Report on Principles of Innovation and Entrepreneurship Analysis

This report provides an understanding of the importance of innovation in the workplace and its impact on organizational productivity and profitability. It delves into the principles of innovation and entrepreneurship, focusing on the need for innovation in organizations and how it boosts profits and capital. The report also differentiates between the 'traditional' and 'effectuation' understandings of entrepreneurship, describing the five principles of effectuation: Bird-in-hand, Affordable Loss, Crazy-quit, Lemonade, and Pilot-in-the-plane. Furthermore, it discusses policies and techniques to enhance employee creativity, factors that inhibit creativity, features of a good crowdfunding campaign, and the positives and negatives of crowdfunding. The analysis provides insights into fostering a creative environment, overcoming barriers to innovation, and leveraging alternative funding sources for entrepreneurial ventures.

Principles of innovation
and entrepreneurship
Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................4

PART A.......................................................................................................................................4
What are the main differences between the ‘traditional’ and the ‘effectuation’ understanding of
entrepreneurship...........................................................................................................................4
Describe the five principles of effectuation and why each is important......................................5
PART B........................................................................................................................................6
Discuss the policies/ tools/techniques you might employ to help your employees be more
creative.........................................................................................................................................6
Discuss the factors that might inhibit or prevent employee creativity.........................................8
The features of a ‘good’ crowdfunding campaign.......................................................................9
The positives and the negatives of a crowdfunding campaign .................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................11
INTRODUCTION
This report helps in understanding about importance of innovation in workplace and how
it may affect organisation productivity and profitability. This report is based on principles of

innovation and entrepreneurship which focuses on understanding the need of innovation in
organisation and how it helps organisation in boosting its profits as well as its capital. This report
also helps in understanding about importance of innovation because innovation is described as
launching new product or service by an organisation based on the need and preference of
consumers and innovation also assist organisation in engaging its existing consumers and
attracting new consumers. Entrepreneurship is related with starting new business and ensuring
effective completion of tasks and activities which are planned by an entrepreneur. This report
also helps in understanding about impact of innovation on organisation activities and how it
assist organisation in satisfying its consumers and delivering quality products.
MAIN BODY
PART A
What are the main differences between the ‘traditional’ and the ‘effectuation’ understanding of
entrepreneurship
Entrepreneur is an individual which starts new business and focuses on utilizing available
resources and ensure that operations during business should be completed effectively and
efficiently. Entrepreneurs are considered as the mastermind and plays a vital role in economy of
any nation and ensures that new ideas should be launched into the market for the welfare of
economy and nation. Entrepreneur focuses on utilizing their resources effectively in order to
maximize productivity and profitability of their business which makes direct impact on growth
and development of new business. There are various issues which are faced by entrepreneurs but
such issues can be resolved by effective planning. Causation process takes place in particular
process and focuses on creating the meaning for the effect. Effectuation process takes place in set
of means out of which possible effects are selected which are created with that set of means.
In the causation process effects are given which are used to get the efforts and in terms of
decision making criteria causation process assist in deciding among the given means which can
be used to achieve the provided effect. Criteria for selecting is based upon expected return and
causation process is considered as effective at exploitation of knowledge and in terms of
relevance it considered as more of pervasive in nature. Causation process is considered effective
and useful in environment which are linear and static in nature. It does focuses on the aspects
which are uncertain and unpredictable in nature and logic behind this process is that future can

be controlled to the extent it is being analysed and predicted. Causation process outcome focuses
on market shares in existing market through effective and competitive strategies.
In the effectuation process only fewer tools and means are provided and on the basis of
that possible effects are chosen. In this process the selection criteria is based upon help to choose
among possible effects which are created by the help of provided means. Such criteria for
selection is based upon risk which is considered as affordable or acceptable. In this means are
given very specifically and choice of effects are driven by characteristic and the ability of
discovering and utilize contingencies. This process is effective in exploitation of contingencies
whereas causation is effective in exploiting knowledge. This process is considered as more
pervasive in terms of human action. This process have explicit assumption of dynamic and
ecological environments. It basically focuses on aspects of unpredictable future which can be
controlled and logic behind this process is that if future can be controlled then there is no need to
predict it. Outcome of this process is to developing markets with alliances and different effective
strategies.
Describe the five principles of effectuation and why each is important
The concept of effectuation was developed by Professor Saras and this concept is used to
understand the decision-making of entrepreneurs making decisions. Purpose behind this concept
is to understand how entrepreneurs make decisions which helps them in building an venture and
purpose is to understand the critical situation faced by entrepreneurs. People which are taken for
this study were given an scenario which is hypothetical in nature in which participant have to
make tough and effective decisions. Purpose of this concept is to understand their attitude when
faced tough situations and response of people when faced tough situations. There are different
principles included in concept of effectuation and these principles are mentioned below:
 Bird-in-hand principle – This principle focuses on the means not just only goal as this
principle focuses on looking and understanding what resources are available and can be
utilised in business environment. This principle focuses on understanding about own
personality and asking questions to self and focusing on utilizing available resources
effectively and efficiently. This principle also focuses on how effectively action can be
taken.
 Affordable loss principle – This principle focuses on making the commitment in advance
regarding what is there to loose and how much an entrepreneur can loose and stick with

the loss during procedure. This principle is can be applied in different decisions in order
to get over any kind of problem. In this entrepreneur have to understand and analyse that
what could possibly be lost by entrepreneur and if it is an affordable loss then what are
the potential gains available in the situation. This principle is very effective in dealing
with failures and analysing success on the basis of work done.
 The crazy-quit principle – Every venture is based upon cooperation and coordination
from others and it is important for companies to keep the commitment that are made
towards project. During this process new ideas can be welcomed and goal change process
can get new means. It is the process which helps in analysing the opportunities and
developing an effective competitive analysis. It is considered as one of the effective
principle of effectuation.
 The lemonade principle – New opportunities and different circumstances invites
contingencies and it is very unexpected to analyse results when new opportunities arise.
This principle helps in understanding that with positive mindset individuals can utilize
surprise situations in their favour and individual can find and cherish such situations
instead of ignoring them.
 The pilot-in-the-plane principle – It is believed that future cannot be predicted as it is
uncertain what is going to happen in future. The only thing which is possible to control
the future outcome and this is what an individual focuses on and also individual focuses
on activities which are in control within the individual. By using such approach
entrepreneurs can achieve the results desired in specific period of time.
PART B
Discuss the policies/ tools/techniques you might employ to help your employees be more
creative
Any organisation focuses on making its products and services creative and in order to
effectively implement creativity in organisation it is important to take risk and execute tasks
which are difficult. As an individual, I think it is important to develop an creative mindset in
organisation as it helps in promoting creativity and innovating products and services. There are
various techniques by which I can help employees to be more creative which are mentioned
below:

 Outsourcing is one of effective techniques for developing creativity in a workplace.
Outsourcing helps in getting new and innovative perspectives over projects and which
ultimately leads to innovation and creativity in workplace. Such outsiders have no
connection with products or services and also they doesn't have any relation with
industry.
 Another technique which can help my employees in promoting creativity in organisation
is possible by effective collaboration among employees. By the help of collaboration
employees can have different perspectives on project which can lead to innovative
thoughts and ideas. Personal bonding among workers promote and enhance creativity in
organisation.
 When thinking of creativity as an individual it is important for me to promote personal
participation in plays which include searching, collecting, comparing, choosing etc. Such
strategy can help my employees to become more motivated and dedicated towards work.
 Another technique by which I can use to make my employees more creative is to
diversify teams as diverse team have various skills which can be utilized to inspire
employees of organisation. By this technique every employee can learn something new
from other employees. Developing an diverse team leads towards more creative
environment and also promotes effective decision-making and problem solving methods.
 Asking for changes and improvements in organisation environment or operations is also
considered as effective technique for promoting creativity. Employees which works 40
hours in a week in organisation knows what should be changed and this could lead to
implementing effective changes in organisation. Asking employees for improvements is
considered as an effective way of promoting creativity in workplace.
 Training of employees can also help me in promoting creativity as trained and skilled
employees of organisation can understand the market trends and according to that
employees can focus on making changes in organisation products and services which can
fulfil need and preference of consumers.
 Promoting innovation among my employees can be possible by encouraging culture of
organisation and creating positive environment in organisation. Organizing weekly
meetings and keeping an open door policy is effective examples of promoting positive
environment in organisation. Training employees, encouraging employees to understand

market trends and proposing creative techniques to develop an positive environment
which can lead to innovation in organisation.
 Promoting creative ideas in organisation is another way by which I can motivate my
employees to be more creative. When employees of organisation see that top
management are acting upon their ideas it motivates them to work hard and it also
encourage employees to be more innovative and propose creative thoughts and ideas.
Discuss the factors that might inhibit or prevent employee creativity
There are various factors which might affect employee creativity as innovation is one of
the key factors in success of any organisation. It is important for organisation to motivate their
employees to be creative and to think out of box to innovate products and services of
organisation which can help organisation in boosting its profits and expand its market.
Factors that might prevent employee creativity are mentioned below:
 Fear is considered as one of the factors that prevent employee creativity in an
organisation and it is also barrier for innovation in an organisation. There are various
fears which can be faced by employees in an organisation such as fear of failure,
Ineffective decision-making, fear of making mistakes, Fear of not being heard by top
management, Fear of adapting change in organisation. This barrier keeps employees for
gaining new insights about any market trend and it also make impact on employee
morale. Employees fear of being ignored and not heard by top management is one of the
common factor which prevent employee creativity in an organisation.
 Poor leadership is also considered as factor which prevent employee creativity because
sometimes in organisation leaders ignore employees thoughts and ideas. If organisation
top management ignores employee ideas or not encourage them to be creative then it is
certain their would be no creativity in products of that organisation. It is important for
every organisation to motivate their employees to be creative. Ineffective leadership also
leads to poor organisation environment which leads to anger, insecurity etc. among
employees.
 Ineffective policies and politics is also considered as part of lack of creativity among
employees. Poor mindset and old age policies prevent employees to give suggestions
regarding innovation in products and services of organisation. Such old age policies
restricts employees to collaborate and communicate their ideas with top management

which can lead to an creative and innovative product. Due to such policies and culture
employees would give up on exploring new insights and providing creative thoughts and
ideas to them.
 Unnecessary pressure on employees for producing effective results also leads to
prevention of creativity. Creativity in organisation cannot be produced as it can only be
possible when employees of organisation are well trained and skilled. It is only possible
when culture of organisation promotes collaboration among employees and it can lead to
creativity in organisation.
The features of a ‘good’ crowdfunding campaign
There are various features which can lead to an effective and efficient crowdfunding
campaign and for this planning before launch is necessary. Features of good crowdfunding
campaign are mentioned below:
 It is important to front-load the campaign because success of these campaign depends on
first week of campaign as they get more funds in initial week. Gaining funding in initial
week of launch leads to make the campaign a successful one because when people will
join the campaign they would feel that they are joining an successful and effective
campaign.
 In order to have good crowdfunding campaign it is necessary to have great story and all
the facts should be clear to backers. It is important to have great story which can inspire
backers to fund the campaign.
 Another feature of having effective crowdfunding campaign is to effectively
communicate with backers as it is been studied that video pitch are far more effective and
it also help in raising more funds. Any type of video pitch requires good editing and it
should be well paced and inspiring which can motivate people to provide funds.
 Any kind of video pitch should look professional as it is important to have cleanly
designed and professional with proper information which can help backers in
understanding about campaign and it will also help in raising the funds without any
problem.
 Campaign goals should be specific and it is important to communicate people the goal of
the campaign which will help in inspiring and motivating people to donate. Goal of the

campaign should be specific, realistic and it should have clear message about the
campaign.
 Effective advertising and marketing is important for any type of crowdfunding campaign.
Use every tool and method to start the campaign and reach out to more and more people
by the use of digital channels as well as different marketing methods.
The positives and the negatives of a crowdfunding campaign
Every crowdfunding campaign have its own positives and negative and in this part of
report crowdfunding campaign positive and negatives are described. Every campaign is based on
specific goals and in order to achieve such goals it is important to identify the risk associated
with it. It is important to understand the positive and negative in order to make it successful and
these points are mentioned below:Positives
 There is not much financial risk in such campaigns and crowdfunding helps in
understanding the idea behind campaign and measuring the financial risk associated with
idea.
 If campaign idea is effective then it is possible that it becomes successful and effective
which can result in achieving the desired goals and objectives. This could help in
exposing the idea to higher number of people which could help in getting massive
amount of funds from people.
 An effective crowdfunding campaign also helps in validating the business idea and
reaching the fundraising goals can be beneficial for the organisation. Crowdfunding also enables organisation to engage with community that support such
business ideas.Negatives
 Effective campaigns of crowdfunding requires lot of effort and time which can lead to
utilization of resources and it is not necessary that it provide positive results.
 Like discussed in above point it is not necessary that every-time campaign achieve its
goals because sometimes it can lead to failure. If campaign doesn't succeed organisation
might have to face major losses.

 It could be possible that competitors might stole the idea of campaign and someone could
copy the idea which is being proposed by an organisation. Organisation could face
various challenges if someone build similar to the idea.
 It is not necessary that campaign would be successful as it it doesn't work for all business
and it might be considered as effective path but it doesn't have any kind of guarantee of
providing success.
CONCLUSION
This report concludes about the importance of innovation in any organisation and how
employees can be motivated and encouraged to take part in the process. This report concludes
about employees can be motivated to promote creativity in workplace and different tools and
techniques which can be utilised to engage employees with creativity.
REFERENCES
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