Example Answers to Tasks on Entrepreneurs and Leadership

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For Frank H. Knight (1921) and Peter Drucker (1970) entrepreneurship is about taking risk. The word Entrepreneurship is originated from French word entrepreneur, refers to "undertakers" its like a leader of an army. In business , it's really broad , who organized and take the risk of the Organization to make it successful .

Australian Economist Joseph Schumpeter's define Entrepreneurship placed an emphasis on innovation of new organization , new product , product market and product method . Entrepreneurship is the act of being an entrepreneur.

Figure 1.1: act of

Source: self-created


∆ Is a person who develops and owns his/ Her own Organization

∆ Desire for Responsibilities

∆Preference moderate risk and desire for immediate feedback .

∆ Skilled at Organising and Converts a situation into opportunity

∆ Demined and also passionate .

∆ Manage the money wisely

A number of definitions have been given of an entrepreneur-

According to Joseph. A .Scum peter (2008) defines an entrepreneur as a person who innovates, raises money, assembles inputs, chooses managers and sets the organization going with his ability to identify opportunities which others are not able to identify and is able to make use of them.

According to Peter Drucker defines an entrepreneur as one who always searches for a change responds to it and exploits it as an opportunity. An entrepreneur innovates. Innovation is a specific instrument of success available to entrepreneur.

According to J.B.Says: "Entrepreneur is influenced by the society [he recognizes needs and fulfils them through organizing and managing resources] and he also influences society by creating new enterprises.''

According to Richard Cantillion: "Entrepreneur is the agent who buys means of production at a certain price in order to combine them into a product that is going to sell at prices that are uncertain at the moment at which he commits himself to the costs"

Source :http://www.marketingpush.info/various-meaning-of-entrepreneur-and

According to my research I have chosen Mr Bill gates as my Entrepreneur , as because he have all the qualities what I am looking from an entrepreneur :-

William Henry Bill Gates III

An American Entrepreneur

"Ultimately, the PC will be a window to everything people are interested in-and everything we need to know."



October28,1955,(1955-10-28) , Seattle, Washington, USA


1835 73rd Ave NE, Medina, WA 98039




Harvard University (dropped out in 1975)


Chairman of Microsoft (non-executive)

Co-Chairman of Bill & Melinda Gates Foundation

Director of Berkshire Hathaway

CEO of Cascade Investment .

Net worth

â-²US$53 billion (2010)


Melinda Gates (1994-present)




William,H.Gates,Sr.Mary Maxwell Gates

Personal Life :-

The Gates' Large mansion in Lake Washington. its side of a hill in Medina . Bill gates have three children, He married to Melinda French on January 1, 1994.:first daughters Jennifer Katharine Gates was born 1996 and Phoebe Adele Gates was born 2002, and his 3rd children Rory John Gates was born 1999 . According to King County public records, as of 2002," the total assessed value of the property (land and house) is $113 million, and the annual property tax is just over $1 million".

Source : http://gadgetopia.com/post/4067


Forbes-400 list : Gates was number one on the "Forbes-400" list from 1993 through to 2007 .

World's Richest People List : He was number one on Forbes list of "The World's Richest People" from 1995 to 2007 and 2009.

Cent-billionaire Status : In 1999, Gates's wealth briefly surpassed $101 billion, causing the media to call him a "cent billionaire"

Power list of CEO : 1999 Bill Gates was listed Times power list named CEO in the Sunday of the year by Chief Executive Officers magazine in 1994.

Source : http://www.billgatesmicrosoft.com/networth.htm

What Makes Bill GATES AN Entrepreneur?"

But research indicates that most successful entrepreneurs come in various ages level, income levels from varies profession, gender, and race and from different ethics. share their certain personal attributes, which including: creativity, dedication, determination on work , flexibility, leadership style , passion, self-confidence, and "smarts and that's the key which makes them successful and differentiate from other .

Creativity :- It is continuous thinking outside of prescribed that drives the development of new products or services or ways to do business in a different way , to come up something new that make them special . a vey new way to push for innovation and improvement with completely different .

Dedication :- Dedication always makes that things happen for real Entrepreneur . On right time ,right Planning and ideas it must be joined with hard work make them to succeed , Dedication encourage to work hard it . money is not the motivation for entrepreneur, its just the reward. Success bring motivation , motivation is extremely strong desire to achieve . A persistence and the ability to bounce back after rough times to face the situation .

Flexibility :- Flexibility is the ability to move quickly in response to changing market demands . its like a Taking a true to a dream while also being mindful of the market realities. A successful entrepreneur must have to be ready to make any change according to the customer demands . Example : Apple first they started IPod but when they have realized there is a very market demand for phone , then they jointed both together with a new invention for market demand and a creation of I phone which made them successful in that industry .

Leadership:- Bill Gates found most favorable place where positional power is high as he has most authorities in the firm, task structure is also defined as he gives the direction to subordinate/follower to fulfill his vision, and last leader-member relation is also good.

That's mean Bill Gates is more likely Task-oriented leader who want performance from his subordinate/follower and work has to be done to achieve the goal/objective of the company.

Level 5 hierarchy

Bill Gates

Contributing Team Member

Highly Capable Individual

Level 4 Leaders

Bill Gates has his own visions of what the business needs to do to succeed. He decides on direction and then gets people to implement his vision. This is what level 4 leader refer to as "first what, then who." Level 4 leaders are very much in the conventional mode. They may be effective when it is not too difficult to decide what to do. And Bill Gates is too confident what he wants to do in near future and pursue his vision through his expertise.

Level 5 Leaders

We not put Bill Gates as level five leader because level five leader require both professional will + humility in which definitely he has professional will but there is some doubt about humility, although he is philanthropist who endowed $28 billion dollar in his own Bill & Melinda Gates Foundation and even promise to donate his 95% wealth as he will have aged but even after a lot of critics is there that he is doing all of it just because of status symbol, he is too centralize and blamed for curbing innovation.

Leadership style

1. Autocratic style

Control is basic to Gate's nature and his management practice. He has an obsession with detail and with checking up. Exp. Used to sign expenses for his right hand man - STEVE BALLMER.

He is trying to monopolize the World Wide Web software market and has had legal problems with the department of justice. Microsoft restricted the ability of its internet partners to deal with its rivals. Also he dislikes complaints.

2. Delegate style

Brightest talent: Gates paid special attention to recruit and retain the best talent in the software industry. He believed that the recruitment of talented software engineers was one of the most critical elements in the software industry. Gates looked for a bundle of attributes in recruits. These included the capacity to grasp new knowledge quickly, the ability to ask probing questions, and deep familiarity with programming structures. Though a great number of potential recruits applied for jobs at Microsoft, Gates assumed that the best talent would never apply directly. Consequently, Microsoft's HR managers had to hunt for the best talent and offer them a job. Gives autonomy to his manager, he delegates authority to managers to run their independent departments.

Passion :- Is the ability to convince others to believe in their vision. It can't substitute for planning, but it help a entrepreneur to stay focused and to get others to look at their plans.

Self-confidence :- to believe him self , Self-confidence gives the entrepreneur the ability to listen without being easily swayed or keep away them from dilemma . Its reduces uncertainty and the level of risk comes from thorough planning .

Smarts : - Its means Mental alertness , smart consists of common sense which is together with knowledge ,education, and life experiences all contribute to smarts in a related business . In society so many people are smart but most of them are not successful . For a smart entrepreneur , all this qualities help them to think ahead and to get better understand of the business which make them special then from others .


A private investment and holding company in United States ''Cascade Investments LLC'', is controlled headquartered in the city of Kirkland, WA.

,A think-tank company name '' bgC3 '

, A rights services and digital image licensing company name'' Corbis '' was invested by Mr. gates .

A nuclear reactor design company name Terra Power .

Source : http://en.wikipedia.org/?title=Bill_Gates

Gates' Management Strategy :-

Executive role : Working as an Executive Mr. Gate was successful Microsoft's founding in 1975 until 2006 Bill Gates had primary responsibility for the company's product strategy.He had a very good contact with his Microsoft's senior managers and program managers. As an Executive his main aim was to establishes business strategies or proposals that placed the company's long-teTaka interests at risk and to get the right solute to competitor with the target market .

Software developer role : as late as 1989 to achieved Microsoft a dominant position in the Software industry Bill Gates wrote code called '' TRS-80 Model ''that shipped in the company's products aggressively broadened the company's range of products . after that he didn't work as a software developer role .

Comparison with Bill Gates :-

Name of the Entrepreneur

William Henry Gates III

Leadership Style

Management strategy

Personal Characteristics


What makes Him successful

Bill Gates as an Inventor - The Entrepreneurial Journey

Gates took BASIC interest in GE system programming. An implementation in GE system programming that allowed users to play games against computer which was known as tic-tac-toe. Gates went to Computer Center Corporation 'CCC' and studied various programs source code that ran on the system, FORTRAN, LISP that's also included .

At the age of 17 Bill Gates started working with Allen and they made a venture which was called 'Traf-O-Data' that was based on the 'Intel 8008 processor' and aim was to to make traffic counters . The based on the 'Intel 8080 CPU' and new release is called 'MITS Altair 8800' facilitated them to go for new possibilities to open their own computer software company. Bill Gates informed the creators of the new microcomputer, Micro Instrumentation and Telemetry Systems (MITS) that he and others working for the platform on BASIC interpreter.November 1975 Bill Gates started working with Allen at MITS in Albuquerque for that reason he have to took a leave of absence from Harvard University . They named their partnership with Micro Instrumentation and Telemetry Systems (MITS) as "Micro-Soft". Micro-soft established their first office located in Albuquerque.

"Microsoft" was registered with the Office of the Secretary of the State of New Mexico,

November 26, 1976. the trade name Microsoft's BASIC was popular with computer hobbyists, they widely copied and distributed quality software without payment .

In late 1976 MICROSOFT became independent ,In Jan-1, 1979 The company moved from their first office Albuquerque to Bellevue, Washington . IBM approached Microsoft to write the BASIC interpreter and operating system for IBM's upcoming personal computer ,In 1980. Gates referred an acceptable operating system 86-DOS (QDOS), an operating system similar to CP/M made by 'Tim Paterson' of 'Seattle Computer Products' (SCP) for hardware similar to the PC. MICROSOFT delivered it to IBM as PC-DOS in exchange for a one-time fee of $50,000 without transferring the copyright on the operating system. The sales of MS-DOS (upgraded PC-DOS) made Microsoft a major player in the Operating System industry. Bill Gates re-incorporated the company Micro -soft in Washington June 25, 1981 and made him as a President of the company.

Task: 02

When investors or entrepreneurs put money into the business, they should consider themselves as the future owner(s) of the company. People invest for different reasons; I will assume that the main reason here is to maximize profit. Therefore a fair market valuation of the business is required and due diligence is required prior to the investments. Here I would assume the investor is putting in money for a business that has passed seed stage. There are on-going sales but the company is seeking for more capital injection in order to grow.

Finance : -

Firstly, an investor would examine the financial statements of the company which are the balance sheet, the cash flow statement and the income statement. These statements tell the health of the company and the salvage value should the company liquidate. The investor can also get a sense of how the company is doing in the past to gauge the future financial performance and the prospective earnings if without the investors' involvement. Can the business survive if without further capital injection. Financial ratios like Quick Ratios, Sales Turnover, Profit Ratios, Inventory Turnover ratios and many more are used here and compare against those of competitors'. In addition, if the reports include periods which the company has "survived" the financial crisis or the bottoming of the world economy, it shows a better indicator that the company can weather such storms.

Referring to Kuratko and Hodgetts, due diligence include a wide array of back ground checks. On the broader scale, the industry demand and its growth rate and its competitors are some fields that the investor has to conduct due diligence on. The target market segments are next to be considered, it is about where the business can carve a niche for itself.

Organization Structure :-

Moving on to the company level, the investor can examine all functional areas that include marketing, human resource, finance, operations, the supply chain and IT. If the investor can uncover any gems and polish them, the gems can propel the business performance to increase and lead to more revenue or better profit margins. It is hoped that there are some obvious problems that can be immediately identified and corrected, which can improve performance instantly. However, what if the problem is obscure and is under the current to the normal investor. A consultant would use a few models and frameworks when he does his due diligence research for example, the overrated Porter's 5 Forces, SWOT analysis, the Value Chain analysis and the Strategic Diamond analysis. These are some framework to organize his thoughts and to assess the risk. They are useful in detecting and formulating strategies. However after all these analyses are completed, in what percentage should an investor rely on these reports to make his final decision to invest or not? And if he does invest in the business, how should his investments be structured with: cash, bonds, warrants, shares.

In the recent case of Oracle bought over Suns Micro system, Oracle hopes to remove duplication of resources like employee and business processes, to eliminate fail competing products and also to integrate Suns' better technology into Oracle. The results are not out yet but the investors are optimistic about the acquisition which is reflected in Oracle's share prices. A probable successful bought over.

Still in consultancy mode, the 7S model is an interesting framework that I like to discuss here. The 7S include 4 Hard S: Strategy, Structure, System and Staff and 3 Soft S: Shared values, Style and Skills. The McKinsey7S model is used for identify any internal misalignment of an organization. However, all S are inter-related, with some S positively co-related while others are negatively co-related depending on the organizations. The most important criteria are the soft factors because they can affect the development of the business in the long term.

The soft Ss are best ensemble in the management team who are the founders in a startup business. These founders will need to have shared values to create and install harmony in the team and the business even if they have different opinions. Definitely, the skill set possess by each founder and the management team should be different but comprehensive to complement one another for the well-being of the business. The Style sets the working culture of the organization, for example, 3M's culture is to always innovate and learn from mistakes while Starbucks's culture is servicing the customer right. Starbucks is in the people business and not in the coffee business. The soft S will set the tone for the company. As such, the management team is a crucial determinant for the investor to invest his money into the company or not. The management team needs to have integrity, honesty, to be motivated to contribute their heart and sweat to the business. This is because in any business that is starting up, they typically go through a few phrases like R&D, Prototype, Pilot Plant, and Mass Production at a later stage. During the first two phases, investors do not expect the business to generate positive cash flow meaning the business will be burning cash, and lots of it. What is important is the right usage of the funds given to the company and whether it is allocated to proper use in the hope to generate income in the future. During the 1997 to 2000 Internet dot com days in the USA, many startups were given hoards of cash and the money were misspent on services and assets that were not supportive to the business. When the money runs out, the company will have to lay off employee, sell its assets or liquidate. The funds were mis-managed by the founders. Intuitively, investor should also ask himself why the entrepreneur is "selling" the company or willing to "give up" equity in return for cash. The entrepreneur may require funding to expand the business thereby requiring more operating cash. Other reasons may include the business is failing and the entrepreneur is trying to unload it before it crashes. There can be many reasons for example, the entrepreneur is in ill-health and needs to rest, the partners cannot see eye to eye and want to leave the business, or the business really needs additional funds to expand and expertise to achieve that objective.

Then again, the serious entrepreneur would also consider the investor's motivation in buying over a business. The investors, on the other hand, maybe buying a business to "kill" it, or integrating the business into his existing businesses vertically or horizontally. Or perhaps, the investors are not willing to take on the startup cost nor the risks associated with it and instead prefer the business to have passed seed stage or have established a working model before acquiring it or have a vested interest in the business.

Future Potentiality of the business :-

Referring to Dr. Scott Shane's Finding Fertile Ground, he stated that most companies that make it to the Fortune 500 are technology companies. These technology companies were able to innovate and surpass themselves, evolving and constantly staying ahead of the competition.

Here the 3S model is used to conduct due diligence to investigate the business prospect. The 3S are Size of Market, Sustainability and Scalability. I have mentioned the size of market studies earlier and will further elaborate on sustainability.

Sustainability include Intellectual Properties right and creating barriers of entry for competitors. A good IP can deter competitors from moving around the technology landscape and thereby coming into the battleground as easily. Sustainability can also include solid customer relationships and good supply chain network that can help reduce total cost to benefit the customers. Other methods include having an open source sharing between the public sector and the organization. Some businesses have patents and IP (Intellectual Property) that can be worth a lot but the technology is not commercially developed yet. For example, IBM filed about 3000 IT patents annually; however, they allow education and medical industry to free use their patents for research and development. IBM hopes that that community can create something useful which they can integrate into their On Demand strategies and ultimately become an open standard. Both sides benefit from such collaboration. IBM developed a trusted brand as well. In essence, when we conduct our due diligence, we will need to examine the sustainability nature of the business.

Business model of the company :-

This will also include the business model. A good business has a few business models. This includes the short run cash generating model and a long run sustaining model. As such, even if there is competition or changes in the business overall environment, the business can still continues to operate and survive.

Take for example; we know that it is difficult to get a license to sell medical drugs in China. The founder manages to obtain a license to operate and he decided to start a medical retail shop. The founder bought the land and setup and renovated the medical supply store. After which, he "franchised" it to an investor who bought the right to operate the store to sell medical supplies and medicine. Using the franchise fee he collected, he started the 2nd store, so on and so forth.

There are 3 business models here. Firstly, the founder owns the title deed of the property. As such, he can see his property rise in value over time as he increase the number of shops he can "sell". Secondly, he controls the supply chain of the medical supplies and medicine. The founder can price the products and make a profit from supplying them. Thirdly, he collects franchise fee to start the next shop. A business like this is sustainable in itself.

Scalability is another aspect that an investor should consider while conducting due diligence. What this means is the speed that the business can step up production or manufacturing to satisfy sudden demand. When critical mass is reach, there is sort of a "surprise" surge in demand and business that can scale up faster than their competitors have a higher chance of capturing market share. From the other point of view, in a down turn economy, business that can scale down faster can also reduce cost and their chances of survival is higher. Scalable businesses are companies who do not require large outlay for capital expenditure. For business with high CAPEX, the time to break even takes longer unless the products can be sold at higher profit margin than those of competitors' or the actual demand is high.

Besides that, he should consider the management team of the business that he is going to invest in either as a limited partner or general partner. If the investors are not going to manage the business but takes on an advisory or "sleeping" position, then they will have to examine the management team's qualification and experiences, whether changes are required or stay with the same team. Even without money, if the founders or the management team is competent and "smart", they can always create new opportunities and value to any business. A good management team is most important to the success of any venture.