The Process of Entrepreneurship - Case Study Example

? Entrepreneurship Introduction The process of entrepreneurship largely depends on the individual attributes of an individual or individuals since their efforts will determine the result of their endeavours. These individuals must not only discover opportunities but also create opportunities for themselves by designing situations in a way that will amplify their chances of finding such opportunities. Kaplan and Wareen (2010) argue that entrepreneurs have some common attributes that put them ahead of others and enhance their chances of creating new opportunities from relevant situations. Firstly, the authors state that entrepreneurs can modify vague situations whereby this means that they are able to improvise their activities to suit certain circumstance. They further observe that entrepreneurs have certain characteristics that enable them to handle situations where there is incomplete decision or make decisions when confronted by conflicting status. Literature Review They describe such situations that entrepreneurs find themselves as comfortable and that in difficult situations; they still exhibit calm and comfort ability. Secondly, the authors use five words to describe an entrepreneur and they include; self-starters, optimists, perseverant, energetic and action oriented. This attributes reflect the ability of the entrepreneur to see a new opportunity. Moreover, entrepreneurs have the ability to persuade others and form networks that give create situations, which eventually heighten their chances of finding opportunities. These individuals exploit the resources people offer by interacting and engaging with others in addition to being highly innovative and imaginative. They are not afraid to take risks and have the ability to create opportunities where others might consider as hostile environment or situations. In their pursuit of opportunities, entrepreneurs remain open to change and employ their analytical skills to evaluate situations and come up with new ideas that propel their ambitions. It is these attributes that some argue that enable entrepreneurs to engineer situations in a way that increase their chances of finding opportunities. The entrepreneurship process entails identifying, recognizing, evaluating and exploiting opportunities that introduce new goods, services and ways of organization by applying efforts that had hitherto not existed or exploited (Shane and Venkataraman, 2000). Entrepreneurship therefore calls for the existence of exploitable opportunities or situations that entrepreneurs can modify to increase their chances of finding those opportunities, which provide platforms for the use of new means-ends structures to recombine resources to achieve a certain goal. Accordingly, opportunities are an essential part of the entrepreneurial process; indeed, the existence of varied opportunities can offer a viable explanation for the patterns that are observed in the entrepreneurial process. The existence of opportunities coupled with the entrepreneur’s ability to effectively engineer situations in a manner that puts them at an advantage of finding opportunities to exploit largely makes the distinction between a great entrepreneur and others. Entrepreneurial opportunity is defined as a situation that aids the possibility of an individual creating new means-ends structures for exploiting available resources that the said individual believes will be profitable (Shane, 2010). Entrepreneurs identify these favourable set of environments that create opportunities for creation of a new manufactured goods, business or service; besides, they all recognize situations that can heighten their chances of discovering entrepreneurial opportunities. An entrepreneurial opportunity is not just an idea and is believed to have four essential qualities. The opportunity has to be timely, attractive to the cause, long-lasting and augmented in a product, service or business that generates or adds value for its buyer or end user. The prospect must be open for an entrepreneur to take advantage of on an opportunity, and the situation the entrepreneur engineers to increase his chances of discovering opportunities must be attractive to the cause. The process of entrepreneurship goes beyond the typical problem solving but rather involves the discovery, evaluation and development of an entrepreneurial opportunity by overcoming the factors that may impede the creation of something new. When designing the different situations to enhance their chances of finding these opportunities, entrepreneurs need to acknowledge that the process has four distinct phases. The entrepreneur first models existing situations in a manner that boosts his chances of finding an exploitable opportunity in order to create something new. The entrepreneur should therefore be alert to possibilities or situations that would create needed possibilities and modify them to boost his chances. The entrepreneur constantly looks for a need and an opportunity to create something new, and he/she strives to make every situation he discovers into a platform that can heighten his chances of getting an opportunity to start a new venture. Despite the fact that no formal mechanisms for identifying new business opportunities or situations can create these opportunities, some situations and sources are always fruitful. For example, an entrepreneur expands his network by engaging consumers who are often the best source of ideas for new ventures. During such engagements, the entrepreneur engineers these situations or encounters to boost his chances of finding opportunities of creating something new. As an example, an entrepreneur might listen to consumers’ complaints about the lack of a certain product in the market or comments about the features of certain service and analytically exploit such situations to find an opportunity of venturing into new business. Some entrepreneurs have come up with new ventures by interacting with end users. Such entrepreneurs engineer these encounters with the end users to increase their chances of discovering entrepreneurial opportunity. One approach an entrepreneur can use to identify a situation that can be engineered to increase his chances of finding an entrepreneurial opportunity is through the observation of trends and critical analysis of how such trends can create opportunities to be pursued. These trends include economic forces, which affect the consumers’ level of disposable income. By getting a handle on these economic forces, an entrepreneur can be able to design a situation to increase his chances of finding an opportunity to venture into new business. In addition to the economic forces, an entrepreneur should be aware have a sound understanding of the impacts of social forces on trends and how they affect new product, service and business ideas. This enables the entrepreneur to engineer existing situations and is therefore a fundamental piece of the opportunity recognition process. Social forces such as globalization of industry, family and work patterns, the proliferation of computers, internet and cell phones, and new forms of entertainment offer situations that an entrepreneur can redesign to enhance his chances of discovering opportunities for venturing into new business (Aldrich and Cliff, 2003). Moreover, an entrepreneur is able to be at par with the rapid pace of technological advances and how they affect current and future opportunities. The entrepreneur discovers these profitable situations and exploits them to increase his chances of coming up with something new (De Koning, 1999). For instance, the creating of new technology offers an opportunity to build new products to advance it. An entrepreneur does not wait for the opportunity to create these new products to present itself but rather he uses existing situations to heighten his chances of finding opportunities that might enable him to create new products. It is important o note that these technological advances usually come together with economic and social changes to create opportunity. In addition to the above factors, political action and regulatory changes also offer basis for opportunities. An entrepreneur positions himself in situations that he can use to increase his likelihood of finding an opportunity to exploit. For example, the creation of new laws creates opportunities for entrepreneurs to start businesses to help companies act in accordance with these laws. An entrepreneur again seeks such situations beforehand that would put him at an advantage of increasing his prospects of learning new opportunities. The situations an individual designs to increase his chances of finding an opportunity may be simple concepts that eventually become more elaborate as entrepreneurs continue to develop them. Ardichvili, Cardozo and Ray (2003) explain that the process of developing these situations into exploitable opportunities involves proactive efforts that give rise to a new business venture. The entrepreneur therefore continuously engineers situations so that chances of finding an opportunity are increased. The process also involves the identification of situations that are fruitful to the creation of opportunities. It includes the entrepreneur sensing or perceiving market needs and underutilized resources by encountering situations that are relevant to the creation of new opportunities. The entrepreneur then recognizes or discovers a fit amongst specific market needs and resources and creates a new fit among these two in a new venture. The entrepreneur therefore not only recognizes situations that would enhance the likelihood of discovering a viable opportunity but also perceives and creates opportunities from such situations. Entrepreneurs who can effectively design existing situations to boost chances of finding opportunities to exploit differ from others in their sensitivity to situations that enhance creation and delivery of new value. Individuals who possess the ability to create and deliver value from varied situations may differ from in the manner that they contemplate the new capability and its applications. Some individuals have a higher sensitivity to market needs or problems that they constantly perceive possibilities for new business ventures in any environment or situation in which they find themselves. For example, some entrepreneurs are able to heighten their chances of finding opportunities by simply observing how parents try to make dinner while supervising small children. However, this sensitivity to needs or possibilities from different environments or situations does not necessarily equate to the development of new ideas for solutions to the problems as people differ in their ability to ask questions and create answers from perceived possibilities. By fully analysing situations and designing them to increase their likelihood of discovering opportunities for new ventures, entrepreneurs are able to readily identify the uncertainties or risks that are associated with the opportunity discovered (Ray and Cardozo, 1996). It is however important to note that an opportunity may present itself not from the engineering of situations to heighten the chances of finding opportunities but might simply involve noticing a problem and trying to solve it. These problems can be identified through the observation of trends and more simple means such as an individual intuition, serendipity or pure chance. It is also important to note that increased alertness in the entrepreneurial awareness may result into accidental discovery whereby the entrepreneur becomes more receptive of the process. This means that in a state whereby the entrepreneur is in a state of passive search, those with a higher level of entrepreneurial alternative in terms of the passive search are likely to be in a position to experience accidental discovery of opportunities. There is therefore a powerful tool to determine the discovery whether it is accidental or purposive as compared to active search. In order to have a successful and prosperous business, one must adopt a successful opportunity to develop success that will require that the entrepreneur recognize the opportunities available, evaluate them as well as develop them (Macmillan, Zemann, Subbanarasimha, 1987). While the development of the opportunities available follow a certain pattern that repeats itself, the evaluation must be conducted several times during the developmental stage. The evaluation is what leads to the possibility of recognizing additional or other opportunities or the prospect of adjusting the initial vision or motive of the chosen business opportunities. Further, the level of entrepreneurial alertness may increase due to several factors, which may include but not limited to personality traits, relevant prior knowledge and experience, and social networks. Under the personality traits, creativity and optimism play an important role in determination of the entrepreneurial alertness. These can be divided into two domains that may either be special interest or knowledge and experience in a specific product and customer market. Conclusion In conclusion, entrepreneurs who are able to effectively design situations or circumstances they encounter into viable opportunities to develop new ideas employ varied methods to accomplish their goal. Most importantly, the nature of networks they develop determines the level of alertness and the type of situation plays an important role in shaping the process of developing and creating an opportunity for venturing into new business. References Aldrich, Howard E. & Cliff, Jennifer E., 2003. The pervasive effects of family on entrepreneurship: toward a family embeddedness perspective. Journal of Business Venturing, Elsevier, vol. 18(5), pages 573-596, September. Ardichvili, Alexander , Cardozo, Richard & Ray, Sourav, (2003). A theory of entrepreneurial opportunity identification and development. Journal of Business Venturing, Elsevier, vol. 18(1), pages 105-123, January. De Koning, A., 1999. Conceptualizing Opportunity Recognition as a Socio-Cognitive Process. Centre for Advanced Studies in Leadership, Stockholm. Kaplan, J. M., & Warren, A. C. (2010). Patterns of entrepreneurship management. Hoboken, N.J., Wiley. Macmillan, Ian C. & Zemann, Lauriann & Subbanarasimha, P. N., 1987. Criteria distinguishing successful from unsuccessful ventures in the venture screening process. Journal of Business Venturing, Elsevier, vol. 2(2), pages 123-137.c Ray, S., Cardozo, R., 1996. Sensitivity and creativity in entrepreneurial opportunity recognition: a framework for empirical investigation. Presented at the Sixth Global Entrepreneurship Research Conference, Imperial College, London. Shane, S. (2003). A general theory of entrepreneurship: the individual-opportunity nexus. Cheltenham, UK, E. Elgar. Read More