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Business Entrepreneur Essay


This assignment rotates around business entrepreneurship. It takes into account the theories and attributes related to business entrepreneurship. With the help of all this entrepreneurship would be explained in the following pages. Initial pages will focus on literature review, in which some attributes would be discussed and the basis would be motivation. This topic motivation would be dealt with in detail together with the theories related to it. This will be the theory part of the assignment.

After this, all the theory will be applied in real context. A successful and popular entrepreneur would be selected and s/he will be the basis. The entrepreneur selected is Ricardo Semler. He will be discussed in relation to the topic selected, i.e., motivation and will be assessed in detail.

Next, an analysis would be carried out taking into account the theory part and the practical part both. The literature review and the entrepreneur selected will be analyzed thoroughly. This is a very important part of the assignment as comparing and contrasting would be carried out.

Lastly, this whole thing would be concluded by summing everything up and tying up the loose knots. This will be in relation to the material above. In clear terms it would be a synthesis of the analysis.

Basically, the bottom line is to explain the term entrepreneurship with the help of theories as well as practical application as this term cannot be properly explained directly just with the help of concepts.

Literature Review:

In order to function, businesses make use of factors of production. These are known as the tools required by businesses to operate. These tools are required by each and every business, regardless of the industry it operates in or the nature of its work. These factors of production include land, labor, capital and enterprise. Coming directly to enterprise, in simple words it is the risk taking ability of entrepreneurs. They are the people who take initiative to start an organization and of course risk travels with it. However, entrepreneurship is the act of being an entrepreneur. Some people say that entrepreneurs are same as managers but this is a farce because the risk taking ability of entrepreneurs distinguishes them from the managers. (Rae, 2007)

As the world is advancing, the term entrepreneurship development is coming in lime light. People are getting aware of the fact that entrepreneurship is directly related to economic growth. It can certainly be defined as a driving force. There are of course some attributes or topics related to this important term. These include leadership, change, motivation, innovation, and etc. We will be focusing on motivation and will be using it as the basis. (Burns, 2001)

Motivation is an ambiguous term and everyone has different opinions regarding it. Basically it is a feeling and desire that drives people to work hard and go ahead. This motivation has really become important nowadays if we talk about businesses. Actually not just nowadays, it was important since very long and it would be absurd to say that people were not aware of it in the past. But it can be said that today it is given more weightage comparatively. It can be categorized into two types, namely intrinsic and extrinsic.

Intrinsic motivation is actually related to psychological factors. An example can be delegation or job empowerment. Through this people feel that they are important and trusted. This creates a desire in them to make optimum use of their skills and work hard, which is called motivation. While on the other hand, extrinsic motivation is related to tangible factors. Examples could be salary, promotion and recognition. This also motivates people in an extrinsic manner.

However, the importance of motivation should not be at all underestimated. In business context, it is more than important that workers in a particular organization are well motivated. For this reason, Human Resource Departments spend hours and hours on designing strategies related to motivating its employees. Labor, in any particular organization can be actually defined as the backbone and it is important that it is well looked after. Its needs should be kept in mind so that they can be motivated. If staff is well motivated, it will work more efficiently resulting in high productivity.

There will be less absenteeism and staff turnover. Less mistakes and high consumer satisfaction as staff is closer to action. Less industrial problems mean less loss of productive days and most importantly workers would feel an important part of the organization instead of feeling like a small cog in a big machine. This would require less supervision and would result in more creativity and dynamism. This all can easily take any particular organization very far in terms of success and prosperity.

Being aware of the importance and benefits of motivation, organizations work on how to motivate their workers. Human Resource departments are struggling to find new ways to motivate their human resource. Regarding this many motivational theorists have researched and presented their findings. Some popular theorists and their theories are given in the following paragraphs.

One such theorist is Maslow, whose theory is based on a hierarchy of needs.

He emphasizes on the fact that all these needs should be satisfied in order to reach self-actualization. According to his theory, physiological or basic needs such as food and clothing should be satisfied first, then safety needs such as job security, then social needs such as friendly environment and then finally esteem needs such as recognition. After all these needs have been satisfied, a person reaches self-actualization or becomes well motivated.

Maslow’s hierarchy is commonly used by leaders and managers as the basis but in spite of this, it has many criticisms attached to it. For example, it is very difficult to locate where a person actually falls in the hierarchy. Secondly, this hierarchy shows that there is an end to needs, i.e., when a person reaches self-actualization but it is not true and realistic according to many theorists, as human race ever stops desiring or never gets fully satisfied at any one point. (Drucker, 2004)

Another such theorist is Herzberg whose theory is based on some motivators and hygiene factors. He thoroughly conducted his research by one to one asking various employees and he presented the answers he got. He was with the fact that both monetary and non-monetary rewards motivate employees. His theory pointed out some ways such as delegation, job enrichment, quality circles, teamwork, recognition, worker participation, healthy working environment, and etcetera. He said that these methods work to a great extent in motivating employees. His theory is well known everywhere and it is used in many organizations.

Concerning the criticisms, all workers cannot be trusted and given responsibility. All do not work passionately and innovatively. In this case, if responsibility is given to workers than it will create big problems for the management. Secondly, there are workers that are only motivated by monetary rewards and the preference of needs of different workers is different. So, the organization cannot satisfy each and every need and it is not wise to give that much power to workers as it might have adverse effects. Despite these criticisms his ways are most proven ways and most practiced ways of motivating employees. (Petri, 2003)

One more theorist is McClelland. His theory and the way he conducted and presented his theory is very different. The basis of his theory was the need to achieve. He researched on the social class background of people and presented his findings. His theory includes the need for achievement, need for power and need for affiliation. The need for achievement is the need to excel and walk ahead of others. The need for power is related to influence and dominancy and the need for affiliation is based on the relationship with collogues and sense of recognition.

His theory further says that these needs differ from person to person. High achievers look for need for achievement as a preference while others are looking for good relationships, social environment and understanding. People who are looking for some authority and power over others have a preference for need for power. To sum up, it is personalized and it all depends. (Drucker, 2004)

One more very popular theorist is McGregor. His theory is based on two types of approach of managers, X approach and Y approach. Managers that practice X approach feel that their workers cannot be trusted and are unwilling to be creative. Hence, they require supervision. While managers that practice Y approach believe that their workers are well motivated and that they will work on their own as they want to and are enough smart to. Thus, they do not require supervision. McGregor’s theory is actually based on the approach of managers as this approach plays a significant role in motivating employees. Sometimes, everything is in proper place but it does not lead to desired results because the approach is not appropriate.

However, it is the task of firms to figure out what kind of needs its workers have so that they can be satisfied. It is important to mention that this task is not at all easy; it requires a lot of esthetic sense and good observation. (Shane, 2003)

These theorists have provided answers to some of the important and core questions of organizations, i.e., how to motivate employees? Firms take care of this and make use of these ways to motivate their workforce. Motivation is so important that it is included in the core tasks of management.

Management is responsible for ensuring that its workers are well motivated and that all needs are met and by needs I mean relevant needs. Motivating is not just a matter of minutes; there is a motivational process that firms introduce in their work place. This process includes the steps firms take to motivate their employees. First of all, the areas that need care and attention are located, then planning is done, then strategies are designed in relation to motivation and then finally it is executed. It takes time, as mentioned above. (Petri, 2003)

The theories given above are just the theories and it is important that these theories are well applied in real life. Every theory has criticisms and entrepreneurs cannot apply the exact theory of any particular theorist and get good results. These theories need to be altered from time to time, depending on the situation. (Reeve, 2008)

Review of the Entrepreneur:

The literature review part was the theory part but this part of the assignment is related to practical application of the theories discussed above. One particular entrepreneur will be the center of attention and his characteristics will be discussed with a focus on motivation. The entrepreneur selected is Ricardo Semler.

Ricardo Semler is the owner and the Chief Executive Officer of a Brazilian based company, Semco SA. This company is involved in industrial democracy and corporate re-engineering. His management style and his policies are well known and proven. His profile has been captured by a lot of renowned magazines including Times. The world economic forum also nominated him. The books written by him are the international bestsellers. Basically when he joined his father’s business, he totally opposed his father’s way of working.

After his father resigned and Ricardo became the CEO, he brought terms like democratic style, worker participation, diversification and matrix structure in the organization. His way of running the business was totally different not just from his father’s but also from most of the entrepreneurs. This all worked and the revenues soared. (Weightman, 2008)

Coming to his entrepreneurial style, Ricardo used a democratic style and sometimes laissez faire even. He let his workers do what ever they want in the context of the business. He let decide their own pays, working conditions, even their own hours. This all resulted in improved productivity, more employee loyalty and increases motivation. He believed that there should be a balance between personal and professional life and he emphasized on the same in front of his employees. He used a very employee-centric approach and it worked for him.

With his workings he found out that the more liberty and flexibility he gives to his workers, the more they became loyal, efficient and productive. He gave a chance to his workers to evaluate their bosses and he practiced job enrichment that gave his workers a chance to get all the flavors. He introduced the profit sharing system and ensured that his workers know what is happening in the organization. In this way, he was able to deal with the recession in Brazil. In spite of the recession, his company grew day by day and his style started coming into limelight.

He was very logical and rationale in his beliefs and workings. Hundreds of executives have visited his work place to conduct a study of his workings. This is actually shocking that these things work in the favor of firms. When asked for his advice, he advised that firms need to adopt a more realistic approach. He emphasized a lot on the balance between work and home life. His organization’s staff turnover is less than one percent, which is commendable in today’s world where people have so many needs as well as alternatives. (Baldoni, 2004)

Of course his workings and beliefs have criticisms attached to it. The critics say that if Ricardo’s approach worked for him and his firm then it is not necessary that it will work for each and everyone. It depends on many factors and every approach has its demerits as well: Giving that much freedom to employees is not a very good idea according to the critics, as they cannot be trusted to this extent. Letting workers select the IT equipments, wages, working hours and even bosses is not a good idea. It has a high probability to fail and if it does then things will be even worse for firms.

Ricardo Semler very well responds to these criticisms in his interviews by saying that there is dire need for entrepreneurs to change their management approach. The traditional factors did not work well in the past, according to him, and are still not working the way they should. So, this means that there is need for big change in core beliefs and workings. He gives examples of some firms and industries such as Microsoft and airline industry to prove his point. As a matter of fact his ideas actually worked for his organization and the world witnessed it, this is itself a prove that his ideas are worth applying.

According to my observation, Ricardo stressed a lot on motivation and thought of it as something not just important but essential in any particular organization. He did not leave even a single way to motivate his employees and satisfy their needs. When his workers turned up at the work place, they felt that they are valued and trusted. This matters a lot, a bond of trust and understanding works in every single firm regardless of the industry in which it operates or the nature of the firm. In a nutshell, he introduced a new dimension in the corporate world.


Having discussed the theories and the practical application of them in the tenure of Ricardo Semler, this part of the assignment will critically analyze the relation of it. The importance of motivation has already been discussed in the pages above. Firms are also aware of it, which is why they think carefully when it comes to this crucial area. Motivational theorists presented their theories on how to motivate employees or workforce. These theories do have practical implementation but the demerits should also be taken into account as no way of motivation has only benefits and no drawbacks. (Silverstein, 2007)

Talking of Ricardo Semler, he made use of many ways to motivate its workforce. If we relate it with the theories explained above, we can easily say that he did not only use the ways mentioned in theory, but went beyond all that. For example the theories ask firms to give some sort of liberty to the workforce one-way or the other but Ricardo gave extreme liberty. Liberty to select and evaluate bosses and liberty to decide wages and working hours is something that is very extreme and shocking as well.

Maslow and McClelland stress on social needs and that these should be addressed by firms but Ricardo worked on addressing all kinds of needs of its employees. The theories are directed towards improved motivation resulting in higher profits for firms but Ricardo’s ideology was different. He believed that workers should not be motivated to earn higher profits but to make them feel good about themselves and their lives.

He also believed that the best investment of profits is to give it to the workforce. This kind of seems unrealistic to many entrepreneurs and theorists. Sticking to Herzberg’s theory, he introduced matrix structure in his organization, as he firmly believed that every single individual wants to achieve excellence. (Thomas, 2009)

Because he changed the whole structure of the organization, it was very difficult for the employees to cope up with it and many did quit in the middle but the ones that worked according to Ricardo never regretted. When Brazil was going through bad times, many companies went bankrupt but Ricardo’s firm kept surviving, though it faced problems. A solution to survive in these times is to cut costs. When Ricardo discussed it with his employees, they agreed but with strings attached.

Finally, Ricardo thought it was wise to accept this deal instead of going bankrupt and closing down. He was right as this resulted in more efforts and hard work by workers and they were participating in strategic planning and decision making with their hearts and souls. It all resulted in amazing results that not only met the expectations but also went beyond that; workers outperformed themselves. This is the reason many theorists say that worker participation, if introduced properly, can surpass the expectations.

Hands-off management style was what he adopted. He removed all the barriers and made sure that employees get the kind of environment they desire. This is not what the theories suggest, they say that a healthy working environment should be there that can help workers increase productivity and efficiency while Ricardo did not use to think of all this, he let the workers decide how the environment should be and this did not have any adverse effects in his case. Moreover, he believed that corporate vision and goals change from time to time instead of remaining stagnant. (Weightman, 2008)

However, as mentioned above, some critics say that Ricardo’s way does not work for everyone. I also agree to it to an extent because you cannot trust your workers blindly and give them everything they desire. Nowadays, firms work a lot on addressing the needs of their workers but with the aim of improved productivity and efficiency. Democratic style should be adopted by managers but it is better if this style alters with the situation. It is not wise to let workers do what they want and make their own rules. There are some areas that should be dealt with by senior management.

When to come, who to keep and how much to pay are some questions that senior management can answer properly. Workers are workers after all. You can ask for their suggestions and then can give a green signal but you cannot right away ask them to do whatever they want. (Rae, 2007)

Secondly, it also depends on the nature of business it is. If we talk about police and army, matrix structure cannot be practiced there. They require an autocratic structure because their work demands it. On the other hand, scientists and researchers can work best when they are given a free hand. Here laissez faire can be practiced. The point is that the management style adopted depends on various factors. Good managers critically analyze the situation and then decide which style to adopt and it should be borne in mind that this style keeps changing with time, situation and the kind of employees, if we consider this case.

Every worker cannot be held free and given complete liberty as the nature of employees differs. Good workers will of course work best this way and will not misuse it but those who are forcefully working and are not responsible enough, cannot be trusted as they require someone to keep an eye on them. Due to this, different approaches are required by managers and entrepreneurs to deal with different employees. One cannot at all expect all to be similar. While this is also true that labor is closer to action and they are the people who transform mere strategies into actions. Thus, they should be well looked after if a firm wants to prosper. (Burns, 2001)


Concluding this assignment, I would again like to stress on the importance of motivation and that firms should make use of different ways to motivate their employees, as there is no alternate of this. Though it is true that the strategies used by Ricardo and his practices have demerits and risks but it should also not be forgotten that this all worked for him. How some of its strategies conflicted with the motivation theories is also analyzed above. (Rae, 2007)

When we say that all workers cannot be given freedom and cannot be trusted, Ricardo showed full faith in his employees and he was never led down. It was not mere luck, in fact the credit goes to smart Ricardo who made sure that its people have a complete idea of his values and beliefs and that they stick to it. He also made sure that his employees know what he wants and expects from them. This is something that he did in his own way that cannot be explained and this brought results for him.

He strongly believed that with increased worker participation bosses do not at all lose their power and influence. No one can deny the fact that his leadership is exemplary and that people in the coming years will study about his leadership style and ideology.


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Berret Koehler Publishers

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