Entrepreneurialism

Entrepreneurship in the 21st Century

Literature that describes business processes contains many definitions of entrepreneurship. In the eighteenth-century, the first definition of entrepreneurship was an economic term that described the process of taking on the risk of selling at uncertain prices and buying at certain prices. Later, the definition was expanded to include the idea of bringing together production factors. This definition led to others questioning whether the term was actually a type of management or an exclusive entrepreneurial function. Recent times saw the addition of the idea of innovation to the definition. Innovation can blossom in many forms: Product innovation and market innovation; factor innovation; organizational innovation; and process innovation. According to the most recent definitions, entrepreneurship is about the creation of new businesses. The founder is the founder.

It has taken a lot of effort to understand the psychological as well as sociological factors that underlie entrepreneurship. These studies revealed some common traits among entrepreneurs: they are driven to achieve, have a sense of control, have an instinctive rather than logical reasoning and have a tendency to take risks. Many have also commented on the common thread of childhood poverty, minority group membership, and early adolescent financial experiences as characteristics that make up the entrepreneur.

The beginnings of an entrepreneurial concept may seem obvious at first glance. A detailed analysis of the literature and actual examples of entrepreneurial tends to make it more difficult to define, if not impossible, to pinpoint.

Take, for instance, the extent to which entrepreneurship can be equated with taking on risk, innovating, or founding a business. Each of these terms focuses on one aspect of entrepreneurs. This would mean that people like Ray Kroc at McDonald’s or Thomas Watson at IBM will not be considered entrepreneurs.

Entrepreneurship is a complex business. Many entrepreneurs have avoided risk by asking others to take the risk. One extremely successful entrepreneur stated, “My idea about risk and reward is that I get the reward and others take the risks.”

Sometimes creativity is not required for entrepreneurship. Successful entrepreneurs are skilled at copying others to improve their ideas. They will be remembered for innovating one aspect that is essential to the success of a product.

Many questions remain regarding the psychology and social characteristics of entrepreneurs. Why is it that both successful and unsuccessful entrepreneurs share many of the common traits? Certain studies show that entrepreneurs with successful ventures often have lower levels of entrepreneurship. This seems to contradict the notion that entrepreneurship is a function of personality traits or character.

We are left with a variety of behaviors and factors that define entrepreneurship for some people. These factors and behaviors reinforce the idea that entrepreneurs are difficult to define. To describe someone who is successful in business, the word can be used best in the past tense.

Measuring Entrepreneurship

Despite the lackluster current research on entrepreneur, there is still an urge, especially among enterprise development professionals, to measure entrepreneurship. These measures can be as simple as a checklist or complex computer programs. It is the idea that entrepreneurship is the agent for success in the launch of any business that drives the need to define and measure it.

They are the ones who can see the market opportunity and have the drive, motivation, and ability to mobilize the resources necessary to fulfill it. Many commentators have listed the following characteristics as key traits of entrepreneurs:

“Self-confident and multi-skilled.

“Resilient in the face if difficulties or discouragement.

” Innovative skills. Opportunities are often hidden from others.

” Results-orientated. You must have the drive to reach the goals you set.

” A risk-taker. A successful entrepreneur will often adopt an incremental approach to risk-taking, where each stage only exposes him/herself to a measured, limited amount of personal risk. Then, he/she moves to the next stage once each decision has been made.

” Total commitment. The entrepreneurial profile requires dedication, hard work, energy and single-mindedness.

This partial list of entrepreneurial qualities needs to be accompanied by two warnings.

First, selecting people for enterprise development training through such a set if attitudes and skills does not guarantee business success.

Second, entrepreneurs often lack the skills required to launch a successful business. This is because growth requires entrepreneurial traits. When a company grows, the situation is drastically different. Entrepreneurs must adapt to the changing business environment as it grows and develops. However, many times they are not able make that transition.

Visionaries and managers

The person who creates a new business or visionary is often an entrepreneur.

Visionaries often start a business because they have a fresh idea. They want to make things better, cheaper, or fulfill a specific need. They are not only interested in making money. The visionary is driven to create something new and different because no one else has done it. It’s interesting and exciting and meets a need. When the business is successful, the nature of the business and its processes will change. This requires a different skill-set than the visionary.

The infant business is now facing its first set challenges.

” How can a visionary entrepreneur turn the skills and inspiration that made a small business wildly successful into something greater?

“How can a business deal with cash flow restrictions?

“How does it get the legitimacy it needs to be able to borrow?

These issues often go unnoticed by the visionary. Visionaries are not well-equipped to manage staff, negotiate with investors, or train successors. Professional management skills are required to ensure the business’s continued growth. These skills are different from those needed to create an enterprise or promote a vision.
The ability to apply management skills to an adolescent business allows it to do well. However, the business culture starts to change. Management is about structure, policies and procedures, as well as profitability. Business is now ready for the next challenge. A management structure or governance is required to manage the maturing enterprise and prevent it from becoming too dominant and threatening the entrepreneurial drive to achieve rapid growth and new markets.

These three stages are characterized by vision and management as well as governance for emerging industries. After becoming an established company with proper governance structures, the business faces a new set common challenges to all industries.

“How can the business keep its vision alive?

“How does one balance growth, risk and profitability?”

“How does one establish a governance system that holds management responsible without compromising its independence and flexibility?”

Conclusion

The business development cycle mentioned above is common to successful businesses. This cycle raises the question of where to focus when selecting a business idea for a program like the TKMPK. Selection activities can be dangerous if you choose entrepreneurial skills over managerial abilities. The business may suffer uneven growth, poor management, and eventual failure if it does not adapt to new markets and trading conditions. Another danger is choosing ideas over people.

Any element that is predicative in the selection process should be focused on the balance between managerial and entrepreneurial skills. In selecting participants for business management training, the main determinant must be the business idea.

molw.net

We are a team of professionals with each having two decades of experience in start-ups, sales, marketing, finance, HR, large scale project and profit centre management and running mature cross functional operations. At Molw.net we are big believers that knowledge transfer is critical to our industry’s evolution. We love to share our experiences and learnings through our online resources.

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