ENTREPRENEURSHIP

1.1.1 Evolution of Entrepreneurship

The word entrepreneur is derived from the 13th-century French word 'entreprendre,' which
means to undertake or do something. By the 16th century, the term "entrepreneur" had
evolved to refer to a person who engages in business ventures or speculation. An entrepreneur
is the person who accepts the risk of the future unknown situation and introduces something
new in the business (Hoselitz, 1952).

The concept of risk began to be applied to the entrepreneur in the seventeenth century where
entrepreneurs are being regarded as a person who entered into contractual relationship with
the government for the performance of service or the supply of goods, the price at which the
contract was valued was fixed and the entrepreneur bore the risks of profit and loss from the
bargain.

Monroe (1951) quoted Cantillion, one of the earliest contributors to the concept of
entrepreneurship, as defining entrepreneur as one who buys factors of services at certain
prices with the view of selling their products at uncertain price in the future and as such
becomes bearer of an uninsurable risk. By this definition, the assumption of uninsurable risk
emphasized the difference between entrepreneurship from other forms of human endeavours.

Morishima (1977:8-10) quoted Walras as accepting Cantillion’s view, and going further he
distinguished the entrepreneur by emphasizing on its necessary effective management skills
and marshaling abilities and so become the first author to regard him as the fourth factor of
production.

At the turn of the twentieth century, the concept saw a fundamental shift in entrepreneurship.
The emphasis shifted from tangible trades to ideas and innovation. So, entrepreneurs such as
Thomas Edison, Henry Ford, and Steve Jobs transformed sectors, establishing
entrepreneurship as a driving force of growth. Therefore, the rise of venture capital and access
to investment boosted the entrepreneurial spirit even further, allowing entrepreneurs to
threaten existing industries.

However, entrepreneurship has grown from humble origins to become a worldwide force that
drives economies and shapes how we live and work. The essence of entrepreneurship hasn’t
altered despite historical transitions and technical advancements

● the pursuit of opportunity,

● the willingness to take risks, and

● the resolve to produce something of value.

Therefore, the evolution of entrepreneurship is a monument to human creativity and the

persistent spirit of invention. Entrepreneurs continue to influence the world with their ideas,
innovations, and tenacity.

Entrepreneurship, unlike fields such as physics, chemistry, or mathematics, does not have a
universally accepted definition. In disciplines such as physics or mathematics, concepts are
well-defined and standardized globally. However, entrepreneurship remains a dynamic and
evolving field with multiple interpretations depending on the context, the scholar defining it,
and the economic or social setting in which it operates.

Despite the absence of a universal definition, various scholars and institutions have attempted
to define entrepreneurship from different perspectives, including innovation, value creation,
risk-taking, and business management.

1.1.2 What is Entrepreneurship?

Entrepreneurship is the willingness and ability of an individual to seek out investment

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

Joseph Schumpeter (1934) defines entrepreneurship as a process of creative destruction,

where entrepreneurs introduce innovations that disrupt existing markets and create new
industries. He argued that entrepreneurship is not just about starting businesses but about
fundamentally changing industries through innovation.

Peter Drucker (1985) describes entrepreneurship as the act of innovation and resource
allocation to exploit opportunities and create value. He emphasized that entrepreneurs must
systematically look for change, respond to it, and exploit it as an opportunity.

The Organisation for Economic Co-operation and Development (OECD) (2019) defines
entrepreneurship as the ability to transform ideas into action, involving innovation, risk-
taking, and the management of a business venture. This definition highlights the role of
entrepreneurship in economic development and job creation.

Jean-Baptiste Say (1803) views entrepreneurs as individuals who shift economic resources
from lower to higher productivity areas, thus creating value. This classical definition aligns
with the idea that entrepreneurs are resource allocators who seek to maximize efficiency and
profitability.

A. A. Salad (Ph.D.) in the year 2023 defined entrepreneurship as any activity that creates
value via the fusion of capital, risk-taking, innovation, and technology, in a book titled
AcadoPreneurship, where he gave this definition as a co-author. This modern definition
integrates the technological advancements of the 21st century into entrepreneurship,
recognizing the crucial role of digital transformation in business success.

1.1.3 Who is An Entrepreneur?

An entrepreneur is viewed as a person who perceives a new way to providing satisfaction or

perceives the existence of a new consumer needs and how to meet that consumer’s need. Also,
an entrepreneur is a person who pays a certain price for a product to resell it at an uncertain
price, thereby making decisions about obtaining and using the resources while consequently
admitting the risk of enterprise (Cantillion, 1755).

1.1.4 Characteristics of An Entrepreneur

1. Self-Confidence: an entrepreneur is confident, optimistic and independent and a

person who believes so much in himself and never believes that anything can be
impossible. He believes in his own ideas even when others do not.

2. Task-Result Oriented: He is an achiever; profit oriented and is very persistent. He

has great determination to succeed; he is hard working and energetic.

3. Leadership: He gets along well with others; exhibits leadership trait. He is responsive
to suggestions and criticism. He creates teamwork; gives directions, sets examples,
shares danger and hardships on equal footing among the workers.

4. Risk Taking: He takes realistic risks that offer challenges and lead to success. He
knows how to avoid low risk situation (conservatism) because they offer no challenges
and equally avoids high-risk situation (gambling) because of the high cost involved in
the event of failure.

5. Originality: He is innovative, creative and flexible, exhibit openness of mind, he is

resourceful, versatile and knowledgeable.

1.1.5 Entrepreneurial Personality

 1. An Improver: An entrepreneur is one uses his/her enterprise as a means of improving
the world. The overarching watchword is ‘morally correct companies will be rewarded
working on a noble cause’.

2. An Advisor: This business personality provides extremely high level of assistance and
advice to customers. The advisor’s motto is ‘the customer is right and we must do
everything to please them’. Enterprise built by advisors become customer-focussed.

3. A Superstar: Personality of this lot is centred on the charisma and high energy of the
Superstar leader. This personality often will cause an organization to be built around
one’s personal brand.

4. An Artist: Here, the person is a highly reserved but highly creative. Such is often
found in the businesses that demand creativity.

5. A Visionary: A business built by visionary leader will often be based on the future
vision. He/she has a high degree of curiosity to understand the world around him/her
which enables him/her to set up plans to mitigate against landmines.

1.1.6 Key Elements of Entrepreneurship

A. Innovation: Entrepreneurs develop new products, services, or business models to

address market needs. Innovation can be technological, process-based, or market-
driven.

B. Risk-Taking: Entrepreneurship involves uncertainty, and entrepreneurs must take

calculated risks to achieve business success. Risks may include financial risks, market
risks, and operational risks.

C. Opportunity Recognition: Successful entrepreneurs identify gaps in the market and

leverage them for business growth. This involves analyzing consumer needs and
emerging trends.

D. Value Creation: The core of entrepreneurship is creating value—whether economic,

social, or environmental. Value is generated when an entrepreneur develops solutions
that benefit consumers, businesses, or society.

E. Resource Management: Entrepreneurs must efficiently allocate financial, human, and

material resources to optimize business performance. Poor resource management often
leads to business failure.
1.1.7 Types of Entrepreneurship

A. Small Business Entrepreneurship: This involves small-scale enterprises such as

retail shops, restaurants, and local service providers. The focus is on sustainability
rather than rapid expansion.

B. Scalable Startup Entrepreneurship: These businesses are designed to grow rapidly,

often driven by innovation and technology. Examples include tech startups like Uber,
Airbnb, and Paystack.

C. Social Entrepreneurship: These businesses aim to address social issues such as

poverty, education, and healthcare while generating revenue. Examples include the
work of Muhammad Yunus with Grameen Bank.

D. Corporate Entrepreneurship (Intrapreneurship): This occurs within large

organizations, where employees innovate new products or business models to enhance
the company’s competitiveness.

E. Serial Entrepreneurship: This refers to individuals who launch multiple ventures,

either simultaneously or sequentially, with a focus on diversifying business risks and
opportunities.

1.1.8 Importance of Entrepreneurship

A. Economic Growth: Entrepreneurship contributes to national GDP and economic

development by introducing new products and services into the market.

B. Employment Generation: Entrepreneurs create job opportunities, reducing

unemployment and improving livelihoods. For example, businesses like Dangote
Group and Jumia have significantly impacted employment in Africa.

C. Innovation and Technological Advancement: Entrepreneurs drive innovation,

leading to advancements in various industries, including healthcare, finance, and
transportation.

D. Wealth Creation: Entrepreneurship enables individuals and communities to generate

wealth, leading to better living standards and economic empowerment.

E. Social Development: Social entrepreneurs address critical societal issues such as

access to clean water, quality education, and affordable healthcare.
1.1.9 Challenges of Entrepreneurship

A. Financial Constraints: Many entrepreneurs struggle to secure startup capital due to

limited access to loans and investment opportunities.

B. Market Competition: New businesses face intense competition from established

firms, making it difficult to gain market share.

C. Regulatory and Bureaucratic Barriers: Complex tax policies, licensing

requirements, and government regulations often discourage entrepreneurial activities.

D. Risk of Failure: Many startups fail within the first five years due to poor
management, inadequate market research, or financial mismanagement.

E. Technological Changes: Entrepreneurs must continuously adapt to evolving

technology to remain relevant in their industries. Businesses that fail to innovate risk
obsolescence.

It is important to note that Entrepreneurship remains a dynamic and evolving field without a
universally accepted definition. Despite this, various scholars have attempted to define and
explain its key characteristics, emphasizing innovation, risk-taking, and value creation.

Entrepreneurship plays a crucial role in economic and social development, fostering job
creation, technological progress, and wealth generation. However, it comes with challenges
that require strategic planning and resilience. As the business landscape evolves,
entrepreneurship will continue to be a driving force in shaping industries and economies
worldwide.

1.1.10 Function of Entrepreneurs

Entrepreneurs perform various functions in different facets of human endeavor. However,

Fadahunsi (2002) summarized them into ten functions. These are:

1. Searching for and discovering new information.

2. Translating new information into new market; techniques and goods.

3. Seeking and discovering economic opportunities.

4. Evaluating economic opportunities.

5. Marshaling financial resources necessary for the enterprise.

 6. Making time-banding arrangement, time management.

7. Taking ultimate responsibility for management.

8. Providing for being responsible for motivational system within the firm.

9. Providing leadership for the work group.

10. Taking the ultimate risk of uncertainty.

Meanwhile, others have categorized these functions into economic, social and technological
spheres (Owualah, 1999 & Ogundele, 2012).

1.1.10.1 Social Functions of Entrepreneurs

1. Transforming traditional indigenous industry into a modern enterprise.

2. Stimulating indigenous entrepreneurship, the entrepreneur has in his employment

potential rivals.

3. Jobs or employment creation in the community.

4. Provision of social welfare of redistributing wealth and income.

5. Providing leadership for the work group.

6. Providing for and responsible for the motivational system within the firm.

1.1.10.2 Economic Functions Entrepreneurs

1. Marshaling the financial resources necessary for the enterprise or mobilizing saving.

2. Bearing the ultimate risk of uncertainty.

3. Providing avenue for the dispersal and diversification of economic activities.

4. Utilization of local raw material and human resources.

1.1.10.3 Technological Function of an Entrepreneur.

1. Stimulating of indigenous technology in the production process.

2. Adapting traditional technology to modern system.

3. Adapting imported technology to local environment.

 4. Developing technological competence in self and the work group.

1.1.11 Reasons for Entrepreneurship

All individual can decide to be on his/her own for the following reasons:

a) Push Factors: Unpleasant life experiences and events can push someone into
becoming his own boss. These include job dissatisfaction, pay dissatisfaction,
relocation of one’s spouse, transfer/redeployment, unemployment, e.t.c.

b) Pull Factors: Favourable events that encourage someone to venture into

entrepreneurship such as enabling business environment, presences of partners,
profitability, independence, acquisition of new idea(s), e.t.c.

c) Supportive Factors: These are factors such as culture, social condition, peer group,
working experience, e.t.c.

1.2 INTRAPRENEURSHIP

1.2.1 What Is Intrapreneurship?

Intrapreneurship refers to a system within a company or organization that allows employees

to act like entrepreneurs. Intrapreneurs are self-motivated, proactive, and action-oriented
individuals who take the initiative to develop innovative products or services.

Unlike entrepreneurs, intrapreneurs operate within a company's safety net, absorbing any
failures or losses. This support encourages creativity and risk-taking, allowing intrapreneurs
to innovate without fearing personal financial loss. By leveraging their creativity and
ingenuity, intrapreneurs can drive significant innovation and transform their workplaces,
similar to entrepreneurs.

Companies can leverage their employees' entrepreneurial spirit by fostering intrapreneurship,

leading to greater innovation, agility, and competitive advantage.

1.2.2 Characteristics of Intrapreneurship

 Intrapreneurship allows employees to act like entrepreneurs within an organization.

 Intrapreneurs are typically self-motivated, proactive, and action-oriented individuals

with leadership skills who think outside the box.
  Intrapreneurship is a stepping stone to entrepreneurship, enabling intrapreneurs to use
their team experiences to develop their own businesses.

1.2.3 Understanding Intrapreneurship

Intrapreneurship creates an entrepreneurial environment by allowing employees to apply

their entrepreneurial skills to benefit the company and themselves. It provides employees
with the freedom to experiment and the potential for growth within the organization.

Intrapreneurship aims to foster autonomy and independence as employees seek the best
solutions. For example, an intrapreneur might be tasked with researching and recommending
a more efficient workflow for a company's brand within a target group or implementing
initiatives to improve company culture.

Employers must recognize and promote intrapreneurs, as failing to do so can harm a

company's success. Encouraging intrapreneurship leads to departmental and overall growth,
driven by innovation and improvement. On the other hand, companies that don't support
intrapreneurs risk losing them to competitors or having them start their own businesses.

Examples of successful intrapreneurship include the Post-it note, Gmail from Google's "20%
time," and Facebook's "like" button, which were developed during a hackathon.

MIT Sloan School. "Intrapreneurship, explained."

Intrapreneurs use the company's existing resources and aren't building from scratch or
risking their own money but still create innovative products or solutions.

1.2.4 Who is an Intrapreneur?

Intrapreneur is individual who is tasked with creating new and innovative products within an
already-established business. Backed by a company's available resources, intrapreneurs develop
open-ended ideas and turn them into real-world products and services.

1.2.5 Types of Intrapreneurs

Including employees from every age group in problem-solving processes leads to a wider
range of solutions and more efficient resolutions, benefiting the entire organization.
Most millennial are particularly drawn to the intrapreneurial work style, as they value
meaning, creativity, and autonomy in their roles. They're eager to develop their own projects
while simultaneously contributing to their company's growth.
1.2.6 Characteristics of Intrapreneurs

Intrapreneurs tackle specific challenges, such as increasing productivity and cutting costs,
requiring a high level of skill, including leadership and innovative thinking. They take risks
and drive innovation within the business to improve its goods and services, better serving
the market.

A successful intrapreneur is comfortable with uncertainty, persistently testing their ideas

until they achieve the desired results. They can interpret market trends and envision how the
company needs to evolve to stay competitive. Intrapreneurs are integral to the company's
backbone, serving as the driving force that maps out the organization’s future.

1.2.7 What is the Main Goal of Intraprenuership?

Intrapreneurship aims to drive innovation within a company by enabling employees to lead

new projects and initiatives. It merges entrepreneurship's creativity and initiative with an
established organization's support and resources. This may benefit the company and its
customers by exploring new revenue streams, diversifying offerings, and boosting
productivity and engagement.7

1.2.8 What Are the Main Risks of Intrapreneurship?

Intrapreneurs may lack autonomy over their projects and must align with company goals and
approval processes. They also generally have less decision-making authority and might not
receive full credit or financial rewards for successful ventures. Career advancement may also
be stalled if their initiatives aren't successful, potentially leading to frustration and decreased
motivation.8

1.2.9 Benefits of being an intrapreneur

Intrapreneurs benefit a company in the same way that entrepreneurs benefit an industry: their
innovations help create progress. And in backing intrapreneurs, the company tends to receive
most of the credit for the innovation. For a company, intrapreneurship can increase both
financial and social capital.

Intrapreneurs also stand to benefit from their major contributions. After all, the intrapreneur had
the idea, put in the work, made the connections, and made the product a reality—proving their
expansive skills, capabilities, and drive. Along the way, they got to take the lead on a project
that felt important to them.

This valuable experience can lead them toward an internal promotion, job offers with other
organizations, or funding offers from venture capitalists to support their next big idea. The
direction they choose to go depends on their goals, but a successful intrapreneur will likely have
options.

1.3 CORPORATE ENTREPRENEURSHIP

1.3.1 What is Corporate Entrepreneurship?

Corporate Entrepreneurship is the process of attempting to identify, encourage, and assist

entrepreneurship within an established company to create new products or services that
become new sources of revenue and leverage the parent company's assets and market
position. The term 'Corporate Entrepreneurship' was first used by Professor Michael E.
Gerber in his book named 'The E-Myth Revisited: Why Most Small Businesses Fail and
What to Do About It'. It embodies one of the major mediums for corporate innovation,
growth, and curtailment of cost. It preserves and helps in increasing employment and
boosting the market while simultaneously providing aid to limit or channel some of the
inconsistencies in the population of businesses.

1.3.2 Why is Corporate Entrepreneurship important?

The breathtaking pace of development and innovation is driving the way business is
conducted. As several new processes, ideas, strategies, and technologies are flooded in the
competitive world, the already established companies can either innovate their future or be
the victims of innovations. The pathway to overcome such circumstances involves fostering
and promoting entrepreneurial activity.

The reason why corporate entrepreneurship is important can be summed up in the following
points:

 Need for Innovation: There is always a need for innovation as managers look for ways
to cut costs, improve quality, or otherwise enhance performance.

 Creation of New Value: Businesses engaged in entrepreneurial activities are expected to

achieve higher levels of growth, profitability, and new wealth creation.
 Effect on Economy: Corporate entrepreneurship can affect an economy by increasing
productivity, improving best practices, creating new industries, and enhancing
international competitiveness.

 Boosting Productivity: Intrapreneurship helps in boosting productivity as people come

up with new ideas and also helps to increase morale among the workforce.

 Benefit for the Organization: Corporate entrepreneurship provides a new source of

revenue which is the ultimate benefit of the parent organization. This leads to a greater
impact on the market condition of the company.

1.3.3 Implementing Corporate Entrepreneurship

Entrepreneurial success is defined in terms of innovative capacity that enables a business to

renew itself and hence survive longer. The key to making an organizational structure
entrepreneurial involves several factors, especially fostering the right climate or culture.
Intrapreneurship can be implemented with the help of the following:

i. Flexibility: Organisations must encourage flexibility whereby bureaucracy is

minimized and the ad-hoc approach is maximized.
ii. Facilitating Opportunities: An entrepreneurial climate that promotes the detection
and facilitation of opportunities as well as fostering motivation to pursue
opportunities provides an ideology to which employees can commit.
iii. Providing Resources: Organisations must provide employees with all the necessary
resources for their projects which might include funding for research and
development, the use of technology, and more importantly the guidance of experts.
iv. Separate Existence: Entrepreneurial structures should be new and separately
organized from the old and existing ways of a business, with a specific place for new
projects.
v. Teamwork: Teamwork and participative management styles improve the
environment inside a company which helps in the altogether growth of employees as
well as the company.
vi. Training and Development: One should offer training programs to enhance
employees' entrepreneurial skills. This may include workshops on problem-solving,
creative thinking, and risk management.

1.3.4 Corporate Entrepreneurship Examples

Several companies have established corporate entrepreneurship. A few examples of
companies that took the initiative of introducing corporate entrepreneurship or
intrapreneurship in their organization are discussed below:

i. Google: Google introduced a policy called “Innovation Time Off” where engineers
are encouraged to spend 20% of their paid time on projects they are passionate
about. It has led to the development of Google products.
ii. Amazon: Amazon Web Services (AWS) introduced by Amazon was the outcome of
corporate entrepreneurship. It was originally developed as an internal infrastructure
service to support Amazon's e-commerce platform. AWS evolved into a separate
business unit, providing cloud computing services to external customers.
iii. Sony: PlayStations by Sony are one of the best examples of Intrapreneurship.
Initially, Sony was not interested in entering this industry but today, gaming
accounts for 29% of Sony’s revenue. Ken Kutaragi was the intrapreneur to launch
the first Sony’s PlayStation.
iv. 3M: "Post it Notes" by 3M is one of the most intrapreneurial inventions. Mr. Fry
developed the Post-It Note during his “15% time,” a program at 3M that allows
employees to use a portion of their paid time to pursue and develop their ideas.
v. Airbus: "Crowdcraft" by Airbus is an intrapreneurship example of ecosystem
innovation. It is a crowdsourcing and crowd-staffing platform to find solutions to
technical challenges. The main objective of this platform is to create a better-
connected world and also to reduce work time and cost through more efficient ways.

1.3.5 Advantages and Disadvantages of Corporate Entrepreneurship

1.3.5.1 Advantages of Corporate Entrepreneurship

i. Organisation Growth and Profitability: When organizations use various new

strategies to make the most of opportunities near them, it will increase the
organization’s profitability and it’s growth.
ii. Availability of Resources: Corporate entrepreneurs get access to different resources,
including finances, established sales force, brand, and customer base, which brings
them one step ahead of others.
iii. Availability of Alternatives: Due to diversity among the employees, there is greater
knowledge inside the group which provides a wide range of alternatives to consider
before making a decision.
iv. Professional Connections: A large network of corporate entrepreneurs can assist the
workforce in developing new business ideas.

1.3.5.2 Disadvantages of Corporate Entrepreneurship

1. Long Approval Cycles: It is crucial to understand that they can’t decide without
getting the approval of a higher authority. Hence, it becomes a lengthy and time-
consuming process of getting approval before taking any decision.
2. Limited Financial Rewards: Corporate entrepreneurs receive fewer rewards as
compared to their efforts for the project, which might be one of the reasons that
affect company morale. It discourages employees from working profoundly.
3. Competition inside the Group: Competition among the members can undermine
the importance of the ultimate goal of the project.
4. Herd-thinking: Herd-thinking tends to force the group to agree and accept the first
apparent solution without considering alternatives. It also shows a lack of open
ownership.

1.3.6 Types of Corporate Entrepreneurship

Corporate entrepreneurship can be broadly classified into the following:

1. Corporate Venturing: Corporate venturing is concerned with launching new

ventures wherein larger companies invest and support entrepreneurs instead of equity
stake. In other words, we can say that it is an activity that seeks to generate new
businesses for the corporation in which it resides through the establishment of
external or internal corporate ventures. It is further classified into sub-categories
which are:

 Internal Corporate Ventures(ICVs)- These are the ventures that originate

within the corporation are owned by it and typically reside within the same
corporate structure. However, as they reside within the same structure they miss
real opportunities which they might get outside it.
  Cooperative Corporate Ventures(CCVs)- Cooperative ventures generally exist
as external entities that function beyond the organizational borders of the
founding partners.

 External Corporate Ventures(ECVs)- Any innovation that is created outside

the firm is an external corporate venture.

2. Intrapreneurship: Intrapreneurship is created to set the employees’ minds and

behavior to create a culture of creativity. It is the process of creating new enterprises
within the established enterprises. It is considered an activity that entrepreneurs use
to develop a company for adding innovation.
3. Organisational Transformation: An organizational transformation can be defined
as changing the organizational system for better economic performance. The main
motive of this transformation is to enhance the performance of the company. This is
applied to align the culture of the organization with its strategy to achieve a
competitive advantage.
4. Industry Rule Bending: Industry Rule Bending form targets the alteration of rules
in the working environment. This standard affects the entire industry. This form of
standard creates an enormous set of opportunities regarding growth and innovation.

1.3.7 Four Models of Corporate Entrepreneurship

The four models of Corporate entrepreneurship are discussed below:

1. The Opportunist Model: The first of four models of corporate entrepreneurship is

The Opportunist Model which signifies the starting point of an entrepreneurial
company, as they typically focus on resource production and ownership authority
across the organization. All companies begin as opportunists. The opportunist model
works well only in companies that are open to experimentation and have diverse
social networks behind the official hierarchy. Consequently, the opportunist
approach is undependable for many companies.
2. The Enabler Model: The Enabler Model is facilitated by developing new business
concepts, which eventually lead to improvements within a company or team’s
personal development and overall engagement executively. The basic principle of the
enabler model is that employees across an organization will be willing to develop
new concepts if given adequate support. Well-designed enabler practices have the
benefit of exposing senior management to ambitious, innovative young employees,
 allowing the company to identify and nurture future leaders. The enabler model
sharply contrasts with the opportunist model, as it often utilizes dedicated resources.
3. The Advocate Model: The Advocate Model focuses on developing new businesses
to become more large-scale corporations. Its essential function is to coach and
facilitate business units in pursuing new opportunities and also to support corporate
entrepreneurship teams. The typical challenge of this model is to find 'business
builders' among the executives. Advocate organizations act as innovation experts,
encouraging corporate entrepreneurship together with business units.
4. The Producer Model: Many companies pursue corporate entrepreneurship by
establishing and supporting formal associations with significant funds or active
influence over business units. The Producer Model utilizes focused power, where the
business shares are held by only a few possessors and dedicated resources to help
grease developing projects, facilitate collaboration, and the development of new
business units. The Producer Model also aims to encourage cross-unit collaboration,
build potentially disruptive businesses, and create pathways for executives to pursue
careers outside their business units.

1.3.8 How to Become a Corporate Entrepreneur?

Guidance to become a corporate entrepreneur:

1. Growth Mindset: The foremost requirement is to develop a growth mindset by

approaching new challenges and new opportunities with a positive, solution-oriented
attitude.
2. Set Objectives: Start with a small team to clearly define and communicate the
company’s objectives for corporate entrepreneurship. Make a roadmap for the
implementation of those objectives.
3. Relation Building: Collaborating and making a network with other entrepreneurs
helps in getting the ideas off the ground. Seeking out mentors for their support and
guidance also helps to overcome shortcomings.
4. Right Model: Selecting the right model is the most important task of all. The right
model will lead you to the right path.
5. Calculate Risk: Experiment and try new things, but be sure to carefully assess the
risks and potential benefits before moving forward. Calculate the risk and stay
flexible.
 6. Grow: Starting a new venture or project within a corporation can be challenging, but
persistence is the key to overcoming the challenges and evolving.

Frequently Asked Questions (FAQs)

1. What are the features of Corporate Entrepreneurship?

Answer:

The features of corporate entrepreneurship include risk-taking, innovation and creativity,

opportunity recognition, resource allocation, and adaptability. It involves analyzing
calculated risks, fostering a culture of innovation and creativity, and identifying and
capitalizing on market opportunities.

2. How can I encourage Corporate Entrepreneurship in my organization

Answer:

An organisation can encourage corporate entrepreneurship by promoting a culture of

innovation among the workforce, supporting creative thinking, and providing resources for
innovative projects to the members.

3. What is a good example of Corporate Entrepreneurship?

Answer:

There are many great examples of corporate entrepreneurship such as Google’s “20%
Time” policy, 3M's "Post-it Notes" and "15% Time" culture, and BOXLAB services by
BASF. Similarly, other companies have encouraged intrapreneurship.

4. What role do employees play in Corporate Entrepreneurship?

Answer:

Employees are central to corporate entrepreneurship. They play a vital role in generating
and developing new ideas, taking the initiative to pursue innovative projects, and being
willing to experiment and take calculated risks. In a culture that supports intrapreneurship.
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CHAPTER TWO

THEORIES OF ENTREPRENEURSHIP

1.0. Introduction
Theories of Entrepreneurship are the framework that serves as a guide to the understanding of
entrepreneurship discipline particularly the emergence, development, and functionality of
entrepreneurial activities. Different theories have emerged based on the different thinkers’
view of entrepreneurship which has led to the development of the entrepreneurship discipline
which we will consider in this chapter. The theories of entrepreneurship can be categorized
into three distinct perspectives Economic, Sociological, and Psychological theories of
entrepreneurship. Other modern entrepreneurship theories were offshoots of these earlier-
mentioned theories. Particular attention will be given to the theorist as we consider this
chapter.

2.0. Objectives

At the end of this chapter, students should be able to have a good understanding of the
following:

 the meaning of theory

 Economic Entrepreneurship Theory

 Psychological Entrepreneurship Theory

 Sociological Entrepreneurship Theory

 Relevance of theory to Entrepreneurship

3.0. Various Theories of Entrepreneurship

3.1 The Economic Theory of Entrepreneurship

The Economic Theory states that entrepreneurs are both considered producers and exchangers.
This theory was created by economist Richard Cantillon (1755), who explained how in the
supply chain of production, where raw materials are turned into finished goods, an
entrepreneur’s actions, and thoughts have a major impact on the development of the product.
Cantillon opined that the entrepreneur is motivated to engage in entrepreneurship activities
with the hope of potential profit from it. According to these theory, entrepreneurship, and
economic growth take place when the economic conditions are favorable. Economic
development takes place when a country's real rational income increases in overall period
wherein the role of entrepreneurs is an integral part.

Among the popular economic theorists are: Cantillon, Schumpeter, Casson, Leibenstein,
Papanek and Harris, Knight, and others. We should take a brief overview of their approach
below.

1 Innovation Theory by Joseph Schumpeter

According to Joseph A. Schumpeter, the effective function of an entrepreneur is to start

innovation in a venture. This theory is also called innovation theory or dynamic theory.
Schumpeter’s theory of entrepreneurship is based on the role of economic factors in the
emergence, behavior, and performance of entrepreneurs. The theory sees entrepreneurship as
an economic entity. An entrepreneur is a person who has a creative nature. He regarded
entrepreneurship as a catalyst that checks the static conditions of the economy, thereby
initiating and thrusting a process of economic development i.e., innovation. He carries the
economy to a new height of development. Schumpeter considered innovation to include the
introduction of new goods, the Introduction of new methods of production, carrying out a new
source of an organization, discovering a new source of raw materials, and Opening of a new
market. He makes a distinction between innovator and inventor. An inventor discovers new
methods and new materials whereas an innovator utilizes or applies inventions and discovers
to produce better quality goods that give greater satisfaction to customers and high profit to
entrepreneurs. In this way, an entrepreneur is an innovator.

2 Theory of Functional Behaviour – Casson

According to Mark Christopher Casson's view, entrepreneurship can provide a synthetic

theory of the business firm that provides an integrated framework for many partial theories of
the firm. His theory deals with the functional behavior of an entrepreneur and his qualities
which are crucial for his success. Drawing on an institutional approach to entrepreneurship, it
is argued that economic insights can combine with managerial perspectives to clarify and
synthesize many strategic issues of firms. Four dimensions of environmental shock lead to
different forms of entrepreneurship that lead, in turn, to different sizes and structures for
firms. Entrepreneurs create firms that identify and monitor sources of volatility and channel
information to key decision-makers in the firm; entrepreneurial firms are located at nodes of
information networks. The standard rational action model of neoclassical economics is
generalized to an uncertain world of volatility and differential access to information, which
generates differing perceptions of the business environment.

3 Theory of Economic Incentives – Papanek and Harris

According to G.F.Papanek and J.R.Harris's Theory, economic incentives are the integral
factors that have induced entrepreneurial initiatives. The main features of this theory are- (i)
Economic incentives, (ii) Link between economic gains and the inner urge, and (iii) Economic
gain.

4 Theory of Adjustment of Price – Kirzner

According to M. Kirzner, the chief role of the entrepreneur is based upon the adjustment of
price in the market. The buyer may pay a higher price or the seller may accept a lower price,
which gives rise to opportunities for profit. Further, if different prices prevail in the same
market, there is an opportunity for profitable arbitrage between two segments

5 Theory of X-Efficiency-Leibenstein Harvey Leibenstein propounded the theory of X-

efficiency which is popularly called Gap Filling Theory. According to Leibenstein,
entrepreneurial functions are determined by the X-efficiency which means the degree of
inefficiency in the use of resources within the firm. It includes routine entrepreneur, new
entrepreneurship, and twin roles of entrepreneur, gap filling, input completing, and X-
efficiency factor. An example of Leibenstein’s Theory is Lalu Prasad Yadav, who is an
entrepreneur for Indian Railways. He had turned around the Indian Railways by improving
efficiency and innovation.

6 Theory of Harvard School Harvard School contemplated that entrepreneurship involves any
deliberate activity that initiates, maintains, and grows a profit-oriented enterprise for the
production or distribution of economic goods or services, which is inconsistent with internal
and external forces. Internal forces refer to the internal qualities of the individual such as
intelligence, skill, knowledge experience, intuition, exposure, etc. These forces influence the
entrepreneurial activities of an individual to a great extent.

On the other hand external forces refer to the economic, political, social, cultural, and legal
factors which influence the origins and growth of entrepreneurship in an economy. This
theory emphasizes two types of entrepreneurial activities i.e.- (i) Entrepreneurial functions
like organization and combination of resources for creating viable enterprises, and (ii) The
responsiveness to the environmental condition that influences decision making function
besides the above-mentioned activities.
7 Theory of Profit-Knight

This theory was developed by Knight, Frank H. He points out that entrepreneurs are a
specialized group of persons who bear risk and deal with uncertainty. According to Knight,
uncertainty and risk form the building blocks of entrepreneurship. The main features of this
theory are pure profit, the situation of uncertainty, risk-bearing capability, a guarantee of a
specified sum, identification of socio-economic and psychological factors, and use of
consolidation techniques to reduce business risks

8 Theory of Market Equilibrium-Hayek

According to Hayek, the absence of entrepreneurs in Neo-classical economics is intimately

associated with the assumption of market equilibrium. The elasticity of bank credit causes a
disparity between the natural and market rate of interest. According to this theory, the
postulate presupposes the fact that there is no need for further information to modify the
decision.

3.2 Sociological Entrepreneurship Theory

This theory describes the social parts of entrepreneurship, as it highlights how an entrepreneur
can create a prosperous business if they consider social prohibitions and religious customs to
satisfy numerous customers' expectations. This would be essential for their business or
startup, as it would increase their overall customer diversity.

The major sociological theorists are: Frank W. Young, B.F. Hoselitz, Max Weber, Cochran
and Stocke. Theory.

1 Theory of Social Change by Max Weber

It was Max Weber who first of all took the stand that entrepreneurial growth was dependent
upon the ethical value system of the society concerned. The central figure of Weber’s theory
of social change consists in his treatment of the protestant ethic and the spirit of capitalism.
Moreover, this theory provides an analysis of religion and its impact on entrepreneurial
culture.

Max Weber opined that the spirit of rapid industrial growth depends upon a rationalized
technology, the acquisition of money, and its rational use for productivity and multiplication
of money. These elements of industrial growth depend upon a specific value orientation of
individuals i.e. the tendency of acquisition and rational attitude towards action which are
generated by ethical values.
According to this theory, driving entrepreneurial energies are generated by the adoption of
exogenous supplied religious beliefs. It is these beliefs that produce intensive exertion in
occupational persecutes, the systematic ordering of means to ends, and the accumulation of
assets.

According to him, non-convent groups are those groups who put pressure on

capitalism, money rationality, and thinking. They were almost successful in

creating entrepreneurs, wealth collection, technology, capital formation and

economic development.

2 Theory of Change in Group Level Pattern by Frank W. Young

Young defines entrepreneurs as that entrepreneurs whose characteristics are found in small
groups where individuals develop as entrepreneurs. Young arrived at the group-level pattern
behavior entrepreneurs based on his studies known as the Thematic Appreciation Test (TAT)
on groups of entrepreneurs. The test revealed the tendency to describe the situation as a
problem to be solved, an awareness of pragmatic effort required, confidence in their ability to
solve the problem and a tendency to take the viewpoint of each individual in turn and analyze
the situation as he might see it before suggesting an outcome. Young’s theory is a theory of
change based on society’s incorporation of reactive subgroups.

3 Theory of Leadership by B.F. Hoselitz

According to Hoselitz, entrepreneurship is a function of managerial skills and leadership.

Business also requires finance but that is of secondary importance. He further explains that a
person who is to become an industrial entrepreneur must have more than the drive to earn
profits and amass wealth.

In this process, he has to show his ability to lead and manage. In business, there are generally
three types of leadership—merchant money lenders, managers, and entrepreneurs. In practice,
money lenders are market-oriented and managers are authority oriented. But entrepreneurs
have in addition to these a production orientation.

The merchant money lenders deal in goods/services which is generally acceptable to

everyone. However, an entrepreneur creates his own commodity and its acceptability is
uncertain. Therefore, the entrepreneur assumes more risk as compared to a trader or a money
lender.
4 Theory of Entrepreneurial Supply:

The theory of Cocharn is a sociological theory of entrepreneurial supply. Cochran emphasizes

cultural values, role expectations, and social sanctions as the key elements that determine the
supply of entrepreneurs. According to him, an entrepreneur is neither a super normal
individual nor a deviant person but represents a society’s model personality.

According to Cochran, ‘cultural values, role expectation, and social acceptance play a
prominent role in entrepreneurship development and entrepreneur is a model of personality’.

5 Socio-cultural Values Theory by Stocke

According to Stokes sociocultural values guide economic deeds. He put forward that personal
and social opportunity and the existence of the necessary psychological distributions may be
considered situations for an individual's progress in industrial entrepreneurship.

6 Theory of Social Change:

This theory is developed by Everett E. Hagen. It explains how a traditional society becomes
one in which continuing technical progress takes place. It exhorts certain elements that
presume the entrepreneur’s creativity as the key element of social transformation and
economic growth. It reveals a general model of society which considers the interrelationships
among physical environment, social culture, personality, etc.

According to Hagen, most of the economic theories of underdevelopment are inadequate.

Hagen insisted that the follower’s syndrome on the part of the entrepreneur is discouraged.
This is because technology is an integral part of socio complex, and super-imposition of the
same into different sociocultural set-ups may not deliver the goods.

This theory describes the social parts of entrepreneurship, as it highlights how an entrepreneur
can create a prosperous business if they consider social prohibitions and religious customs to
satisfy numerous customers' expectations. This would be essential for their business or
startup, as it would increase their overall customer diversity.

3.3 The Psychological Entrepreneurship Theory

Entrepreneurship is termed as a psychological concept and process. According to this theory,

psychological factors are the primary source of entrepreneurship development. Few authors
like McClelland, Rotter, and John Kunkell have expressed their opinion about psychological
factors affecting entrepreneurship. The Psychological Entrepreneurship Theory highlights the
mental aspects of an entrepreneur, which can be broken into three (3) segments: their internal
and external control facets, which include their deft skills and support systems, their
personality and traits, which are their successful entrepreneurial qualities, and their mindset to
achieve their goals, which includes their passion and desire to attain success.

The major contributors to the psychological entrepreneurship theory include, David C.

McClelland, Julian Rotter, Hagen and John Kunkell Theory. Their various contributions are
discussed below:

1 Need for Achievement Theory by David C. McClelland

This theory was developed by David. C. McClelland. McClelland concerned himself with
economic growth and the factors that influence it. In this context, he tries to find the internal
factors i.e. “human values and motives that lead man to exploit opportunities, to take
advantage of favorable trade conditions.” That is why he gives importance to the innovative
characteristics of the entrepreneurial role. The entrepreneur is concerned with the need for
achievement (n-achievement).

David C. McClelland has given a particular concept of entrepreneurship. According to him,

the need for high achievement is an essential feature of entrepreneurial behaviour. According
to McClelland, “Burning desire of need for achievement attracts an entrepreneur for
activities.”

For achieving heights of excellence and specific performances, an entrepreneur needs rational
thinking, new combinations, deep thinking, power, etc. The achievement motive is
uncalculated through child-rearing practices, which stress standards of excellence, material
warmth, and self-reliance training a low, further dominance. Individuals with high
achievement motives tend to take keen interest in situations of highrisk desire for
responsibility and a desire for a Concrete measure of task performance.

Hence, entrepreneurial behavior is a function of surrounding and social structures, both past
and present and can be readily influenced by the manipulative economic and social incentives.

2 Theory of Social Behaviour by John H. Kunkel

John H. Kunkel has also given a particular concept about entrepreneurship. He has presented a
theory of entrepreneurial behavior in connection to the development of entrepreneurship.
Kunkel’s theory is concerned with the expressed activities of individuals and their relations to
the previous and present surroundings, social structures, physical conditions, and behavioral
patterns determined by reinforcing and opposing present in the context.
Kunkel presents a behavioral model of entrepreneurship. The supply of entrepreneurs is a
function of social, political, and economic structure. Behavioral model is concerned with the
overtly expressed activities of individuals and their relations to the previous and present
surroundings, social structures, and physical conditions.

3 Rotter’s locus of control theory

Rotter’s locus of control has garnered prominent attention among personality theories of
entrepreneurship. This theory was formulated in 1954 by Julian Rotter. Furthermore, locus of
Control offers people the belief that control resides within them i.e. internally or can be
created externally.

3.2 RATIONALE AND RELEVANCE OF ENTREPRENEURSHIP THEORY

“He who loves practice without theory is like the sailor who boards ship without a rudder and
compass and never knows where he may cast.” – Leonardo Da Vinci. Theories are formulated
to explain, predict, and understand phenomena and they help to challenge and extend the body
of existing knowledge. Theories of Entrepreneurship in particular are the framework that
serves as a guide to the understanding of entrepreneurship discipline particularly the
emergence, development, and functionality of entrepreneurial activities. They are the pillars
upon which entrepreneurship discipline rests. Theories of entrepreneurship are for the
understanding of the complex nature of entrepreneurial activities. The frameworks help in
explaining the reason why some people become entrepreneurs while others do not.
Entrepreneurship theories lead to a better understanding of entrepreneurial traits exhibited by
different entrepreneurs which largely influence or affect their performance in totality. In other
words, Entrepreneurship theories give indispensable insights into those factors that propel
entrepreneurs to success. Based on the foregoing, students, policymakers, educators, and
practitioners of entrepreneurship alike should have a good mastery of the various theories
guiding the entrepreneurship discipline in order to fully explore the field.

In summary, entrepreneurship theories can be viewed from the following perspectives:

1. Explaining entrepreneurial behavior- Theories help explain why some people become
entrepreneurs and others do not. They also help explain the factors that contribute to the
success or failure of new ventures.
2. Understanding the entrepreneurial journey - Theories offer a comprehensive understanding
of the entrepreneurial journey, from opportunity spotting to network building.

3. Supporting aspiring entrepreneurs - Theories help policymakers, educators, and

practitioners support aspiring entrepreneurs.

4. Adapting to changing market conditions - Theories help entrepreneurs and business leaders
adapt to changing market conditions.

5. Understanding the role of entrepreneurs - Theories help explain the role of entrepreneurs in
the economy, including their abilities to perceive profit opportunities and create new ventures.

3.3 NECESSITY AND OPPORTUNITY ENTREPRENEURSHIP

Going by the diver’s definition of entrepreneurship, it involves economic activities which lead
to economic gain by the entrepreneur. Classification of entrepreneurship as either necessity or
opportunity is simply based on the motivation for starting the business. Opportunity
entrepreneurship refers to individuals whose main motivating factor for starting is the
identification of viable business opportunities in the market that they want to explore. The
business opportunity might be a gap in the market, an opportunity to innovate and disrupt an
existing industry, or a new product or service idea. Opportunity driven entrepreneurship is
also referred to as oriented growth entrepreneurship. It is a purpose-driven form of endeavour.

On the other hand, necessity entrepreneurship means individuals who start a business out of
compelling necessity rather than opportunity. The necessity can be related to a variety of
reasons, such as unemployment, underemployment, or lack of other viable options for earning
a living. Necessity entrepreneurs are compelled to engage in entrepreneurial activities for the
purpose of generating income to support themselves and their families, and may not have a
strong passion for entrepreneurship personally. The necessity form of entrepreneurship is also
known as survivalist entrepreneurship as the major motivating factor is the desire to survive.
In this regard, we can assume that necessity is the mother of entrepreneurship for the
survivalist. This form of entrepreneurship is the most common in our society. The majority of
survivalist entrepreneurs operate informally. This is not only common in Nigeria but is a
common feature of developing economies which are characterized by high rates of
unemployment. The same dichotomy of entrepreneurial logic is used by authors in the works
of literature that give extant information on informal entrepreneurship: they distinguish
survivalist which is necessity-driven and oriented growth that is opportunity-driven in
entrepreneurial logic and thus find the informal economy entrepreneurs tend to be primarily
survivalist ( House, 1984; Gomez, 2008; Berner et al., 2012).

While both types of entrepreneurships can lead to successful businesses, the motivations
behind starting a business can have a significant impact on the entrepreneurial journey.
Opportunity entrepreneurs may have a greater degree

of passion and commitment to their business, while necessity entrepreneurs

may face greater financial pressures and may have to balance their entrepreneurial pursuits
with other obligations.

According to Rizvi (2024), Opportunity entrepreneurship and necessity entrepreneurship are

two distinct types of entrepreneurships with several key

differences:

1. Motivation: The primary difference between the two types of entrepreneurships is

motivation. Opportunity entrepreneurs start a business because they see a viable opportunity
in the market and have a passion for entrepreneurship. Necessity entrepreneurs, on the other
hand, start a business out of a need to generate income and may not have a strong passion for
entrepreneurship itself.

2. Innovation: Opportunity entrepreneurs often focus on innovation and creating something

new and different, whereas necessity entrepreneurs may focus on providing basic products or
services that meet a specific need.

3. Risk tolerance: Opportunity entrepreneurs may be more willing to take risks and invest in
their businesses because they believe in the potential of their ideas. Necessity entrepreneurs,
on the other hand, maybe more risk-averse and focus on minimizing costs and generating an
immediate income.

4. Resource availability: Opportunity entrepreneurs may have more access to resources such
as capital, networks, and education, which can help them start and grow their businesses.
Necessity entrepreneurs may have fewer resources available to them and may need to rely on
their own skills and abilities to start and run their businesses.

5. Long-term goals: Opportunity entrepreneurs often have long-term goals and aspirations for
their businesses, such as growth, innovation, and impact. Necessity entrepreneurs may have
more immediate goals, such as generating income to support themselves and their families.
The differences between opportunity and necessity entrepreneurship can have

a significant impact on the entrepreneurial journey, from the initial idea to the

long-term success of the business.

Rizvi (2024) also noted the following similarities. These include:

1. Innovation: Both types of entrepreneurships require a degree of innovation and creativity,

whether it is in developing new products or services or finding new ways to deliver existing
ones.

2. Problem-solving: Successful entrepreneurs, whether they are pursuing opportunity or

necessity entrepreneurship, must be adept at identifying and solving problems, whether it is a
gap in the market or a need for a particular service.

3. Entrepreneurial mindset: Both types of entrepreneurships require an entrepreneurial

mindset, which involves a willingness to take risks, an ability to adapt to changing market
conditions, and a commitment to pursuing opportunities and challenges.

4. Self-motivation: Whether pursuing opportunity or necessity entrepreneurship,

entrepreneurs must be self-motivated and driven, with a strong work ethic and a willingness to
persevere through challenges and setbacks.

5. Business skills: Successful entrepreneurs must have a range of business skills, including
financial management, marketing, and operations, regardless of whether they are pursuing
opportunity or necessity entrepreneurship.

References

Berner, E., Gomez, G., & Knorringa, P. (2012). ‘Helping a large number of people become a
little less poor’: The logic of survival entrepreneurs. European Journal of Development
Research, 24(3); 382-395.

Gomez, J. M. (2008). Do micro-enterprises promote equity or growth? The Netherlands:

Institute of Social Studies Journal, 3(2); 64-76

House, W. J. (1984). ‘Nairobi’s Informal Sector: Dynamic Entrepreneurs or Surplus

Labor?’ Economic Development and Cultural Change, 32 (2): 277–302.
McClelland, D. (1961) The Achieving Society, Collier- Macmillan Free Press New York.

Osuagwu, L. (2001), Small Business and Entrepreneurship Management, Grey Resources

limited, Surulere.

Schumpeter, J.A. (1934) The Theory of Economic Development, Harvard University Press.
Rizvi, H.(2024) Opportunity vs Necessity Entrepreneurship: Choosing One Over The Other
For Success. hidayatrizvi.com

CHAPTER THREE
CHARACTERISTICS OF AN ENTREPRENEUR
Introduction
Entrepreneurs possess a range of unique set of characteristics that contribute to their success
in identifying and capitalizing on business opportunities. These traits can either be in born and
acquired through education. In this chapter we shall be considering some of these
characteristics such as: Opportunity seeker, risk-takers, natural or nurtured, problem solvers,
changed agent, innovative thinkers and creative thinker. Although, there are several other
characteristics which we shall be considering in this chapter.

Objective:
At the end of this chapter, students should be able to:
 Know some characteristics of an entrepreneur
 Answer the common question whether entrepreneur is born or made
 Identify some traits that make someone an entrepreneur

Let critically look at some of the characteristics that make someone an entrepreneur:
1) Opportunity Seeker:
Entrepreneurs are highly skilled in identifying gaps in the marketplace and turning them into
viable business opportunities. This skill often stems from an ability to recognize patterns,
market trends, and unmet needs. Research by Shane and Venkataraman, (2000) emphasizes
that the discovery and exploitation of opportunities is at the heart of entrepreneurial activity.
They argue that recognizing opportunities is both a learned and an innate skill, with some
entrepreneurs naturally more aligned to recognizing potential value where others may not see
it.

One of the most defining characteristics of entrepreneurs is their ability to recognize and act
on opportunities. Opportunity seeking involves scanning the environment, identifying market
gaps, and assessing unmet needs that can be translated into viable business ideas. According to
Shane and Venkataraman (2000) and further expanded by recent research from Ardichvili,
Cardozo, and Ray (2021) opportunity recognition is both an inherent skill and one that can be
developed through experience and market exposure.

Finally, successful Shane, S. (2000) state that entrepreneurs are proactive in seeking out
opportunities rather than waiting for them to arise. They observe trends, customer needs, and
technological advancements, often discovering new markets or niches before competitors. For
instance, the rapid growth of digital platforms has provided numerous opportunities for
entrepreneurs to innovate in fields such as e-commerce, fintech, and health tech.

2) Risk- Taking
Life itself is risky, and every enterprise has an element of risk. The higher the risk, the higher
the profit. Entrepreneurs are risk- takers but they take calculated risks which is the hallmark of
entrepreneurship, as new ventures inherently involve uncertainty. According to McClelland's,
(1961) entrepreneurs are often driven by a need for achievement and are willing to engage in
moderate risk-taking to realize their visions. Unlike gamblers, entrepreneurs assess risk
carefully, evaluating potential rewards relative to possible losses. Successful entrepreneurs
tend to be comfortable with ambiguity and are willing to take risks in exchange for growth
and profitability (Kuratko, 2016).

Entrepreneurs are known for their willingness to take risks, though they tend to approach risk
in a calculated way rather than as mere chance-taking. This willingness to face uncertainty is
crucial, as new ventures involve unpredictable outcomes. According to Charness and Gneezy,
(2020) risk-taking in entrepreneurship is often associated with a tolerance for ambiguity, the
ability to make decisions with incomplete information, and a strong motivation for
achievement.

3) Natural or Nurtured
Entrepreneurship is often seen as a blend of inherent traits and developed skills. This answer
whether entrepreneurs are born or made Some individuals possess a natural tendency toward
entrepreneurial traits such as creativity, resilience, and leadership. However, these abilities can
also be nurtured through education, mentorship, and experience. Studies by Sarasvathy,
(2001) argue that while certain personality traits may predispose individuals to
entrepreneurship, skills such as decision-making, strategic planning, and financial
management are nurtured over time and can enhance entrepreneurial capabilities.

4) Problem Solvers:
Entrepreneurs are problem solvers. They frequently seek to resolve existing issues by offering
innovative solutions, which forms the basis for many new products and services. They are
solution-oriented people and capable of approaching problems from various perspectives. This
problem-solving ability enables them to pivot their strategies and adapt their businesses as
challenges arise. According to Fiet (2007), the problem-solving mindset is often developed
through hands-on experience and iterative learning, where entrepreneurs refine their approach
with each obstacle.

5) Change Agent:
The most permanent thing in life is change. Entrepreneurs act as catalysts for change within
society by introducing innovations that disrupt industries and improve efficiency,
convenience, and quality of life. Drucker (1985), argued that "innovation is the specific
instrument of entrepreneurship," highlighting that entrepreneurs are not just concerned with
profit but with creating a lasting impact. Entrepreneurs like Steve Jobs and Elon Musk are
often cited as examples of change agents who introduced transformative products and
technologies, inspiring shifts in consumer behavior and industry practices.

6) Innovation:
Innovation and Entrepreneur are used interwoven, you can’t talk about entrepreneurship
without innovation. Innovation often goes hand-in-hand with entrepreneurship.
While innovation in business can be defined as an idea that’s both novel and useful, it doesn’t
always involve creating an entirely new product or service. Some of the most successful
startups have taken existing products or services and drastically improved them to meet the
changing needs of the market.

Innovation is central to entrepreneurship, enabling entrepreneurs to create unique solutions,

products, or business models that fulfill unmet needs. Innovation, according to Drucker
(1985), is the primary tool through which entrepreneurs differentiate themselves and create
value. He described innovation as a means to exploit change, aiming to generate value and
meet consumer needs in novel ways.

Schumpeter (1934), in his theory of creative destruction, also underscored that entrepreneurs
drive economic progress by disrupting existing systems with innovative products or services.
He argued that this "creative destruction" process helps replace outdated technologies and
practices with more efficient ones, fueling long-term economic growth. Thus, innovation
allows entrepreneurs to introduce breakthrough ideas and achieve a competitive edge in the
market, often reshaping entire industries.

Although innovation doesn’t come naturally to every entrepreneur, it’s a type of strategic
mindset that can be cultivated. By developing your problem-solving skills, you’ll be well-
equipped to spot innovative opportunities and position your venture for success.

7) Creative Thinkers:
Creative thinking is another core trait that enables entrepreneurs to approach problems and
opportunities from new angles. Creative thinkers excel at divergent thinking, which involves
generating multiple solutions to a single problem, and lateral thinking, which involves
viewing problems in untraditional ways. Amabile (1996), a renowned scholar in creativity,
highlighted that creativity among entrepreneurs involves combining knowledge and
experience in novel ways to yield innovative solutions.

Creativity is essential for entrepreneurs, allowing them to generate original ideas and
approach challenges from unconventional perspectives. Creative thinkers exhibit flexibility in
thought and can generate multiple solutions for complex problems. According to Amabile
(2019), state that creativity in entrepreneurship involves a blend of divergent thinking, which
produces multiple possible solutions, and convergent thinking, which selects the best
approach.

For instance, during the COVID-19 pandemic, many small business owners creatively pivoted
their operations online, offering virtual services or implementing contactless delivery, which
allowed them to stay resilient. This adaptability and creative problem-solving highlight the
importance of creativity for entrepreneurs facing dynamic markets and challenges.

According to The Entrepreneurial Mindset by McGrath and MacMillan (2000), creative

thinking helps entrepreneurs navigate uncertainty and ambiguity by envisioning various
potential outcomes. They argue that creativity is not only valuable in the ideation phase but is
also critical for adapting to challenges and changing circumstances. Creativity thus equips
entrepreneurs to remain flexible and agile, adapting to dynamic environments and generating
new value propositions.

There are several other characteristics of an entrepreneur highlighted by other scholars:

Timmons (1989) identified fourteen dominant characteristics of successful entrepreneurs.
They are:
1.) Drive and Energy: Entrepreneurs are more energetic than the average person. They
possess the capacity to work for long hours and in spurts of several days with less than a
normal amount of sleep. Long hours and hard work are the rules rather than the exception, and
the pace can be grueling.
2.) Self-confidence: Entrepreneurs typically have an abundance of confidence in their
abilities to achieve the goals they set and are confident that they chose the correct career path.
They also believe that events in their lives are mainly self-determined, that they have a major
influence on their destinies, and have little belief in fate.
3.) Long-term involvement: Entrepreneurship is hard work, and launching a company
successfully requires total commitment from an entrepreneur. They commit to a long-term
project, and they work towards goals that may be quite distant in the future. Business founders
often immerse themselves completely in their companies. Entrepreneurs who create high
potential ventures are driven to build a business, rather than simply get in and out in a hurry
with someone else's money.
4.) Money as a measure: One of the most common misconceptions about entrepreneurs is
that they are driven wholly by the desire to make money. On the contrary, achievement seems
to be the entrepreneur's primary motivating force: money is simply a way of keeping a score
of accomplishment – a symbol of achievement. What drives entrepreneur goes much deeper
than just the desire for wealth, (Scarborough, 2014).
5.) Persistent problem solving: Entrepreneurs possess an intense level of determination
and desire to overcome hurdles, solve a problem and complete the job in the course of
successfully building new enterprises. They are not intimidated by difficult situations.
6.) Goal setting: Entrepreneurs have the ability and commitment to set goals that are both
measurable and attainable for themselves. These goals tend to be high and challenging, but
they are realistic and attainable. Entrepreneurs are doers, they are goal and action-oriented
individuals. Entrepreneurs are motivated by a high need for achievement.
7.) Preference for moderate risk: Entrepreneurs are not wild risk takers but instead take
calculated and moderate risks.
8.) Dealing with failure: Entrepreneurs do not fear failure. Anybody afraid of falling will
cancel whatever achievement motivation he or she possesses. From the point of view of an
entrepreneur, failing is an opportunity to learn.
9.) Desire for immediate feedback: Entrepreneurs like the challenge of doing a business
and they want to know how far they are doing in terms of performance. The use of feedback
enables entrepreneurs to assess/take stock of their performance to improve on it.
10.) Taking initiative and seeking personal responsibility: Entrepreneurs feel a deep sense
of personal responsibility for the outcome of businesses they start. They willingly put
themselves in situations where they take responsibility for the success or failure of the
business. They prefer to use available resources to achieve self-determined goals and also
want to be in charge of their resources.
11.) Use of resources: Entrepreneurs have been known to use resources efficiently and
effectively to achieve organizational goals.
12.) Competing against self-imposed and objective standards: High-performing
entrepreneurs possess this internalized kind of competitive spirit in which he or she
continuously engages in competition with himself/herself to beat their last best performance.
13.) Internal locus of control belief: The success or failure of a new business enterprise
from the point of view of an entrepreneur does not depend on luck or chance, or other
external, personally uncontrollable factors. But rather, the entrepreneur believes that one's
accomplishments, as well as setbacks, lie within one's control and influence.
14.) Tolerance of ambiguity and uncertainty: Entrepreneurs tend to have a high tolerance
for ambiguous ever-changing situations, the environment in which they most often operate.
This ability to handle uncertainty is critical because these business builders constantly make
decisions using new, sometimes conflicting information gleaned from a variety of unfamiliar
sources. The above characteristics are not by any means exhaustive.

References:
Amabile, T. M., Conti, R., Coon, H., Lazenby, J., & Herron, M. (1996). Assessing the work
environment for creativity. Academy of management journal, 39(5), 1154-1184.
Amabile, T. M. (2020). Creativity, artificial intelligence, and a world of surprises. Academy of
Management Discoveries, 6(3), 351-354.
Audretsch, D. B., Kuratko, D. F., & Link, A. N. (2016). Dynamic entrepreneurship and
technology-based innovation. Journal of evolutionary economics, 26, 603-620.

Charness, G., Gneezy, U., & Rasocha, V. (2021). Experimental methods: Eliciting
beliefs. Journal of Economic Behavior & Organization, 189, 234-256.

Dai, W., Arndt, F., & Liao, M. (2021). Hear it straight from the horse's mouth: recognizing
policy-induced opportunities. In Entrepreneurship in China (pp. 56-76). Routledge.

Drucker, P. F. (1985). Entrepreneurial strategies. California management review, 27(2).

Fiet, J. O. (2007). A prescriptive analysis of search and discovery. Journal of Management

Studies, 44(4), 592-611.

McClelland, D. C. (1961). The achieving society. Van No Strand.

McGrath, R. G., & MacMillan, I. C. (2000). The entrepreneurial mindset: Strategies for
continuously creating opportunity in an age of uncertainty (Vol. 284). Harvard Business Press.
Sarasvathy, S. D. (2001). Causation and effectuation: Toward a theoretical shift from
economic inevitability to entrepreneurial contingency. Academy of management
Review, 26(2), 243-263.

Shane, S. (2000). The Promise of Entrepreneurship As a Field of Research. Academy of

Management Review.

Ziemnowicz, C. (2020). Joseph A. Schumpeter and innovation. In Encyclopedia of creativity,

invention, innovation and entrepreneurship (pp. 1517-1522). Cham: Springer International
Publishing.
 CHAPTER FOUR

ENTREPRENEURIAL THINKING

(CRITICAL THINKING, REFLECTIVE THINKING AND CREATIVE THINKING)

Introduction

Thinking like an entrepreneur is super important for making it in today’s tricky business
world. For folks starting businesses in Nigeria, developing skills like critical, reflective, and
creative thinking is key to dealing with the specific challenges that come from the country's
economic and social-political situation. These types of thinking not only help people spot
opportunities but also allow them to come up with clever solutions to local problems, boost
economic growth, and aid societal development.

a. Critical Thinking in Entrepreneurship: What It Is and Why It Matters

Critical thinking means looking at information carefully, breaking down facts, and coming up
with reasonable conclusions. Entrepreneurs in Nigeria deal with a pretty unstable business
scene filled with crazy market shifts, changing rules, and poor infrastructure. Having strong
critical thinking skills helps them make better choices even when everything seems uncertain.
So, Ajayi (2020) suggests that critical thinking helps Nigerian business owners deal with
tricky regulations and spot market trends, leading them to make smarter choices for their
companies.

Components/Key Bits of Critical Thinking:

- Analysis – Breaking down what's happening in the market, how consumers act, and the rules
out there.

- Evaluation – Figuring out how new laws or business ideas might affect things.

- Inference – Guessing what might happen in the future based on what’s happened before and
what’s going on now.

- Problem-Solving – Coming up with real-world fixes for everyday issues like power cuts,
getting funding, and dealing with crazy government policies.

In Nigeria's Scene:

With regulations changing all the time and infrastructure issues galore, Nigerian entrepreneurs
need to keep using their critical thinking skills just to keep their businesses afloat.

b. Reflective Thinking in Entrepreneurship: What It Is and Why It Matters

So, reflective thinking is basically looking back on what you’ve done as an entrepreneur to
see how it went and figure out ways to do better next time. For folks starting businesses in
Nigeria, this sort of thinking is super important because it helps them deal with the ups and
downs of a growing economy. As pointed out by Ogujiuba and Jumare (2021), engaging in
reflective thought lets entrepreneurs tackle the ever-changing business scene in Nigeria by
learning from their past choices and blunders.

Components/Pieces of Reflective Thinking

•Self-awareness – Getting a grip on how your own biases or beliefs can shape your business
calls.

•Action Check-up – Looking at how well previous methods worked out.

•Learning from Experiences – Picking up lessons from things that went well or didn’t go as
planned.

•Tweaking & Improving – Using what you’ve learned through reflection to fine-tune the way
you run things and make decisions.

Using It in Nigeria

Thinking back on experiences really helps Nigerian business owners learn from what they go
through, especially with the tricky parts of running a business in a place where policies can
shift suddenly and resources are often hard to come by. Some key ways this plays out include:

•Looking back at how well past marketing efforts worked to pull customers in a market as
mixed as Nigeria's.

•Gaining insights from unsuccessful tries at landing government contracts because of

complicated bidding rules.

For instance:

A Nigerian entrepreneur who couldn't get funding from a nearby bank might think about the
whole process again to figure out why their request was turned down. Through this reflection,
they could see that boosting their financial handling skills and jazzing up their business plan
for future requests might be beneficial.

Nigerian Angle

Reflective thinking gives Nigerian entrepreneurs a clearer grip on the social and political
factors that shape their world.

c. Creative Thinking in Biz Ventures: What It Is and Why It Matters

So, creative thinking is all about coming up with fresh ideas and solutions that break the mold.
In Nigeria, where stuff like infrastructure, education, and healthcare face a bunch of issues,
having some creativity is super important for entrepreneurs to come up with smart ways to
tackle these problems. Abiodun and Okeke (2020) point out that Nigerian business owners
who really tap into creative thinking have a better shot at making it big in a tough market by
rolling out one-of-a-kind products or services.

Parts of Creative Thought

•Idea Generation – Brainstorming and spotting new biz opportunities.

•Innovation – Taking those wild ideas and turning them into cool new products, services, or
ways of doing things.

•Flexibility – Staying open to offbeat ideas and different solutions.

•Risk-taking – Being up for trying new methods and taking some calculated leaps.

Application in Nigeria's Scene

Nigeria's business environment needs a good dose of creativity to tackle some pretty tough
structural hurdles. Entrepreneurs usually come up with innovative ways to deal with things
like spotty electricity, bad road conditions, and a disjointed supply chain. For instance:

There’s been a boom in fintech companies such as Paystack and Flutterwave that cleverly
manage problems linked to digital payments in a place where tons of folks still don’t have
bank accounts.

Some entrepreneurs are crafting budget-friendly solar power options to help fix the country’s
never-ending electricity issues.

For example:

A fashion entrepreneur from Nigeria might think outside the box by using local fabrics and
materials to whip up one-of-a-kind designs that strike a chord both locally and abroad.

Traits of an Entrepreneurial Mindset

The entrepreneurial way of thinking is all about coming up with new ideas, tackling problems
head-on, and taking bold steps to grab chances as they come. Here’s a rundown of what that
looks like:

• Creative Thinking: Entrepreneurs are always on the hunt for fresh ideas and possibilities.
They're not stuck in old-school ways but are keen to try out different methods to tackle issues.

• Risk Acceptance: They often find themselves in unpredictable situations and are okay with
taking smart risks. For them, failing isn't the end—it's just another chance to learn something
new.
• Taking Initiative: These folks are doers. Rather than sitting around waiting for things to
unfold, they jump into action to make their visions happen.

• Grit: Entrepreneurs run into hurdles and disappointments, but it’s their grit that helps them
bounce back and keep going strong.

Entrepreneurial Thinking vs. Traditional Thinking

Entrepreneurial thinking differs significantly from traditional thinking in the way it

approaches problems, opportunities, and innovation. Here’s a comparison:

Aspect Entrepreneurial Thinking Traditional Thinking

Risk Approach Embraces risk as an Avoids risk, favoring
opportunity for growth stability
Problem-Solving Seeks innovative and Uses established and proven
creative solutions solutions
Opportunity Perception Constantly looks for Focuses on maintaining
opportunities even in crises current processes and
systems
Decision-Making Rapid, iterative decisions; Cautious, hierarchical, and
learns from failure slow decision-making
Learning Approach Continuously seeks Relies on past experience
knowledge, adapts quickly and conventional education
Growth Focus Seeks exponential growth Prioritizes incremental,
and scalability controlled growth

Notable Entrepreneurial Minds Throughout History

A bunch of historical folks really nailed the idea of thinking entrepreneurially. Their fresh
ideas shook up industries and made a big difference in history:

• Thomas Edison: This guy was all about innovation. He had more than 1,000 patents to his
name and famously quipped, "I haven’t failed. I’ve just discovered 10,000 ways that don’t
work." His invention of the light bulb totally changed how people lived.

• Henry Ford: Ford changed the game in car manufacturing by rolling out the assembly line,
which slashed production costs and helped make cars within reach for regular folks. His
vision reshaped how things were made and run in business.
• Madam C.J. Walker: A pioneering African American businesswoman, Walker created a
whole beauty brand aimed at meeting the needs of African American women.

•Elon Musk: A current example, Musk's way of thinking as a business guy has pushed forward
major progress in cars, rockets, and energy with his companies like Tesla, SpaceX, and
SolarCity. His readiness to take on huge challenges—such as going to space and making
energy more sustainable—really shows what it means to be an entrepreneur today.

Entrepreneurial Mindset vs. Classic Mindset: A Closer Look

This comparison is super important for getting how the different approaches can lead to
various results in business and life. The classic mindset tends to stick with what works, play it
safe, and follow the usual procedures. On the flip side, entrepreneurial thinking:

•Sees change as a chance to grow.

•Taps into connections and partnerships to tackle tricky problems.

•Freely questions industry standards and norms.

For instance, while someone with a classic approach might depend on formal schooling and
typical career routes for success, an entrepreneurial thinker may use their curiosity and
creativity to carve out fresh markets or innovative business models.

Nigerian Take

Creative thinking has really played a big role in boosting industries like Nollywood and the
Nigerian music scene. Entrepreneurs have skillfully come up with clever business strategies to
tackle issues like lack of funding and shaky infrastructure (Edoho, 2016). These sectors have
figured out how to work around the limits of the Nigerian market by using digital platforms
and social media to tap into global audiences.

Mixing Critical, Reflective, and Creative Thought in Nigerian Entrepreneurship

Entrepreneurs in Nigeria encounter a bunch of hurdles, like poor infrastructure, inconsistent

regulations, and corruption. To deal with these problems effectively, they need to weave
critical, reflective, and creative thinking into how they make decisions. Merging these types of
thought helps Nigerian entrepreneurs to:

• Break down complicated issues through critical thought.

• Think back on past choices to boost future outcomes.

• Come up with fresh ideas that tackle local problems using creative reasoning.

A Peek at Integrated Thinking in Nigeria

Take a look at a Nigerian tech entrepreneur who’s making an app for small businesses to keep
tabs on their finances. By using critical thinking here, they'd look into the money management
struggles small businesses face in Nigeria—like the challenges posed by limited access to
financial literacy resources.

Why Industry Internships Matter in Entrepreneurship

Introduction

Internships, or those industry placements, are pretty much organized programs that give
students some real work exposure related to what they’re studying. When it comes to learning
about entrepreneurship, these placements are super important for linking what you learn in
school with how things really work in the business world. Getting students involved in active
industries not only helps them develop their entrepreneurial abilities but also sparks
innovation and provides practical problem-solving experiences that are essential for thriving
as an entrepreneur.

Importance of Industry Internships in Entrepreneurship

•Facing Real-World Issues

One big plus of industry internships is that they give students a chance to deal with actual
business problems. Unlike what you might find in a classroom, where things are often
simplified or made-up, these placements throw students into lively settings where unexpected
issues pop up all the time. This kind of experience boosts their ability to think on their feet
and adjust to surprises—stuff that's super important for making it as an entrepreneur (Baum et
al., 2001).

•Skill Building

Being an entrepreneur isn't just about book smarts; it's also about getting your hands dirty
with skills like leading a team, talking effectively, and managing projects. Internships in the
industry help students get those skills polished up in a real-world setting.

Connecting and Building Relationships

One big part of doing well in entrepreneurship is networking. When students take on industry
placements, they get to meet all kinds of professionals, mentors, and possible business
partners. This kind of network can give them guidance, resources, and chances that stick
around even after the internship wraps up. Studies indicate that entrepreneurs who have solid
professional connections tend to do better since they can tap into important info and support
(Pittaway et al., 2007

• Sparking Innovation and Imagination

Students who go on industry internships often bring new ideas and what they've learned in
school to their companies. At the same time, they get to figure out how to innovate within
current business frameworks and spot spots for improvement. This back-and-forth exchange
boosts creativity and helps students see how they can take academic concepts and turn them
into real-world business solutions (Rae, 2007).

• Closing the Gap between School and Work

Lots of schools try to get students ready for jobs, but sometimes their classes miss the
practical parts that are needed in actual work settings. Internships help fill this gap by letting
students put their theoretical knowledge to use in real life, which makes them more ready
either to start their own businesses or do well in existing ones (Gibb, 1996).

•Boosting Job Prospects and Entrepreneurial Thinking

Studies indicate that students who go through industry internships tend to land jobs after they
graduate (Wilton, 2012). Even more so for those studying entrepreneurship, these internships
help build a mindset geared towards entrepreneurship—pushing them to be proactive, take
smart risks, and look for creative answers. This way of thinking is essential whether they're
looking to kickstart their own ventures or function as “intrapreneurs” inside bigger companies
(Hynes & Richardson, 2007).

The Importance of Internships in Entrepreneurial Education

• Learning by Doing

Internships fit right into the whole experiential learning thing, where you actually get to learn
through hands-on stuff. Kolb’s (1984) model shows this cycle that includes having
experiences, thinking about them, coming up with concepts, and trying things out—and all
this can really shine during an internship. Students dive into real business tasks, think back on
what they've done, tweak their understanding, and try out new concepts based on those
thoughts.

• Putting Problem-Solving Skills to Work

Entrepreneurship is all about spotting issues and figuring out how to fix 'em. Internships give
students a close-up view of challenges in businesses so they can pitch fresh solutions. This
kind of experience is super important for honing problem-solving skills and building a
mindset geared towards finding solutions for emerging entrepreneurs (Neck & Greene, 2011).

• Teamwork between Professors and Businesses

To make industry placements work well, schools and businesses need to team up. Teachers are
key in steering students, making sure the job placements match what they’re learning while
building connections with those in the industry. This teamwork adds value to their education
and boosts students' entrepreneurial skills by providing them with practical knowledge and
reactions (Gartner & Vesper, 1994).

Successful Case Studies of Industry Placement Programs

• Stanford University's Entrepreneurship Internship Program

The Center for Entrepreneurial Studies at Stanford has this cool internship thing that connects
students with start-ups and venture capital firms in the heart of Silicon Valley. Because of this
program, a bunch of successful companies popped up thanks to alumni who went through it,
with founders from major names like Google and Instagram. The whole thing works so well
because students get real-world experience and get a taste of the entrepreneurial vibe while
they're out there (Stanford University, 2021).

•The University of Leeds’ Year in Industry Program

So, the University of Leeds has this "Year in Industry" thing for its biz and entrepreneurship
students. Basically, during this year, they get to work at businesses to pick up some real-world
experience and sharpen their entrepreneurial skills. It’s been super helpful for boosting
employability and building those important business skills. A lot of these students end up
kickstarting their own ventures later on (University of Leeds, 2021).

Spotting Issues in Business Environments

Introduction

Figuring out problems is a big deal when it comes to making decisions in organizations. It’s
about noticing gaps between what’s happening right now and what the organization actually
wants to achieve. No matter if you're running a small shop or part of a huge international
brand, getting the problem pinpointed is super important for coming up with good fixes. If
you mix this up, it could waste time and resources, lead to bad strategies, or just keep things
stuck as they are.

Why Spotting Problems Matter in Organizations

•Enhances Decision-Making

Nailing down the issue accurately is key to solid decision-making. When organizations clearly
define what's wrong, they can better spread their resources, focus their time, and give proper
attention to sorting it out. On the flip side, if problems aren't defined well enough, solutions
may end up being off-target and not tackle what's really going on (Simon, 1960).

•Boosts Organizational Effectiveness

By catching issues early on, companies can take steps to fix things before they get out of
hand, which makes everything run smoother. Businesses that are good at spotting problems
tend to manage their operations better, cut costs, and steer clear of hiccups (Drucker, 1994).

•Promotes Creativity and Enhancement

Finding problems nudges creative thinking and steady progress. When businesses see gaps or
hurdles in how they operate, it opens the door for workers to pitch inventive fixes and fine-
tune processes (Amabile, 1996).

The Process of Figuring Out Problems

• Spotting Symptoms vs. Actual Causes

One big hurdle in figuring out problems is telling apart symptoms from the true causes.
Symptoms are what you see on the outside (like dropping sales or high employee turnover),
and the root cause is what's really behind those issues. Using techniques for root cause
analysis, like the "5 Whys" approach, helps companies get to the heart of problems instead of
just tackling the obvious ones (Ohno, 1988).

For instance: A slump in sales could just be a symptom; meanwhile, stuff like bad customer
service, outdated products, or tougher competition might be what’s really causing it.

• Analysis Based on Data

More and more organizations are using data to help identify problems. Numbers can give
clear insights into trends in performance, how customers behave, and where things aren't
working as they should.
•Using Data for Insights

These days, companies are leaning more on data to help spot problems. This info can give
clear views on how things are performing, what customers are up to, and where things might
be going wrong. Tools like SWOT (Strengths, Weaknesses, Opportunities, Threats) and
PESTLE (Political, Economic, Social, Technological, Legal, Environmental) analyses often
come into play to look closely at both inside and outside factors that may lead to issues in the
organization (Humphrey, 1960).

•Getting Everyone Involved

Spotting the right problems usually means getting feedback from a bunch of different people
—employees, customers, suppliers—pretty much anyone who has a stake in it. Each group
offers its own take which could shine some light on hidden troubles. For instance, workers on
the ground might see inefficiencies in how things run while customers could raise flags about
product issues (Heifetz & Linsky, 2002).

Hurdles in Figuring Out Problems

• Mental Blocks

These mental blocks, like confirmation bias, anchoring, or groupthink, can really mess up how
we spot problems. People or teams might just get stuck on things they already know about and
miss out on fresh info or jump to conclusions without digging into the issue properly (Tversky
& Kahneman, 1974).

• Workplace Vibes

The vibe of a workplace can either help or hurt spotting issues. In places where folks worry
about getting blamed or criticized, they might hide problems instead of tackling them head-on.
On the flip side, a culture that’s all about being open and improving keeps people motivated to
highlight issues and pitch in with solutions (Schein, 2010).

•Lack of Resources

Limitations in time, money, and manpower can hold companies back from thoroughly probing
into issues. Bosses might hurry to apply band-aid solutions because of looming deadlines or
financial strains, which can lead to half-baked problem recognition and unhelpful fixes
(Collins, 2001).

Ways and Tools for Figuring Out Issues

•Fishbone Diagram (Ishikawa Thingy)

The Fishbone Diagram gives teams a way to sketch out possible reasons behind a problem by
sorting them into categories like people, processes, tech stuff, and environment. This tool
pushes for looking at all the different parts that might play a role in an issue (Ishikawa, 1982).

•Pareto Analysis

Pareto analysis is a method that helps figure out which problems to tackle first by spotting the
"important few" factors that have the biggest impact on a situation. Based on the idea that
80% of troubles come from just 20% of causes, it’s pretty handy (Juran, 1954).

•Root Cause Analysis (RCA)

RCA is an organized way to dig down to the core reasons behind issues or events. It tries to
uncover not only what went wrong but also why it happened and how to stop it from
happening again. RCA uses different techniques like "5 Whys," Failure Mode and Effects
Analysis (FMEA), and fault tree analysis (Rooney & Vanden Heuvel, 2004).

Problem Identification Case Studies

• Toyota's Lean Manufacturing

Toyota’s style of lean manufacturing, especially their "5 Whys" method, really shows how
crucial it is to get to the bottom of issues when figuring out problems. By continually
questioning "why" something's not working, Toyota digs deep into the real reason behind
production hitches, which helps them keep improving and coming up with new ideas (Liker,
2004).

•IBM's Shift in Direction

IBM made a big comeback in the '90s thanks to CEO Lou Gerstner, which is a solid case of
recognizing issues. Gerstner and his crew spotted that there was a gap between IBM’s old-
school mainframe strategy and the growing need for personal computers and software options.
By nailing down this issue, IBM managed to transform itself and take back its top spot in the
market (Gerstner, 2002).

Smart Tips for Spotting Problems Effectively

• Promote a Curious Atmosphere

Bosses ought to cultivate an environment where questioning, openness, and feedback are the
norm. Team members at any level should feel safe to voice their concerns and take part in
solving issues without worrying about getting blamed or facing backlash (Schein, 2010).

• Stick to a Methodical Process

Companies should go with structured methods like SWOT, RCA, and Pareto analysis for
reliably spotting and tackling problems. These methods offer a step-by-step way to find issues
that helps make sure important details aren't missed (Humphrey, 1960).

• Keep an Eye Out & Get Feedback

Problems aren’t stagnant; they can change as time goes on. Organizations need to set up
systems for ongoing monitoring and feedback loops so they can catch new problems early on
and tweak their strategies as needed (Argyris, 1991).

Solution Creation and Fresh Ideas

Introduction

Creating solutions and coming up with new concepts are super important for solving issues in
companies. Figuring out what the problems are is just the first step; then you gotta figure out
how to tackle them, which is where solution creation comes in. Innovation means bringing in
fresh ideas, products, services, or methods that add value and meet what organizations need.
When these two things work together, they help businesses grow and keep up with other
competitors in this quick-moving and complicated world.

The Significance of Solution Design in Companies

• Linking Issues and Practical Results

Solution design acts as a link that ties together figuring out issues with taking effective steps.
It's about coming up with, checking out, and picking strategies that tackle challenges within
an organization. If solution design isn't handled carefully, even problems that are spot-on can
end up ignored or get worse because of messy attempts to fix them (Ulrich, 2000).

• Makes Sure it's Doable and Lasting

Good solution design isn’t just about being inventive; it also takes into account whether the
solutions can actually work and last. Solutions need to fit the company's resources, how it
operates, and what's going on in the market. This way, you can steer clear of quick fixes that
might cause more headaches down the line (Schilling, 2013).
• Boosts Flexibility in Organizations

These days, companies have to be flexible if they want to stay ahead. Having solid skills in
solution design lets businesses quickly adapt to changing market trends, what customers want,
and tech advancements. This is particularly vital in sectors where changes happen all the time
(Teece, Peteraf, & Leih, 2016).

The Importance of Innovation in Crafting Solutions

•Boosting Competitive Edge

Staying ahead in the market relies heavily on innovation. Companies that nurture a creative
atmosphere tend to whip up solutions that set them apart from their rivals. Take Apple, for
instance; their knack for shaking things up with the iPhone completely transformed the mobile
phone game and has kept them leading the pack in tech advancements (Christensen, 1997).

•Promotes Creative Problem-Solving

Innovation encourages a lively culture within companies, giving teams the freedom to tackle
challenges with out-of-the-box thinking. When you think innovatively, it often means
breaking away from what’s typically done in the industry to discover fresh and better ways to
roll out products, services, or processes (Amabile, 1996).

• Sparks Major Change

New ideas can create big shifts that shake up whole industries or ways of doing business.
Think about how Uber and Airbnb turned the old-school markets upside down with their fresh
approaches that really hit home for customers (Christensen, 1997). These game-changing
innovations usually pop up from out-of-the-box thinking that goes against the usual

The Solution Design Process

•Clarifying the Problem

Before jumping into finding solutions, it's super important to really get a grip on what the
problem is. You gotta dig deep and fine-tune how you describe the issue to make sure you're
tackling the actual root causes instead of just dealing with surface-level stuff. Tools like root
cause analysis and checking in with stakeholders can keep the design process centered on
fixing real problems (Bessant & Tidd, 2011).

•Coming Up with Ideas

In this phase, it’s all about letting those creative juices flow and coming up with fresh
solutions. Techniques like brainstorming, mind mapping, and design thinking push teams to
think outside the box and whip up a bunch of possible fixes. Design thinking especially is
great because it puts users at the heart of things by getting them involved in generating ideas
(Brown, 2009).

•Prototyping and Experimenting

After coming up with ideas, prototyping and testing help figure out if the suggested fixes
actually work. Quick prototyping lets companies whip up models or simulations of their
solutions to collect thoughts from stakeholders or customers before going all in (Ries, 2011).

•Ongoing Tweaking

Designing a solution usually happens in cycles, with constant feedback and adjustments. This
back-and-forth process helps make things better by using what’s learned from tests and user
insights. Ongoing tweaking makes sure that the end result fits nicely with what the
organization aims for (Cooper, 2008).

Hurdles to Good Solution Design and Creativity

•Organizational Stuckness

A lot of companies don’t like to shake things up because they’re too comfy in their usual
routines, processes, and power dynamics. This kinda stuckness can really hold back fresh
ideas since employees might hesitate to pitch or jump on new plans that mess with how things
have always been (Hannan & Freeman, 1984).

•Resource Limitations

Creating new solutions usually needs time, cash, and staffing. Companies that are a bit
strapped for resources often struggle to pour money into stuff like new tech or training
programs that could lead to more innovative ideas (Teece, 1996).

•Fear of Risk

Companies that shy away from taking chances usually steer clear of diving into innovative
solutions because they’re scared of failing. This fear can make them stagnant, causing them to
overlook chances for growth and betterment (O'Reilly & Tushman, 2004).

Ways and Tools for Coming Up with Solutions and Innovations

• Design Thinking

So, design thinking is all about putting people first. It’s like stepping into the shoes of users,
figuring out what the issues are, brainstorming some ideas, making prototypes, and giving
them a test run. This method is super useful for whipping up cool products or services that
really click with the folks who will use them (Brown, 2009).

• Lean Startup Methodology

The lean startup idea is all about picking apart solutions quickly through trial and error while
getting feedback along the way. This helps cut down on waste and makes sure that any effort
put in actually goes toward stuff that's ready to hit the market (Ries, 2011).

• Open Innovation

Open innovation means bringing in outside knowledge and ideas to spice up your own
creative efforts. By teaming up with external players like universities, startups, or even
customers themselves, businesses can tap into a wider range of know-how to come up with
better designs (Chesbrough, 2006).

•TRIZ (Theory of Inventive Problem Solving)

TRIZ is a way to tackle problems that aids companies in coming up with creative ideas by
looking at trends in inventions and innovations from different areas. This method promotes
organized thinking and can result in major breakthroughs (Altshuller, 1999).

Case Studies of Cool Solution Design and Innovation

• Google's 20% Time Stuff

Google is well-known for its "20% time" idea, which lets workers use a fifth of their work
hours to chase after different projects that aren't part of their usual gigs. This approach has
sparked the birth of some pretty neat products like Gmail and Google News since it gives
employees the chance to get creative with problem-solving (Steiber & Alänge, 2013).

• Procter & Gamble’s Connect + Develop Thing

P&G's Connect + Develop initiative is a solid example of open innovation. By teaming up

with outside partners, P&G has rolled out plenty of innovative goodies like Swiffer and Crest
Whitestrips. This program shows how using ideas from outside sources can really boost
solution-making (Huston & Sakkab, 2006).
•Tesla's EVs

Tesla's breakthrough in electric vehicles is a prime example of solution design tackling a

worldwide issue: cutting down carbon emissions from cars. With its fresh tech, stylish
designs, and unique business approach, Tesla has transformed the electric car scene (Musk,
2013).

Top Tips for Smart Solution Building and New Ideas

•Encourage an Innovation-Friendly Atmosphere

Companies oughta set up a vibe where coming up with new ideas is both supported and
appreciated. This means letting employees have some wiggle room to try things out, accepting
setbacks as a way to learn, and promoting teamwork across different departments (Amabile,
1998).

•Mix Imagination with Organization

Even though being imaginative is super important, businesses also need proper processes in
place for figuring out and rolling out solutions. By mixing creative thinking with organized
methods like lean startup or design thinking, companies can come up with innovations that
really work (Schilling, 2013).

•Get Stakeholders Involved from the Start

Getting stakeholders on board early in the solution design journey helps make sure that what
you're creating meets their needs and expectations. By bringing in customers, employees, and
partners during brainstorming and testing stages, you can really boost how relevant and
accepted new solutions are (Brown, 2009).

•Keep Learning and Adjusting

Innovation isn’t a one-time deal. Companies should set up ways to keep learning and getting
feedback so they can tweak their solutions based on market shifts, customer input, and new
tech developments (Teece et al., 2016).

Engaging with Industries and Getting Feedback

Introduction

Working with industries and gathering feedback is super important for creating a solid link
between schools, companies, and other sectors. In the world of entrepreneurship, getting
involved with industry gives students, teachers, and researchers valuable real-life insights,
practical know-how, and helpful critiques that can shape innovation, course design, and skill
development. This kind of collaboration also helps businesses by bringing in fresh talent,
creative ideas, and advanced research.

Why Industry Engagement Matters

•Boosts Hands-On Learning

Getting involved with industries helps students acquire useful knowledge that goes hand-in-
hand with what they learn in the classroom. This real-world experience introduces them to the
everyday struggles businesses face, making it easier to connect what they learn academically
to actual situations (Collins, 2011).The Significance of Getting Involved with Industry

For instance, internships and co-op programs let students take what they've learned in class
and put it into practice at a workplace, which helps them pick up some handy skills.

•Gives Some Real-World Insights

When schools partner up with companies, they get a leg up on the latest trends, tech stuff, and
what the market is looking for. This keeps their courses updated to match what employers are
actually after so that graduates have the right skills (Guile & Young, 1998). Business leaders
share key insights that help tweak course material, research focus, and skill-building efforts so
they're in sync with what's changing in various industries.

•Encourages Research and New Ideas

When academic institutions team up with businesses, it paves the way for joint research
projects that can spark innovation. College researchers can join forces with companies to cook
up new products or technologies while also improving processes—it's a win-win situation for
both sides (Etzkowitz, 2003).These collaborations create opportunities for applied research
and help academia contribute solutions to real-world business problems.

•Offers Networking Opportunities

Industry engagement provides networking opportunities for students, faculty, and institutions.
Connections made during internships, conferences, workshops, and mentorship programs can
lead to future career prospects, partnerships, and collaborations (Rowe, 2017). Networking
allows students and academic staff to stay updated on industry developments and maintain
long-term professional relationships.
Industry Insights: How They Shape Education and Business

• Boosts Curriculum Upgrades

Feedback from the industry is super important when it comes to tweaking and updating school
programs. By chatting with folks in various industries, schools can shuffle around their
teaching materials to align with what's hot right now, like new tech or job market vibes
(Coyle, 2014). This way, graduates are set to tackle what employers need. For instance, if tech
companies give a nudge about current trends, this might prompt universities to throw in some
data science and AI classes into their computer science offerings.

• Elevates Student Performance

Helpful critiques from industry mentors during internships and hands-on learning experiences
can help students sharpen their work skills. This kind of feedback touches on everything from
technical know-how to how well they communicate and collaborate with others—basically
making them more capable and ready for the workforce (Collins, 2011).

•Sparks New Ideas and Ongoing Growth

In both the world of education and business, getting feedback is super important for sparking
new ideas and improving stuff. For companies, insights from schools often result in better
business practices, hopping on board with new tech, or even rethinking how products are
designed (Etzkowitz, 2003). On the educational side, info coming from industries helps tweak
research goals, teaching styles, and efforts to build key skills.

•Boosts Quality Checks

Feedback from the industry acts like a yardstick for measuring how good and relevant
academic programs really are. Keeping a steady dialogue with industry players makes sure
that what’s being taught matches up with what employers want and professional standards
require—this all plays into making sure academic institutions stay accredited and maintain
their quality (Guile & Young, 1998).

Ways to Connect with Industry and Gather Input

•Internships and Apprenticeships

Internships and apprenticeships are among the top ways to get involved with various
industries. These opportunities give students hands-on work experience while also showing
them the skills required for their careers. For businesses, these programs act as a way to find
potential future workers who understand their environment and how they do things (Silva et
al., 2018). Frequent feedback from bosses during these internships helps students sharpen
their abilities and boost their work quality.

• Collaborations Between Schools and Businesses

Long-lasting collaborations between colleges and companies create chances for ongoing
teamwork. These partnerships might include shared research efforts, projects in development,
and even the joint creation of courses. Big names like IBM and Microsoft have teamed up
with universities around the world to whip up tailored classes that fit what industries need,
which often shapes what skills and knowledge students pick up along their academic path
(Etzkowitz, 2003).

• Guest Talks and Workshops

Bringing in industry professionals for guest talks or workshops can spice up the learning
experience for both students and teachers. These speakers shed light on what's happening right
now in the industry, tackle challenges they face, and highlight new trends—basically giving
students a peek into what various jobs are really like (Rowe, 2017). These events usually
spark conversations between students and pros from the industry, helping ideas flow back and
forth.

•Advisory Groups and Committees

Lots of schools set up advisory groups with folks from the industry. These groups give a place
for those in business to talk about what they need, the problems they're facing, and how they
think classes could be better. The insights collected this way help keep academic programs
relevant and competitive (Coyle, 2014).

•Hackathons and Contests

Companies or schools put on hackathons, contests, and challenges that let students tackle real-
world issues. These events are great for getting feedback from judges and mentors in the field,
which helps participants sharpen their problem-solving skills and technical know-how (Floyd
et al., 2017). Plus, they spark innovation by pushing students to get creative when under
pressure.

Issues that Prevent Good Industry Engagement and Feedback

•Mismatch of Expectations
A big problem in working with industries is the chance that what academics want doesn't line
up with what industries actually need. While schools might be diving into wide-ranging
theories and research, companies usually want quick fixes for their specific issues. To close
this gap, it’s important to keep the lines of communication open and work together (Barnes et
al., 2002).

•Time and Resource Limitations

Both academia and industries deal with squeezed time frames and tight budgets, which can
put a damper on how much they can get involved with each other. Building solid partnerships
or providing internships, for example, takes a lot of time and money—something especially
tough for smaller businesses (Coyle, 2014).

•Not Enough Ways to Get Feedback

Sometimes, there aren't formal ways to gather input from industry partners. This can lead to
missed chances to enhance academic programs. To fix this, schools should set up clear
feedback routes and often reach out for insights from industry players (Barnes et al., 2002).

Examples of Industry Connections and Input Success

•MIT’s Industrial Liaison Program (ILP)

The ILP at MIT is a really good program that brings together industry folks with researchers
and profs from MIT. This connection lets businesses tap into some of the latest research, while
MIT gets valuable input from the industry that helps steer their research and course offerings
(Etzkowitz, 2003). Because of this teamwork, there have been some big leaps in tech and
innovation across different fields.

•Siemens and College Collaborations

Siemens has built solid partnerships with universities to help mold engineering courses. They
bring in guest speakers, offer internships for students, and work together on various research
gigs. These collaborations have led to academic programs that closely match what Siemens is
looking for, boosting job prospects for graduates (Rowe, 2017).

•Capstone Projects at Stanford Uni

At Stanford Uni, teaming up with industries is super important for engineering students'
capstone projects. These gigs have students tackling actual problems thrown their way by
company partners. Input from these businesses sharpens the students' solutions and gets them
ready for the real-life hurdles they'll encounter once they finish school (Silva et al., 2018

Best Practices for Getting the Most Out of Industry Interaction and Input

•Set Clear Goals

To engage effectively, both the academic world and industries need to have well-defined goals
that steer their partnerships. Whether it’s about boosting student job readiness, encouraging
research, or tackling business challenges, outlining shared objectives is super important for
genuine engagement (Barnes et al., 2002).

•Build Organized Feedback Loops

Schools should set up proper ways to collect feedback from their industry partners. This could
mean having regular catch-ups, surveys, advisory boards, and follow-up reports on internships
and joint research projects (Coyle, 2014). These systems make sure that feedback gets
gathered regularly and used to enhance academic programs.

Good Tips for Solid Industry Engagement and Feedback

•Promote Ongoing Collaboration

Getting involved with the industry isn’t just a single chat; it's an ongoing thing. Building long-
term partnerships lets both sides keep working together on research, course design, and
internships for students. Schools and businesses should really focus on keeping those
relationships alive (Etzkowitz, 2003).

•Encourage Honest Communication

It's super important to keep communication lines open between schools and company partners.
Everyone needs to be upfront about what they expect, the hurdles they face, and any feedback
to stay in sync and tackle problems as they pop up (Rowe, 2017).

Reporting and Documentation

Introduction

So, reporting and documentation are super important in both business and academia. They’re
all about writing down, sorting, and showing info in a way that makes sense. When done right,
they make sure everyone involved gets the right facts at the right time, which helps make
decisions easier, keeps things accountable, and promotes openness.
Why Reporting Matters

• Helps With Decision-Making

Reports lay out data clearly and organized so folks can make smart choices. By putting
together and breaking down key info, reports bring to light trends, problems, and performance
stats that help with planning strategies and tweaking operations (Drucker, 2006).

•Boosts Accountability and Openness

Regular reporting helps create a record of what’s been done, decisions made, and results
achieved, which means it boosts accountability and openness in an organization. This way,
stakeholders like employees, investors, and regulators can check out how the organization is
doing and whether it’s following set rules (KPMG, 2012).

•Assists Performance Tracking and Assessment

Reports play a vital role in keeping tabs on how things are measuring up against goals and
standards. They give clues on if targets are being hit, spot areas that need fixing up, and
suggest ways to improve performance (Kaplan & Norton, 1996).

•Facilitates Communication

Good reporting makes communication smoother both within the organization as well as with
outsiders. It ensures info gets shared clearly and consistently which helps get everyone on the
same page , keep stakeholders informed ,and build trust (Miller , 2011).

The Importance of Documentation

•Keeps a History

Docs act as a way to keep track of what’s happened before—like activities, choices made, and
how things were done. They help you see how far you've come and give insight into past
actions, plus they’re useful for making decisions down the line. Good record-keeping is key
for keeping the memory of an organization alive and ensuring smooth operations (Becker,
2004).

•Makes Sure Rules are Followed

Documentation is often needed to meet regulatory standards and for audits. It shows that what
an organization does is in line with laws and industry rules, which helps steer clear of any
legal trouble or money issues (COSO, 2013).
•Aids Knowledge Keeping

Good documentation plays a big part in keeping knowledge organized by recording important
info, experiences, and effective methods. It allows companies to use the knowledge they’ve
gathered, improve their training efforts, and encourage new ideas (Nonaka & Takeuchi, 1995).

•Boosts Process Effectiveness

Having straightforward and precise documentation makes it easier to run processes by

offering set procedures and instructions. It cuts down on mistakes, lowers repeated work, and
keeps operations consistent (Davenport & Prusak, 1998)

Different Kinds of Reports

•Money Reports

Money reports give a snapshot of how an organization is doing financially. They cover things
like balance sheets, income statements, cash flow logs, and reports on shareholder equity.
These kinds of reports are super important for figuring out financial well-being and making
investment choices (Horngren et al., 2013).

•Update Reports

Update reports keep tabs on the progress of projects or initiatives. They outline what’s been
accomplished, any hurdles faced, and milestones achieved, providing a look into how
everything's going and if changes are needed. These are used to keep everyone in the loop—
stakeholders and project backers alike (PMI, 2013).

•Research Docs

Research docs share the results from studies or investigations. They usually have parts like
how it was done, what happened, discussions, and final thoughts. These kinds of reports are
super important for spreading knowledge and backing up decisions with solid evidence (Bell
& Waters, 2014).

•Compliance Docs

Compliance docs keep track of following laws and internal rules. They often cover stuff like
compliance checks, risk handling, and sticking to legal and industry norms. These sorts of
reports make sure companies are doing what they’re supposed to do legally (KPMG, 2012).

Guidelines for Good Reporting

•Set Clear Goals

It's important that reports have specific goals that match up with what the organization aims to
achieve. By clearly outlining what the report is about, it makes sure that it tackles the right
topics and serves its target audience well (Miller, 2011).

•Check for Accuracy and Trustworthiness

Having accurate data and dependable sources is key to solid reporting. It's necessary to
double-check and confirm facts so that the info shared is reliable and can be trusted (Drucker,
2006).

Some Handy Tips for Reporting

•Keep it Simple and Straightforward

Make sure your reports use straightforward language that everyone can get. Steering clear of
complicated terms and industry lingo makes it easier for all the readers to understand what
you’re saying (Becker, 2004).

•Add Some Visuals

Incorporating things like charts, graphs, and tables can really help make your reports more
readable. They break down complicated data and trends so readers can easily catch on to the
important stuff (Kaplan & Norton, 1996).

•Stick to a Basic Structure

It’s best if reports have a set layout that includes parts like an overview, intro, methodology,
findings, and suggestions. Keeping a consistent format helps with readability and makes
comparing different reports way simpler (PMI, 2013).

Best Ways to Do Documentation

•Sort Info Logically

Docs oughta be set up in a logical way so folks can find and snag info easily. That means
using straightforward titles, subtitles, and maybe even an index (Davenport & Prusak, 1998).

•Keep it Uniform

Using the same format, terms, and style throughout your docs is key for making things clear
and looking professional. Plus, it makes it simpler to check over and refresh documents when
needed (Nonaka & Takeuchi, 1995).
•Keep It Fresh

Docs should get updated often to show the latest practices, rule changes, or fresh ideas. This
way, everything stays relevant and on point (Becker, 2004).

•Make It Easy to Find but Safe

Documents should be easy to reach for those who are allowed, but also keep private info safe.
Setting up access rules and security steps helps protect against unwanted eyes and data leaks
(COSO, 2013).

Tools for Keeping Track and Writing Stuff Down

•Reporting Tools

Programs such as Microsoft Power BI, Tableau, and Google Data Studio make it easier to
whip up reports that come with cool interactive visuals. They help break down data in a way
that's easy for folks to understand (Microsoft, 2020).

•Document Management Systems

Platforms like SharePoint, Google Drive, and Dropbox are great for sorting out documents,
keeping 'em safe, and sharing them around. These systems also have features for tracking
changes, working together in real-time, and making sure access is secure (Google, 2023).

•Project Management Tools

So, you’ve got project management stuff like Asana, Trello, and Microsoft Project that keep
an eye on how your projects are going, whip up status reports, and note down what’s
happening in the project. These tools boost how visible the project is and help everyone work
together better (Atlassian, 2024).

•Research Management Tools

You can use tools such as EndNote, Mendeley, and Zotero to keep things organized when it
comes to research materials. They’re handy for handling bibliographies and references which
makes documenting research findings a breeze (Clarivate, 2023).

Studies on Good Reporting and Record Keeping

•Enron's Financial Fiasco

The fall of Enron really drives home how crucial it is to have accurate and clear financial
reports. Their dishonest reporting ended up causing a ton of legal trouble and financial mess,
showing why we need strict standards when it comes to reporting (Healy & Palepu, 2003).

•NASA’s Mars Rover Adventures

NASA's record-keeping for the Mars Rover missions shows just how vital having detailed and
organized documentation can be. The careful logs of planning, data gathering, and analysis
played a big role in the success of several Mars missions while also offering important lessons
for future explorations (NASA, 2021).

•Research Docs at the WHO

The World Health Organization (WHO) is a great example of solid research doc practices with
its detailed reports on health stuff across the globe. These write-ups dish out key info on
disease outbreaks, health policies, and research insights, which help shape responses and
guidelines in global health matters (WHO, 2022).

Wrapping It Up

In Nigeria’s tough business environment, doing well depends a lot on building critical
thinking, reflective thought, and creativity. Entrepreneurs should keep honing these abilities to
spot chances, tackle challenges, and come up with innovative ideas that boost both the
country's economy and social growth. Industry experiences are super important in
entrepreneurship training as they give students hands-on exposure that sharpens their skills,
grows their networks, and makes them more hirable.

Figuring out problems accurately is super important in managing organizations, helping with
long-term choices and kicking off new ideas. Companies that use clear methods for spotting
issues and build good vibes in their culture can stay ahead of the game. Coming up with
solutions and being innovative matter just as much since they lead to practical plans and help
develop fresh products or services. Using organized methods and getting everyone involved
really helps growth and success in this area.

Working together across industries is key for making sure academic programs match up with
what’s actually needed in the world. By teaming up with businesses through internships,
research projects, and advisory roles, schools can boost student success and spark innovation.
Keeping track of reports and documentation is also vital for staying accountable, making
decisions, and handling knowledge effectively—it all contributes to a company thriving when
done right.

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CHAPTER FIVE

INNOVATION (C0NCEPT, DIMENSIONS, CHANGE AND INNOVATION,

KNOWLEDGE AND INNOVATION)

Definition of Innovation

Innovation refers to the process of creating and implementing new ideas, methods, products,
or services that bring value. It involves improving existing solutions or developing entirely
new ones to address challenges or opportunities. Innovation is essential for progress and
competitive advantage. It requires creativity, strategic thinking, and a willingness to take risks.
Businesses, governments, and individuals must foster an environment where innovation can
thrive.

Dimensions of Innovation

Product Innovation
Product innovation involves the creation and introduction of a new or significantly improved
product. This can encompass improvements in performance, features, design, or functionality
that deliver enhanced value to customers. It is a crucial aspect of maintaining competitiveness
and meeting evolving market demands.
Types of Product Innovation
1. Incremental Innovation:
o Definition: Gradual improvements to existing products.
o Examples: Adding new features to a smartphone, improving fuel efficiency in
cars, upgrading software versions.
o Characteristics: Typically involves minor adjustments or enhancements rather
than complete overhauls.
2. Disruptive Innovation:
o Definition: Introduction of a new product that disrupts existing markets and
displaces established products or services.
o Examples: The rise of smartphones disrupting traditional cell phones and
cameras, streaming services replacing physical media.
o Characteristics: Often starts with simpler, more affordable alternatives that
improve over time, eventually displacing existing products.
3. Radical Innovation:
o Definition: Introduction of a completely new and novel product that creates
new markets or significantly changes existing ones.
o Examples: The invention of the internet, the development of electric cars.
o Characteristics: Represents a major leap from existing solutions, often
involving new technologies or business models.

The Product Innovation Process

1. Idea Generation:
 o Sources: Can come from market research, customer feedback, internal
brainstorming sessions, technological advancements, or competitor analysis.
o Techniques: Brainstorming, crowd sourcing, and trend analysis to identify
potential opportunities.
2. Concept Development and Testing:
o Concept Development: Transforming ideas into detailed product concepts,
including design specifications, features, and benefits.
o Testing: Creating prototypes or models to test functionality, usability, and
market acceptance. This may involve beta testing with a select group of
customers.
3. Business Analysis:
o Market Analysis: Evaluating market size, growth potential, and customer
needs.
o Financial Analysis: Estimating costs, pricing strategies, and potential
profitability. Includes cost-benefit analysis and financial projections.
4. Product Development:
o Design and Engineering: Developing the final product design, including
technical specifications, materials, and manufacturing processes.
o Testing and Refinement: Conducting rigorous testing to ensure product
quality, safety, and performance. Making necessary adjustments based on
feedback.
5. Commercialization:
o Marketing Strategy: Developing a marketing plan that includes positioning,
branding, and promotional tactics to launch the product.
o Distribution: Establishing channels for product distribution and sales,
including partnerships, retail strategies, and online platforms.
6. Post-Launch Evaluation:
o Monitoring Performance: Tracking product performance through sales data,
customer feedback, and market reaction.
o Continuous Improvement: Making ongoing improvements and updates based
on performance analysis and customer input.

Key Factors Influencing Product Innovation

1. Customer Needs and Preferences:
o Understanding and addressing the evolving needs and desires of customers is
crucial for successful product innovation.
2. Technological Advancements:
o Leveraging new technologies can drive innovation and create opportunities for
developing advanced products.
3. Market Trends:
o Staying attuned to market trends helps in identifying opportunities for
innovation and aligning products with current demands.
4. Competitive Landscape:
o Analyzing competitors’ products and strategies can provide insights into gaps
in the market and areas for differentiation.
 5. Regulatory and Environmental Considerations:
o Ensuring compliance with regulations and addressing environmental concerns
can influence product design and development.

Challenges in Product Innovation

1. High Development Costs:
o The cost of research, development, and production can be significant, making
it crucial to manage budgets and resources effectively.
2. Market Uncertainty:
o Predicting market acceptance and demand can be challenging, requiring
thorough research and risk management strategies.
3. Intellectual Property Issues:
o Protecting innovations through patents and trademarks is important to
safeguard intellectual property and prevent infringement.
4. Time-to-Market Pressure:
o Speeding up the development process while maintaining quality can be a
balancing act, particularly in competitive industries.

Process Innovation:
Process innovation refers to the implementation of new or significantly improved production
or delivery methods. This involves enhancing processes to achieve better efficiency,
effectiveness, and quality, which can lead to reduced costs, increased productivity, and
improved customer satisfaction. Unlike product innovation, which focuses on developing new
products or services, process innovation is centered on improving how products and services
are created and delivered.
Types of Process Innovation
1. Technological Process Innovation:
o Definition: Introduction of new technologies or equipment that transform how
processes are carried out.
o Examples: Implementation of advanced robotics in manufacturing, adoption of
cloud computing for data management.
o Characteristics: Often involves significant changes in technology or
infrastructure that lead to enhanced capabilities or efficiencies.
2. Methodological Process Innovation:
o Definition: Adoption of new methods or techniques that improve operational
efficiency and effectiveness.
o Examples: Lean manufacturing techniques, Six Sigma methodologies, Agile
project management.
o Characteristics: Focuses on optimizing existing processes through improved
methods and practices.
3. Organizational Process Innovation:
o Definition: Changes in organizational structure or processes that enhance
coordination and performance.
o Examples: Reengineering workflows, decentralizing decision-making,
implementing cross-functional teams.
 o Characteristics: Aims at improving internal communication, collaboration,
and overall organizational effectiveness.
4. Service Process Innovation:
o Definition: Development of new or improved processes for delivering services
to customers.
o Examples: Online banking systems, automated customer service chatbots,
streamlined logistics and delivery services.
o Characteristics: Enhances the quality and efficiency of service delivery, often
focusing on improving customer experience.

The Process Innovation Process

1. Identifying Opportunities:
o Sources: Opportunities for process innovation can arise from customer
feedback, operational inefficiencies, technological advancements, or
competitive pressures.
o Techniques: Process mapping, value stream analysis, benchmarking against
industry standards.
2. Idea Generation and Concept Development:
o Idea Generation: Brainstorming and research to generate ideas for improving
processes.
o Concept Development: Formulating detailed concepts and solutions for the
proposed process improvements, including technical and operational aspects.
3. Pilot Testing and Validation:
o Pilot Testing: Implementing the new process on a small scale to test its
feasibility, effectiveness, and potential issues.
o Validation: Gathering data and feedback to assess the performance of the new
process and make necessary adjustments.
4. Implementation:
o Planning: Developing a detailed implementation plan, including timelines,
resource allocation, and risk management strategies.
o Execution: Rolling out the new process across relevant areas or departments,
ensuring proper training and support for employees.
5. Monitoring and Evaluation:
o Performance Tracking: Measuring the effectiveness of the new process using
key performance indicators (KPIs) and other metrics.
o Continuous Improvement: Making ongoing adjustments and refinements
based on performance data and feedback to ensure sustained improvements.

Benefits of Process Innovation

1. Increased Efficiency:
o Definition: Streamlining processes to reduce waste, minimize delays, and
optimize resource utilization.
o Examples: Reducing production cycle times, lowering operational costs.
2. Enhanced Quality:
o Definition: Improving the consistency and reliability of outputs and services.
 o Examples: Implementing quality control measures, reducing defect rates.
3. Cost Reduction:
o Definition: Lowering production or operational costs through more efficient
processes.
o Examples: Automating repetitive tasks, optimizing supply chain management.
4. Improved Customer Experience:
o Definition: Enhancing the overall experience for customers through better
service delivery and responsiveness.
o Examples: Faster delivery times, improved customer support.
5. Competitive Advantage:
o Definition: Gaining an edge over competitors by offering superior processes
and operational capabilities.
o Examples: Faster go-to-market times, unique service offerings.

Challenges in Process Innovation

1. Resistance to Change:
o Description: Employees and stakeholders may resist changes to established
processes.
o Solutions: Effective change management strategies, clear communication, and
involvement of stakeholders in the process.
2. High Implementation Costs:
o Description: The costs associated with developing and implementing new
processes can be significant.
o Solutions: Careful planning, budgeting, and phased implementation to manage
costs effectively.
3. Integration with Existing Systems:
o Description: New processes may need to integrate with existing systems and
technologies.
o Solutions: Ensuring compatibility and conducting thorough testing to avoid
disruptions.
4. Measuring Impact:
o Description: Evaluating the impact of process innovations can be challenging.
o Solutions: Establishing clear metrics and KPIs to assess performance and
effectiveness.

Successful Examples of Process Innovation

1. Toyota Production System (TPS):
o Revolutionized manufacturing with lean principles and just-in-time production,
significantly improving efficiency and quality.
2. Amazon Fulfillment Centers:
o Utilized advanced logistics and automation technologies to streamline order
processing and reduce delivery times.
3. Netflix’s Streaming Model:
o Shifted from DVD rentals to online streaming, transforming the media
consumption process and setting a new standard in the industry.
Business Model Innovation
Business Model Innovation (BMI) refers to the process of creating, refining, or redesigning a
company's business model to gain a competitive advantage, deliver more value to customers,
and drive growth. It focuses on changing the fundamental way a business creates, delivers,
and captures value, rather than just improving existing products or services.

Key Components of Business Model Innovation:

1. Value Proposition: Redefining what value is delivered to customers, often through new
products, services, or entirely different approaches to solving customer problems.
2. Revenue Model: Innovating how a company makes money. This could involve changing
pricing strategies, exploring new income streams, or switching to a subscription-based model.
3. Target Market: Reaching new customer segments or redefining the way a company serves
its existing audience. This may include expanding into new geographic regions or adapting
products to suit different customer needs.
4. Cost Structure: Reducing costs or changing how resources are allocated, potentially by
leveraging technology, outsourcing, or automating processes.
5. Distribution Channels: Innovating how products or services are delivered to customers.
Examples include moving from physical retail to e-commerce or implementing direct-to-
consumer models.
6. Partnerships: Building new alliances or ecosystems to enhance capabilities, enter new
markets, or improve the product or service offering.

Examples of Business Model Innovation:

-Netflix: Transitioning from DVD rentals to a streaming subscription service.
- Airbnb: Creating a platform that allows individuals to rent out their homes, disrupting the
traditional hotel industry.
- Apple: Combining hardware, software, and services to create an ecosystem (iPhone, iCloud,
App Store) that locks customers into its products. Others are the subscription services,
platform-based businesses (e.g., Uber, Airbnb), freemium models.

Importance of Business Model Innovation:

- Adaptation: It allows companies to stay relevant in rapidly changing markets.
- Growth: A well-executed BMI can open new revenue streams or reduce costs, leading to
higher profitability.
- Disruption: Companies that innovate their business models can disrupt entire industries and
gain a competitive edge over incumbents.

Organizational Innovation
Organizational Innovation refers to the implementation of new methods in a company’s
business practices, workplace organization, or external relations to improve efficiency,
effectiveness, and overall performance. Unlike product or technological innovation, which
focuses on what a company produces, organizational innovation focuses on how a company
operates.

Key Aspects of Organizational Innovation:

1. Business Processes: Introducing new approaches to how work is done. This could involve
automating tasks, restructuring workflows, or improving communication and collaboration
tools.
2. Workplace Organization: Changes in the internal structure of the organization, such as
shifting from a hierarchical structure to a flat or matrix structure, creating cross-functional
teams, or adopting flexible work environments.
3. Corporate Culture: Fostering a culture that encourages creativity, collaboration, and open
communication. This can involve implementing new HR practices, leadership development
programs, or emphasizing employee empowerment and autonomy.
4. External Relations: Improving how the company interacts with partners, suppliers,
customers, and stakeholders. This might include new collaboration models, joint ventures, or
more transparent communication channels with external parties.
5. Management and Leadership: Innovations in decision-making processes or leadership
approaches. For example, adopting agile management techniques or distributed leadership
models.

Drivers of Organizational Innovation:

- Technology: The rise of digital tools, artificial intelligence, and automation has enabled
companies to rethink how they organize their work.
- Globalization: Global competition and the need to operate across borders drive organizations
to innovate their structures to remain competitive.
- Workforce Expectations: With a growing focus on employee well-being, work-life balance,
and remote work, organizations are innovating to meet these changing expectations.
- Sustainability: Organizations are adopting innovative processes to reduce their
environmental impact, optimize resource use, and contribute to social responsibility.

Benefits of Organizational Innovation:

- Increased Efficiency: Streamlined processes can reduce costs and save time.
- Better Employee Engagement: Innovative workplaces often foster a more motivated and
productive workforce.
- Enhanced Agility: A more flexible organizational structure enables quicker adaptation to
market changes or disruptions.
- Competitive Advantage: Organizations that innovate internally can better position
themselves to compete in the marketplace, differentiate from competitors, and respond to
customer needs.

Examples of Organizational Innovation:

- Google: Known for its flexible work environment, decentralized decision-making, and
encouraging employee creativity through the “20% time” rule (allowing employees to spend
20% of their time on projects they are passionate about).
- Zappos: Adopted a holacracy, a flat management structure that removes traditional
hierarchical management in favor of self-managing teams, giving employees more autonomy.
- Toyota: Developed the Toyota Production System (TPS), which introduced lean
manufacturing principles, eliminating waste and continuously improving processes through
employee involvement and feedback.

Importance of Organizational Innovation:

Organizational innovation is critical for companies to remain agile, competitive, and capable
of handling internal and external challenges. By continuously innovating, companies can
improve operational efficiency, employee satisfaction, and their ability to adapt to changing
markets or environments. It refers to changes in organizational structure or practices that
enhance performance.
Examples: Agile management practices, remote work structures, decentralized decision-
making.

Marketing Innovation:
Marketing Innovation refers to the implementation of new or significantly improved
marketing strategies or methods. This type of innovation focuses on changes in how products
or services are promoted, positioned, or delivered to customers, with the goal of enhancing
customer engagement, brand visibility, and overall sales performance.

Key Components of Marketing Innovation:

1. Product Design or Packaging: Innovating in the design, appearance, or packaging of a
product to make it more appealing or functional. For example, using eco-friendly materials or
introducing interactive packaging.
2. Pricing Strategies: Developing new pricing models that attract customers, such as dynamic
pricing, freemium models, or personalized pricing based on customer behavior.
3. Sales Channels: Utilizing new platforms or channels for reaching customers. This could
involve the adoption of e-commerce, social media, or mobile apps for direct-to-consumer
sales, or using influencer marketing as a primary method of promotion.
4. Communication and Promotion: Changing how a company communicates with customers
or promotes its products. This may involve adopting new digital marketing tools, content
marketing strategies, data-driven personalized advertising, or leveraging virtual or augmented
reality for immersive brand experiences.
5. Customer Experience: Enhancing the overall experience of interacting with the brand.
Innovations in customer service, loyalty programs, or personalized marketing (e.g., AI-driven
product recommendations) can improve customer satisfaction and retention.
6. Brand Positioning: Repositioning a brand in the market by targeting new customer
segments, developing a new brand identity, or changing the brand’s message to align with
current trends, such as sustainability or diversity.

Drivers of Marketing Innovation:

- Technological Advances: The rise of digital platforms, social media, and artificial
intelligence (AI) enables marketers to reach and engage customers in more personalized and
data-driven ways.
- Changing Consumer Behavior: With consumers becoming more digitally savvy and
conscious of social and environmental issues, marketing innovation helps companies address
evolving needs and preferences.
- Competitive Pressure: As companies compete for market share, innovative marketing tactics
can provide a differentiating factor that attracts and retains customers.
- Data Availability: The increasing availability of consumer data enables more targeted,
personalized, and efficient marketing efforts.

Benefits of Marketing Innovation:

- Improved Customer Engagement: New marketing techniques can capture customer attention,
create memorable experiences, and strengthen brand loyalty.
- Competitive Advantage: Marketing innovations can differentiate a company from its
competitors, making its products more attractive and relevant.
- Increased Sales and Market Share: By adopting new strategies, companies can reach
untapped markets or gain more visibility, leading to increased revenue.
- Cost Efficiency: Digital and data-driven marketing innovations often result in more efficient
use of marketing budgets through better-targeted campaigns and improved return on
investment (ROI).

Examples of Marketing Innovation:

- Coca-Cola: The "Share a Coke" campaign, which replaced the brand logo with people’s
names on bottles, encouraged personalized engagement and social sharing.
- Nike: The integration of wearable technology (Nike+ app) with its products to track fitness
progress, creating an engaging ecosystem for its customers.
- Spotify: Leveraging big data to create personalized playlists and targeted ads, tailoring the
customer experience to individual preferences.
- Red Bull: Innovating in content marketing through extreme sports events and sponsoring
athletes, transforming itself from just an energy drink company into a lifestyle brand. Others
are: Influencer marketing, experiential marketing, targeted digital advertising

Importance of Marketing Innovation:

Marketing innovation is essential for companies to keep pace with changing consumer
expectations, competitive pressures, and technological advancements. It allows businesses to
stay relevant, build stronger relationships with customers, and enhance brand equity. By
constantly seeking new ways to communicate, deliver, and engage, companies can drive long-
term growth and sustainability. It involves novel marketing strategies that improve product or
service promotion and distribution.

Key Drivers of Innovation

Drivers of Innovation
1. Technological Advances:
- New technologies enable novel solutions and improve existing processes.
- Examples: Artificial intelligence, blockchain technology, advanced materials.
2. Market Demands:
- Changing consumer needs and preferences drive the need for new and improved solutions.
- Trends such as sustainability, personalization, and digitalization.
3. Competitive Pressure:
- The need to stay ahead of competitors and capture market share can spur innovation.
- Strategies for maintaining a competitive edge and differentiating from rivals.
4. Regulatory and Social Factors:
- Compliance with regulations and addressing social issues can drive innovation.
- Examples: Environmental regulations leading to green technologies, social movements
influencing product design.

The Innovation Process

The Innovation Process

1. Idea Generation:
- Techniques for generating innovative ideas include brainstorming, crowd-sourcing, and trend
analysis.
- Importance of fostering a creative environment and encouraging diverse perspectives.
2. Idea Screening:
- Evaluating ideas to assess their feasibility, market potential, and alignment with strategic
goals.
- Tools include SWOT analysis, feasibility studies, and risk assessments.
3. Concept Development and Testing:
- Refining ideas into viable concepts and testing them through prototypes or pilot programs.
- Gathering feedback from stakeholders and potential users to validate and improve the
concept.
4. Business Analysis:
- Conducting a thorough analysis of the financial and operational aspects of the innovation.
- Includes cost-benefit analysis, market research, and financial projections.
5. Implementation:
- Bringing the innovation to market or integrating it into existing processes.
- Involves project management, resource allocation, and scaling strategies.
6. Post-Launch Evaluation:
- Monitoring and assessing the performance and impact of the innovation.
- Collecting feedback, measuring success metrics, and making necessary adjustments.

Barriers to Innovation

Resistance to Change:
- Overcoming organizational inertia and resistance from stakeholders.
- Strategies include change management practices and effective communication.
2. Resource Constraints:
- Limited financial, human, or technological resources can hinder innovation efforts.
- Solutions involve prioritizing investments, securing funding, and leveraging partnership
3. Risk and Uncertainty:
- Navigating the uncertainties associated with new ideas and market acceptance.
- Risk management approaches, including phased rollouts and contingency planning.
4. Intellectual Property Issues:
- Protecting and managing intellectual property rights to safeguard innovations.
- Understanding patents, copyrights, and trademarks.

Leadership in Innovation

Innovation leadership involves guiding and empowering individuals and teams to think
creatively, challenge the status quo, and implement novel ideas that drive progress. It requires
a combination of strategic vision, openness to change, and the ability to inspire and manage a
diverse group of people.
Key Characteristics of Innovation Leaders:
1. Visionary Thinking:
- Innovation leaders have a clear vision of the future and can articulate how innovation
aligns with the organization’s long-term goals. They inspire others to pursue this vision
through creative solutions and breakthrough thinking.
2. Encouraging Risk-Taking:
 - Leaders in innovation embrace uncertainty and encourage their teams to take calculated
risks. They understand that failure is part of the innovation process and promote learning from
setbacks.
3. Fostering Collaboration:
- Innovation leaders create an environment of trust and collaboration, where diverse
perspectives are valued. They encourage cross-functional teamwork and open communication
to harness the collective intelligence of the organization.
4. Empowering Teams:
- Rather than micromanaging, innovation leaders empower their teams by giving them
autonomy and the resources to explore new ideas. They remove barriers and provide
guidance, but trust their teams to drive the process.
5. Adaptability and Agility:
- Innovation leaders are flexible and open to change. They can quickly adapt to new
information, market trends, or technology shifts and adjust strategies as needed.
6. Commitment to Continuous Learning:
- These leaders constantly seek out new knowledge, trends, and technologies. They promote
continuous learning within their teams, encouraging skill development and staying updated
with the latest innovations.
7. Emotional Intelligence:
- Successful innovation leaders possess high emotional intelligence, allowing them to
manage the dynamics of their teams effectively. They are empathetic, supportive, and skilled
at resolving conflicts, which creates a positive and productive team environment.

Responsibilities of Innovation Leaders

- Establishing a Clear Innovation Strategy: Defining how innovation aligns with business
goals and setting priorities.
- Promoting a Culture of Innovation: Encouraging experimentation, creativity, and
collaboration across all levels of the organization.
- Resource Allocation: Ensuring teams have the necessary tools, time, and resources to
innovate effectively.
- Managing Risks and Failures: Accepting that not all ideas will succeed and guiding the team
through the learning process.
- Measuring Success: Defining innovation metrics to track progress and outcomes, such as the
number of ideas generated, revenue from new products, or time to market.

Change and Innovation

Defining Change in Business

Change refers to the process of transforming or transitioning from one state, condition, or
situation to another. In a business context, change can manifest in various ways, such as:

Structural changes: modifications to an organization's structure, hierarchy, or operations.

Technological changes: adoption of new technologies, systems, or processes.

Cultural changes: shifts in an organization's values, norms, or behaviors.

Strategic changes: adjustments to an organization's overall strategy, goals, or mission.

The Importance of Change in Business

In today's fast-paced and competitive business environment, change is inevitable.

Organizations that fail to adapt to changing circumstances risk becoming obsolete or losing
their competitive edge. Change can bring numerous benefits, including:

Improved efficiency: streamlining processes and reducing waste.

Enhanced innovation: encouraging creativity and experimentation.

Increased competitiveness: staying ahead of the competition.

Better adaptability: responding to changing market conditions.

Innovation and Change

Innovation is a key driver of change in business. It involves introducing new or improved

products, services, or processes that create value for customers and stakeholders.

Innovation can be facilitated through:

Research and development: investing in R&D to create new products or services.

Collaboration and partnerships: working with external partners to access new technologies or
markets.

Encouraging a culture of innovation: fostering a culture that supports experimentation and

creativity.

Managing Change in Business

Effective change management is critical to ensuring that changes are implemented

successfully and sustainably. This involves:

Communicating the need for change: clearly articulating the reasons for change and the
benefits it will bring.

Engaging stakeholders: involving employees, customers, and other stakeholders in the change
process.

Developing a change management plan: creating a structured plan to guide the change
process.

Monitoring and evaluating progress: tracking progress and making adjustments as needed.

Types of Change

Change can be categorized into different types based on its scope, scale, and impact.
Understanding these types of change can help organizations develop effective strategies for
managing and implementing change.
1. Incremental Change
Definition: Small, gradual changes that build upon existing processes or systems.
Characteristics: Continuous improvement, refinement, and fine-tuning.
Example: Implementing a new software update to improve existing features.
2. Transformational Change
Definition: Radical, fundamental changes that alter the organization's culture, structure, or
business model.
Characteristics: Revolutionary, disruptive, and far-reaching.
Example: Merging with another company to create a new entity.
3. Operational Change
Definition: Changes that improve the efficiency and effectiveness of existing processes or
systems.
Characteristics: Process improvements, cost reductions, and productivity enhancements.
Example: Implementing lean manufacturing techniques to reduce waste.
4. Strategic Change
Definition: Changes that align with the organization's overall strategy and goals.
Characteristics: Long-term focus, competitive advantage, and market positioning.
Example: Expanding into new markets or launching a new product line.
5. Technological Change
Definition: Changes that involve the adoption of new technologies or systems.
Characteristics: Automation, digitalization, and innovation.
Example: Implementing artificial intelligence (AI) or robotics to improve operations.
6. Cultural Change
Definition: Changes that aim to alter the organization's culture, values, or behaviors.
Characteristics: Shifts in mindset, attitudes, and norms.
Example: Implementing diversity and inclusion initiatives to promote a more inclusive
culture.
7. Structural Change
Definition: Changes that alter the organization's structure, hierarchy, or reporting lines.
Characteristics: Reorganization, downsizing, or restructuring.
Example: Flattening the organizational structure to improve communication and decision-
making.

Barriers to Change and Innovation

Despite the importance of change and innovation in business, various barriers can hinder their
implementation. These barriers can be internal or external, and they can affect organizations in
different ways.
Internal Barriers
Resistance to Change: Employees may resist changes due to fear of the unknown, loss of job
security, or disruption to their routine.
Lack of Communication: Poor communication can lead to misunderstandings, mistrust, and
resistance to change.
Inadequate Resources: Insufficient funding, inadequate training, or lack of necessary tools and
equipment can hinder innovation and change.
Inefficient Processes: Bureaucratic processes, unnecessary procedures, and inadequate
systems can slow down or prevent change.
Risk Aversion: Fear of failure, fear of the unknown, or fear of taking risks can prevent
organizations from embracing change and innovation.
External Barriers
Regulatory Constraints: Laws, regulations, and industry standards can limit an organization's
ability to innovate and change.
Market Conditions: Economic downturns, intense competition, or changing market trends can
make it difficult for organizations to innovate and adapt to change.
Technological Limitations: Insufficient technological infrastructure, outdated systems, or lack
of access to new technologies can hinder innovation and change.
Stakeholder Expectations: Shareholders, customers, or other stakeholders may have
expectations that limit an organization's ability to innovate and change.
Environmental Factors: Environmental concerns, social responsibility, or other external
factors can influence an organization's ability to innovate and change.
Overcoming Barriers to Change and Innovation
To overcome these barriers, organizations can:
Develop a Culture of Innovation: Encourage experimentation, learning from failure, and
continuous improvement.
Communicate Effectively: Clearly articulate the need for change, involve stakeholders, and
provide regular updates.
Provide Training and Development: Equip employees with the necessary skills and knowledge
to adapt to change.
Foster Collaboration: Encourage cross-functional teams, partnerships, and open innovation to
drive change and innovation.
Monitor and Evaluate Progress: Regularly assess progress, identify areas for improvement,
and make adjustments as needed.
Knowledge and Innovation

Knowledge is a critical driver of innovation, enabling organizations and societies to develop

new solutions and improve existing ones. Effective knowledge management enhances
creativity, competitiveness, and long-term success in innovation.

The Relationship Between Knowledge and Innovation

 Knowledge serves as the foundation for innovation by providing the necessary insights,
data, and expertise.
 Innovation transforms knowledge into practical solutions, leading to new products,
services, or processes.
 A knowledge-driven culture fosters continuous learning and creativity, essential for
sustained innovation.

Types of Knowledge in Innovation

a. Explicit Knowledge

 Formal, structured knowledge that can be documented and shared.

 Example: Research papers, manuals, patents, and blueprints.

b. Tacit Knowledge

 Personal, experience-based knowledge that is difficult to document.

 Example: Skills, intuition, and expertise gained through practice.

c. Collective Knowledge

 Knowledge shared within an organization or society.

 Example: Organizational best practices and team collaboration.

Key Factors that Facilitate the Knowledge-Innovation Cycle

Collaboration and Knowledge Sharing: Encouraging collaboration and knowledge sharing
among employees, partners, and stakeholders.
Investment in Research and Development: Investing in R&D to generate new knowledge and
drive innovation.
Culture of Experimentation and Risk-Taking: Fostering a culture that encourages
experimentation, risk-taking, and learning from failure.
Effective Knowledge Management: Implementing effective knowledge management systems
to capture, store, and share knowledge.
Barriers to Knowledge and Innovation
Despite the importance of knowledge and innovation in driving organizational growth and
competitiveness, various barriers can hinder their development and implementation. These
barriers can be internal or external, and they can affect organizations in different ways.
Internal Barriers
Lack of Resources: Insufficient funding, inadequate infrastructure, or limited access to
technology can hinder knowledge creation and innovation.
Poor Communication and Collaboration: Inadequate communication, lack of trust, and
insufficient collaboration among employees, departments, or teams can limit knowledge
sharing and innovation.
Inadequate Training and Development: Insufficient training, inadequate skills, and limited
opportunities for professional development can hinder employees' ability to create and apply
knowledge.
Risk Aversion: Fear of failure, fear of the unknown, or fear of taking risks can prevent
organizations from experimenting, innovating, and embracing new ideas.
Bureaucratic Processes: Complex, rigid, and slow decision-making processes can stifle
innovation and limit the ability to respond quickly to changing circumstances.
External Barriers
Regulatory Constraints: Laws, regulations, and industry standards can limit an organization's
ability to innovate and implement new ideas.
Market Conditions: Economic downturns, intense competition, or changing market trends can
make it difficult for organizations to invest in knowledge creation and innovation.
Technological Limitations: Insufficient technological infrastructure, outdated systems, or lack
of access to new technologies can hinder knowledge creation and innovation.
Cultural and Social Factors: Cultural and social norms, values, and beliefs can influence an
organization's ability to create and apply knowledge.
Environmental Factors: Environmental concerns, social responsibility, or other external
factors can influence an organization's ability to innovate and implement new ideas.
Overcoming Barriers to Knowledge and Innovation
To overcome these barriers, organizations can:
Foster a Culture of Innovation: Encourage experimentation, learning from failure, and
continuous improvement.
Invest in Training and Development: Provide employees with the necessary skills and
knowledge to create and apply knowledge.
Encourage Collaboration and Knowledge Sharing: Foster a culture of collaboration, trust, and
open communication.
Develop Strategic Partnerships: Collaborate with external partners to access new knowledge,
technologies, and markets.
Monitor and Evaluate Progress: Regularly assess progress, identify areas for improvement,
and make adjustments as needed.
 CHAPTER SIX
ENTERPRISE FORMATION
Introduction
Formation of business enterprises entails planning, taking vital decisions, and a number of
legal tasks. Launching a business is a big commitment that can cost a lot of money, time, and
effort. Being an entrepreneur is a desirable career choice. However, regardless of the size of
the business, a lot of decisions must be made before it is launched and run. The following are
some of the questions that must be addressed: does the person genuinely wish to be in charge
of the business? Which good or service ought to serve as the foundation of the enterprise? Is
there market for the product or service? Where should the market be located? Does the
business have enough potential to pay its owner and staff a living wage? How can someone
source for the capital they need to start? Should someone who wants to launch a new business
work full-time or part-time? Should the individual start alone or with partners?
Steps to Formation of Business Enterprises
Come up with business ideas: You can come up with a business idea by addressing issues or
solving problems that potential clients or customers are interested in, issues that actually affect
people, and offering goods and services as a solution. Identifying areas where you can offer a
more innovative, cost-effective, or better solution than the current provider can also help you
come up with business ideas. You can recognize problems, like a production bottleneck, an
unmet customer need, or new technology, and come up with solutions.
Research your business ideas: The goal of this stage is to determine whether your idea or
ideas have the potential to become a successful business. You may find out if there is a chance
to make your idea a profitable business by conducting market research. It is a means of
learning more about local companies and prospective customers or clients. You can better
understand your industry, competitors, and your target customer's needs, preferences, and
behaviour by conducting market research. To determine whether there is a market for your
business, goods, and services, you must identify and evaluate your target market. Verify
whether there is a direct market for your products or if you will need to inform consumers
about the need for your goods and services. You ought to know exactly who your potential
customers or clients are. Success depends on having a solid grasp of how to connect with
potential customers and increase your market share.
Write your business plan: The foundation of your business is your business plan. It is a road
map that outlines how to set up, manage, and expand or grow your new enterprise. You will
use it to persuade others that it is advantageous to invest in your business or work with you. A
few key questions are necessary for you to ask yourself: What is the goal of your business?
Who are you trying to sell to? How will you connect with your customers or clients? With
whom are you going to compete? How will you finance your initial or startup expenses? A
well-written company plan can provide answers to these questions.
Find funding for your business: You can determine how much money you will need to
launch your business with the aid of your business plan. There is no one-size-fits-all financial
answer because every organization has unique needs. Your business's financial future will be
influenced by your personal financial circumstances and business goals. It is time to determine
how to obtain startup capital once you have determined how much you will require. Finding
the capital, you require is now easier than ever due to options including bank business loans,
invoice finance, venture capital, business angels, and small business grants.
Choose your business name: Choosing the ideal name may not be easy. You should choose a
name that accurately represents your brand, is catchy, memorable, and expresses your
business's goals. Select a name that appeals to both your target audience and yourself. Verify
that the name does not have an unpleasant or unfavourable translation in any other country.
Choose a name that is simple to spell, speak, and remember rather than one that is lengthy and
unclear. When choosing a business name, be original and consider the future. Steer clear of
names that will limit your company's future growth. Think about how your name will appear
or sound in television or radio advertisements.
Choose a location for your business: One of the most crucial choices you will make is where
to locate your company. The decisions you make will depend on the kind of business you run,
whether you are opening an internet store or establishing a brick-and-mortar location (a
physical presence of a business in a building). Professional buildings, shopping centres,
business parks, and other structures are all made to accommodate the unique requirements of
different kinds of enterprises. Home-based, retail, mobile, and commercial spaces are all
possible business locations.
Register your business: One of the most important prerequisites for launching a business as
an entrepreneur is registering a business name. Only a properly registered business will attract
the attention of an investor. An entrepreneur's business must be registered in order for it to
qualify for certain incentives or benefits from the government or investors. The Corporate
Affairs Commission (CAC) is the organization in charge of business registration in Nigeria.
Open a business bank account: This will enable you to examine your cash flow, track your
business income and expenses, and clearly display your business finances apart from your
personal accounts. Having a business account will demonstrate to clients, colleagues, and
suppliers that you take your business seriously and will showcase your company in a more
professional manner.
Partnership and Networking
In today's business environment, strategic partnerships and networking are critical
components of success. Establishing a solid network and forming fruitful partnerships that can
assist you in reaching your objectives and expanding your company can be accomplished by
defining clear goals, finding possible partners, fostering connections, communicating,
concentrating on value, and following up.
A business partnership is a formal arrangement that establishes shared ownership and
management of a business between two or more parties. A partnership might exist between
two individuals, two companies, or any number of individuals and organizations. A formal
document detailing the nature of the partnership and the specifics of the arrangement, signed
by all parties, confirms the verbal agreement between the business partners to either start a
new business or share an existing one. Developing strategic partnerships entails finding and
connecting with companies or people who have similar objectives, principles, and vision to
your own. These partnerships can take many forms among which are partnerships for product
development, marketing, or sales. You may expand your brand's awareness and gain access to
new markets and resources by forming partnership. Partnership can be in form of general or
limited partnership.
The degree of liability and participation in the firm for each type of partner is the primary
distinction between a limited partnership and a general partnership. In a general partnership,
each partner bears unlimited personal accountability for the business's debts and obligations.
General partners are also in charge of company management, and any partner has the
authority to commit the firm to responsibilities. Limited partners in a limited partnership are
generally only liable for the amount of their investment. They are not involved in the day-to-
day operations of the business and are frequently referred to as silent partners.
Networking is the practice of meeting and communicating with people in order to share
resources, ideas, and information. It is essential to developing a solid professional network,
which can open doors for you to advance your career, start new businesses, and advance
personally. There are numerous ways to network, such as going to conferences and events,
joining organizations for professionals, taking part in online discussion boards, and interacting
with people on social media. Maintaining good connections with customers/clients and other
professionals in your fields is known as business networking. Keeping a contact list can help
you accomplish business/company objectives, remain informed about industry advancements,
and exchange valuable insights. You might also learn about employment openings or provide
and get insightful professional advice.
Tips for Building Strategic Partnerships and Networking
1. Set clear goals: It's crucial to establish your goals before you begin networking or pursuing
partnerships. Do you wish to get new/customers/clients? Would you like to add more products
to your lineup? Would you like more people to know about your brand? Once your objectives
are well defined, you may concentrate your efforts on the individuals and institutions that can
assist you in reaching them.
2. Identify potential partners: Seek out businesses or people who share your objectives and
ideals. Think about partnering/networking with businesses that offer complementary goods or
services or cater for a similar customers/client. Attend conferences and events to network with
possible business partners, and take part in online forums to meet people in your sector.

3. Build relationships: Developing relationships is the foundation of networking and

partnership building. Spend time getting to know others and learning about their interests and
needs. Be sincere in your interaction and offer to assist them in any manner you can. Although
it takes time and work to establish solid relationships, the benefits can be long-lasting.

4. Communicate clearly: Effective and straightforward communication is crucial while

seeking a partnership or attempting to establish a relationship. Clearly state your objectives,
standards and expectations, and remain open to ideas and criticism. Before you proceed, make
sure you and your possible companion are in agreement. Prior to any further action, make sure
you and your possible partner are in agreement.
5. Focus on value: Mutual value is the foundation of successful partnerships. Make sure you
are providing your partner with something of value, such as resources, knowledge, or access
to your customers/client base

6. Follow up and follow through: Strong relationships take constant work to develop. Make
sure you fulfil any obligation you have made and follow up with your partners and contacts on
a regular basis. Demonstrate your dependability, honesty, and appreciation for the partnership.

Organizations to Join for Networking Opportunities

Joining organizations that are relevant to your interests might offer beneficial networking
opportunities that could result in strategic partnerships. Here are some organizations that
entrepreneurs might consider:

 Local Chamber of Commerce: You can be connected to other local business leaders
by becoming a member of a chamber.
 Professional Associations: Networking opportunities with peers who share your
business interests and challenges can be found through industry-specific associations.
 Business Networking International (BNI): BNI specializes on referrals and is a
useful resource for connecting with like-minded businesses that are looking to gain
from one another.
 Service Clubs: In addition to being service-oriented, groups like Rotary Clubs and
Lions Clubs are excellent places to network with other business executives who are
active in the community.

Benefits of Creating Business Partnerships and Networking

1. Shared Knowledge: Sharing ideas and learning new things are two benefits of
networking. It will help you learn more and see things from a different angle, whether
you're getting feedback or sharing your thoughts on a subject. There is an opportunity
to learn something new. It also provides product development and professional
advancement.
2. Gained Creative Ideas: your network can provide you with innovative ideas and fresh
viewpoints to aid in your business endeavours. Joining network organizations is a way
for people to share their personal growth experiences and discover new business ideas
and tactics.
3. Strengthened Business Connections: Sharing opportunities that can benefit others and
being selfless are key components of networking. Remember that those who contribute
gain a great deal. Maintaining a positive relationship with your contacts can be
achieved by consistently interacting with them.
4. Easy Business Opportunities: Opportunities naturally arise from networking. The
opportunities that networking presents allow business and career-minded people to
grow with little effort.
5. Increased Visibility: Attending networking events on a regular basis allows you to
meet hundreds of people. Therefore, another reason networking is vital is for enhanced
visibility. In other words, as your network grows, more people will know what you're
seeking for and what you can give. Therefore, increasing your profile can lead to new
 business and employment opportunities, regardless of whether you are a job seeker or
a business owner.

6. Business Growth Promotion

As an entrepreneur, here are the 5 main ways in which networking can help you grow your
business:

 It Increases awareness: Networking is a powerful tool for spreading the awareness

about your goods and services. If you want to reach a wider audience with your
products, think about attending a trade fair.
 Expands your customer base: People are more likely to purchase your product if they
are aware of it. Additionally, if your customers/clients are satisfied with your goods or
services, they are likely to tell others about them.
 Enables you to stay on top of trends: The business world is rapidly evolving, so it
may be challenging to stay up to date. Fortunately, networking allows you to
effortlessly keep up with the newest industry trends and breakthroughs. Attending
conferences and other networking events might help you learn about what's new in the
field.
 Helps you improve your product: Networking connects you with other professionals
and business owners, allowing you to learn what worked and didn't work for them, as
well as receive advice and feedbacks. Networking also allows you to connect with
industry leaders who can provide you advice.
 Allows you to know your competitor: Meeting your competitors through networking is
essential to staying ahead. For example, when your rival launches a new product at a
networking event, you have a chance to identify any possible weaknesses in their
product that you may address with your own.

Basics of Business Plan

Your business plan is the foundation of your business. It is a roadmap that shows how to
structure, run, and expand your new business. You’ll use it to convince people that working
with you or investing in your business is worthwhile. You need to ask yourself a few
important questions: What is the purpose of your business? Who are you selling to? How will
you reach your customers? Who will you compete against? How will you fund your start-up
costs? These questions can be addressed in a well-written business plan. A business plan
should be comprehensive enough to provide any possible investor with an accurate picture
and understanding of the new venture. A business plan typically includes the following
elements:
Business description: What do you plan to do, why are you starting the venture?
Products/services: What are the products/services you intend to offer? What are the features
and benefits of the products/services?
Market analysis: Who will be your customers, what do they want from you?
Competitor assessment: Who will you compete against, what do these competitors offer?
Marketing plan: How will you reach your customers?
Operating plan: How do you plan to implement your idea?
Financial plan: How much money will it cost, and where will you get the necessary funds?
Executive summary: What are the fundamentals of the venture?
Meanwhile, the basic elements of a standard and a comprehensive business plan include, and
are arranged as follow:
Title Page
Table of Contents
Executive Summary
Company/Business Description
Product/Service
Market and Competition Analysis
Marketing and Sales Strategy
Operating Plan
Financial Plan
Supporting Documents

Executive summary
The executive summary is the basis of any good business plan. People read this section to
determine whether or not to read the rest. It should provide a concise summary of the
technical, marketing, financial, and managerial details. More importantly, it must convince the
reader that the new venture is a viable investment. The executive summary allows you to
highlight the most crucial components of your venture. It should be brief and serve as a
summary of your business plan. Try to make it fit on one page. Your mission and goals, the
product, the market and its potential, the marketing plan, the management team, the essential
components of your operations, the funding requirements, the profit and cash predictions, and
the return to the investor should all be highlighted. This is positioned first on the list of
elements of a business plan; however, it is the final step, meaning the section of the business
plan is developed after the entire plan has been written. This is because it is simple to write
the executive summary once all of the details have been covered.
Company/Business Description
As an introduction to your company/business, this part should include an outline of the
business and its goals. Your business plan's readers will be curious as to why this enterprise is
necessary. This can be communicated with the use of a mission statement. A mission
statement expresses the purpose, beliefs, and reasons behind what you're doing. A strong
mission statement should clearly clarify why your enterprise exists and express the purpose of
your business and its global goals. The company description focuses on the entrepreneur's
goals and strategy. It includes the company name, mission statement, vision, strengths,
weaknesses, opportunities, and threats.

Product/Service
Describe your product and how it will be used in this section. This is your opportunity to
explain your products/services, define their features and benefits, and demonstrate how they
answer market demands or challenges. If you plan to sell a product, describe what it is, what it
does, and its features and benefits. Include photographs, drawings, or technical representations
that will help readers understand your product. Discuss its size, shape, colour, price, design,
quality, capabilities, technological life-cycle, and patentability.
Production Plan
The production plan details how a company's products and services will be manufactured. Production
planning is creating a complete strategy for producing the company's products and services. A
production plan specifies the production goals, resources required, and overall schedules, as well as all
production steps and their interdependencies. The goal is to find the most efficient way to manufacture
and deliver the company's products while maintaining the necessary degree of quality. A well-designed
production plan can help businesses improve output while saving money by creating a more efficient
workflow and eliminating waste. Production planning encompasses many areas of production, from
demand forecasting to determining the raw materials, manpower, equipment, and activities required to
manufacture the company's products.

Market and Competition analysis

This is the section where you can describe the market and your approach to it. It describes the
market's features, your target customer's profile, the competition, and how you intend to
obtain an advantage over them in order to launch a profitable company. Your company will be
part of an industry. Describe the industry so that readers can grasp the marketplace. Include
information on its size, location, history, competitiveness, profitability, and overall health.
When writing your market analysis. You will select only those potential clients who are able
and willing to purchase your product. Although your product or service may address the needs
of a huge number of potential customers/clients, the goal is to identify your target
customers/client as precisely as possible, both quantitatively and qualitatively. As you gather
information, you will create a profile of your target customer.
Analyse your particular competition in your market analysis. Every firm has some kind of
competition. While some competitors offer similar goods, others offer goods that fulfil the
same purpose. Established businesses are unlikely to accept your entry into the industry
lightly. Determine who your competitors are, and create a profile of them. You should evaluate
competitors critically, comparing their strengths and weaknesses to your own. It's critical to
comprehend how your competitors operate so that you can determine where you stand in
comparison.
Marketing and Sales Strategy

Typically, marketing and sales strategies cover topics like pricing, distribution, and advertising.
Considering the cost of producing your product or service will assist you decide on your pricing. You
should also consider the prices at which comparable products in the market are sold. Consider the
reasons why your product or service should cost more or less than the going rate. Above all, show that
the prices you charge will permit you to make profit.

Describe how and where your product or service will be distributed in the distribution section
of your marketing plan. The methods and delivery channels that will maximize your sales and
earnings are the main focus of distribution decisions. As businesses decide how goods will
physically travel from producer to consumer, logistics management is crucial to these choices.
Your distribution channel choice is influenced by a number of factors, including cost and
efficiency, timeliness, freshness, customer service, customer access, and control. Describe how
your product will be offered, whether through retail, direct sales, or other channels. Discuss any ties
you've had with distributors or any licensing arrangements you have. Describe how your product will
reach clients, including distribution routes channels geographic regions.

Promotional activities are intended to communicate the value of your products and services to
your clients, ultimately leading to a purchase decision. You can use a variety of promotional
tools, including advertising, personal selling attempts, and general public relations initiatives.
An effective promotional strategy must focus on your target audience; what is the most effective and
efficient way to get your message in front of this group? The second major concern is funding; how
much money do you have to spend on promotional activities? Finally, a promotional plan must include
a timeline for actions. When should you pursue the individual activities outlined in the plan? Creativity
is essential in this case; a low-cost, creative promotion can be significantly more effective than an
expensive, paid advertising effort.

Operating Plan/ Organization and Management

The operating section of the plan focuses on the internal organizational structure, operations,
and equipment required to run your venture. You should talk about how the company will be
owned and operated, what staff and physical resources you'll need, and any legal concerns that
will arise. In the management and ownership section, state who owns your enterprise and how
the business will be run on a daily basis. For example, if your venture will be run as a
partnership, clarify who the partners are and how management decisions and arguments will
be resolved. If you plan to hire staff other than yourself and other owner/operators, outline your
personnel requirements. Estimate the facilities and equipment you will utilize, as well as their location
in relation to your suppliers and consumers. Protecting your company and its products from imitators
should be a top priority early in your endeavour, especially if you have new products. Trademarks and
service marks safeguard your company's marketing symbols for products and services. Patents will
safeguard the products you make.

Financial Plan

The financial plan is an essential component of analysing a new investment opportunity. With
it, you can estimate your profit potential. In this section, describe the current financial
situation and provide estimates for future financial forecast. If you are using the business plan
to seek funding, include information about the type and quantity of financing you want to
obtain, as well as the possible return on investment. The financial section of your business
plan will be extensively scrutinized by anyone interested in joining you, investing in the
endeavour, or lending you money, so it must be comprehensive. They'll want to know how
you plan to use the capital you have invested to build a profitable enterprise. A new venture's
business plan normally includes three financial projections: a balance sheet, an income statement, and
a cash-flow analysis. These necessitate precise forecasts of expenses and sales.

Appendix
The appendix of the business plan typically provides any backup material that is not necessary
in the main body of the document. This may include other important or relevant documents
required to prepare the plan. For example, financial documents, proof of product acceptability,
resumes of the management, study on competition, market research data and so on.

Forms of Business Ownership

Non-Corporate Business
A non-corporate business is one that is created without the formal authority of an existing
government. Although it does not have a distinct entity of its own, it may be registered with
the Corporate Affairs Commission or another appropriate institution. However, when entering
into contractual agreements during operations, it is necessary to comply with legal
requirements. Partnerships and sole proprietorships are examples of non-corporate businesses.
Sole proprietorship
Sole proprietorship is often known as one-man business. It is a kind of business that is started
and owned by a single individual and his close relatives. The owner of this type of business
must, however, register both the business name and the business location with the ministry of
commerce and the local government body in which the business is located. Sole
proprietorship is the most common structure of business formed all over the world. It is
created in every aspect of business which include agriculture, mining, shoes making,
wholesaling, retailing, warehousing, transportation, health care, legal services and so on.
People may choose to run a sole proprietorship for the following reasons:
1. Psychological satisfaction of one’ own business: When one is the sole owner of a business,
he or she normally has a kind of pleasant feeling that he or she is his or her own boss and is
answerable and accountable only to himself.
2. Quick decision making: In a sole proprietorship form of business, the owner and manager
can act promptly in times of emergencies without consultation with others.
3. Privacy and secrecy of business: The records of the business are not required by law to be
published at the end of the accounting year. Though, the accounting records of the business
may be required by bankers or lenders when the owner needs to borrow money.
4. Owners’ personal interest: The interest of the business and the owner/ manager is the same.
There is no conflict of interest thus goal similarity is attained.
5. Ease of formation and management: This is the easiest form of business to run. There is no
special documentation involved in operating this business. Again, it requires little amount of
capital.
6. There is no double taxation: The owner pays tax for himself and not the business.
7. The owner manager has all the profit to himself: When profit is made out of the business, it
is not shared with any other person.
8. The owner manager has freedom of management: Business owner may decide to rest at
home for some time before going to the office, and he or she may at times decide to over-
labour himself or herself to work overtime and close late.
In spite of all these advantages enumerated above, a sole proprietorship is not without some
disadvantages which include:
1. There is a limit to growth and expansion because of insufficient capital.

2. The sole proprietor may not have the suitable or appropriate skills and techniques needed
for running the business. He is a jack of all trade. Hence, there is no specialization.
3. Lack of perpetual existence: -. The death, permanent illness and insanity of the owner
manager may lead to the end of the business.

4. In a case of business failure, the liability of the owner is unlimited. He may lose his
personal assets to pay business debts.
5. The business owner borne all risks associated with the business alone. Since he shares
profit with no one, he equally bears and suffers all loses and other perils alone.
6. Lack of accurate stock taking and other accounting records makes it difficult for the
business owner to have a true picture of the financial position of the business.

Partnership
The relationship that exists between people conducting business together with the intention of
making money or profit is called a partnership. A minimum of two people and a maximum of
twenty people own this form of business. In reality, In reality, partnerships exist as one of the
tools that business investors can utilize to overcome some of the challenges associated with
sole proprietorships.

Partnership, like sole proprietorship, is not subject to any government authority in its
establishment; nonetheless, an agreement of intent, which can be oral, written, or implied by
the partners' actions, must be made. To avoid future business disputes or misunderstandings, it
is advisable to have the agreement in writing. This arrangement is known as the partnership
deed or articles of partnership.

The Partnership Deed

It is a legal agreement and not a legal requirement, which stipulates the rights, powers and
interests of the members of the partnership.

The Partnership Deed is made up of the following;

 Name and address of business.
 Name and address of partners.
 Nature of business.
 Duration of the agreement.
 Amount of capital contributed by each partner
 Method of sharing profits or losses.
 Provision for salaries or drawings accounts of partners.
 Statement of the rights and duties of partners.
 Procedure for the admission of a new partner.
 Procedure for dissolution of the partnership.
 Method of determining a partner‘s investment if he wishes to withdraw.

Advantages of Partnership
1. Ease to form and manage: Partnership unlike corporation has no much procedure in its
formation. A minimum legal restriction is required to form it.
2. There is the avoidance of double taxation because partners are taxed individually rather
than the business income.
3. There is secrecy and privacy, of business records because the partnership book of account is
not for public inspection.
4. Every partner is an expert in his own field. Their skills, abilities and resources are pooled
together for efficiency. Hence, there is specialization.
5. There is likelihood for growth expansion because of the possibility of raising additional
capital.
6. Where two or more businesses are combined as partnership, there is room for economies of
scale.
7. Drawings of business resources are charged with interest; thus, drawing is discouraged.
8. The losses and risks associated with the business are borne by every partner.
9. There is possibility for continuity because the death, permanent. illness or insanity of a
partner may not end the business.
10. Since one man does not own the business; a partner may take holidays or rest due to
illness without affecting the business.

Disadvantages of Partnership

1. Decision-making is slow because the decision committee is made up of members of the

partnership
2. Partners may not have personal interest in the business

3. There could be disagreements and clashes among the partners in the process of managing
the business.

4. The profit realized from the business is not for one person rather it is shared among all the
partners.
5. There could be mistrust and dishonesty among partners and this will negatively affect the
growth of the business

6. The liability of the partners is unlimited to their investment, except for a Limited partner.

Corporate Business
This is the type of business that is subject and must adhere to legal and government
regulations before it can be formed. A corporate business is an association of people, an
artificial being that is invisible, intangible, and exists solely in the eyes of the law. A corporate
business, as the name implies, exists and most likely has a legal personality separate from the
men and women who own or work within it. A corporate business or corporation can
occasionally enter into agreements, sue, and be sued in its own right rather than in the name of
its owners. A corporation's interests may differ from those of its stakeholders. The members'
liabilities are limited.
There are diverse ways of categorizing a corporate business or corporation. A convenient one
is a two-fold division with sub-divisions. Hence, we can categorize corporate business as:
Private Corporate Business and Public Corporate Business.
Private Corporate Business
These are publicly held corporations. They are the product of private investments made by
individuals. Share-limited corporations are for profit, whereas guarantee-limited corporations,
such as social, religious, charitable, recreational, or educational enterprises, are not for profit.
Private corporations are also referred to as joint stock businesses. There are two sub-divisions
of private corporate enterprise. These are private companies and public companies.

Private Companies
These are companies owned by a minimum of two and a maximum of fifty people who
purchase shares in the firm and become shareholders. In a private corporation, a shareholder
cannot transfer his share without the company's permission, and the company cannot invite
the general public to subscribe for shares. In reality, private firms are created by sole
proprietors who wish to take advantage of restricted liability. These businesses are labeled
LTD.

Public Companies
These are companies that allow the investing public to share in the company's profits without
necessarily being involved in its management. Its establishment requires at least seven people
to sign the relevant registration documents. These companies are designated as PLC.
The primary distinctions between private and public companies are the number of
shareholders and the issuance of shares. A private company has two to fifty members, whereas
a public company has seven to infinity. Second, a public company can invite and issue shares
to the general public, but a private company cannot.

Public Corporate Business

A public corporate business is a corporation established by the state to carry out public
missions and services. To carry out these public objectives and services, a public corporation
engages in activities or offers services similar to those supplied by private sector. A public
corporation is given more operating flexibility to ensure its success while maintaining
principles of public accountability and core public policy. The President or Governor appoints
a public corporation's board of directors, who are then confirmed by legislators.
A public corporate enterprise is a corporate entity established by a special Act of Parliament.
This Act establishes the power, duties, privileges, and management structure of these
organizations. Such an institution is a statutory body that serves the general public. A public
corporation combines the power of the government with the flexibility and initiative of private
firms. A public firm has complete managerial autonomy.

Characteristics of Public Corporation

The followings are some of the essential characteristics of public corporation:
1) It is a corporate body formed by the special act in the state or central legislature. The power
and duties of these corporations are well-defined by this Act.
2) It enjoys the status of a legal entity and as such it can enter into contract in its own name.
3) It is completely owned by the government and as such no private individuals are allowed to
purchase shares of these organizations.
4) A public corporation is managed by a board of directors. The members of the board are
from all strides of industry and commerce. The chairmen of these corporations are appointed
by the government.
5) The whole capital is financed by the government. It was formed with a capital of its own
and is entitled to borrow, use and re-use revenue from the sale of goods.
6) A public corporation is primarily meant to provide service and making profit is its
secondary considerations.
7) The employees of corporation are subject to service conditions laid down by the
corporation. Civil service rules for the government do not apply to the employees of the
corporation.
8) There are no shareholders in public corporations. The funds come from the government,
from government approved loans and from the private sector.

Company Amalgamation
Amalgamation is the process of merging organizations to form a larger, more organized
entity. When companies are merged, the company's name, management, and structure may all
change.
There are two categories of firm mergers. These include vertical and horizontal integration.
Horizontal Integration
This arises where firms in the same stage of productive process come together as one: For
example, where two or more furniture manufacturers come together as one.
Vertical Integration
This occurs where firms at different stages of productive process merged together. For
example, where a timber dealer merges his business with a furniture manufacturer, there is
said to be a vertical integration.

Business Registration in Nigeria

One of the most important requirements for launching a business as an entrepreneur is
registering a business name. Only a properly registered business will attract the attention of an
investor. To be eligible for certain benefits from an investor or the government, an
entrepreneur's business must be registered. In Nigeria, the Corporate Affairs Commission
(CAC) is in charge of business registration. The Corporate Affairs Commission (CAC) was
established under the Companies and Allied procedures Act (CAMA) to regulate company
formation and activities in Nigeria. The commission is in charge of company and business
registration, as well as post-incorporation procedures.
The requirements an applicant must provide to commence the registration of a company
in Nigeria
 The registered address of the proposed company
 Email and phone number of the proposed company
 Forms of identification such as International Passports and driver’s licenses of the
directors/ shareholders.
 Approval note of name reservation from CAC
 Owners (s) full names, residential address, occupation and date of birth.
 Objects of the company: the allowable business activities of a company. It outlines the
scope within which the company can operate and confines it from engaging in
activities not specified
For registration of the company, the below are the steps required:
 1. Login to CAC Portal https://www.cac.gov.ng/
2. Submission of two desired company names for the search
3. Preparation incorporation documents
4. Complete the Pre-registration form and statement of share capital
5. Payment of the Stamp duty and filing Fee
6. Uploading relevant documents
7. Submission of registration application online.
8. When the registration is approved, the electronic incorporation certificates and other
incorporation documents will be issued by CAC.

Five Benefits of Registering Your Business with the Corporate Affairs Commission
(CAC)
It will assist you in raising funding for expansion.
It will get you access to government assistance and support.
It will allow you to operate in a more standardized/structured manner and protect your
company name.
It will set you apart from all other businesses.
It will position you for assistance from agencies such as Small and Medium Enterprises
Development Agency of Nigeria (SMEDAN).

Law Relating to Business Operation in Nigeria

Custom Duties (Dumped and Subsidized goods) Act No. 9 of 1958. The act specifies
imposition of a special duty on any goods, which are being dumped or are subsidized by any
government or authority outside Nigeria borders
Partnership Act of 1961(Amended in 1988): This pertains to the registration of business
names for a person or persons carrying on a business under a name that differs from his or her
personal names or incorporates any words other than those of the business's name.
Patents and Designs Decree No. 60 of 1970. Under this decree, any person(s) claiming to be
the proprietor of a trademark may apply to the registrar for the registration thereof by himself
or through his agent.
Standard Organization of Nigeria Act, 1971: It allows for the standardization and quality
control of industrial items produced and imported into the country.
Companies and Allied Matters Decree 1990: The decree governs the establishment,
registration, and operation of corporations in Nigeria.
The Nigerian Enterprises Promotion Decree 1977: The decree, also known as the
indigenization decree, expanded on the previous one issued in 1974, which established the
primary regulation of equity ownership in Nigeria, as well as the acceptable patterns of
foreign participation. The edict establishes business groups that can only be controlled and
operated by Nigerians, and excludes foreigners.
Foods and Drugs Act: The act seeks to shield consumers from dishonest manufacturers,
distributors and administrators of foods and drugs. National Agency for Food and Drug
Administration and Control - (NAFDAC) Decree No. 15 of 1993. Under the decree,
NAFDAC was established to replace Food and Drug Administration and Control Department
of the Federal Ministry of Health
Industrial inspectorate Act 1970: It allows for the registration, appraisal and valuation of all
plant, machinery, and equipment imported into the country.
Government Legislation Aimed at Protecting the Nigerian Consumers: Several state and
federal legislations have been enacted to protect consumers.
Price Control Decree/Act: The Decree establishes maximum prices for specific products, and
no seller can exceed the restriction.
Hire Purchase Act/Sales of Goods Act: The act is designed to safeguard business owners who
buy on credit from fraudulent traders.
Forming Alliances and Joint Venture
Joint ventures and alliances are becoming more significant strategic instruments for
businesses as they adapt to market changes while driving innovation and growth. A joint
venture can give the advantages of collaboration while avoiding the financial risks associated
with an acquisition. Joint ventures are essentially a type of merger in which two companies
merge through a different legal organization rather than directly. At the heart of strategic
alliances are organizations that want to grow but lack the means to pursue specific objectives.
Rather than doing it alone, they can look for other companies with the necessary resources or
experience to collaborate with.
Joint Venture
A joint venture happens when two companies come together to form a completely new,
separate company, with each existing company becoming a parent. Joint ventures frequently
result in full acquisitions, but only if the joint venture is deemed successful. If the joint
ventures fail, the parent businesses can easily split them off, unlike after a merger or purchase.
Joint ventures are preceded by a memorandum of understanding (MOU) between the
companies involved. The MOU defines the conditions of the contract, which include problems
such as capital commitment expected from each of the investors, milestones expected from the
joint ventures, issues regarding corporate governance, the duration of the deal and
opportunities for renewal, and each party's exit options.
Common Reasons for Joint Ventures
There are several recognized motives for a company to undertake a joint venture transaction:
Lower costs
Joint ventures reduce costs by sharing costs with one or more companies, and as a result,
financial risks are reduced.
Combined expertise
Certain combinations make sense based only on the qualities of each company. For example,
computer businesses and cell phone manufacturers can come together and form joint ventures
to produce smartphones.
Leveraging combined resources
A joint venture can generate synergies by combining two companies' resources.
Enter foreign markets
When entering a new overseas market, rather than acquiring a foreign company outright, a
company may choose to make an investment that utilizes the existing resources (often the
distribution network) of a company already present in that market.
Strategic Alliance
A strategic alliance is an agreement between two companies to pursue a mutually beneficial
initiative while maintaining their independence. A company may form a strategic alliance to
enter a new market, extend its product range, or gain an advantage over competitors. In rare
circumstances, strategic alliances may include more than two companies. It is a collaboration
between two (or more) businesses that have opted to pool their resources to complete a
specific, mutually beneficial project.
Types Strategic alliances
Learning alliances
A formal or informal agreement between two organizations to enable and facilitate know-how
transfer between each other.
Co-specializations
In co-specializations, each business organization contributes its own set of competencies to
the table, which are combined to achieve a certain goal.
Coalitions
A group of enterprises from the same industry within the same country, all with similar goals,
working together to form a coalition to break into the new market.
Common Reasons for Strategic Alliance
There are many reasons that a company might choose to enter into a strategic alliance. They
include:
Improving short-term finances
Companies looking for instant financial impact may find it easy to harness another company's
resources to boost their short-term position in the market.
Eliminating barriers to entry
Companies may not have the necessary capital to enter certain markets. Instead, they can work
with companies that have already made those investments to acquire access more cheaply and
quickly.
Gaining better business insights
Companies may have no idea how a specific company strategy will function. Companies can
exploit strategic connections rather than having to design a full model and self-fund an
experiment.
Sharing financial risk
If a business enterprise fails, both partners in a strategic alliance are likely to bear financial
responsibility. Instead of carrying sole responsibility for the failure, each side may obtain aid
from the other as part of the alliance agreement.
Innovating beyond current capabilities.
Promoting the innovative ability of both organizations.

The Main Difference Between Joint Ventures and Strategic Alliances

While both joint ventures and strategic alliances aim to achieve a specific strategic purpose -
for example. Entering a new market or launching a new product: the main distinction between
the two is the level of commitment.

Joint Ventures Strategic Alliances

1 With a joint venture, two or more With a strategic alliance, each company
companies form a single legal entity in collaborates, but no new legal entity is
which each owns a share formed.

2 Joint Ventures may eventually lead to Strategic Alliances hardly lead to merger
merger and acquisition and acquisition

3 Less complex MOUs Involves creating MOU in details

4 Participant can be from entirely Participant incline to be either from the

different industry same or complimentary industry

References
Aaboen, L., Rocca, A. L., Lind, F., Andrea Perna & Shih, T. (2020). Starting up in
business networks, Palgrave Macmillan London. DOI: https://doi.org/10.1057/978-1-
137-52719-6
Adeosun, O. T. & Shittu, A. I. (2022). Small–medium enterprise formation and Nigerian
economic growth. Emerald Publishing Limited, vol. 7(4), pp. 286-301.
DOI 10.1108/REPS-07-2020-0089
Azis, A. Dewi, A. Auzar, Septyadi, G., Sihite, R., Indrayani, Khaddafi, M. (2023). Joint
venture
and strategic alliance. Journal of Management Research, Utility Finance and Digital
Assets, vol. 1(5). Pp. 431-445. DOI:10.54443/jaruda.v1i5.66
Ehmke, C. & Akridge, J. (2020) The Elements of a Business Plan: First Steps for New
Entrepreneurs. Purdue Partners for Innovation in Indiana Agriculture, Department of
Agricultural Economics, Purdue University, Indiana USA
Gitman, J. L., McDaniel, C., Shah, A., Reece, M. Linda Koffel, L. Bethann Talsma, B. &
Hyatt, J.C. (2018). Introduction to business. OpenStax, Rice University, Houston,
Texas. ISBN 13: 9781947172555
Nkwopara, S. (2023). Businesss Registration in Nigeria Simplified: Save Time and Money.
Amason Digital Services LLC. ISBN: 9798375897493
Reynolds, P. D. (2018). Business Creation. Aston Business School, Birmingham, UK
ISBN: 978 1 78811 834 7
Skripak, S. J. & Poff, R. (2023). Fundamentals of Business. Pamplin College of Business in
association with Virginia Tech Publishing. 4th Edition ISBN 13: 9780997920178.
https://doi.org/10.21061/fundamentalsofbusiness4e
Skripak, S. J. (2016). Forms of Business. Pamplin College of Business and Virginia Tech
Libraries. http://hdl.handle.net/10919/70961
 CHAPTER SEVEN
CONTEMPORARY ENTREPRENEURSHIP ISSUES
MRS. B. A. OLU-ALONGE

1.0 Introduction
In this chapter, you are going to study and learn about the concept of contemporary
entrepreneurship issues, the characteristics and forms. Identify how to address
contemporary entrepreneurship issues, meaning of knowledge and digital literacy with its
importance in entrepreneurship, Understanding the concept of intellectual property and
explanations on its various types. Meaning of virtual office and types with its
characteristics as well as meaning of networking to an entrepreneur. The types and
characteristics of networking, available opportunities and the likely challenges.
2.0 Learning Objectives
At the end of this chapter, students should be able to:
i. explain the meaning of Contemporary Entrepreneurship Issues
ii. enumerate the various Contemporary Issues in Entrepreneurship
iii. identify how to address Contemporary Entrepreneurship Issues
iv. examine and enumerate the meaning of Knowledge in Entrepreneurship
v. identify digital literacy and its importance in Entrepreneurship
vi. examine and enumerate the meaning of Skills, Technology and their challenges
vii. explain the meaning of Intellectual Property and its types
viii. explain the meaning of Virtual Office and its types
ix. examine and enumerate the characteristics and benefits of Virtual Office
x. explain the meaning of Networking in Entrepreneurship and its types
xi. identify the characteristics and benefits of Networking
xii. challenges and opportunities for Networking in Entrepreneurship
3.0 Main Contents
3.1. Definition and Explanation
Contemporary entrepreneurship issues refer to the current and emerging challenges,
trends, and concerns that entrepreneurs face when starting, running, and growing their
businesses in today's fast-paced and ever-changing business environment. These issues can
arise from various sources, including internal, external, and personal factors. Understanding
these contemporary entrepreneurship issues, entrepreneurs can better navigate the
complexities of the modern time business landscape, build successful, and sustainable
businesses (Adekunle & Oyebanji, 2020).
3.1.1 Contemporary Issues in Entrepreneurship:
1. Globalization: The increasing interconnectedness of the world's economies, societies, and
cultures. Globalization refers to the increasing interconnectedness of the world's economies,
societies, and cultures. It involves the free flow of goods, services, ideas, and people across
national borders. Globalization is the spread of products, technology, information, and jobs
across national borders and cultures. In economics terms, it describes an interdependence of
nations around the globe fostered through free trade. It is a worldwide movement towards
economic, financial, communication, and trade integrations. Globalization enables the coming
together of individuals, corporations and resources from different countries. The unique
characteristics of globalization have allowed people with diverse backgrounds to interact
freely. It is the vehicle that has helped global trade scale new heights in the last few decades
and many Nigerian entrepreneurs are also beneficiaries.
Characteristics of Globalization
This concept has enabled economies of scale for companies in services, production and
distribution. It has also encouraged outsourcing and technological transfer among companies
and countries, thus increasing their interdependence on each other which further promote
global trade. The main characteristics of globalization are listed below:
i. Globalization has helped improve trade volumes between nations with minimal interference.
The reason is that governments are not micromanaging every minute aspect of business
transactions. The Gross Domestic Product (GDP) of countries that have accepted globalization
has also increased significantly, thus bringing in greater prosperity. It has also resulted in
better cooperation between governments that leads to further improvement in trade.
ii. Another characteristics of globalization is the improvement in the business climate for
corporations. It has helped entrepreneurs to set up businesses and transact both within and
outside the country. The rules and regulations for companies are relaxed significantly to allow
for more trade between nations due to globalization. Flexibility in trade regulations pushes
governments to make further concessions to industries. Both Liberalization and Globalization
are dependent on each other.
iii. Every industry is responsible for generating both direct and indirect jobs because that is
the essence of its establishment. And when production increases, it has a positive effect on
employment. Globalization helps companies increase their production capacity and set up
operations in different parts of the world. It has also helped boosting work opportunities in
countries where these corporations have set up operations.
iv. Globalization has helped countries improve trade relations with each other. It has increased
interaction between people and businesses. Better connectivity also boosts a country’s
economy and enhances the standard of living for its citizens. Increased trade between
countries, leading to the emergence of global supply chains. It brought about the growing
interdependence of the world’s economies, cultures, and populations, with cross-border trade
in goods and services, technology, and flows of investment, people, and information.
Increased movement of people across national borders, leading to the growth of global
diaspora communities.
v. Since no nation can be referred to as an island and with the advent of globalization,
countries have become more reliant on each other. Businesses get the opportunity to import
cheaper raw materials to produce their commodities. They are also being allowed to export to
countries that have more demand for their finished goods. It has helped reduce trading barriers
and build overall economic prosperity.
vi. Improvement in people to people contacts have encouraged the intermingling of cultural
practices and customs. It has allowed people to exchange ideas, behaviours and values with
other countries. Communities are less isolated as a result of globalization. For example,
several American eateries have penetrated different parts of the world. Similarly, cuisine from
far off countries is now readily available in Nigeria. Increased exchange of ideas, values, and
cultures between different societies with Nigerian counter-part.
vii. One of the adverse effect of globalization is the increase in urban centers. When many
foreign/local companies set up businesses in a particular area, it becomes a hotbed of
economic activity. The people who work in those companies and industries need infrastructure
near their workplace in terms of housing, transport, shops and other establishments.
Globalization leads to the building of urban centers in and around industrial areas.
viii. People are living large considering the increase in economic activity and opportunities for
employment, people have more money in their pockets and do enjoy the privilege of meeting
many of their needs to better their lots. They also have more options to choose from because
of improved job opportunities. It is one of the main reasons why globalization allows more
and more people to improve their standard of living.
ix. In a globalized world, companies are free to establish their operations in areas where the
cost of production is low. The cheap availability of land, labour and raw materials has become
very important. So it makes sense for companies to go where these resources are present in
abundant quantities and at discounted rates. It helps them gain over their rivals by lowering
costs and improving profit margins. Increased investment by companies in foreign markets,
leading to the growth of multinational corporations
x. Another major characteristics of globalization is that it allows companies to bring in third
parties from outside the country to manage specific processes. They take this step to reduce
internal costs, improve the quality of services or both. Outsourcing is a boon for several
human resource-rich countries that are looking to generate employment. Countries like India
and the Philippines have benefitted immensely as a result of this practice. Globalization has
helped nations integrate their economy with the rest of the world, and it has reduced barriers
to trade and increased economic activity manifold. It has also led to cultural, social and
technological exchanges that have helped governments tackle internal and external challenges
with greater efficiency.

Impacts of Globalization
i. Economic Growth: Globalization has led to increased economic growth, job creation, and
poverty reduction.
ii. Cultural Diversity: Globalization has led to increased cultural diversity, exchange, and
understanding.
iii. Environmental Concerns: Globalization has led to increased environmental concerns, such
as climate change, pollution, and resource depletion.
iv. Income Inequality: Globalization has led to increased income inequality, as some
individuals and groups have benefited more than others.
3.2.1 Digitalization: The rapid advancement and adoption of digital technologies, such as
artificial intelligence, block chain, and the Internet of Things (IoT). Digitalization refers to the
process of adopting digital technologies, such as computers, smartphones, and the internet, to
transform business processes, products, and services. By so doing, digital business
transformation is the process of integrating digital technology into all aspects of a business,
fundamentally changing how it operates and delivers value to customers. This transformation
is essential for businesses to stay competitive in today's rapidly changing digital landscape.
Characteristics of Digital Business Transformation:
i. Digital transformation puts the customer at the center of the business by using data and
technology to understand their needs and deliver personalized experiences.
ii. Digital businesses rely on data analytics to make informed decisions and drive growth.
They collect and analyze data from various sources to gain insights into customer behavior
and market trends.
iii. Digital transformation enables businesses to quickly adapt to changing market conditions
and customer demands. They can experiment, innovate, and iterate at a rapid pace.
iv. Digital businesses leverage a wide range of technologies, such as cloud computing,
artificial intelligence, and the Internet of Things, to streamline operations, enhance
productivity, and improve customer experiences. The adoption of digital technologies, such as
artificial intelligence, blockchain, and the Internet of Things (IoT).
v. Digital transformation fosters a culture of collaboration and communication within
organizations. Teams work together across departments and geographies, using digital tools to
communicate and share information.
vi. Digital businesses embrace innovation and disruption as key drivers of growth. They
constantly seek out new ways to improve products and services and enter new markets. The
creation of new digital products, services, and business models.
vii. Digital transformation requires a skilled workforce with expertise in areas such as data
analysis, digital marketing, and software development. Businesses invest in training and
development to nurture these skills. The development of digital skills and literacy among
individuals and organizations.
viii. Digital businesses prioritize security and compliance to protect customer data and
maintain trust. They implement robust cyber-security measures and adhere to security
regulations.
ix. Digital businesses have the ability to scale operations quickly and expand into new
markets. They leverage digital technologies to reach a larger audience and drive revenue
growth.
x. Digital transformation is an ongoing process that requires businesses to continuously assess
and improve their digital capabilities. They listen to customer feedback, monitor performance
metrics, and adjust strategies accordingly. Digital business transformation is a strategic
imperative for organizations looking to thrive in today's digital economy. By embracing these
characteristics, businesses can innovate, grow, and build lasting relationships with customers
in a digitally connected world.
Impacts of Digitalization
i. Increased Efficiency: Digitalization has led to increased efficiency, productivity, and speed
in business processes.
ii. New Business Models: Digitalization has led to the creation of new digital business
models, such as e-commerce, digital payments, and streaming services.
iii. Job Displacement: Digitalization has led to job displacement, as automation and artificial
intelligence replace human workers.
iv. Cyber-security Concerns: Digitalization has led to increased cyber-security concerns, as
digital technologies create new vulnerabilities and risks.
3.3.1. Sustainability: The growing importance of Environmental, Social, and Governance
(ESG) factors in business decision-making. ESG is often called sustainability. In a business
context, sustainability is about the company’s business model, i.e. how its products and
services contribute to sustainable development. ESG is an acronym that stands for
environmental, social, and governance.
a. Environmental
Environmental factors refer to an organization’s environmental impact(s) and risk
management practices. These include direct and indirect greenhouse gas emissions,
management’s stewardship over natural resources, and the firm’s overall resiliency against
physical climate risks (like climate change, flooding, and fires).
b. Social
The social pillar refers to an organization’s relationships with stakeholders. Examples of
factors that a firm may be measured against include Human Capital Management (HCM)
metrics (like fair wages and employee engagement) but also an organization’s impact on the
communities in which it operates. A hallmark of ESG is how social impact expectations have
extended outside the walls of the company and to supply chain partners, particularly those in
developing economies where environmental and labour standards may be less robust like
Nigeria.
c. Governance
Corporate governance refers to how an organization is led and managed. ESG analysts will
seek to understand better how leadership’s incentives are aligned with stakeholder
expectations, how shareholder rights are viewed and honored, and what types of internal
controls exist to promote transparency and accountability on the part of leadership.
3.4.1. Uncertainty and Complexity: The increasing uncertainty and complexity of the
business environment, driven by factors such as technological disruption, geopolitical
tensions, and climate change. Uncertainty refers to the state of being unsure or uncertain about
the outcome of a situation, event, or decision. It involves a lack of clarity, predictability, or
confidence in the future.
Characteristics of Uncertainty
1. Lack of Clarity: Uncertainty involves a lack of clear information, data, or understanding.
2. Unpredictability: Uncertainty makes it difficult to predict the outcome of a situation or
event.
3. Risk and Ambiguity: Uncertainty involves risk and ambiguity, making it challenging to
make informed decisions.
4. Dynamic and Changing Environment: Uncertainty often arises in dynamic and changing
environments, where circumstances are constantly evolving.
Complexity refers to the state of being complicated, intricate, or composed of many
interconnected parts. It involves a high degree of interconnectedness, interdependence, and
non-linearity.
Characteristics of Complexity
1. Interconnectedness: Complexity involves a high degree of interconnectedness between
different components, systems, or stakeholders.
2. Interdependence: Complexity involves interdependence between different components,
systems, or stakeholders, making it challenging to understand and manage.
3. Non-Linearity: Complexity involves non-linearity, where small changes can have
significant and disproportionate effects.
4. Emergence: Complexity involves emergence, where new patterns, behaviors, or properties
arise from the interactions and interdependencies between different components or systems.
Impact of Uncertainty and Complexity on Entrepreneurship
1. Increased Risk: Uncertainty and complexity increase the risk of entrepreneurial ventures,
making it challenging to predict outcomes and make informed decisions.
2. Need for Adaptability: Uncertainty and complexity require entrepreneurs to be adaptable,
flexible, and responsive to changing circumstances.
3. Importance of Resilience: Uncertainty and complexity highlight the importance of
resilience, as entrepreneurs need to be able to absorb and recover from setbacks and failures.
4. Opportunities for Innovation: Uncertainty and complexity can also create opportunities for
innovation, as entrepreneurs are forced to think creatively and develop new solutions to
complex problems.
Examples of Contemporary Entrepreneurship Issues
1. Digital Transformation: The need for entrepreneurs to adapt to new digital technologies and
business models.
2. Sustainable Business Practices: The importance of incorporating environmental, social, and
governance (ESG) factors into business decision-making.
3. Cyber security: The growing threat of cyber-attacks and data breaches, and the need for
entrepreneurs to protect their businesses and customers.
4. Artificial Intelligence and Automation: The impact of AI and automation on business
models, jobs, and society.
5. Global Supply Chain Management: The challenges and opportunities of managing global
supply chains in a rapidly changing business environment.
6. Entrepreneurial Finance: The need for entrepreneurs to access funding and manage finances
in a rapidly changing business environment.
7. Diversity, Equity, and Inclusion: The importance of promoting diversity, equity, and
inclusion in entrepreneurship and business.
Addressing Contemporary Entrepreneurship Issues
1. Staying Up-to-Date with Industry Trends: Continuously updating knowledge and skills to
stay ahead of the curve.
2. Building a Supportive Network: Surrounding yourself with a network of peers, mentors,
and advisors who can provide guidance and support.
3. Fostering a Culture of Innovation: Encouraging experimentation, creativity, and risk-taking
within the organization.
4. Embracing Digital Transformation: Leveraging digital technologies to drive business
growth, improve efficiency, and enhance customer experience.
5. Prioritizing Sustainability and Social Responsibility: Incorporating environmental, social,
and governance (ESG) factors into business decision-making.

4.1.1. Knowledge
Knowledge refers to the information, understanding, and insights that an individual
entrepreneurs or organization possess about their business, industry, market, and customers. It
encompasses various types of knowledge as related to entrepreneurship issues, including:
i. Explicit knowledge: Documented and easily transferable knowledge, such as business plans,
market research reports, and financial statements. Nigerian entrepreneurs need knowledge on
entrepreneurship principles, practices, and strategies to start and grow successful businesses.
ii. Tacit knowledge: Personal and experiential knowledge that is difficult to document and
transfer, such as intuition, expertise, and know-how. Understanding the Nigerian market,
including consumer behaviour, preferences, and needs, is crucial for entrepreneurs to develop
effective marketing strategies.
iii. Procedural knowledge: Knowledge of procedures, processes, and protocols that guide
business operations and decision-making. Staying up-to-date with industry trends,
developments, and best practices is essential for Nigerian entrepreneurs to remain
competitive. Entrepreneurs receive knowledge through the followings sources:
 i. Through formal education and training programmes.
ii. Mentorship and coaching
iii. Networking and collaboration with other entrepreneurs, experts, and organisations.
iv. Research and development activities, such as market research, product testing, and
experimentation.
Definition of Digital Literacy
Digital literacy refers to the ability to effectively use digital technologies, such as
computers, smartphones, and the internet, to access, evaluate, and create information needed
by the entrepreneurs to start and further bring about expansion and growth of his/her business
enterprise.
Key Components of Digital Literacy
1. Technical Skills: The ability to use digital devices, software, and platforms.
2. Information Literacy: The ability to find, evaluate, and use online information effectively.
3. Media Literacy: The ability to critically evaluate online media, including social media,
images, and videos.
4. Communication Skills: The ability to effectively communicate online, including email,
instant messaging, and video conferencing.
5. Critical Thinking: The ability to critically evaluate online information and make informed
decisions.

Importance of Digital Literacy

1. Improved Employability: Digital literacy is a highly valued skill in the modern workforce.
2. Enhanced Education: Digital literacy can improve access to educational resources and
enhance learning outcomes.
3. Increased Online Safety: Digital literacy can help individuals protect themselves from
online threats, such as cyberbullying and identity theft.
4. Better Access to Information: Digital literacy can improve access to online information,
including news, healthcare resources, and government services.
Digital Literacy Skills for Entrepreneurs
1. Basic Computer Skills: The ability to use a computer, including typing, email, and basic
software applications.
2. Online Marketing: The ability to use digital marketing tools, including social media, email
marketing, and search engine optimization.
3. E-commerce: The ability to use digital platforms to buy and sell goods and services.
4. Data Analysis: The ability to collect, analyze, and interpret data to inform business
decisions.
5. Cybersecurity: The ability to protect business data and systems from online threats.
How to Improve Digital Literacy
1. Take Online Courses: Websites like Coursera, Udemy, and edX offer a wide range of digital
literacy courses.
2. Practice Digital Skills: The more you practice using digital technologies, the more
comfortable you will become.
3. Seek Mentorship: Find someone who is digitally literate and ask for their guidance and
support.
4. Join Online Communities: Join online communities, such as social media groups or online
forums, to connect with others who share your interests and learn from their experiences.

5.1. Skills
Skills refer to the abilities, competencies, and proficiencies that entrepreneurs possess to start,
run, and grow their businesses. These skills encompass various aspects of entrepreneurship,
including:
1. Technical skills: Specific skills required for a particular job or task, such as programming,
design, or engineering. With the increasing importance of digital technologies, Nigerian
entrepreneurs need skills in digital marketing, e-commerce, and data analysis.
2. Soft skills: Interpersonal and social skills that enable effective communication,
collaboration, and relationships, such as communication, teamwork, and leadership. Nigerian
entrepreneurs need skills such as creativity, innovation, risk-taking, and problem-solving to
start and grow successful businesses.
3. Business skills: Skills required to manage and operate a business, including financial
management, marketing, and strategic planning. Entrepreneurs need skills in business
management, including financial management, human resource management, and operations
management
6.1. Technology
Technology refers to the application of scientific knowledge, tools, and techniques to
create, innovate, and grow businesses especially for practical purposes in industry. It
encompasses various types of technology, including:
i. Information Technology: Technology used to manage, process, and store information, such
as computers, software, and networks. These enable entrepreneurs to process, store, and
communicate information. Such technology used to facilitate communication, such as phones,
email, and video conferencing are very germane here.
iii. Digital Technology: Technology used to create, store, and manage digital content, such as
digital media, e-commerce platforms, and social media. Digital Technologies: Nigerian
entrepreneurs need to leverage digital technologies such as artificial intelligence, blockchain,
and the Internet of Things (IoT) to innovate and grow their businesses. Nigerian entrepreneurs
need to adopt digital payment systems such as mobile money, online banking, and digital
wallets to facilitate transactions and improve customer experience.
iv. E-commerce Platforms: With the growing importance of e-commerce, Nigerian
entrepreneurs need to utilize e-commerce platforms such as Jumia, Konga, Temu, and
Payporte to reach new customers and markets.
Challenges of Technology to Entrepreneurs
i. Limited Access to Funding: Nigerian entrepreneurs face challenges in accessing funding to
acquire knowledge, skills, and invest in new technologies. Loans from financial institutions
are not easily come by going by the two digit interest rate.
ii. Infrastructure Deficits: The lack of reliable infrastructure such as electricity, internet, and
transportation hinders the adoption of technology and digital skills especially in Nigeria where
investors are expected to provide all the facilities that would promote business formation and
expansion.
iii. Brain Drain: The migration of skilled Nigerians to other countries due to better
opportunities and working conditions affects the availability of skilled manpower. This further
compound the challenges faced by entrepreneurs as the required specialists are not available.
iv. Technical Complexity: Entrepreneurs may struggle to understand and implement new
technologies especially when such technology is based on technological transfer from the
developed countries of the world. Such entrepreneurs would need to undergo serious training
and capacity building to understand the intricacies for the implementation of such technology.

Opportunities for Technology in Entrepreneurship

1. Growing Demand for Digital Services: The increasing demand for digital services such as
e-commerce, online education, and healthcare presents opportunities for Nigerian
entrepreneurs to innovate and grow their businesses using the modern technological
appliances.
2. Government Support: The Nigerian government has initiated programmes such as the
National Entrepreneurship and Innovation Programme (NEIP) and the Youth Entrepreneurship
Development Programme (YEDP) to support entrepreneurs.
3. Private Sector Investment: Private sector organizations such as the Tony Elumelu
Foundation and the African Entrepreneurship Network are investing in entrepreneurship
development programmes and initiatives.

7.1. Intellectual Property

Intellectual property (IP) refers to creations of the mind, such as inventions, literary
works, artistic works, designs, and images used in commerce. Works of art and designs for
new technology may seem ephemeral—even otherworldly at times—but they also have
economic value and certain legal protections, thanks to a designation known as intellectual
property (IP). Just like tangible assets, they have the potential to generate income for their
creators or owners. In fact, some of today’s most valuable companies (Apple, Microsoft, and
Alphabet) derive most of their profit from IP. Determining the best way to get legal
protections for your work can be challenging. Whether you’re a new entrepreneur or a
seasoned business owner, learn how to get IP protections for your products and services in this
guide. Examples of intellectual property protections include patents for inventions, copyrights
for books and music, and trademarks for brand logos.
Protecting IP from unauthorized use—also known as intellectual property infringement
—is crucial for businesses and individuals to safeguard their creative and innovative efforts.
Intellectual property law is designed to protect and encourage innovation while letting creators
benefit exclusively from the commercial exploitation of their own work for a period of time
without fear of being undercut by copycats.
Types of Intellectual Property
1. Copyright
2. Trademark
3. Patent
4. Trade secret
5. Industrial design
6. Geographical indication

1. Copyright
Copyright law grants the creator of an original work exclusive rights to its use and
distribution, usually for a limited time (generally 70 years after the creator’s death), so the
creator and their estate can receive compensation for their intellectual investment. This type of
IP protection applies to a wide range of creative, intellectual, or artistic forms or works. Works
can include:
 Literary: Books, articles, poems, plays, and other written content.
 Artistic: Paintings, drawings, sculptures, photographs, etc.
 Music: Compositions, songs, musical scores, and performances.
 Audiovisual: Films, TV shows, and commercials.
 Architectural: Building designs and architectural plans.
 Software: Software programmes and computer code.
Copyright infringement can include using someone else’s copyrighted work without
permission, or using copyrighted material in a way that violates the copyright holder’s rights.
It’s a civil offense and can be prosecuted in federal court.
How to register a copyright: Anyone can register their work with the Nigeria Copyright
Commission (NCC). The NCC is responsible for all copyright matters in Nigeria, including
the administration of copyright laws, registration of copyright works and enforcement of
copyright rights. It offers greater legal protection than not registering the copyright, like the
ability to sue an infringer through federal court. Entrepreneurs must be aware of how to
protect their copyrights and they need to understand the consequences of intellectual property
infringement and how to avoid it.
2. Trademark
 Trademarks are distinctive symbols, names, phrases, logos, or other identifiers used to
distinguish the source of goods or services from others. They play a crucial role in protecting
a company’s brand identity and helping consumers recognize and choose products or services
they trust and prefer. Trademarks are a form of intellectual property protection granting
exclusive IP rights to use a mark in connection with specific goods or services. For example,
the multinational food manufacturing company Dangote owns the trademarks of recognizable
brands like Sugar, Salt, Spaghetti, and Flakes.
Trademark infringement occurs when someone uses a trademark that violates the rights of the
trademark holder or uses a trademark that is confusingly similar to another trademark. This
type of IP infringement is a civil offense and can be prosecuted in the court of law.
How to register a trademark: While the use of a trademark can provide some level of
intellectual property protection, registering a trademark with a government authority such as
the Nigerian Intellectual Property Office offers additional legal benefits and protections.
Registration typically involves a thorough examination process to ensure the mark meets the
required special considerations, spelled out in the Federal Ministry of Industry, Trade and
Investment. Under trademark law, legal rights can potentially last indefinitely if the trademark
owners continue to use the mark and maintain the registration.

3. Patent
Patents give inventors the exclusive right to their inventions for a set period. The
purpose is to encourage innovation by granting this temporary monopoly on use,
development, and commercial exploitation. This allows inventors to recoup the costs of
research and development and to potentially profit from them.
Three types of patents you can register:
Utility patents. These protect IP like machines, processes, and materials.
Design patents. These cover the shape or design of an invention.
Plant patents. These cover species of plant life copied through grafting.
Patent law typically covers new and useful inventions, processes, machines, or compositions
of matter, such as drugs or chemicals. In some cases, patents can also cover new
developments for existing products.
Patent infringement occurs when someone makes, uses, sells, or imports a patented invention
without the patent holder’s permission.
How to register a patent: You can apply for a patent through the US Patent and Trademark
Office. Most often, you’ll need assistance from a patent attorney familiar with patent law to
ensure your application is watertight. This can be an expensive process. Registration fees
aside, other patent filing costs include basic registration fees, patentability starches, and issue
or maintenance fees. Patents typically last for 20 years from the filing date. However, it’s
worth noting that the Nigerian Intellectual Property Office typically involves a thorough
 examination process to ensure the mark meets the required special considerations, spelled out
in the Federal Ministry of Industry, Trade and Investment. Intellectual Property Office often
has a backlog of applications, meaning it could take a few years for a patent to be approved.
Formal protection might actually amount to 20 years from the date of filling the patent
application. After the 20 years period, the patent expires, and the invention enters the public
domain, allowing others to use, make, and sell the invention without infringing on the original
patent.
4. Trade Secret
A trade secret protection refers to confidential and proprietary information providing a
business with a competitive advantage. Trade secrets can include a wide range of technical
information such as formulas, processes, workflows, customer lists, and other business
information that derives its value from being kept secret. You can protect your IP as a trade
secret by keeping it confidential and only disclosing it to people who need to know, such as
specific employees. Say you’ve developed a new software algorithm that gives your company
a competitive edge. You can keep it a secret and only disclose it to employees who need to
know, such as your developers. Trade secret misappropriation is the unauthorized disclosure
of a trade secret. This can include disclosing a trade secret to someone not authorized to know
it, or using a trade secret in a way that violates the rights of the trade secret holder.
How to register a trade secret: There are no official registries or offices where a company can
register trade secrets, as they might with a copyright, a patent, or a trademark. Instead, well-
written business contracts, enforced through civil litigation, protect trade secrets.
5. Industrial Design
An industrial design protection covers the visual appearance or configuration of a product that
makes it visually distinctive. Examples include patterns, packaging design, or sneakers like
TM
Unlike design patents, industrial property protection only protects a product’s appearance—
not the technology or configuration. Other people can create a similar product, but the
industrial design IP prevents them from using the same visual design.
How to register an industrial design: You can apply to register your design with the
Intellectual Property Office. This is a long process—it can take between one and three years to
hear back on your industrial design IP application.
6. Geographical Indication
Geographical indication (GI) is a type of IP protection that’s granted to products that share
unique characteristics related to a geographical location. They protect the authenticity and
origin of a product.
8.1. Virtual Office
An office is a place where work is done; that work may be of a highly diverse nature.
In the context of this article, the location, establishment, or premises intended for carrying out
some type of professional management, administration, or other work will be considered an
office. A virtual office is a business location that exists only in cyberspace, allowing
entrepreneurs, freelancers, and remote workers to operate their businesses from anywhere, at
any time. A virtual office is a service that enables employees and business owners to work
remotely by providing a range of business functions accessible through the internet. It also
enables organizations to create and maintain a presence in a desirable location without the
need to pay rent for an actual space. Essentially, employees come together to conduct or
discuss business digitally, rather than meeting physically at a building every day. An example
of a virtual office is a company that only exists on the Internet and whose employees work
remotely.
A virtual office is a remote work arrangement that allows individuals or businesses to
access a range of professional services without the need for a dedicated physical and flexible
workspace. It provides a suite of services, including a prestigious business address, mail
handling, call answering, and access to meeting spaces on-demand. Leveraging cutting-edge
technology and digital communication tools, virtual offices enable professionals to work from
anywhere in the world while maintaining a professional business image.
Characteristics of Virtual Offices
a. Virtual Address: A virtual office provides a professional business address, which can be
used on business cards, letterheads, and websites.
b. Remote Work: Virtual offices enable remote work, allowing team members to work from
anywhere, at any time.
c. Cloud-Based Services: Virtual offices often provide cloud-based services, such as virtual
phone systems, video conferencing tools, and cloud storage.
d. Flexible Work Arrangements: Virtual offices offer flexible work arrangements, allowing
entrepreneurs and remote workers to balance work and personal life.
e. Cost-Effective: Virtual offices are often more cost-effective than traditional physical offices,
as they eliminate the need for rent, utilities, and other overhead costs.

Benefits of Virtual Offices

1. Virtual Offices Increased Flexibility: Virtual offices provide the flexibility to work from
anywhere, at any time. Flexibility and Work-Life Balance: Virtual offices empower
professionals to work according to their own schedules and preferences. With the freedom to
work from anywhere, individuals can strike a healthy work-life balance, avoid long
commutes, and spend more time with their families. Flexibility also enables businesses to tap
into a global talent pool, regardless of geographical boundaries.
2. Virtual Offices Aids Cost Savings: Virtual offices eliminate the need for rent, utilities, and
other overhead costs. Cost Savings: One of the primary advantages of a virtual office is its
cost-effectiveness. Traditional office setups come with substantial overhead costs such as rent,
utilities, and maintenance. In contrast, a virtual office eliminates these expenses, allowing
businesses to allocate resources towards core activities, business expansion, or talent
acquisition.
3. Virtual Offices Improved Work-Life Balance: Virtual offices enable entrepreneurs and
remote workers to balance work and personal life. A virtual office provides a prestigious
business address in a prime location boosting a company’s credibility and enhancing its
professional image. This is particularly beneficial for startups, freelancers, and small
businesses that aim to establish a presence in different markets, attract larger clients or even
make a better first impression with various stakeholder groups. Having an address at the
Abuja Central Business District or Lagos Island around Nnamid Azikwe way office space can
create the perception of being associated with a thriving business hub, potentially opening
doors to networking opportunities and partnerships within the dynamic business ecosystem of
the city.
4. Virtual Offices Aids Access to Global Talent: Virtual offices provide access to global
talent, allowing entrepreneurs and businesses to hire the best talent from around the world.
Access to global talent is one of the significant benefits of virtual offices. With a virtual office,
entrepreneurs and businesses can:
i. Hire the best talent: Regardless of location, virtual offices enable entrepreneurs and
businesses to hire the best talent from around the world.
ii. Diversify teams: Virtual offices allow entrepreneurs and businesses to build diverse teams
with members from different cultures, backgrounds, and experiences.
iii. Access specialized skills: Virtual offices provide access to specialized skills and expertise
that may not be available locally.
iv. Reduce recruitment costs: Virtual offices can reduce recruitment costs, as entrepreneurs
and businesses can hire talent from around the world without the need for relocation.
v. Increase flexibility: Virtual offices provide flexibility in hiring, as entrepreneurs and
businesses can hire talent on a project-by-project basis or for specific periods.
5. Virtual Offices Enhanced Productivity: Virtual offices can enhance productivity, as
entrepreneurs and remote workers can work in a distraction-free environment. Virtual offices
can enhance productivity in several ways:
i. Flexible work arrangements: Virtual offices provide flexible work arrangements, allowing
team members to work from anywhere, at any time.
ii. Reduced distractions: Virtual offices can reduce distractions, as team members can work in
a quiet and comfortable environment.
iii. Improved work-life balance: Virtual offices can improve work-life balance, as team
members can easily balance work and personal responsibilities.
iv. Increased autonomy: Virtual offices provide increased autonomy, as team members can
work independently and make decisions without needing direct supervision.
v. Better time management*: Virtual offices can help team members manage their time more
effectively, as they can prioritize tasks and manage their workload more efficiently.

Tools and Software for Enhanced Productivity

Several tools and software can enhance productivity in virtual offices:
i. Project management tools: Tools like Asana, Trello, and Basecamp can help team members
manage projects and tasks more effectively.
ii. Time tracking software: Software like Harvest, Toggl, and RescueTime can help team
members track their time and manage their workload more efficiently.
iii. Communication tools: Tools like Slack, Microsoft Teams, and Google Workspace can help
team members communicate more effectively and collaborate on projects.
iv. Virtual meeting tools: Tools like Zoom, Google Meet, and Skype can help team members
hold virtual meetings and collaborate on projects.
v. Task automation tools: Tools like Zapier, IFTTT, and Automator can help team members
automate tasks and workflows, freeing up time for more strategic work.
6. Virtual Offices Offer Access to Essential Services: Virtual offices offer a range of
services that contribute to operational efficiency. These include call answering by trained
professionals, mail handling, administrative support, and access to meeting rooms or co-
working spaces. Such amenities enable businesses to maintain a professional front and
conduct meetings or collaborations in a seamless manner.
7. Mitigating the Home-office blues: The rise of remote working has led to an increase in
worker isolation and greater awareness about the mental health of employees. At Mind-space,
a virtual office also includes a discounted daily pass to work from one of our beautiful co-
working spaces as well as access to all our community events – including happy hours,
professional workshops and inspirational lectures.
Types of Virtual Offices
1. Virtual Mailbox: A virtual mailbox provides a physical address for receiving mail and
packages.
2. Virtual Phone System: A virtual phone system provides a business phone number and
voicemail service.
3. Virtual Meeting Room: A virtual meeting room provides a virtual space for meetings and
video conferencing.
4. Virtual Assistant: A virtual assistant provides administrative support, such as email
management, calendar organization, and data entry.
5. Virtual Business Address: A virtual business address provides a professional business
address for use on business cards, letterheads, and websites.
Tools and Software for Virtual Offices
1. Zoom: A video conferencing tool for virtual meetings.
2. Slack: A communication tool for team collaboration.
3. Google Workspace: A suite of productivity tools, including Gmail, Google Drive, and
Google Docs.
4. Microsoft Teams: A communication and collaboration tool for teams.
5. Calendly: A scheduling tool for virtual meetings.
9.1. Networking
Networking refers to the process of building and maintaining relationships with people
who can provide support, guidance, and opportunities for entrepreneurs and their businesses.
It is a requirement to initiate successful business enterprise and it helps the entrepreneurs to
enter the market and create value. (Popoola & Okolugbo, 2018).
Importance of Networking in Entrepreneurship
i. Access to Resources: Networking provides entrepreneurs with access to resources, such as
funding, mentorship, and expertise.
ii. Market Opportunities: Networking can lead to market opportunities, such as new
customers, partners, and suppliers.
iii. Personal Development: Networking can help entrepreneurs develop personally and
professionally, through learning from others and gaining new insights.
iv. Support System: Networking can provide entrepreneurs with a support system, including
peers, mentors, and role models.
Types of Networking
i. Formal Networking: Formal networking involves attending organized events, such as
conferences, trade shows, and networking meetings.
ii. Informal Networking: Informal networking involves building relationships through casual
interactions, such as coffee meetings, phone calls, and social media.
iii. Online Networking: Online networking involves building relationships through digital
platforms, such as LinkedIn, X (Twitter), and Facebook.
iv. Strategic Networking: Strategic networking involves building relationships with people
who can provide specific benefits, such as funding, mentorship, or expertise.
Challenges of Networking in Entrepreneurship
i. Time Management: Networking can be time-consuming, and entrepreneurs may struggle to
balance networking with other business activities.
ii. Building Relationships: Building meaningful relationships through networking can be
challenging, especially for introverted entrepreneurs who are not good in communication and
in building lasting relationship.
iii. Finding the Right Network: Finding the right network or community can be challenging,
especially for entrepreneurs in niche industries.
iv. Maintaining Relationships: Maintaining relationships built through networking can be
challenging, especially if entrepreneurs are busy with other business activities.
Best Practices for Networking in Entrepreneurship
i. Be Clear About Your Goals: Be clear about your networking goals, and focus on building
relationships that can help you achieve those goals. By joining professional associations and
attending industry events can help entrepreneurs build relationships and stay up-to-date on
industry trends.
ii. Be Authentic and Genuine: Be authentic and genuine in your networking interactions, and
focus on building meaningful relationships with other investors/entrepreneurs.
iii. Follow Up and Follow Through: Follow up with new contacts, and follow through on
commitments made during networking interactions. Entrepreneurs need to be active on social
media platforms to build their personal brand and network
iv. Be Consistent: Be consistent in your networking efforts, and make networking a regular
part of your business activities. Entrepreneurs can benefit from mentorship programmes,
which can provide guidance, support, and valuable connections.
Benefits of Networking for Nigerian Entrepreneurs
i. Access to Funding: Networking can provide Nigerian entrepreneurs with access to funding
opportunities, such as financial and technical support from investors, grants from
governmental and non-governmental organisations, and loans from financial institutions or
corporate organisations.
ii. Market Opportunities: Networking can help Nigerian entrepreneurs identify new market
opportunities, such as partnerships with other entrepreneurs of high reputes, collaborations
with other investors whether locally or foreign based, and business deals that expansion of
enterprises.
iii. Mentorship and Guidance: Networking can provide Nigerian entrepreneurs with access to
mentorship and guidance from experienced entrepreneurs, investors who had fully established
with great footing in business conglomerates, and industry experts.
iv. Support System: Networking can provide Nigerian entrepreneurs with a support system,
including peers, mentors, and role models.
v. Personal Development: Networking can help Nigerian entrepreneurs develop personally
and professionally, through learning from others and gaining new insights through attendance
in international conferences and summits.
Challenges of Networking for Nigerian Entrepreneurs
i. Limited Access to Networks: Nigerian entrepreneurs may face challenges in accessing
networks, especially if they are not well-connected or do not have the right contacts.
ii. Cultural and Social Barriers: Nigerian entrepreneurs may face cultural and social barriers,
such as language barriers, cultural differences, and social norms that can make it difficult to
network effectively.
iii. Trust and Credibility: Nigerian entrepreneurs may face challenges in building trust and
credibility with potential partners, investors, and customers, especially if they are new to the
market or do not have a established track record.
iv. Time and Resource Constraints: Nigerian entrepreneurs may face challenges in finding the
time and resources to network effectively, especially if they are busy with other business
activities.

Opportunities for Networking in Nigeria

Nigerian Entrepreneur Network, (NEN, 2018), highlighted the under listed as the
opportunities that are available for Nigerian entrepreneurs:
i. Industry Events and Conferences: Nigeria hosts several industry events and conferences
throughout the year, providing opportunities for entrepreneurs to network with peers,
investors, and industry experts both at home and abroad.
ii. Networking Groups and Associations: Nigeria has several networking groups and
associations, such as the Nigerian Entrepreneurs Network, the Lagos Chamber of Commerce
and Industry, and the Nigerian-American Chamber of Commerce and several other
professional organisations in the country.
iii. Social Media and Online Platforms: Social media and online platforms, such as LinkedIn,
X formerly referred to as Twitter, Whatsapp and Facebook, provide opportunities for Nigerian
entrepreneurs to network with peers, investors, and industry experts both local and foreign.
iv. Incubators and Accelerators: Nigeria has several incubators and accelerators, such as the
Lagos-based Co-Creation Hub and the Abuja-based Ventures Platform, that provide
opportunities for entrepreneurs to network with peers, investors, and industry
References
Academy of Entrepreneurship (AOE) (2019). Skills and Knowledge for Entrepreneurial
Success. Conference Proceedings: AOE, Publishers. ISBN: 9781949214107
Adekunle O. A. & Oyebanjo, O. A. (2020). The Impact of Technology on Entrepreneurship.
Journal of Entrepreneurship and Innovation, Volume: 10(2): 123-145.
Adekunle, O. A. & Oyebanjo, O. A. (2020). The Impact of Networking on Entrepreneurial
Success in Nigeria. -Journal of Entrepreneurship and Innovation.
Chukwuma, O. E. & Chikaodili C. I. (2018). The Role of Networking in Accessing Funding
Opportunities for Nigerian Entrepreneurs. Journal of Entrepreneurship and Finance
Comanor, W. D. & Juliano, E. M. (2020). Entrepreneurship: Theory, Process, and Practice.
Routledge Publisher, USA.
Corbett, A. C. (2020). (Ed). Journal of Entrepreneurship.
Dinwoodie, G. B. (2018) (Ed). Journal of Intellectual Property Law & Practice.
Enterprise Development Centre (2020). Networking for Nigerian Entrepreneurs.
Hisrich, R. D. & Peters, M. P. (2019). Technology Entrepreneurship. McGraw-Hill
Educational Publishers.
Ian H. Perry (2019). (Ed). Journal of Intellectual Property Quarterly.
Intellectual Property and Entrepreneurship (2020). United States Patent and Trademark Office
(USPTO).
Intellectual Property and Entrepreneurship (2020). World Intellectual Property Organization
(WIPO).
International Council for Small Business (ICSB) (2020). Technology and Entrepreneurship:
Emerging Trends and Opportunities. Conference Proceedings: ICSB Publisher. ISBN:
9781949214114.
Nigerian Entrepreneurs Network (NEN, 2018). Networking Opportunities for Nigerian
Entrepreneurs.
Ogunji, E. O. & Osunubi, O. A. (2019). Networking Strategies for Nigerian Entrepreneurs.
Journal of Small Business Management
Ogunji, E. O. & Osunubi, O. A. (2019). Skills and Knowledge Requirements for
Entrepreneurial Success. Journal of Small Business Management, Vol. 57(3): 537-555.
Popoola, A., & Okolugbo, C. N. (2018). Introduction to Entrepreneurial and New Venture
Creation. In Oladele, P. O., Ajayi, I. A., & Ajayi, L. O. (Eds), Introduction to
Entrepreneurial Skill. Ekiti State University Printing Press. 1-29.
Scarborough, T., & Zimmer, T. (2005). Essentials of Entrepreneurship and small Business
Management. Pearson Prentice Hall
Small and Medium Enterprises Development Agency of Nigeria (2019). The Importance of
Networking for Entrepreneurs in Nigeria
The Economic Benefits of Intellectual Property. (2019). International Chamber of Commerce
(ICC).

CHAPTER EIGHT

ENTREPRENEURSHIP IN NIGERIA

Entrepreneurship is the process of identifying opportunities, developing, and bringing a novel

and unique idea, product, service, or business model that adds value while taking on the

associated financial, social, and operational risks. Therefore, the key concepts of

entrepreneurship include proactiveness, risk-taking, and innovativeness.

In Nigeria, entrepreneurship impacts the country's economic growth by bringing new

products, techniques, and processes to the market and also extensively increases productivity

and competition amongst producers of goods and services. It drives economic diversification

and development by creating jobs and fostering innovation. It also plays a critical role in

addressing challenges such as unemployment, poverty and underutilization of resources.

Despite its potential, the entrepreneurial ecosystem in Nigeria faces challenges such as

environmental challenges as well as cultural challenges. This chapter explores the Nigerian

entrepreneurship landscape, highlighting inspiring stories, the rise of youth and women

entrepreneurs, the role of support institutions and the barriers that hinder the growth of

entrepreneurship in Nigeria.

Historical overview of entrepreneurship in Nigeria

Entrepreneurship in Nigeria has a vibrant history that is deeply rooted in socio-cultural and

economic development. Its evolution spans through pre-colonial, colonial, and post-

independence periods in Nigeria. Each era has its own distinct characteristics, opportunities

and difficulties that had influenced the nation's entrepreneurial environment.

 Pre-Colonial Era: Indigenous Entrepreneurship

During the pre-colonial era, Nigerian entrepreneurship was primarily informal and focused on

trade, agriculture, crafts and services. Then, entrepreneurial activities were closely tied and

adapted to the local environment and socio-economic structures of various ethnic groups in

the region. However, agriculture was the primary and major economic activity across all

regions. In the southwestern region, people cultivated crops like yam, millet, maize and

subsequently cocoa while livestock rearing and groundnut cultivation were common in the

North. Entrepreneurial activities revolved around the production and delivery of these goods.

The excess produce was frequently traded through barter or sold in local markets. Another

aspect of entrepreneurship during this time was trade. The Northerners were known for long-

distance trading. They interchanged commodities such as gold, textiles, salt, and kolanut.

Yoruba people were known for their market-based economies while the Igbos were also

successful in trading craft items and palm oil. Also, craftsmanship flourished across various

ethnic groups. The Hausa were skilled in leatherwork, dyeing, and blacksmithing while the

Yorubas specialized in weaving, pottery and bead-making.

 Colonial Era: Transformation and Challenges

The arrival of colonial Masters in the late 19th and early 20th centuries brought about some

changes, such as the integration of the Nigerian economy into the global capitalist system and

shifting the focus from subsistence and local trade to export-oriented economic activities.

The colonial administration encouraged the cultivation of cash crops such as cocoa, palm oil,

rubber and groundnuts to meet the demands of European markets. This facilitated export-
oriented activities that created opportunities for farmers and traders to engage in international

trade. There was also an emergence of formal enterprises such as factories, banks and trading

companies. Missionary schools introduced Western education which indirectly influenced

entrepreneurship by creating a new class of literate Nigerians. Many of these educated

individuals ventured into small businesses, leveraging their skills in bookkeeping, retail and

services. The movement of goods and services was facilitated by the construction of railways,

ports and roads thereby boosting entrepreneurial activities in Lagos, which emerged as a

commercial hub. Despite these developments, indigenous entrepreneurs faced stiff

competition from European firms that had greater access to capital and government support.

Policies such as the monopoly on key exports and the restriction of credit to Nigerians stifled

the growth of local businesses. But some entrepreneurs, like Candido Da Rocha, thrived

during this period and became known for their success in real estate and commerce, laying the

foundation for modern entrepreneurship.

 Post-Independence Era: Expanding Horizons

The era subsequent to Nigeria's independence in 1960 signified a new phase for

entrepreneurship in the country, as economic development was given top priority by the

government, which also promoted participation of indigenous enterprises. To increase

Nigerian ownership of enterprises, the Nigerian government implemented indigenization

policies in the 1970s. Consequently, post-independence Nigeria witnessed the growth of

industries such as banking, manufacturing and telecommunications. Entrepreneurs like Aliko

Dangote (Dangote Group) and Michael Ibru (Ibru Organization) emerged as key players in

these sectors, contributing significantly to Nigeria’s economic development. Though this

policy increased Nigerians' involvement in business and industry, it also resulted in some

companies purchased from foreign owners being mismanaged. The major challenge of

entrepreneurship during this era was the advent of oil. The oil boom of the 1970s brought
significant revenue to the country, which led to dependency on oil exports. As a result, other

sectors were neglected, which eventually stifled diversification.

 Contemporary Era: Globalization and Technology

The contemporary era is known for its technological advancements and globalization, which

have transformed Nigerian entrepreneurship in recent decades. These two forces worked

together to drive societal transformations, influencing economies and reshaping human

interactions.

The introduction of the internet and mobile technology has created new opportunities in e-

commerce, fintech and digital media. Platforms like Jumia, Flutterwave and Andela are

examples of how Nigerian entrepreneurs are leveraging technology to build global businesses.

Globalization describes how trade, investment and technology have made the economies,

cultures and inhabitants of the world more interconnected and dependent on one another.

Globalization has grown more rapid in the modern age as a result of improvements in

communication and transportation technologies. The integration of markets has led to free

trade agreements, the establishment of global supply chains and the proliferation of

multinational corporations. Emerging economies have become significant players and global

financial markets are more interconnected.

In the contemporary era, technology has influenced the entrepreneurial landscape by

reshaping how firms are established, grown and managed. It can be referred to as a facilitator

because it provides entrepreneurs with unprecedented tools and opportunities while

simultaneously transforming the competitive environment.

Technology has made entrepreneurship more accessible by reducing barriers to entry,

especially for start-ups, through low-cost tools such as cloud computing services like AWS
and Google Cloud. It provides digital market places in form of platforms like Amazon, eBay,

and Etsy to enable entrepreneurs reach global markets without the need for physical stores.

Also, technology avails individuals of free and affordable online courses on platforms like

Coursera, Udemy and YouTube to help individuals acquire skills necessary for

entrepreneurship. It equally enhances market access by assisting entrepreneurs to sell products

and services across borders through platforms like Shopify, Alibaba, and BigCommerce.

Moreover, websites like Kickstarter, Indiegogo, and GoFundMe allow entrepreneurs to raise

funds directly from supporters; peer-to-peer lending platforms and digital wallets like PayPal

and Venmo facilitate smoother financial transactions.

Spanning through the informal trade networks of the pre-colonial era to the global tech

startups of today, it can be seen that entrepreneurship in Nigeria highlights its resilience and

adaptability. Nigerian entrepreneurs have consistently found ways to innovate and thrive

despite economic and political challenges.

Biography of Inspirational Entrepreneurs

An entrepreneur is someone who identifies a need, creates a solution, and takes the necessary

risks to bring their ideas to reality. They are characterized by creativity, resilience and the

ability to innovate. Inspirational entrepreneurs are individuals who have overcome challenges,

broken barriers and transformed industries by capitalizing on opportunities identified in

innovative ways. They serve as role models, demonstrating that with vision, persistence and

adaptability, individuals can create a lasting impact. Inspirational entrepreneurs go beyond

financial success, leaving a legacy of positive change in their communities or industries. The

biographies of some Nigerian inspirational entrepreneurs are discussed below:

 Aliko Dangote
Aliko Dangote is a name synonymous with the inspiring story of resilience, strategic thinking

and relentless ambition in Nigerian entrepreneurship. He was born in Kano State in 1957. He

is the founder of the Dangote Group, a conglomerate with interests in cement, sugar, salt, and

other commodities. Dangote's journey into entrepreneurship began early, inspired by his

grandfather, who was a successful commodity trader. He started with a small loan from his

uncle, embraced perseverance and long-term vision, then focused on industries with high

demand. Over the years, he expanded into manufacturing, establishing one of Africa's largest

cement factories. Dangote’s success stems from a clear business philosophy characterized by:

Vision and Long-Term Thinking: He consistently identifies and invests in sectors critical to

Nigeria’s and Africa's development.

Risk-Taking: From borrowing seed capital to investing billions in manufacturing, Dangote

has exhibited a propensity for calculated risks.

Efficiency and Scale: He emphasizes economies of scale, ensuring that his companies operate

efficiently to reduce costs and maximize profits.

Adaptability: Dangote has continuously adapted his business strategies to meet changing

market conditions and government policies.

Though he started small, he grows incrementally, focusing on industries with high demand

and embracing perseverance and long-term vision.

 Folorunsho Alakija

Another entrepreneur, who is a self-made billionaire, is Folorunsho Alakija. Her story is an

inspiration, especially to women entrepreneurs. She began her career as a secretary before

pursuing her passion for fashion and made her mark in fashion. Her success in the fashion

industry led her to venture into oil exploration with her company, Famfa Oil. However, her

journey was not without challenges. The Nigerian government later tried to take a significant
share of her stake in the oil block, which led to a protracted legal battle. She successfully

retained a substantial portion of her stake after a landmark Supreme Court ruling in 2012. In

addition to oil and fashion, Alakija invested heavily in real estate. She owns prime properties

in Nigeria and abroad, further diversifying her wealth portfolio. These properties are known

for their luxury and strategic locations. She pursues passion, diversifies when opportunities

arise, and leverages partnerships and networks. She demonstrated resilience by embarking on

a legal battle with the government over her oil block.

 Tony Elumelu

Tony Onyemaechi Elumelu was born on March 22, 1963 in Jos, Plateau State, Nigeria.

He hails from Onicha-Ukwu in the Aniocha North Local Government Area of Delta

State. He holds a bachelor’s degree in Economics from Ambrose Alli University and a

Master’s degree in Economics from the University of Lagos. His educational

background equipped him with the knowledge and skills he needed to succeed in

Nigeria's competitive banking and business sector. As a youth corps member at Union

Bank of Nigeria during his National Youth Service Corps (NYSC) program where he

started his banking career. He eventually became an entry-level analyst at Allstates

Trust Bank, here he displayed drive, ambition, and creative thinking. It was during his

time as CEO that UBA established a presence in major international financial hubs,

including London, New York and Paris, in addition to expanding its activities

throughout 20 African nations. Elumelu's role as a transformative leader was

established when UBA gained recognition for its cutting-edge financial products and

customer-focused services. Elumelu established a privately held investment company

known as Heirs Holdings in 2010 after leaving his position as CEO of UBA. The

business concentrates on major sectors like healthcare, energy, real estate, financial

services and agriculture. Elumelu has made investments through Heirs Holdings in

businesses that propel economic growth throughout Africa, which include the
 acquisition of Transcorp, one of the biggest publicly traded conglomerates in Nigeria.

Transcorp Power is one of Nigeria's top suppliers of electricity, which makes a

substantial contribution to the nation's energy requirements. His dedication to

resolving Africa's infrastructure issues is demonstrated by his leadership at Transcorp.

His ability to take UBA to a worldwide scale and navigate Nigeria's difficult business

environment demonstrates his resilience, adaptability, flexibility and persistence.

 Ibukun Awosika

Ibukun Awosika was born on December 24, 1962 in Ibadan, Oyo State, Nigeria. She studied

chemistry at the University of Ife (now Obafemi Awolowo University), Ile-Ife, Nigeria. Her

career was later driven by her significant interest in entrepreneurship and business

management. The renowned entrepreneur and supporter of women's empowerment is the first

female chairperson of First Bank Nigeria. Awosika is an advocate of women's

entrepreneurship and empowerment. She encourages young women to follow their aspirations

and break barriers in male-dominated fields through her speaking engagements and

mentorship programs.

She established "The Chair Centre Limited," a furniture manufacturing and retail business that

specializes in office furniture and interior design solutions, in 1989 when she was just 25

years old. Her desire to provide high-quality, regionally produced furniture that could compete

with global brands gave rise to the business. The Chair Centre began as a small enterprise and

developed into one of the major companies in the Nigerian furniture market. In order to

increase production and distribution capacity throughout West Africa, she merged with both

domestic and foreign partners to form Sokoa Chair Centre Limited, a larger conglomerate.

Women and Youth Entrepreneurship: A Catalyst for Economic Growth and Social

Development
It has been established that entrepreneurship is a major driver in transforming society, creative

thinking and economic growth. The contributions of young entrepreneurs and women are

significant in this context. They stand for untapped potentials in terms of skill, innovation and

financial gain. In addition to addressing socioeconomic disparities, investing in women and

youths promotes inclusive growth.

The Importance of Women and Youth in Entrepreneurship

 Economic Growth

Activities of women and youth in entrepreneurship reduce unemployment and poverty,

thereby increasing household income by generating job opportunities. In many economies, a

large percentage of new jobs are created by small and medium-sized businesses (SMEs),

which are frequently run by these groups. Women are more likely to reinvest their earnings in

education, healthcare and family welfare, thereby creating a ripple effect of development.

 Innovation

Youths are more likely to embrace innovation and technology, thereby offering new

insights. Also, women frequently spot unique business opportunities based on their

own experiences and the needs of the community.

 Gender Equality

Promoting women's entrepreneurship alters gender norms and promotes gender equality.

Empowered, strong, and independent women are role models who encourage others to pursue

their dreams.

 Innovation and technology

Young entrepreneurs frequently lead technological innovation, particularly in digital sectors

such as banking, e-commerce, and artificial intelligence. They leverage technology to develop

transformative and scalable remedies to global problems.

 Energy and risk taking

Young business owners are more inclined to take risks and try to explore novel business

concepts, which brings about innovation. They can flourish in rapidly shifting market

conditions because of their zeal and flexibility.

 Social Innovation

Women and young entrepreneurs frequently concentrate on addressing social issues, like

access to clean water, education, and healthcare. They support the Sustainable Development

Goals (SDGs) through their businesses. Examples of youth entrepreneurs are:

a) Mark Essien is a Nigerian businessman known for his innovative contributions to

the Hotel and technology industries. As the CEO of Hotels.ng, Essien is a prime

example of how young entrepreneurs can solve practical issues and promote

economic development in Nigeria. His path in entrepreneurship demonstrates the

significance of innovation, resilience, and the utilization of technology to establish

scalable enterprises.

b) Temie Giwa-Tubosun, a Nigerian businesswoman and innovator, is recognized for

her groundbreaking contributions to healthcare logistics. Giwa-Tubosun, the

founder and CEO of Life-Bank, has revolutionized the delivery of vital medical

supplies, particularly blood, to Nigerian hospitals. Her story serves as evidence of

the positive effects that young people's entrepreneurship can have on public health

systems and the resolution of life-threatening issues. Giwa-Tubosun, a young

entrepreneur, is an example of how young people may use their drive and skills to
 solve urgent problems. Several young Nigerians have been motivated to engage in

social entrepreneurship and improve their communities by her leadership.

Entrepreneurs among youths and women in Nigeria have achieved considerable progress,

regardless of cultural and systemic obstacles. Tara Fela-Durotoye, founder of House of Tara

and Adenike Ogunlesi, founder of Ruff ‘n’ Tumble, have contributed significantly to their

respective industries.

Entrepreneurship Support Institutions

 Governmental Institutions

a) SMEDAN

The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) is a

government organization that was established in 2003. Its major goal is to provide significant

support for entrepreneurship in Nigeria with the aim of assisting small and medium-sized

enterprises (SMEs) grow and thrive by providing capacity building, creating a supportive

environment and making it easier for them to access resources and finance. It was also

established to promote economic expansion and reduce unemployment and poverty.

SMEDAN also plays the following roles:

i. Facilitation of MSMEs' access to funding by linking them with financial institutions.

ii. Rendering assistance to MSMEs to prepare viable business plans and financial

proposals.

iii. Provision of training workshops and mentorship programs to improve the skills and

competencies of entrepreneurs for productivity and competitiveness enhancement.

iv. SMEDAN facilitates access of MSMEs to loans, grants and other funding

opportunities
 v. Maintenance of comprehensive database of MSMEs to support policy formulation and

program design in Nigeria.

b) National Directorate of Employment (NDE)

NDE is another government institution that focuses on job creation through skills acquisition

and entrepreneurship development. It was founded in 1986 with the goal of minimizing

unemployment and advancing economic growth. Its main objective is to combat

unemployment using a variety of approaches, such as job creation programs, entrepreneurial

promotion and skill development. It enables people to start their own enterprises by teaching

them different trades like electronics, carpentry, and tailoring etc. It also promotes

entrepreneurship by providing access to finance facilities and training in business

development.

c) Bank of Industry

Bank of Industry (BOI) is Nigeria's most ancient and largest development finance institution

founded in 1959 as the Investment Corporation of Nigeria (ICON). It was subsequently

reformed into the Bank of Industry (BOI) in 2001. Bank of Industry is entirely owned by the

Nigerian government and functions under the Federal Ministry of Industry, Trade and

Investment. BOI focuses on sectors such as manufacturing, agriculture, technology and

innovation as well as renewable energy. Objectives of BOI include:

i. Fostering the growth and expansion of industrial enterprises in Nigeria.

ii. Offering financial assistance and advisory services to entrepreneurs,

particularly within the SME sector.

iii. Mitigating against reliance on oil by encouraging investments in non-oil

sectors, including agriculture, manufacturing, and technology.

iv. Enhancing employment opportunities through the financing of productive

ventures.
  Non-Governmental Organizations

a) Tony Elumelu Foundation (TEF)

The Tony Elumelu Foundation (TEF) is a prominent non-governmental organization

committed to fostering entrepreneurship throughout Africa. It was founded in 2010 by a

Nigerian entrepreneur and philanthropist in the person of Tony Elumelu. The foundation seeks

to empower African entrepreneurs in order to promote economic growth, generate

employment and lessen poverty in the country.

b) FATE Foundation

It is another non-governmental institution founded by Fola Adeola, the co-founder of GTB, in

2000. Its major objective is to provide support for existing businesses to grow and achieve

sustainability. It is dedicated to equipping individuals with the skills and tools needed to start,

grow and scale successful businesses.

 International Bodies

a) World Bank Group

The World Bank is an international financial institution that provides financial and

technical assistance to developing countries for development projects in sectors such

as education, health and agriculture. The major objective of this institution is to reduce

poverty and promote sustainable development. The group supports entrepreneurship

through initiatives like the International Finance Corporation (IFC), which

provides funding and technical support to startups and SMEs; the Women

Entrepreneurs Finance Initiative (We-Fi), which specifically targets female

 entrepreneurs; and Education and Skills Development, which focuses on ensuring

universal access to primary education and improving education quality globally.

b) United Nations Development Programme (UNDP)

The United Nations Development Programme (UNDP) was founded in 1965. It is a key

agency of the United Nations that works to end poverty, lessen inequality and increase shock

and crisis resilience. UNDP works in more than 170 nations and territories to promote

sustainable development by offering finance for development projects, policy

recommendations and capacity building.

Youth Enterprise Networks

Youth Enterprise networks are collaborative forums or platforms that unite young

entrepreneurs, enterprises, policymakers, and development partners in order to encourage

entrepreneurship and empower young people in the changing and technological advancement

world. Some of the platforms are Young African Leaders Initiative (YALI), Global

Entrepreneurship Network (GEN) and Social Media Communities. These networks seek to

solve issues including unemployment and restricted access to resources, promote innovation

and offer startup support systems. They provide young entrepreneurs with resources, training

and contacts at the local, regional and global levels. Other objectives are:

i. To provide youths with the resources and skills required to launch and expand

their enterprise.

ii. To make grants, microloans and venture capital more accessible to young

business owners.

iii. To enhance entrepreneurial capacities, offer incubation services, mentorship

and training.

iv. To encourage the implementation of policies and initiatives that promote

youth-led businesses.
 v. To promote cooperation and market access, link together young business

owners with mentors, investors and peers.

Environmental and Cultural Barriers to Entrepreneurship

Environments that encourage creativity, risk-taking and market-driven solutions are the most

ideal environments for entrepreneurship. However, entrepreneurship can be impeded by a

number of cultural and environmental variables, especially in developing nations. These

obstacles result from cultural norms and values, as well as external factors that influence how

individuals view and behave in relation to entrepreneurship. They are:

 Environmental Barriers

i. Poor Infrastructure: Market access and supply chain efficiency are hampered by

inadequate power supply, transportation and communication systems.

ii. Access to Finance: Due to undeveloped financial markets, stiff collateral

requirements and investor risk aversion, entrepreneurs frequently have difficulty

in obtaining capital.

iii. Economic instability: High rates of inflation, exchange rate swings and recessions

deter businesses.

iv. High unemployment and low-income levels: Low demand and patronage for goods

and services as a result of consumers' limited purchasing power is another

challenge in entrepreneurship.

v. Limited Access to Technology: Digital tools and broadband internet, which are

essential for modern firms, may not be available to entrepreneurs in isolated or

rural areas.
 vi. Energy and Power Problems: High energy prices or frequent power outages can

raise operating costs and cause production disruptions.

 Cultural Barriers

i. Aversion to risk: Risk-taking is discouraged in many cultures, which prioritize

safe, secure jobs above starting one’s own business. Talents are diverted from

entrepreneurial activities by the emphasis on established professions such as

engineering, law and medicine. People are discouraged from exploring business

prospects due to their fear of failure, which is exacerbated by social shame. Some

regions in Nigeria prefer job security over entrepreneurship due to the fear of

failure.

ii. Gender Inequality

Limiting or restricting women's access to money and education or expectations

around home roles as a result of cultural norms prevents them from engaging in

entrepreneurship.

iii. Low Entrepreneurial Role Models

Young people may lack inspiration or mentorship in communities with few

successful entrepreneurs.

iv) Ethical and Religious Restrictions

Certain ethical standards or religious convictions may limit entrepreneurship in

particular sectors (such as gambling or alcohol). In some communities, ethical

concern about generating profit might also deter entrepreneurship.

REFERENCES
Adebayo, A. G. (1992). Trade and politics in the Nigerian middle belt: Society and economy

in the nineteenth and twentieth centuries. African Studies Review, 35(1), 91–93.

Ekundare, R. O. (1973). An economic history of Nigeria, 1860–1960. Methuen & Co. Ltd.

Falola, T., & Heaton, M. M. (2008). A history of Nigeria. Cambridge University Press.

Uche, C. U. (1999). Foreign banks, Africans, and credit in colonial Nigeria, 1890–1912. The

Economic History Review, 52(4), 669–691. https://doi.org/10.1111/1468-0289.00144

Irobi, N. C. (2019). Evolution of entrepreneurship in Nigeria: Policy, practice, and

implications. Journal of Development Studies, 47(2), 201–213.

Oyelaran-Oyeyinka, B. (2020). The challenge of social innovation in urban Nigeria. Springer.

Babalola, S. S. (2009). Women entrepreneurial innovative behavior: The role of psychological

capital. African Journal of Business Management, 3(12), 787–796.

Central Bank of Nigeria. (2018). Financial inclusion report. Central Bank of Nigeria.

National Bureau of Statistics (NBS) & Small and Medium Enterprises Development Agency

of Nigeria (SMEDAN). (2021). SME development in Nigeria: Challenges and policy

recommendations.

The Tony Elumelu Foundation. (2020). Africapitalism and the entrepreneurial landscape in

Nigeria. The Tony Elumelu Foundation.

Hisrich, R. D., Peters, M. P., & Shepherd, D. A. (2020). Entrepreneurship (12th ed.).

McGraw Hill.

Youth Business International (YBI). (2023). Annual Impact Report 2022–2023. Retrieved

from https://www.youthbusiness.org
Timmons, J. A., & Spinelli, S. (2019). New venture creation: Entrepreneurship for the 21st

century (10th ed.). McGraw-Hill Education.

CHAPTER NINE

Basic Principles of E-commerce

Introduction
Electronic commerce, commonly known as E-commerce, refers to trading of products or
services using computer networks, such as the Internet. The centrepiece of modern-day
business is electronic commerce. The relationship that exist in E-commerce can come in two
dimensions, i.e. from the customers to business/government and business/government to
customers. How enterprises, organisations, or government agencies do business with their
clients or customers has changed over time, necessitating adaptation to the dynamics in the
global business terrain to E-business and E-commerce. Internet-based businesses can increase
productivity, decrease costs, and open new market opportunities. There is a wide variety of
resources available to improve e-commerce skills, decide what skills (basic abilities, like word
processing and Internet navigation; more complex capabilities, such as designing and building
websites and database management) are needed and identify the appropriate resources (online
resources, books and magazines, seminars and training courses) to help build those skills.

History of E-commerce
The emergence and evolution of E-commerce generally fall into five phases:
1. The First Phase (1970s-Early 1980s): Some government and international businessmen
emerged as private networks, trying to develop ways to exchange information with
relative security. However, the high price and complexity of the system at that time
prevented further development, and only a few companies, such as financial
companies, were able to adopt such technology.
2. The Second Phase (Late 1980s-early 1990s): Emergence of e-mail and chat. It brought
about the first generation of news communication and communication facilities such
as e-mail and chat.
3. The Third Phase (1995): Emergence of explorers: The emergence of explorers on the
web-based on the hypertext transfer protocol and the creation of host pages as one of
the essential functions of websites is considered to be the third phase of e-commerce
development.
4. The Fourth Phase (mid-1990s): This phase began with the activities of retail sites. It
began when the first retail sites in e-commerce, known as .com sites, started
performing small economic transactions. These sites' activity and results encouraged
many companies to key into E-commerce. This was the first step toward the
development and actualisation of E-commerce.
5. The Fifth Phase (Late 1990s): Defining models of E-commerce: This phase started in
the late 1990s when large traders and companies realised that E-commerce could be
activated as a trade model and used just like a trade-consumer model. Thus, the web
was introduced and became the central place for early generations of auction markets,
trade, and trade-consumer transactions (Sepasi et al., 2014).

Objectives of E-Commerce
The overall objective of adopting E-commerce is to meet customers’ demands and
business/corporate targets. The specific objectives of E-commerce are to:
1. Improve service delivery to meet and exceed customers' expectations.
 2. Faster response to customers’ inquiries and complaints.
3. Reduced costs (Office space and its associated expenses such as electricity, rent among
others).
4. Reduced product time of stay on shelve.
5. Reach a broader coverage of potential and existing customers.

Definitions
E-commerce (EC): Electronic commerce is the process of buying, transferring, or
exchanging products, services, and/or information via computer networks, including the
Internet. EC can also be beneficial from many perspectives including business process,
service, learning, collaborative, community. EC is often confused with e-business (Kisii
University, 2022).
E-commerce is the sharing of business information, maintaining business relationships, and
conducting business transactions using computers connected to telecommunication networks
(Veer Surendra Sai University of Technology, 2016).
E-commerce: Is the use of electronic communications and digital information processing
technology in business transactions to create, transform, and redefine relationships for value
creation between or among organisations and between organisations and individuals (Sepasi et
al., 2014).
E-Commerce: Electronic commerce is a modern business methodology that addresses the
needs of business organisations, government agencies, vendors, and customers to reduce costs
and improve the quality of goods and services while increasing the speed of delivery. E-
commerce refers to the paperless exchange of business information using electronic data
exchange (EDI), electronic mail (e-mail), electronic bulletin boards, electronic fund transfer
(EFT), and other network-based technologies (Joseph, 2017).
Paperless business information exchanges are business transactions that use computers,
telephones, fax machines, barcode readers, credit cards, automated teller machines (ATMs), or
other electronic appliances without the exchange of paper-based documents. They include
procurement, order entry, transaction processing, payment authentication, inventory control,
and customer support.
E-commerce refers to a wide range of online business activities for products and services. It
also pertains to "any form of business transaction in which the parties interact electronically
rather than by physical exchanges or direct physical contact.
Therefore,
E-business (EB) is the application of information and communication technologies to support
all business activities. It involves distributing, buying, selling, and marketing products and
services over electronic systems (Kisii University, 2022). i.e. It refers to the use of digital
technology to carry out various business processes more efficiently. Such business processes
include using digital platform for managing inventories, employee recruitment,
communications, marketing among others.
Electronic business or E-business is a term often used interchangeably with E-commerce,
but it is more concerned with transforming key business processes through the use of Internet
technologies (Ohene-Djan, 2008).
E-business: This is the transformation of key business processes through Internet
technologies (Joseph, 2017).
E-business encompasses all aspects of running a business online including e-commerce,
supply chain, customer relationship management, online collaboration and electronic data
interchange.

Nature of E-commerce
EC draws on technologies such as mobile commerce, electronic funds transfer, supply chain
management, Internet marketing, online transaction processing, electronic data interchange
(EDI), inventory management systems, and automated data collection systems. Modern
electronic commerce typically uses the World Wide Web for at least one part of the
transaction's life cycle. However, it may also use other technologies like e-mail (Veer
Surendra Sai University of Technology, 2016). The nature of e-commerce has three key
concepts:
1. The management of transactions and transaction costs through online technologies and
computerised networks.
2. Reengineering business processes into logical, related, and sequential activities that
ensure businesses engage in transactions in the most efficient and effective manner
through the use of online technologies and computerised networks.
3. The use of information technologies and computerised networks to facilitate
employees’ telecommuting or teleworking. Such activities enable flexible working,
distributed workforces and efficient productivity paths (Ohene-Djan, 2008).

Examples of E-Commerce
1. An individual purchases product(s) on the Internet.
 2. Bidding, auction and approval of contracts online.
3. Booking of a hotel, VISA appointment and flight ticket online.
4. Money withdrawal from automated teller machines (ATM) and usage of mobile
applications
5. Accepting credit cards for commercial online sales
6. Payment of acceptance fees and school fees on dedicated online platforms
7. Selling to consumers on a pay-per-download basis, through a Web site, etc.

Differences between E-Business and E-commerce

E-commerce is an integral part of e-business, specifically, the trading aspect of e-business. E-
commerce seeks to add revenue streams using the World Wide Web or the Internet to build
and enhance relationships with clients and partners and to improve efficiency.
S/ E-Business E-commerce
N

1 E-business is conducting all aspect of business E-commerce is concerned with buying and selling
that involve use of digital technologies and on the internet
internet

2 E-business is the transformation of business E-commerce conducts financial transactions

processes through the Internet. electronically

3 E-business refers to a more strategic focus with E-commerce is a subset of an overall e-business
an emphasis on the functions that result when strategy
using electronic capabilities

E-Commerce Categories:
1. Electronic Markets are the foundation of E-Commerce. They integrate advertising,
product ordering, delivery, and payment systems. They present a range of offerings
available in a market segment so that the purchaser can compare the prices of the
offerings and make a purchase decision. For example, Airline booking systems
(Wakanow, Travelwings, among others).
2. Electronic Data Interchange (EDI): EDI transfers business documents in an
organisation internally between its various departments/units or externally with
 suppliers, customers, etc. EDI Documents include invoices, purchase orders, shipping
requests, acknowledgements and, business correspondence letters.
Other attributes of EDI are the provision of a standardised system, the coding of trade
transactions, communication from one computer to another without the need for printed
orders, invoices, and delays and errors in paper handling, and its use by organisations that
make a large number of regular transactions.
3. Internet Commerce
It is used to advertise and sell a wide range of goods and services. This application is for both
business-to-business and business-to-consumer transactions. Commercial activities on the
Internet include auctioning, placing orders, making payments, transferring funds,
collaborating with trading partners, providing customer support, supply chain management,
identifying new markets, and providing 24-hour point of sale irrespective of the location.
Advantages of E-commerce:
1. Buying/selling a variety of goods and services from one's comfort (home or other
places of stay).
2. It is accessible and operates 24 hours a day (browsing, buying and selling)
3. Opportunity to compare different products and prices from different online vendors or
same vendor (price comparison on Uber, Bolt and Lagride)
4. Businesses can reach out to worldwide clients - can establish business partnerships
5. Order processing costs are reduced
6. Faster electronic funds transfer
7. Choices of payment options (cash, credit card, debit card, gift cards, paypal and
vouchers etc.)
8. No geographic limitation
9. Supply chain management is simpler, faster, and cheaper using e-commerce (Veer
Surendra Sai University of Technology, 2016).
10. No standing on queues or being placed on hold forever
11. There is no need for a physical store/location
12. Ability to scale up rapidly (grow) (Kisii University, 2022).
Disadvantages of E-commerce:
1. Electronic data interchange using EDI is expensive for small businesses
2. The website is prone to viruses and attack from hackers
3. Privacy of e-transactions is not 100% guaranteed
 4. E-commerce de-personalises shopping (Veer Surendra Sai University of Technology,
2016)
5. Highly dependent on technology and needs to be continuously updated with the latest
web features and CRM (Customer Relationship Management) tools.
6. Reduction in the extent of customer loyalty
7. Highly competitive
8. Many businesses face cultural and legal obstacles when conducting electronic
commerce.
9. Under pressure to innovate and develop business models to exploit new opportunities,
organisations sometimes adopt strategies that are detrimental to them.
10. Increasing competition from national and international competitors often leads to price
wars and subsequent unsustainable losses for the organisation.
11. As people become more used to interacting electronically, there could be an erosion of
personal and social skills, which is detrimental to our world where people are more
comfortable interacting with a screen than face-to-face (Joseph, 2017).
Threats of E-commerce:
1. Hackers attempting to steal customer information or disrupt the website
2. A server containing customer information can be stolen by competitors, ex-employees
etc.
3. Imposters can mirror your e-commerce website to steal customer money.
4. A dissatisfied employee can disrupt the e-commerce system (Veer Surendra Sai
University of Technology, 2016).

Features of E-Commerce:
1. Ubiquity: E-commerce is ubiquitous, i.e., available everywhere. It is available
everywhere and at all times by using the internet and Wi-Fi hotspots, such as airports,
coffee cafes, and private and public places.
2. Global Reach: Technology-enhanced commerce is enabled across cultural and national
boundaries because products and services are within customers' reach.
3. Universal standards
4. Richness: Customers can send and receive information through video, audio, and text
marketing messages.
5. Interactivity: E-commerce technologies allow two-way communication between the
merchant and the consumer. As a result, e-commerce technologies can adjust to each
 individual's experience through Frequently Asked Questions and chat icon on the
website.
6. Information Density: The use of EC reduces the cost of storage, processing, and
information communication while simultaneously increasing accuracy and timeliness,
thus making information accurate, inexpensive, and plentiful.
7. Personalisation/Customisation: Technologies within e-commerce allow for the
personalisation and customisation of marketing messages that groups or individuals
receive. An example of personalisation includes product recommendations based on a
user's search history on a website that allows individuals to create an account (Veer
Surendra Sai University of Technology, 2016).
8. Social Technology: E-commerce technology has tied up social media networking
applications to provide the best source of content-sharing technology and e-marketing
systems. Information or content can be shared easily in just one click.
9. User-Generated Content: Social networks use e-commerce technologies to allow
members, the general public, to share content with the worldwide community.
Consumers with accounts can share personal and commercial information to promote a
product or service. E.g share icons on E-commerce websites (Facebook, Instagram, X
formerly Twitter, Email) (Joseph, 2017).

Principles in Designing an E-commerce Platform

Since customer service should be largely seen from the customer's perspective, every business
primary target is to meet customers' demands, exceed customers' expectations and achieve
corporate goals to foster customer interaction, support customer decision-making, continuum
patronage and gain customer loyalty. Therefore, the following are key in meeting and
exceeding the customers' expectations while designing the platform for which e-commerce
will exist and thrive:
1. Service Quality: responsiveness, assurance, empathy, reliability and follow-up
service.
2. Usability: It must be easy to use, fast, simple, user-friendly, answer frequently asked
questions, be accessible, consistent, match the real world, understandable and
navigable.
3. System Quality: The platform must be secure enough, accessible, error-recovery-
friendly, operational and computation-friendly, and attractive. It must also be
functional, payment, ordering mechanism, and content-friendly. Customers should be
 able to make and track orders, content, easy payment, error recovery, appearance, and
functionality.
4. Playfulness: In the process of engaging customers online, the customers must be able
to find the following characteristics that could stimulate his/her interest:
i. Enjoyment is needed to provide an appearance experience.
ii. Attractive Appearance: The website must be exciting and appealing to customers.
iii. Control: Users must be in control of whatever feature they want to explore.
iv. Curiosity: The E-commerce platform should be able to motivate users' cognitive
curiosity.
v. Intrinsic interest must exist to match customers' interests.

Business Models of E-commerce

There are eight types of business models based on transaction parties. In other word, these
business models can be called classifications or applications in the relationship of E-
commerce usage among its stakeholders. The business model is the method of doing business
by which an enterprise can sustain itself, i.e. generate revenue:
1. Business-to-Consumer (B2C)
In Business-to-Consumer (B2C), enterprises sell their goods to consumers online who are the
end users of their products or services. Usually, B2C E-commerce web-shops have open
access for any visitor, meaning that there is no need for a person to log in to make any
product-related inquiry. Typically, B2C provides a Web-based application by which customers
enter and manage their orders.

Adopted from (Veer Surendra Sai University of Technology, 2016).

2. Business-to-Government (B2G)
B2G refers to sales between companies and government agencies using the internet for public
procurement, licensing procedures, and other government-related operations (Sepasi et al.,
2014).
3. Government-to-Consumer (G-to-C):
It is also known as e-government. Government sites offer information, forms and facilities to
conduct individual transactions, including paying bills and submitting official forms online,
such as tax returns.
4. Government-to-Government (G-to-G):
It is also known as e-government. It is a transaction between the government of Edo State and
the government of Ekiti State within a confederation or country to country.
5. Business-to-Business (B2B)
Companies sell their online goods to other companies without being engaged in sales to
consumers. In most B2B E-commerce environments, entering the web-shop requires a log-in.
A B2B web shop usually contains customer-specific pricing, assortments, and discounts. E-
commerce refers to sales between companies or between suppliers and manufacturers or
between manufacturers and distributors, or between distributors and retailers.

Adopted from (Veer Surendra Sai University of Technology, 2016).

6. Consumer-to-Business (C2B)
In a Consumer-to-Business E-commerce environment, consumers usually post their products
or services online, on which companies can post their bids. A consumer reviews the bids and
selects the company that meets his price expectations. (Sepasi et al., 2014), A consumer posts
his project with a set budget online, and within hours, companies review the consumer's
requirements and bid on the project; the consumer reviews the bids and selects the company
that will complete the project.
Adopted from (Veer Surendra Sai University of Technology, 2016).
7. Business-to-Employee (B2E)
Business-to-employee is described as the exchange of intra-firm information (such as terms of
employment, benefits, policies, operation manuals, and company newsletters) with employees
over the internet or an intranet (Joseph, 2017).

8. Consumer-to-Consumer (C2C)
E-commerce is defined as commerce between private individuals or consumers; this type of e-
commerce is characterised by the growth of electronic marketplaces and online auctions,
particularly in vertical industries where firms/businesses can bid for what they want from
among multiple suppliers. In a Consumer-to-Consumer E-commerce environment, consumers
sell their goods to other consumers online. A well-known example is eBay.

Adopted from (Veer Surendra Sai University of Technology, 2016).

References
Joseph, P. . (2017). E-Commerce. In E-commerce: An Indian perspective (pp. 2–4, 7, 15-17
25).
Kisii University. (2022). Principles of E-Commerce. Commerce TVET.
https://www.coursehero.com/file/152488321/Principles-of-E/
Ohene-Djan, J. (2008). Introducing electronic commerce. In Electronic commerce (p. 10).
University of London.
Sepasi, S., Kazempour, M., & Mansourlakoraj, R. (2014). Proposal of principles for e-
commerce. International Journal of Current Life Sciences, 4(2).
Veer Surendra Sai University of Technology. (2016). Lecture Notes on E-commerce and
Cyber Laws.