Module 5: Asking for resources

5.1 Themes & learning outcomes

Themes

  • Resource acquisition

  • Interdependence of communication and conflict

Intended learning outcomes

After completing this module you will be able to:

  • Recognise different communication styles and name your own preferred communication style

  • Adapt your way of communicating in order to effectively communicate with your team and interview partners

  • Understand how to secure and manage financial resources in new enterprises

  • Know how to estimate the amount of start-up funds and working capital necessary to start your business

Time required: 5-7 hours

5.2 Introduction

What do you need to pursue your idea? In this module, you will have to communicate both within your team and with potential stakeholders asking for resources. However, this can be quite tricky and even lead to conflicts, especially across cultures. The video below will introduce you to the following:

  • What a resource is and how it can be more than finance

  • Intercultural communication and the impact of communication styles on conversation processes, and potential sources for conflict

Communication styles

When you examine how people communicate you can usually recognise a tendency: they either prefer to express themselves rather directly or rather indirectly. These two ways of communication are generally linked to the amount of information that is carried through words. When you communicate more directly, you tend to put all the information in your words. However, when you communicate more indirectly, you remain relatively vague in your words and rely on the others to recognise and interpret your cues. What impression does that make on a person who is used to the other style of communication? You might already assume that this can lead to misunderstandings and conflict. To learn more about the impact of direct and indirect communication, read the pages below:

Direct and Indirect Communication (PDF 176 KB)

(Source: ‘The impact of direct and indirect communication’. By Cynthia Joyce, The University of Iowa. Published in the November, 2012, edition of the Independent Voice, the newsletter of the International Ombudsman Association.)

In order to communicate effectively it is important to be aware of the influence of communication style on the course of conversation and to be aware of one´s own preferred communication style. This is true for your virtual team, but especially when you are asking for resources from people – then you really need to understand the other person’s way of communicating in order for your message to get through.

Do the following activities which help you work on your communication skills:

Recognising communication styles

For this activity, picture yourself as an observer in an international meeting, where a discussion on a current project takes place. Below you will find some statements from the participants. Think about whether the statements are rather direct or indirect and then write the correct answer next to each one of them:

  • I have some small suggestions : _________

  • Could we move on to the next topic? : _________

  • What do you think Sandy? : _________

  • I don’t agree : _________

  • Your figures are wrong! : _________

  • We will try our best : _________

  • This needs to be done by tomorrow : _________

  • It might be helpful to the project if we might consider contacting the other department : _________

  • We have correctly answered nine out of ten questions this week : _________

Switching communication styles

Now that you can recognise communication styles, we ask you to translate from one style to the other: How would you phrase the rather indirect statements from step 1 more directly and vice versa? Read the statements again and switch their styles. Compare your answers with the ones suggested below.

Your figures are wrong!

Saying it more indirectly:

  • I have some other figures here.

  • It might be that those figures are a little old.

  • Are those the figures from last week?

What do you think, Sandy?

Saying it more indirectly:

  • Are there any other options?

  • Would anyone else like to say something?

  • Have we heard all of our options?

It might work.

Saying it more directly:

  • We have a better idea.

  • I do not think this will work.

  • There are some problems to solve.

Could we move on to the next topic?

Saying it more directly:

  • We would first get some more information.

  • I do not want to talk about this anymore.

  • We are not ready to talk about this.

I don’t agree.

Saying it more indirectly:

  • May I propose a suggestion?

  • I have another idea.

  • Could we discuss another idea?

Reflecting on your communication style

Examine your own preferred communication style and put into practice your newly acquired communication skills: Picture yourself in a virtual meeting with your team members where you are discussing the upcoming tasks for your Global Challenge. What´s your choice on preferred communication style and how does that show?

Share your thoughts with your team and find out about your team members' communication styles. Knowing that, what's your take-away for the upcoming team assignment?

5.3 Warm-up

Answer the questions below and make sure to save your notes, you will need them at a later step.

Step 1: Context

To set the context, write down answers to these two questions for individual reflection:

  • What are your general thoughts about resources?

  • What different ways are there to acquire resources for your venture?

Step 2: Where do you fit?

Now picture yourself in one of your suggested resource acquisition contexts, think about these questions and take notes of your answers:

  • What are your expectations on communication – written, verbal, formal, informal - anything else?

“Trust is the glue of life. It´s the most essential ingredient in effective communication. It´s the foundational principle that holds all relationships.” Stephen R. Covey

  • Thinking about communication styles, what do you provide to your partner in order to instil trust?

5.4 Advice & “know-how”

Below you will learn more about the following concepts that will help you further develop your project idea:

  • Acquisition of resources

  • Bootstrapping

  • Start-up costs and budgeting

Acquisition of resources

Obtaining and managing the resources in new and small firms is highly complex, because of the scale of the resources and different organisational challenges, which may make them less attractive for more traditional resource providers such as banks. Against this background small entrepreneurial firms may need to be more creative in obtaining the needed resources.

Read this text about the Acquisition of Resources (PDF 346 KB).

After reading the above text, answer the following three multiple choice questions (multiple answers are correct in some questions):

1. Resources are commonly understood as:

a. Wide range of tangible and intangible assets that firms may require to perform their activities

b. Wide range of tangible assets that firms may require to perform their activities

c. Wide range of intangible assets that firms may require to perform their activities

2. Which of the following qualify as resource categories:

a. Financial resources

b. Social resources

c. Physical resources

d. Institutional resources

e. All of the above

3. Small firms face challenges due to:

a. Internal liability of newness

b. External liability of newness

c. Internal and external liabilities of smallness

d. The fact that large investors are fond of them

e. All of the above

Bootstrapping

Entrepreneurs experience both external and internal barriers to starting their own ventures, in particular when it comes to obtaining capital from external sources such as banks, business angels, venture capitalists, etc. Bootstrapping finance and bricolage as strategies could potentially be a way of addressing this challenge. Bootstrapping has been defined as “use of methods to meet the need for resources without relying on external finance, for example borrowing money or raising equity” while bricolage refers to managing resources with what is already available.

Watch this video on bootstrapping theory to learn more:

After watching the video, answer the following three multiple choice questions (multiple answers are correct in some questions):

1. Which of the following would qualify as bootstrapping finance methods?

a. Use of personal savings to secure your venture

b. Use of personal credit cards

c. Getting a loan from a bank

d. Using free or low cost labour from your relatives or friends

e. Receiving pre-payments from customers

f. Selling shares of your company to big investors such as venture capitalists or business angels

g. Using facilities that are acquired with relatively low or no cost

h. Having coffee instead of a tea in the morning

i. All of the above

2. Starr and MacMillan’s work was presented in the video. They describe an entrepreneur creatively acquiring resources by:

a. Using a friend´s resources as a help to enter the Manhattan market

b. Successfully obtaining large funds from a bank right at the beginning of a venture

c. Obtaining a large investment from a business angel after successfully pitching an idea

d. None of the above

3. The use of bootstrapping will depend on:

a. Each country's setting and context

b. Alternative financial possibilities

c. Differences in the industrial structure

d. The mood you are in when you wake up in the morning

e. All of the above

Case study

Now please watch the video below about a start-up called Pitupi – a children’s clothing company. You will find plenty of examples of bootstrapping methods in the case! Take notes while watching.

What are some of the bootstrapping methods you have identified from the video? Write down your thoughts.

Start-up costs and budgeting

You have now learned a lot about different ways of acquiring resources to fund your venture. Before going out there to ask for funds it is of course crucial that you know how much funding you need and for what. You need to know how to estimate your costs, and how to create a simple budget. Read the following articles: 

After reading through the articles, note down what you think is important for you to consider in the budget for your project. Don't forget to save your ideas as you will need them in a later step.

5.5 Resources

  • Cassar, G. (2004). "The financing of business start-ups." Journal of Business Venturing 19, 261-83.

  • DeClercq, D., V. Fried, O. Lehtonen, and H. Sapienza. (2006), "An Entrepreneur’s Guide to Venture Capital." Academy of Management Perspectives 20(3), 90-112.

  • Ebben, J. and A. Johnson (2006), "Bootstrapping in small firms: An empirical analysis of change over time." Journal of Business Venturing 21, 851-65.

  • Gibson, C. and J. Manuel. (2003), "Building Trust: Effective Multi-Cultural Communication Process in Virtual Teams". In: C. Gibson and S. Cohen (eds.), Virtual Teams That Work: Creating Conditions For Virtual Team Effectiveness. San Francisco: Jossey-Bass.

  • Hammer, M. (2005). "The Intercultural Conflict Style Inventory: A conceptual framework and measure of intercultural conflict resolution approaches." International Journal of Intercultural Relations 29 (6): 675-695.

5.6 Challenge

By now you have learned a lot about different kinds of resource acquisition possibilities and about how to calculate the amount of funds that you may need. It is time to discuss with your team and to apply your knowledge to your project.

As a team, review your individual answers from the beginning on funding and communication. Use them to identify the next steps for you to take in the project as a team. To do this, discuss and answer the guiding questions below.

Goals, Resources, and Obstacles

Your goal - What exactly is it you are trying to achieve? When, where, and how will you do so? Who will be in charge of doing what?

Your resources - Looking at the knowledge you gained in the advice section and the competencies you bring to the NICE project, define the resources that are there in your team. What resources are you lacking, and how will you acquire them?

Obstacles - What could harm or hinder you from reaching your goal? Find words and try to be specific.

Don’t forget to take notes!

Paving the way - Have fun during the following team assignment and best of luck!

5.7 Team assignment

In this team assignment you are asked to organise and conduct a real-life interview where you ask for a particular resource that you need to make your project idea a reality.

To complete the task, gather your team and follow the four-step instructions provided below:

Step 1: Resources

Discuss the following questions in your team:

  • Which resources do you need?

  • Prioritise the resources from “most urgent need” to “least urgent need”.

  • If funding, how much funding do you need?

Write down your answers.

Step 2: Tasks

Discuss with your team members:

  • Who possesses the resources that you need most urgently?

  • How can each of you access an appropriate person/organisation to ask about the resources?

  • Who is going to interview whom? Think about the advice and know-how provided earlier and make an informed decision!

Note down your tasks.

Step 3: Interviews

The interview should be about presenting your project and asking for resources. Think about how you will do that. Consider your communication styles and how that may affect the interview.

Now go and do your interviews.

Step 4: Results

After the interviews, reflect upon the interviews and the results.

  • What are the results of your interviews?

Write down your results.

5.8 Reflection

At the end of this module, it is now time to reflect:

  • How did the experience of the interviews meet your expectations?

  • What surprised you the most?

  • If your team were to receive an award for completing this module's challenge, what would you be honoured for?

Write down your thoughts.