leadership qualities. Various leadership styles were explained that demonstrate
the many different ways people can lead others.

Discussion Questions

1. How do you define leadership?

2. What kind of personality traits do you think transformation leaders have?
102 7 Entrepreneurial Leadership

3. What kind of leadership traits do middle managers have?

Learning Outcomes

1. To understand why leadership is important in entrepreneurship.

2. To be able to build leadership skills.
3. To differentiate between different forms of leadership.

Multiple Choice Questions

1. Leadership can be defined as

(a) the accomplishment of group purpose
(b) by the availability of resources
(c) by questions of value
(d) all of the above
2. What kind of theory suggests that people behave in a certain way based on the
belief that they will obtain a certain outcome?
(a) transactional
(b) goal setting
(c) expectancy
(d) transformational
3. What kind of leadership involves leaders using their position to influence others?
(a) transactional
(b) transformational
(c) charismatic
(d) none of the above
4. What leadership theory focuses on people doing scientific actions to help them
achieve their goals?
(a) goal setting
(b) transactional
(c) transformational
(d) all of the above
5. Situational leadership was initially referred to as what kind of theory?
(a) charismatic
(b) life cycle
Reading Resources 103

(c) transactional
(d) all of the above
Answers 1d, 2c, 3a, 4a, 5b

Web Resources

https://brenebrown.com/podcast-show/dare-to-lead/
On Brene Brown’s website she has a link to a podcast series titled ‘Dare to
Lead’. The podcast includes conversations with a range of people who are focused
on positive forms of innovation. She is a research professor at the University of
Houston so has a research background that she brings to her podcast series that
emphasise change and cultural elements.
www.tonyrobbins.com
Tony Robbins is a motivational speaker whose website provides information on
how to improve leadership skills. There are success stories and case studies available
to read as well as resources such as podcasts and videos.
www.eckharttolle.com
Eckhart Tolle has a website that provides articles and video teachings about how
to realise your highest purpose. It is spiritually based and provides information on
how to understand yourself better. This means emphasising the present rather than
the past.
www.oprah.com
Oprah has a website that includes products and book reviews. There are motiva-
tional quotes on the website as well as inspirational quizzes to do. There are videos
about being happy and helpful resource material to be viewed or downloaded.

Reading Resources

Sandberg, S. (2013). Lean in: Women, work, and the will to lead. Deckle Edge.
This book is by Sheryl Sandberg who is the chief operating officer of Meta that
was previously called Facebook. In the book the emphasis is on empowering women
through encouraging networking and engagement. Thus, rather than competing with
other females collaborating so that everyone succeeds. Each chapter in the book
includes information on how women can take risks that can lead to new business
growth. This means being proactive and focusing on new innovations that can lead
to a competitive advantage in the marketplace. Practical guidelines such as how to
change the conversation to a more positive perspective is stated. Data and research
on business advice is provided as a way of promoting women in business. There
is information on work/life balance and the role of gender in the workplace. This
includes tips on building a good career and how to negotiate in business discussions.
104 7 Entrepreneurial Leadership

Strelecky, J. (2015). The big five for life. Aspen Light Publishing.
This book tells the story of what makes a great leader. It discusses the factors that
lead to a good life and why it is important to look after yourself. Included in the book
are suggestions about how to improve your leadership style.
Kaufman, J. (2020). The personal MBA: Master the art of business. Portfolio.
This book focuses on the key principles of business in terms of starting and
managing a venture. As its title suggest, each chapter in the book highlights how
to master the art of business, thereby emulating the topics and subjects taught in
a Masters of Business Administration course. This means information on commu-
nication, planning, marketing and sales is provided. The book contains analysis
techniques such as developing a business plan that includes critical dates and tasks,
thereby helping to encourage productivity through focusing on key outcomes.
John, D., & Paisner, D. (2016). The power of broke: How empty pockets, a tight
budget and a hunger for success can become your greatest competitive advantage.
Currency.
Daymond John and his co-author wrote this book about the power of overcoming
financial restrictions in a person’s entrepreneurial journey. It discusses Daymond
John’s personal journey from selling t-shirts to the launch of FUBU. He was a start
of the television show Shark Tank and highlights how being broke means you need
to strategise and think creatively. By doing so it forces you to be innovative and have
a proactive attitude. In the book it examines how other entrepreneurs utilised limited
savings to build their empires. This includes Steve Aoki who became a global music
superstar after initially starting as a DJ. These examples are helpful in learning how to
tap into your entrepreneurial potential by encouraging your passion, thereby learning
important lessons about how you can be successful if you dream and prioritise your
business goals.
Herjavec, R. (2010). Driven: How to succeed in business and in life. Harper-
Collins.
This book by Robert Herjavec details the role of entrepreneurship from a hard
work and perseverance perspective. The author discusses how he built his wealth by
focusing on his vision and by taking chances. He did this by working in a number of
industries that lead him to form the Herjavec Groups, which is a technology company.
Warrillow, J. (2011). Built to sell: Creating a business that can thrive without you.
Portfolio.
This book suggests that an entrepreneur needs to build businesses that are self-
sustaining. This means the business does not rely on the founder but rather on the
team. This strategy means that business ideas and ventures can be replicated in new
contexts. To do this the book discusses how it is important to avoid price wars and
to focus on the competitive advantage of a product or service instead. By doing so it
will enable recurring revenue due to repurchased items.
Carnegie, D. (1936). How to win friends and influence people. Simon & Schuster,
New York.
This book was written some time ago but is still popular and regularly appears
on bestseller lists. As the title of the book suggests, the chapters focus on how to
influence others in terms of action. This means it relates to entrepreneurial business
References 105

planning in terms of harnessing a person’s social networks and contacts. This can
then help encourage positive results to take place.
Reis, E. (2011). The lean startup. New York: Crown Business, 27, 2016–2020.
This book describes how startups are built and launched. It acknowledges that
startups being as quick businesses often fail. This means they have to overcome
business hurdles in order to provide a benefit to society. The book suggests that
human and financial capital should be used in an efficient way. This means rapid
scientific experimentation as a way of making market progress. To do this, an agility
approach is required that emphasises short product development cycles.

References

Avery, G. C., & Ryan, J. (2002). Applying situational leadership in Australia. Journal of
Management Development, 21(4), 242–262.
Blanchard, K. H., & Hersey, P. (1996). Great ideas revisited. Training & Development, 50(1), 42–48.
Gardner, J. (1990) On leadership, The free press.
Horner, M. (1997). Leadership theory: Past, present and future. Team Performance Management:
An International Journal, 3(4), 270–287.
Klein, K. J., & House, R. J. (1995). On fire: Charismatic leadership and levels of analysis. The
Leadership Quarterly, 6(2), 183–198.

Further Readings

Bagheri, A., & Pihie, Z. A. L. (2011). Entrepreneurial leadership: Towards a model for learning
and development. Human Resource Development International, 14(4), 447–463.
Leitch, C. M., & Volery, T. (2017). Entrepreneurial leadership: Insights and directions. International
Small Business Journal, 35(2), 147–156.
Chapter 8
Corporate Social Responsibility
and Sustainable Entrepreneurship

Introduction

This chapter discusses the role of sustainability in society, which is increasingly being
incorporated into business practices. The role of the United Nations Sustainable
Development Goals are stated in terms of their relevance in society. In addition,
sustainable forms of entrepreneurship and planning are examined with the goal of
providing examples of good business practices.

Learning Objectives

1. To understand why sustainability is important in business.

2. To examine the role of corporate social responsibility in society.
3. To understand how sustainable entrepreneurship can be developed.

Sustainability

Sustainability is an important concept in entrepreneurship and business management.

Its meaning differs depending on the context and type of business. This means there
are many alternative ways to define it and sometimes people use the term without
clarifying its meaning. Salas-Zapata and Ortiz-Munoz (2019: 155) define sustain-
ability as “the integration of a set of social-environmental criteria or qualities in
human actions”. This definition implies that the actions of humans have environ-
mental consequences. This means it is important for humans to consider how they
design business processes due to social-ecological reasons.
Sustainability can refer to the following uses (1) a set of criteria, (2) a vision or
goal, (3) an object and (4) an approach (Salas-Zapata & Ortiz-Munoz, 2019). A set

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2024 107
V. Ratten, Entrepreneurial Business Venturing,
https://doi.org/10.1007/978-981-97-1935-8_8
108 8 Corporate Social Responsibility and Sustainable Entrepreneurship

of criteria refers to specific objectives that need to be met in order to be considered

as sustainability. This can include actions or outcomes from the activity. A vision
or goal refers to the reason for doing the activity. It needs to consider economic,
environmental and social purposes to be considered as sustainability. Normally this
involves certain expectations surrounding how the activity is conducted in society.
An object refers to something that can progress from an idea to action. This includes
behaviour and ability of an entity to act in a sustainable way. Sometimes this involves
being able to balance financial and social goals. An approach involves studying the
ways systems can incorporate sustainability thinking. This means there should be
consideration of environmental effects as well as financial motivations.

Group Activity
In groups of 3–5 people choose a company and do research on its sustainability practices
then derive 2–3 recommendations on how it could improve.

Corporate Social Responsibility

Corporate social responsibility is based on the idea that businesses have an obligation
to consider societal impact. It involves taking into account expectations from stake-
holders about overall company performance based on social and economic concerns.
One of the most well-known definitions is by Carroll (1979: 500) who stated it is “the
economic, legal, ethical, and discretionary expectations that society has of organiza-
tions at a given point in time”. Other definitions have emphasised policy implications
as evident in Matten and Moon (2008: 405) defining it as “clearly articulated and
communicated policies and practices of corporations that reflect business respon-
sibility for some of the wider social good”. Therefore, the definition of corporate
social responsibility differs depending on the context but generally it is about incor-
porating economic, environmental and social initiatives into business decisions. It is
often called the triple bottom line because of the three interactive objectives.
The book titled ‘Social Responsibilities of the Businessman’ by Howard Bowen
published in 1953 was amongst the first books to highlight that there are social as
well as financial obligations of business people (Aguinis et al., 2024). The book made
people rethink about how business should consider philanthropic endeavours. This
meant a realisation for businesses that they could do good by engaging in positive
social projects in the community such as that evident in volunteering programmes.
The main goal of corporate social responsibility is to follow a course of action
that is desirable in society in terms of making a profit and having a positive social
impact. This means balancing different expectations from stakeholders. Thus, the
concept of corporate social responsibility changes based on cultural conditions and
what responses beyond a financial goal are expected. This means business should
Corporate Social Responsibility 109

configure their policies around societal relationships and by observing impacts but
also being responsive to change. By doing so a business can act beyond their financial
goals and appear to be progressive with regard to social projects.

South Melbourne Market

www.southmelbournemarket.com.au
The South Melbourne Market is the oldest continuing market in Melbourne. It is
located in the inner Melbourne suburb of South Melbourne. It has a tram station near it
and is open Wednesday, Friday, Saturday and Sunday. It has rooftop parking as well as
parking on the street. In 1856 citizens in the area petitioned the local council to establish
a market. In 1867 the market was opened on land located on Coventry, Cecil and York
streets. The initial market was 10 acres, but the size has changed in recent years. In
1866 sheds on the site were established and in 1924 electric lighting was added. In
1972 a rooftop car park was added and in 2012 a roof over the rooftop carpark was
built. The stores at the market are categorised under deli, eat and drink, fashion and
accessories, florist and nursery, fruit and vegetables, grocery, health and beauty, home
and living, kids, meat, poultry and seafood, pets, services and SO:ME space.
Discussion Questions
1. What kind of sustainability initiative does the South Melbourne Market have?
2. What sustainability recommendation would you recommend the South Melbourne
Market implement?

Sustainability initiatives recognise that there is an interdependence between busi-

ness and the natural environment. Whilst sustainability tends to focus on environ-
mental issues, human living and working conditions are also part of its definition.
Corporate social responsibility is a political issue due to its impact on the economy
and need to comply with regulations. In addition, consumers are emphasising
sustainability in their buying patterns.
There are cultural and linguistic differences in how corporate social responsibility
is perceived with some regions focusing on the use of land and water by businesses but
other regions highlighting the ethical issues around supply chain management. The
diversity of perceptions has meant it can be a confusing concept as it is a buzzword
for many.
Florez-Jimenez et al. (2024) suggest that corporate sustainability is based on
social, economic and environmental development. Social development is defined
as “managing a corporation to strengthen the human capital of stakeholders and
furthering the quality of life of its communities” (Florez-Jimenez et al., 2024: 4). This
means people in terms of human capital are important in the successful functioning
of a business. Human capital involves the experiences, skills and education that a
person has which can be used to facilitate business goals. By taking a stakeholder
approach it emphasises that there are numerous other people and entities influencing
a business such as the government, institutions and competitors. The quality of life
means considering how people live in terms of factors such as hours worked and
lifestyle conditions.
110 8 Corporate Social Responsibility and Sustainable Entrepreneurship

Economic development is defined as “managing a company with cashflow suffi-

cient to ensure return and liquidity for developing operations” (Florez-Jimenez et al.,
2024: 4). This means that there is a need for a positive financial result from the busi-
ness activities. The emphasis on cash flow is important as at different times of the year
a company will have different amounts of money depending on accounts received.
Thus, it is important to manage the inflow and outflow of money. The liquidity means
that the finances should be able to be rapidly converted into cash in an easy way.
Developing operations emphasises that investment in new machines or processes is
needed to stay competitive.
Environmental development is defined as “managing a company so that its prod-
ucts and its activity do not degrade ecosystem services” (Florez-Jimenez et al.,
2024: 4). This means that business activity should not be done at the expense of
its ecosystem, thereby highlighting how products are made in terms of raw materials
or ingredients needed.
The idea behind the concept of sustainability is derived from the principle of only
taking what you need and leaving the rest for others. Due to the increase in global
population meaning more resources are being consumed, it is important to consider
future needs of society, thereby proposing that there is a restructure of system usage
for sustainability reasons.
Discussion about sustainability increased after the United Nations ‘Our Common
Future’ also known as the ‘Bruntland Report’ was published in 1987. This report
stressed the need to consider future needs of society. This means sustainability is
a social policy that emphasises environmental matters and social policy. Based on
social policy principles, sustainability targets economic prosperity but also social
welfare.
The United Nations proposed the Millennium Development Goals in 2000 which
were to be achieved by 2015. The eight goals were to (1) eradicate extreme poverty
and hunger, (2) achieve universal primary education, (3) promote gender equality and
empower women, (4) reduce child mortality, (5) improve maternal health, (6) combat
HIV/AIDS, malaria and other diseases, (7) ensure environmental sustainability and
(8) global partnership for development. The Millennium Development Goals were
replaced by the Sustainable Development Goals in 2015. The large number of goals
set by the United Nations has merit due to the breadth and coverage but has been
criticised for being too vague. The concept of creating shared value has been proposed
as an alternative to sustainability. This is due to the emphasis on co-creation between
entities regarding social and ecological concerns.

Sumol + Compal
www.sumolcompal.pt
Sumol + Compal is a soft drink and fruit juice maker located in Portugal. It began
in 1945 with a small company created by António João Eusebio. Since then, it has
grown and developed its own branded products as well as representing other company
brands. In 2009 the Sumol and Compal brands were merged and in 2011 it renewed
Sustainable Entrepreneurship 111

its franchise agreement with PepsiCo. Their stated purpose is to satisfy consumers by
offering new innovative branded products. This includes juice and nectar drinks that
are made with fruit and vegetables.
Discussion Questions
1. How are Sumol + Compal integrating sustainability practices into their products?
2. How can drink containers be recycled and used in other products?

Sustainable Entrepreneurship

Sustainable entrepreneurship can be considered as a process of “identifying sustain-

ability as new business opportunities, resulting in new and sustainable products,
methods of production or ways of organising business processes in a sustainable
way” (Lans et al., 2014: 37). Entrepreneurship can incorporate sustainability objec-
tives when it focuses on economic and environmental gain. The connection between
business and the environment is evident in many policies discussions around regional
development. This is due to business being required for employment reasons but the
environment leading to other types of activity such as tourism offers economic gain.
The main goal of sustainable entrepreneurship is to pursue opportunities that benefit
different stakeholders including individuals, the community and the global economy.
Sustainable entrepreneurship has also been referred to as green entrepreneurship,
social entrepreneurship and environmental entrepreneurship in different contexts.
The variety of terms in existence is reflective of the need to consider future generations
in business activity. It is no longer okay for business to just produce products, but
they need to think about the impacts of their business on others. Sustainable forms
of entrepreneurship are most evident in the agricultural and energy sector. They are
playing a key role in changing the way entrepreneurship is viewed in society.
Entrepreneurship has generally been viewed as a way of generating new and novel
business ideas. More recently environmental issues such as global warming and
climate change have become important. This means the perception of entrepreneur-
ship as a pure wealth generating activity has changed to incorporate environmental
issues. This means value creation incorporates financial and non-financial goals.
Sustainable entrepreneurship is based on the triple bottom line perspective which
emphasises environmental, social and economic aspects of business activity. This
means environmental issues such as land degradation or water usage are considered
along with social aspects such as inequality and economic perspectives such as
regional growth.
Businesses that conduct sustainable entrepreneurship are behaving in an ethical
way. They are discovering new business opportunities that improve the quality of
life for current and future generations. They are evaluating market ideas based on
whether they are environmentally relevant. This means considering economic and
112 8 Corporate Social Responsibility and Sustainable Entrepreneurship

other consequences of their business ventures. The idea of sustainable entrepreneur-

ship is to provide developmental gain for others by identifying sustainability in
business activities.

Individual Activity
Choose a city or town in your local area and research how it is incorporating
sustainability practices into regional development policies.

United Nations Sustainable Development Goals

https://sdgs.un.org/goals
The United Nations Sustainable Development Goals incorporate seventeen
different goals related to sustainability. Each goal has their own aims and objec-
tives in terms of making a positive impact on society. Increasingly organisations are
incorporating how they are meeting the goals in their performance outcomes. Some
organisations chart the progress of each goal or choose specific goals to follow. Below
is a summary of each goal and why they are important in addressing sustainability
concerns in the global economy.
1. No Poverty
The first goal focuses on trying to eradicate poverty in terms of lack of vital
resources such as clean drinking water, nutritious food and adequate living condi-
tions. Many people around the world live below poverty in terms of the amount of
money they have for essential tasks. Poverty can be defined in different ways but it
normally refers to the ability to work and life based on the income levels.
In emerging economies poverty tends to refer to proper sanitation and having
money left over from work for other expenses. This means the emphasis is on
increasing the standard of houses to include proper cooking and sleeping quarters.
It can also refer to time taken to get to work or school as well as the percentage of
resources used for accommodation. In developed countries poverty can refer to the
quality of life in terms of where people live and the percentage of money spent on
food and transport.
2. Zero Hunger
The goal zero hunger refers to making sure people around the world have enough
to eat. This includes eating nutritious and healthy meals at an affordable price. In
some regions food is in short supply due to drought or supply chain conditions.
This means food needs to be subsidised and provided to those in need. In developed
countries food can be in abundance but wasted, which means innovations in food
usage are needed. Nutrition is a key issue in many countries due to the increase in
diseases such as diabetes requiring people to consume less sugar and salt in their
United Nations Sustainable Development Goals 113

diet. In addition, there is more of a conscious effort to utilise food wastage in other
ways such as through garden compositing or as energy sources.
3. Good Health and Wellbeing
This goal focuses on improving the quality of life of people around the world
through health and wellbeing. Health can include physical as well as mental compo-
nents. Physical health relates to how well a person lives based on their physical
conditions. Increased emphasis is being placed on exercise in people from young
to old age. In addition, there is interest in sedentary behaviours and activeness is
being prioritised. As a consequence, more policy initiatives are aimed at outdoors
and indoors exercise techniques. This can include green living spaces in cities as well
as rural places. Mental health refers to how well a person copes in terms of adjusting
to new and emerging living conditions. This has become increasingly important in
the post COVID-19 era. During the COVID-19 pandemic more focus was placed on
people’s mental health in terms of anxiety and depression. This was due to social
distancing requirements limiting a person’s interaction with others.

Classroom Activity
In class on poster paper brainstorm different words for the term ‘sustainability’ and
consider why these words are important.

4. Quality Education
This goal focuses on trying to ensure people have access to quality education
that includes up-to-date curriculum. It highlights the need for people to engage in
lifelong education in order to update their knowledge. By emphasising inclusivity in
education, it stresses how people regardless of income or location need education.
This means ensuring people are encouraged to attend primary and secondary school
then higher education institutions. This is crucial in the knowledge economy that
emphasises digital and financial literacy.
5. Gender Equality
This goal tries to ensure equality amongst male and females in society. By doing
so it ensures that thought has gone into any gender disparities that exist. This means
emphasising change as a way to empower people. The role of females in leader-
ship and political positions is stressed as well as how gender quotas can decrease
disparities. Other issues related to gender include marriage, property rights and repro-
ductive health issues. To do this, a decrease in discrimination based on gender is being
prioritised.

In-Class Debate Question

Divide the class into two groups with one group focusing on why sustainability is
114 8 Corporate Social Responsibility and Sustainable Entrepreneurship

beneficial to financial growth of a firm and the other group examining why it is not
productive.

6. Clean Water and Sanitation

This goal focuses on how to ensure there is clean water in terms of drinking water
that is linked to health issues. Safe drinking water is emphasised as well as sanitation
issues associated with hand washing and showering facilities. In addition, the role
of water in an ecosystem in terms of lakes and rivers is emphasised.
7. Affordable and Clean Energy
Due to the cost-of-living pressures more people are seeking affordable sources
of energy. This has led to an increased emphasis on solar, wind and other sources of
natural energy. As some sources of energy emit pollution there is increased interest
in changing to clean energy sources. This means changing to modern energy sources
that are cheaper and more efficient.
8. Decent Work and Economic Growth
This goal promotes obtaining good forms of employment for people. This means
considering what kind of skills a person has and their qualifications. Other aspects
related to work such as location and closeness to home are considered. Productive
forms of employment are emphasised as a way to facilitate economic growth. This
includes encouraging work that has associated social benefits such as superannuation.

Internet Exercise
On the internet do some research about sustainability initiatives in your local council.
Consider what kind of programmes they have for recycling.

9. Industry, Innovation and Infrastructure

This goal focuses on the importance of industry in a region. This means empha-
sising industrialisation and the existence of productive enterprise. Part of this goal
is on promoting sustainable forms of industrialisation in terms of ensuring envi-
ronmental goals are met. To do this business needs to comply with sustainability
initiatives but also be proactive about being innovative with regard to environmental
management. Thus, industry should foster sustainable forms of innovation that can
lead to competitive advantages.
10. Reduced Inequalities
This goal emphasises equity in ensuring people around the world that they have
access to certain services and a high quality of life. This can be difficult to do as each
country has different cultural and political systems that may lead to social difficulties.
United Nations Sustainable Development Goals 115

Thus, by helping poorer countries finance digital infrastructure and other essential
services, it can reduce inequality.
11. Sustainable Cities and Communities
This goal focuses on making areas of habitation more environmentally friendly.
By doing so it emphasises efficient transport systems and access to public trans-
port. Other transportation issues such as having all weather roads and decreasing
air pollution through clean energy usage are emphasised. The goal tries to make
human settlements more inclusive in the type and range of services offered. This
helps enable more area to be dedicated to public spaces and leisure activities.
12. Responsible Consumption and Production
This goal emphasises that people, business and the community should consume
products and services in a responsible way. This ensures sustainable production
methods and that resources are available for future generations. As part of this goal
less emphasis is placed on fossil fuels and other polluting energy sources. By doing
so it tries to lessen the global footprint of people in terms of what resources they
consume.
13. Climate Action
This goal seeks to implement strategies to reduce climate change such as that
occurring through global warming. Increased resource usage by humans has led to
more deforestation, pollution levels and a rise in the sea level. This has flow on effects
in terms of where people live and the crops grown on land. As a consequence, there
are highly vulnerable regions that are exposed to weather changes such as floods and
droughts.
14. Life Below Water
This goal seeks to conserve and grow life below water in terms of sea animals and
flora, thereby emphasising sustainable usage and maintenance of marine resources.
By doing so it emphasises clean water usage in terms of reducing pollution levels.
In addition, trying to reduce over fishing through targeted catchment areas is
emphasised.
15. Life on Land
This goal seeks to promote the sustainable usage of land by emphasising better
land management policies. This means reversing land degradation and putting in
place forest regeneration systems. This can reduce biodiversity loss that includes
threated species and loss of native plants. By restoring forest ecosystems it can
reduce greenhouse gas emissions and provide a better relationship between humans
and nature.
16. Peace, Justice and Strong Institutions
116 8 Corporate Social Responsibility and Sustainable Entrepreneurship

This goal emphasises the need for effective institutions in society, thereby high-
lighting how accountable and fair institutions regulate conduct by business, govern-
ment and people in society. This is important in providing an inclusive society that
is based on transparent policies, thereby reducing the possibility of wars and other
conflicts.
17. Partnerships for the Goals
This last goal emphasises the need for global cooperation in order to implement
and manage the goals. Due to the trade and travel relationships between countries,
it is important that collaboration is emphasised. This is due to the amount of goods
exported and imported by countries as well as the flow of labour between countries.

Application Activities
Interview a local business owner and/or manager about how they are trying to be
sustainable and the costs involved.

Protected Areas

Protected areas need to be looked after in terms of keeping natural resources in a

good condition but also to consider entrepreneurial business endeavours. Dawo et al.
(2023: 72) define protected areas as “international recognised sites for the conserva-
tion of nature and protection of cultural heritage”. They are facing pressure from a
range of global and societal issues such as growing inequality rates and environmental
changes. The COVID-19 pandemic led to decreased tourism and a reliance on digital
business endeavours. This meant areas with lower internet capabilities and remote-
ness felt greater hardships than those in urban areas. Moreover, ecological challenges
such as drought, famine, pollution and climate change have altered the conditions of
some protected areas. Sustainable forms of entrepreneurship are needed to protect
areas in order to combine environmental concerns with financial revenue. In order to
contribute to the sustained ability of a protected area to stay competitively relevant,
some form of entrepreneurship is required. Sustainable entrepreneurs in protected
areas help manage competing interests of economic and environmental needs. They
are aware of the contextual situation of the area and need to consider policy and
conservation interests. In fragile ecological areas it is important to understand the
market and institutional barriers. This means engaging in community development
whilst simultaneously preserving natural habitats.

Pomora
www.pomora.com
Circular Economy 117

Pomora is an olive tree adoption programme in which you adopt an olive tree. An
adoption pack including information and a certificate is included. During the year,
updates about the olive tree are given. There are different types of olive oil shipments
people can receive from their olive tree and this includes flavoured varieties including
chilli, lemon and rosemary. The people who grow the olive trees are listed on the
website and details about where their land is located on the web page. The advantage
of adopting an olive tree is that there is a sense of connection between knowing where
the olive oil comes from and how it is grown thereby emphasising the provenance.
Discussion Questions
1. What other kind of food products have an adoption programme?
2. Do you think people want to know the provenance of their food?

Circular Economy

The circular economy refers to the idea that products are recycled and reused in
other ways. The idea has been around for a long time with people using products
for other purposes. The growth in interest in the circular economy is due to more
emphasis being placed on the environment and sustainability initiatives. Digital tech-
nologies such as artificial intelligence, blockchain, data analytics and the Internet-of-
Things are facilitating the growth of the circular economy. In the current knowledge-
based society there is an emphasis on digital technologies that incorporate sustain-
ability initiatives. Knowledge is an indispensable resource in today’s global economy.
Digital technologies can be used to monitor product performance and help move the
economy in general towards a more circular economy.
The circular economy is different to the linear economy in which products are
used then discarded for a specific purpose. In a circular economy waste is minimised
as material flows from one user to another. A product’s life can be analysed in terms
of three main stages: beginning of life, middle of life and end of life (Terzi et al.,
2010). At a product’s beginning of life it is designed with a specific purpose in mind.
The price, quality, usefulness and likeability of the product determine how long it is
used for. Products with a higher price such as a computer or car tend to be used for
longer periods of time. Cheaper items such as food tend to be consumed in frequent
amounts and are often disposed of after usage. However, sometimes they can be used
for other purposes such as a soft drink bottle being used to store plants. Middle of life
products are products that are not new but have been used for a period of time. They
can include clothes and other items such as plastic containers. End of life products
are products that are almost falling apart and need to be replaced. These can include
a computer with an older style battery or household items such as bed linen.
In the circular economy, innovation is emphasised. Bessant et al. (2014: 1284)
state, “innovation involves three key elements—search, selection and implementa-
tion”. Searching involves trying to find something that can be changed in a positive
way. Not everything needs improvement so the search process can take time. Once
118 8 Corporate Social Responsibility and Sustainable Entrepreneurship

an innovative idea is found then choices need to be made about the process of inno-
vation. This includes deciding on resource allocation and allocating funds to its
development. The implementation stage involves actually doing the innovation in
terms of making the change and then following through with its implementation in
the marketplace.

Nuseed
www.nuseed.com
Nuseed is a seeds business that sells different types of plant seeds. This includes
canola, carinata, sorghum and sunflower seeds that can then be grown in commercial
crops. The seeds help provide sustainable plant-based solutions that encourage more
environmentally friendly practices. Some of their innovative products include Nuseed
Carinata which is grown as a crop cover in Argentina and Manola grown in Australia
that is a healthy variety of canola oil.
Discussion Questions
1. How is Nuseed innovative with the production of new plant seeds?
2. What kind of new products or services would you recommend Nuseed to enter
into?
References
https://www.farmonline.com.au/story/7965441/nufarm-revving-up-fuel-energy-
and-health-crops-to-match-ag-chem-sales/
https://www.seedworld.com/express-tolerant-high-oleic-added-to-nuseeds-2024-
lineup/

Conclusion

This chapter has discussed the importance of sustainability in society by focusing

on environmental as well as economic objectives. The role of sustainable forms
of entrepreneurship was highlighted that emphasised ethical and moral obligations
of entrepreneurs. The different United Nations sustainable development goals were
stated in terms of how they can be utilised by business.

Discussion Questions

1. Why are more businesses incorporating sustainability products?

2. What are the United Nations sustainable development goals and why are they
important?
3. What kind of sustainable products or services are available in the marketplace?
Multiple Choice Questions 119

Learning Outcomes

1. To understand why sustainability is essential in business practices.

2. To know how to create corporate social responsibility.
3. To encourage the use of creating shared value.

Multiple Choice Questions

1. Sustainability refers to
(a) making more products for the marketplace
(b) the integration of a set of social-environmental criteria or qualities in human
actions (Salas-Zapata & Ortiz-Munoz, 2019: 155)
(c) internationalisation
(d) none of the above
2. CSR is an abbreviation for
(a) community sustainability revenue
(b) community societal revenue
(c) corporate social results
(d) corporate social responsibility
3. What kind of expectation that society has on organisations is included within
CSR?
(a) economic
(b) legal
(c) ethical
(d) all of the above
4. What kind of development involves managing a corporation to strengthen the
human capital of stakeholders?
(a) social
(b) economic
(c) environmental
(d) none of the above
5. What kind of development involves managing a company with cash flow
sufficient to ensure return and liquidity for developing operations?
(a) social
(b) economic
(c) environmental
(d) none of the above
Answers: 1b, 2d, 3d, 4a, 5b
120 8 Corporate Social Responsibility and Sustainable Entrepreneurship

Web Resources

https://www.lego.com/en-au
The Lego innovation website enables you to collaborate with Lego in devel-
oping new innovations. On the website you can chat with a chatbot who can help
you navigate the website. There is information on Lego’s values and sustainability
initiatives.
https://www.ukri.org/
The United Kingdom Research and Innovation website is a United Kingdom-
based information repository. Its aim is to contribute to society by emphasising posi-
tive forms of innovation. It is sponsored by the Department for Science, Innovation
and Technology as a way of highlighting new sources of knowledge.
https://www.usaid.gov/
The USAid website provides information about the USAid organisation, which
is an international development agency. The goal of USAid is to promote the United
States national security agenda in the international marketplace. The website has
information on humanitarian assistance, anti-corruption and global health as well as
many other topics. Organisations that work with USAid are stated together with new
policy documents such as the Gender Equality and Women’s Empowerment policy.
https://www.sciencedirect.com/journal/business-horizons
Business Horizons is a journal that publishes articles about topical business issues.
The emphasis is on new and original thoughts regarding business processes. This
means the articles are written in an easy to read format by mostly academics.

Reading Resources

Voss, V. (2017). Never split the difference: Negotiating as if your life depended on
it.
This book is about high-stakes negotiations when it is important to focus on what
you want from the business deal. Nine key principles are identified in the book that
help people negotiate better. This can help people feel comfortable with talking about
what they want in terms of a negotiation. Sometimes this can be hard to do due to
the monetary and emotional attachment people have towards negotiation.
Robinson, K. (2021). The ministry for the future. Orbit Books.
This book discusses on how climate change will affect society. It focuses on
the impact of greenhouse gases and pollution on humanity. It discusses the role of
environmental crises on the planet and how to plan for the future.
References 121

References

Aguinis, H., Rupp, D. E., & Glavas, A. (2024). Corporate social responsibility and individual
behaviour. Nature Human Behaviour, 8, 1–9.
Bessant, J., Öberg, C., & Trifilova, A. (2014). Framing problems in radical innovation. Industrial
Marketing Management, 43(8), 1284–1292.
Carroll, A. (1979). A three-dimensional conceptual model of corporate performance. Academy of
Management Review, 4, 498–505.
Dawo, H. L. A., Long, T. B., & de Jong, G. (2023). Sustainable entrepreneurship and legitimacy
building in protected areas: Overcoming distinctive barriers through activism. Business Strategy
and the Environment, 32(1), 72–95.
Florez-Jimenez, M. P., Lleo, A., Danvila-del-Valle, I., & Sánchez-Marín, G. (2024). Corporate
sustainability, organizational resilience and corporate purpose: a triple concept for achieving
long-term prosperity. Management Decision. https://doi.org/10.1108/MD-06-2023-0938
Lans, T., Blok, V., & Wesselink, R. (2014). Learning apart and together: Towards an integrated
competence framework for sustainable entrepreneurship in higher education. Journal of Cleaner
Production, 62, 37–47.
Matten, D., & Moon, J. (2008). Implicit and explicit CSR: A conceptual framework for a comparative
understanding of corporate social responsibility. Academy of Management Review, 33, 404–424.
Salas-Zapata, W. A., & Ortiz-Muñoz, S. M. (2019). Analysis of meanings of the concept of
sustainability. Sustainable Development, 27(1), 153–161.
Terzi, S., Bouras, A., Dutta, D., Garetti, M., & Kiritsis, D. (2010). Product lifecycle management—
From its history to its new role. International Journal of Product Lifecycle Management, 4(4),
360–389.

Further Readings

Belz, F. M., & Binder, J. K. (2017). Sustainable entrepreneurship: A convergent process model.
Business Strategy and the Environment, 26(1), 1–17.
Gupta, B. B., Gaurav, A., & Panigrahi, P. K. (2023). Analysis of the development of sustainable
entrepreneurship practices through knowledge and smart innovative based education system.
International Entrepreneurship and Management Journal, 19(2), 923–940.
Spence, M., Ben Boubaker Gherib, J., & Ondoua Biwolé, V. (2011). Sustainable entrepreneurship:
Is entrepreneurial will enough? A north–south comparison. Journal of Business Ethics, 99,
335–367.