Entrepreneurship Concept Essay
Entrepreneurship is one of the most important factors contributing to firm success. Entrepreneurial activities serve to encourage the consistency and success of companies by contributing to growth in employment and growth. Various researches revealed that entrepreneurship is capable of improving revenue streams, empowering employees, and enhancing profitability (Zahra, 1996; Lumpkin & Dess, 1996).
Seeing how competitive the business arena of twenty first century has become, as well as more dynamic and uncertain (Hamel, 2000), it became imperative for companies to hone an entrepreneurial mindset that would allow them to identify and take advantage of opportunities in their environments. Strategy implementation is the most important project in any organization. We will explain the concept of implementation of strategy and how entrepreneurship helps it in theory and practice, by providing examples to support this aspect. Entrepreneurship Concept Entrepreneurship has no one standard definition.
Many researchers and scholars have given their definition of the term. Entrepreneurship was used to refer to intrapreneurship (Kuratko, et al, 1990), corporate ventures (Scholhammer, 1982), corporate ventures (Ellis & Taylor, 1987), venture management (Veciana, 1996) and many more. Generally, entrepreneurship is used to describe the bringing together of the factors of production as well as to the process of market,
Need essay sample on "Entrepreneurship Concept"? We will write a custom essay sample specifically for you for only $ 13.90/page
However, some scholars argued against this general definition of entrepreneurial activities and wanted to include those struggles of large firms; others argue that the concept of entrepreneurship should encompass the struggle of large firms in order to foster new relationships in the business arena or to maintain their competitive position (Baumol, 1986; Bulgerman, 1983). According to Zahra (1991), corporate entrepreneurship refers to the process of creating new business within established firms in order to improve organizational profitability and enhance a firm’s competitive position or the strategic renewal of existing businesses.
Moreover, a broad definition of corporate entrepreneurship will consist of two types of processes: a). the birth of new businesses within existing organizations, whether through internal innovation or joint ventures/alliances, and b). the transformation of organizations through strategic renewal, i. e. the creation of new wealth through the combination of resources (Guth & Ginsberg, 1990). Corporate entrepreneurship is when an organization go through a renewal process (Sathe, 1989) that has two distinct but related dimensions.
First, innovation and venturing, and strategic stress creating new business through market developments or by undertaking process, product, technological and administrative innovations. The second dimension embodies renewal activities that enhance a firm’s ability to compete and take risks (Miller, 1983). Renewal has many aspects, including reorganization, redefinition of the business concept, and the introduction of system-wide changes for innovation.
This evolution of the concept led Robert Ronstand to make another definition and capture its essence: “Entrepreneurship is the dynamic process of creating incremental wealth. This wealth created by individuals who assume the major risks in terms of equity, time and/or career commitment of providing value for some product or service. The product/service itself may or may not be new or unique but value must somehow be infused by the entrepreneur by securing and allocating the necessary skills and resources”.
Despite the fact that Ronstand’s definition covers the topic of entrepreneurship effectively, it could still not be considered as the standard definition of entrepreneurship. The only certain conclusion we could gather from all these definitions is that entrepreneurship is a multidimensional concept involving the renewal of existing business, innovation and venturing, allocation of resources and all that in order for firms to compete in an unstable environment. All these concurring and arguing for the right definition support the reality that it is challenging to define entrepreneurship.
In offering avenues for further research on the entrepreneur, Gartner (1988) recognized that entrepreneurship involves a process of learning, particularly in terms of acquiring knowledge and skills regarding organization creation. Within the entrepreneurship domain a body of research is emerging that explores how entrepreneurs learn during the creation and management of entrepreneurial ventures. However, Deakins (1996) emphasizes the need for greater theoretical development around the concept of entrepreneurial learning.
“We do not understand how entrepreneurs learn, yet it is accepted that there is a learning experience from merely establishing a new venture…Entrepreneurship involves a learning process, an ability to cope with problems and to learn from those problems…There is now a need for re-focusing research away from the emphasis on picking successful entrepreneurs or picking winners, to identifying key issues in the learning and developmental process of entrepreneurship. ” (Deakins, 1996; p21-22) Importance of Entrepreneurship The need to seek after entrepreneurship is explained by many scholars differently.
For one, Kuratko et al. (1990) claimed that entrepreneurship should be pursued as a response to various critical problems such as making necessary changes, innovations and improvements in the marketplace because of increasing competition globally. Another reason why entrepreneurial activities are important for firms is that rapid technological progress is taking place, which could lead companies to quickly stagnate and decline or have their products become obsolete if they do not know how to take advantage of these developments as quickly as possible (Miller and Friesen, 1982).
Lastly, there is a perceived weakness in the traditional methods of management the turnover of innovative-minded employees who are disappointed with bureaucratic organizations so engaging in innovation has become important. Traditional organizational models, built around rigid hierarchies and clearly defined boundaries, are not suitable or seem outdated already for today’s entrepreneurial corporations. Such models, with their inherent bureaucracies tend to limit flexibility and stifle communications, which could be detrimental to the successful operations of the firms in today’s competitive business structure (Kanter, 1983; Kao, 1989).
All too often, when it comes to implementing strategy, companies seem to have a different management model. A model that often fails to provide adequate resources to confirm that strategy will be implemented. Strategy implementation is the largest and most important project in any company and all too often an under-managed project. Therefore, many companies are finding it rewarding to experiment with innovative organization designs that could embrace the concept of infinity and no-boundary ideas (Devanna & Tichy, 1990).
This concept is a deliberate and concerted effort to replace the boundaries emphasized in the traditional model with boundaries that are more porous and permeable. These flexible boundaries allow the company to move and act more with independence and freedom, which allows it to implement strategies more effectively because of the continuously changing environment. Making bureaucratic organizations more flexible and efficient via entrepreneurship can result in a more successful implementation.
This illustrates that entrepreneurship can indeed enhance the implementation of strategy by making it more apt for success and to deal with unpleasant or/and unexpected changes due to the fact that it is more adaptable. When companies decide to launch a major new product development effort or build a significant new manufacturing plant they assign a dedicated product leader to make sure that everything that needs to get done is listed, tracked and reported on. If the project is important enough, the project leader will even have a staff of people forming a project management office to ensure that things are accomplished.
Women and Immigrant Entrepreneurs Another phenomenon in the business world related to entrepreneurship is the increasing number of women entrepreneurs. Women entrepreneurs have become increasingly common in the business world. Women entrepreneurs encounter unique rewards and challenges when they become entrepreneurs. Their unique position makes it interesting for educators, businesspeople and government officials to understand the phenomenon. According to the study, there is a high positive correlation between the level of national women’s entrepreneurial activity and growth in GDP of the country.
This illustrate that women entrepreneurs are growing phenomenon in richer countries because they are more supported and vice versa, women entrepreneurs are able to contribute to their countries economically, and making a positive impact on economic growth rates. For instance, women entrepreneurs are increasing in Israel. These women are usually those already married with grown up children (IVC, 2005). The rewards that women entrepreneurs receive from engaging in entrepreneurial activities are many.
Women have unique advantages that they could exploit when they become entrepreneurs. According to the study, evidence support the fact that women have broader perspectives than men have and they have the ability to think more contextually and holistically. This could work well for them as entrepreneurs. Moreover, compared to men, they are more mentally stable, more intuitive and creative, so that their decisions reflect these. Long term planning is easier for them to do, which is important for entrepreneurship to work.
Furthermore, as the world becomes even more competitive because of technological advancements and globalization in general, the dynamism of the environment calls for entrepreneurs capable of building strong interrelationships and capable of looking at the bigger picture. Women entrepreneurs are more capable of these skills and have the better temperament for these tasks. Traditionally, business leaders and consultants were focused on a linear approach that is more masculine. They make decisions and actions step by step.
However, this would not work in a rapidly changing economy anymore, when new things could happen in an instant and in a blink of an eye. Women are more suitable for this environment and to engage in entrepreneurial activities more because they have the higher propensity to look at business problems in their unique contexts and to analyze the whole issue in its totality rather than in parts. With this capability, women will find it easier to see more points or options, weigh more variables and be able to have innovative and creative solutions to challenges in entrepreneurship.
They will also be able to alter plans quicker when the situation calls for it and plan for the long term. Women are innately flexible and tolerant. Women also have a way with words that can be useful for negotiating and marketing. Because networking is very important for entrepreneurial activities, and women are naturally sociable and cooperative, women will also find this another rewarding reason to engage in entrepreneurship. Moreover, as technology rapidly changes, women will find it easier to engage in entrepreneurship and reap the rewards as well.
If they are worried about the possible tradeoffs between having a career and taking care of their families, technologies make it easier for them to do their entrepreneurial activities right in their homes and reduce the possible work-family conflicts. According to statistics, “women’s enterprises are more likely to stay in business. US businesses owned by women have a two-year success rate of 80 percent, well over the national average of about 50 percent. ” (IVC, 2005). The obstacles or disadvantages that women encounter when they engage in entrepreneurship are many as well.
It could not be ignored that they are unique barriers that women face, especially since women entrepreneurs are still rare compared to their male counterparts. Women face internal problems such as low self-confidence, low need for achievement and low tolerance for failure or risks more. On the other hand, they also encounter external problems such as lack of role models to emulate or draw inspiration from, lesser family or institutional support as well as lack of experience in handling management positions. Women therefore not only lack support and connections, they also lack the necessary skills.
Women also do not have the required capital to engage in entrepreneurial activities because the banking institutions perceive them as having less legitimacy and would not give them the necessary funds because of these stereotypes. It is recognized that women entrepreneurs stimulate economic growth, however, if institutional biases and challenges faced by women would not be reduced, women will constantly find in hard to engage in entrepreneurial activities, and not so many women could do it properly (IVC, 2005). According to a study, immigrants are more likely to be entrepreneurs.
Entrepreneurs however face myriad of problems ranging from language barriers, difficulties getting credit, and problems connecting with mainstream agencies that help businesses grow. Moreover, it is seen that although their contributions to the economy has been recognized, they are not included or are overlooked in the long term decisions of the government (Bernstein, 2007). Conclusion To this end, an entrepreneurial spirit can be said to be promoted and supported by the dynamic and continually changing environment.
Traditional models that work in a traditional business setting are not anymore, so entrepreneurial activities that involves thinking outside of the box and be innovative has become very important. However, according to Burgelman (1983) the management style affects the level of success in the implementation of entrepreneurial ideas. Therefore, the organizational structure is an important factor when applying a strategy and the performance of a company influences corporate entrepreneurship (Guth & Ginsberg, 1990). This being said, these should be attended well for corporate entrepreneurship to work.
Also, “women entrepreneurship is beneficial for women as well as for the economy. The increasing number of women entrepreneurs can facilitate economic mobility and self-fulfillment for individuals, promote economic and social equity, create employment, encourage trade, improve the use of valuable human capital and bolster national economic prosperity. ” (IVC, 2005). Same problems are faced by immigrant entrepreneurs, although their numbers are increasing all over the world. REFERENCES Baumol, W. J. (1986): “Entrepreneurship and a Century of Growth”, Journal of Business Venturing, 1, 2, 141-145
Bernstein, N. (2007). Immigrant Entrepreneurs Shape a New Economy. Retrieved from http://www. nytimes. com/2007/02/06/nyregion/06entrepreneurs. html? _r=1 Burgelman, Robert A. (1983): “A Model of the Interaction of Strategic Behavior, Corporate Context, and the Concept of Strategy”, Academy of Management Review, 8, 1, 61-71 Burgelman, Robert A. (1984): “Designs for Corporate Entrepreneurship”, California Management Review, 26, 154-166 Deakins, D. (1996),Entrepreneurship and Small Firms, Maidenhead: McGraw-Hill. Devanna, M. A. & Tichy, N. (1990): “Creating the competitive organization of the 21st century: The Boundaryless Corporation”, Human Resource Management, 29, 4, 455-471 Ellis, R. J. and Taylor, N. (1987): “Specifying Entrepreneurship”, Frontiers of Entrepreneurship Research, Wellsley, MA,: Babson College, 527-542 Gartner, W. B. (1988), “Who is an entrepreneur?
Is the wrong question. American Journal of Small Business, 13(1), 11-32 Guth, William and Ginsberg, Ari (1990): “Gust Editors’ Introduction: Corporate Entrepreneurship”, Strategic Management Journal, 11, 297-308 Hamel, G. (2000): “Leading the Revolution”, Boston, Harvard Business School Press; Kanter, R. M. (1983): “The change masters”, New York, Simon & Schuster Kao, J. J. (1989): “Entrepreneurship, creativity, and organization”, Englewood Cliffs, N. J. , Prentice Hall Kuratko, Donald et al. (1990): “Developing an Intrapreneurial Assessment Instrument for Effective Corporate Entrepreneurial Environment”, Strategic Management Journal, Summer Special Issue, 11, 49-58 Lumpkin, G. T. & Dess, G. G. (1996): “Clarifying the Entrepreneurial Orientation Construct and Linking it to Performance”, Academy of Management Review, 21, 1, 135-172
Miller, Danny (1983): “The Corelates of Entrepreneurship in Three Types of Firms”, Management Science, 29, 7, 770-791 Miller, Danny and Friesen, Peter H. (1982): “Innovation in Conservative and Entrepreneurial Firms: Two Models of Strategic Management”, Strategic Management Journal, 3, 1-25 Sathe, V. (1989): “Fostering Entrepreneurship in the Carge, Diversified Firm”, Organizational Dynamics, 18, 2, 20-32 Schollhammer, Hans (1982): “Internal Corporate Entrepreneurship”, In C. Kent, D. Sexton and K. Vesper (eds), Encyclopedia of Entrepreneurship, Prentice Hall, Englewood.
Veciana, Jose (1996): “Generacion y Dessarollo de Nuevos Projectos Innovadores: ? Venture Management o Corporate Entrepreneurship? ”, Economia Industral, 310/IV Women Entrepreneurs (2005). IVC. Retrieved from http://www. ivc-online. com/upload/archive/IVCJ/IVCJ-03-06. pdf Zahra, S. A. (1996): Governance, ownership and corporate entrepreneurship: The moderating impact of industry technological opportunities”, Academy of Management Journal, 39, 6, 1713-1735 Zahra, Shaker (1991): “Predictors and Financial Outcomes of Corporate Entrepreneurship: An explorative study”, Journal of Business Venturing, 6, 259-285