Entrepreneurship as a Crucial Business Activity - Essay Example

ESSAY BY Introduction Entrepreneurship is a crucial activity that set off a profitable business. Through this activity, the objective is to preserve and constantly establish a business which offers a profitable long-term future for the organization. An individual who assumes these activities is known as an entrepreneur. Entrepreneurship has become a leading power in the world economy, particularly in the hospitality sector. In fact, a number of hospitality ventures are featured by the entrepreneur who looks for opportunities in the market, takes advantage of it and makes a forte in that line of business. Moreover, an entrepreneur is proactive, prepared to take risks and flexible to the changes in the environment (Rainsford & Bangs, 1992). Entrepreneurship is usually related with the introductory stage of an industrys life cycle, but the entrepreneurial spirit is just as significant in the maturity stage. Such types of entrepreneurship, independently and jointly, are present in all sectors of the hospitality industry. A number of entrepreneurs have brought their businesses to national and international fame. As the industry matures, nurturing corporate entrepreneurship is required for innovative strategies which would reinforce the position of hospitality in the future (Rainsford & Bangs, 1992). The significance of service sectors in the world economy has been constantly growing along with the entrepreneurs in the service sector. Entrepreneurship plays a key role in gaining sustainable competitive benefits, particularly in the dynamic and rapidly developing hospitality industry to meet the changing needs of their customers (Rainsford & Bangs, 1992). Bygrave (1993) defined an entrepreneurial activity as the formation of a new organization to pursue an opportunity. An entrepreneur then would be an individual who initiates a new business. This definition entails the entrepreneur who purchases an existing business with the understanding that this is the beginning of a new business for that individual (Bygrave, 1997). One such entrepreneur, who became a most important force in the global economy when he started his first restaurant in 1919, is Conrad Nicholson Hilton (1887-1979). He is the creator of the Hilton Hotel chain of hotels. Hilton developed his enterprise to a national chain of hotels offering services to business travelers (Hallett & Hallett, 1997). It was in San Antonio in New Mexico, that Conrad Hilton was born. When Hilton turned 21 he took the responsibility of his fathers store but quickly became irritated with the dullness of the business. But it was his work at his father’s store that helped him develop his entrepreneurial skills (Hallett & Hallett, 1997). After going through a number of fields, the oil business was on the rise in Texas; Hilton looked forward to make money through opening a bank. His efforts at buying one bank in Cisco proved unsuccessful and Hilton took shelter in a close by hotel. When he entered the lobby of the hotel, he was surprised to see the number of oil field workers looking for rooms. It was at the Mobley Hotel that Hilton saw wealth and possibility. He saved enough cash in the next few days to purchase the hotel and started renovating it without delay. Hilton expertly handled his Cisco hotel and over the next few years, acquired a number of other properties. With the revenue generated from the Mobley Hotel, Hilton bought a hotel in Fort Worth, and the next year another one in Dallas. By 1923 he possessed five Texas hotels and by 1930, he was the leading hotel operator in the area (Hallett & Hallett, 1997). In 1925, he pledged to construct a Hilton Hotel in Dallas. The venture did not go as planned, and Hilton ran out of money before the hotel was completed. Other investors were found and the hotel did get built, but Hilton lost the possession of the property (Hallett & Hallett, 1997). This was followed by a number of other problems. The Depression brought chaos to the hotel industry, with more than 80 percent of all properties being forced into insolvency. Hilton was not free from this; he lost three of his eight hotels and fell into arrears with no source of income (Hallett & Hallett, 1997). Even after going through the turmoil of losing his business and his family, Hilton did not give up. Gradually he pulled himself through the Depression and initiated a number of deals, purchasing hotels at low prices and selling them at a profit (Hallett & Hallett, 1997). In 1949, Hilton received world recognition when he bought the famous Waldorf-Astoria Hotel in New York City. After a few years, he purchased the complete chain of Statler Hotels. He also initiated his international operations in 1949, opening 300-room Caribe Hilton in San Juan, Puerto Rico (Hallett & Hallett, 1997). In the present day, Hilton Hotels Corporation is known internationally for service to its customers. Conrad Hilton is remembered, not as a banker, but as a greatest hotelier and an exceptional oilfield entrepreneur. The reinstated and renovated Mobley Hotel, which Hilton once called as, ‘a cross between a flophouse and a gold mine,’ now hosts the Cisco Chamber of Commerce and offers services as a community center, museum, and park (Conrad Hiltons Oilfield Hotel, 2005). An entrepreneur is an innovator who starts a new business offering new or existing products or services for generation of revenue. Entrepreneurs have strong ideas about market opportunities and eagerly take up a high level of risk. An entrepreneur has a number of diverse characteristics that offer a skill set for accomplishing success and a great amount of reward (Smith & Miner, 1989). Researchers have explained two kinds of entrepreneurs based on personality, environment and action: craftsmen entrepreneurs and opportunistic entrepreneurs. These two kinds of entrepreneurs exhibit numerous conflicting personality characteristics in their actions and orientation. Craftsman entrepreneurs generally lack formal education in the area, lack the intensity in managerial experience, and have blue-collar backgrounds. They frequently take pleasure in being engrossed in operations and doing planning and managerial work. Craftsmen usually are not worried about social participation, may be short of social awareness and do not mingle or communicate effectively. They by and large have a preference for authoritative management styles by giving orders and making decisions without giving heed to others’ contribution. Such entrepreneurs have a great distaste for risk taking and demonstrate a high amount of inflexibility and lack of confidence. Organizations managed by craftsmen more often than not function without long-term plans and usually experience low growth rates. Craftsmen determine their success by customer satisfaction and are usually satisfied with making a comfortable living (Smith & Miner, 1989). Alternatively, opportunistic entrepreneurs often have a high amount of formal education, bring a wide-ranging diversity of management experience to a job, and come from middle-class backgrounds. These entrepreneurs have a preference for democratic, decentralized management styles and stress the significance of marketing efforts. They are extremely socially aware and are greatly involved in social relationships. They are inclined to be trend-oriented in forecasting the future of their organizations. The key determinants and indicators for success comprise of profit, personal income and business development (Smith & Miner, 1989). It is quite clear from the above given description, that Conrad Holton belonged to the opportunistic class of entrepreneurs with not belonging to a middle class family but also being highly socially aware as exemplified by his status as a socialite. Furthermore, his democratic management style is characterized by the fact that he hired strong managers and allowed them to make important decisions regarding individual hotel policies (Be my guest, 2010). Hilton was among the earliest businessmen to put into action practices that are now industry-wide in the hotel management industry. Architects designed Hilton hotels to meet high standards for operational effectiveness and comfort of the customers. Hilton followed the thinking that hotels should mirror the conditions and style of the city in which they are built in (Be my guest, 2010). The entrepreneurial skills of Conrad Hilton were a synergy of genetic and environmental influence. His competitive spirit and the need to achieve enabled him to acquire a number of large American hotels. Furthermore, his risk-taking nature and motivation to gain more forced him to take up the challenges of the Depression and come out as a winner. The behavioral characteristics of Conrad Hilton suggested that he was a determined individual who had clear goals with an internal locus of control. The idea of locus of control offers a generalized belief that an individual does or does not have power over his or her own fate (Rotter 1966). Individuals who attribute control of happenings to oneself are believed to have an internal locus of control. On the other hand, individuals who ascribe control of happenings to external factors are believed to have an external locus of control (Spector 1992). Thus, Conrad Hilton possessed an internal locus of control as he believed that he had a control over his destiny and created the Hilton chain of Hotels. Furthermore, his ability to buy hotels at a low price and sell them with profit when he was under debt illustrated his persistent problem-solving ability (Hallett & Hallett, 1997). His personality attributes suggested that he was an extrovert as indicated by his status as a socialite. He was an intuit who possessed the ability to foresee the future of the organization (Conrad Hiltons Oilfield Hotel, 2005). The environmental factors that influenced Conrad Hilton’s entrepreneurial career were that he had an entrepreneurial heritage. He had come to Cisco with the purpose to purchase a local bank, but he bought the Mobley Hotel in its place, believing he could make use of some of the hotel-keeping skill he acquired from his family’s hotel operation in New Mexico (Hallett & Hallett, 1997). He began his entrepreneurial activity and gained work experience at an early age by looking after his father’ store and was not over-educated. Even though, he did not have any formal experience in this field but he was still able to apply the little experience that he had (Conrad Hiltons Oilfield Hotel, 2005). Conrad Hilton basically wanted to make a difference by offering business travelers a place to stay and offer them services standardized services all around the world (Hallett & Hallett, 1997). He was into continuously creating something new and whenever he got an innovative idea, he would see it through to the end and then start climbing another mountain. This is clear from the fact that Hilton first strengthened Hilton Hotels in America before expanding its operations internationally (Be my guest, 2010). He possessed the ability to see or craft opportunities that other individuals missed and was an expert at exploiting contacts and sources. Furthermore, Hilton had the skill to solve problems under stress and change problems into opportunities and had the ability to make use of the experts efficiently and effectively. He controlled his business by paying close attention to details and essential ratios and put into effect strategic control over his business. The success of Conrad Hilton lied in his philosophy to listen to the customers and respond to their feedback (Be my guest, 2010). Conclusion From the owner of the Mobley Hotel in a small area of Texas to the worlds leader in of international hospitality, Conrad Hiltons stunning rise helped revise the unlimited prospects around the world. The worlds greatest hotelier has lived up to his name that facilitated in bringing the world closer together and is a prime example of an entrepreneur. His skills in entrepreneurship are a lesson to individuals who seek to create a name for themselves not only in the hospitality industry but any field of the world. He taught people how to work hard and with dedication because an entrepreneur has an aspiration to accomplish, the motivation to overcome problems, and bring forward successful ventures. Winning entrepreneurs, such as Conrad Hilton suggest that the impossible is only psychological. As Conrad Hilton stated: "Success seems to be connected with action. Successful people keep moving. They make mistakes, but they dont quit." Be my guest. (2010). REFERENCES 1. Be my guest. (2010). Hilton Worldwide, http://www.doubletreefranchise.com/ Scripts/ HHC.asp?http://www.doubletreefranchise.com/SF/Overview/HHC_History.asp?HCode=HHC, Date accessed 17/8/10 2. Bygrave, W. (1993). Theory building in the entrepreneurial paradigm. Journal of Business Venturing, 8(3), 255-280. 3. Conrad Hiltons Oilfield Hotel. (2005). Petroleum History Resources. Petroleun Age, 2(2), http://sites.google.com/site/petroleumhistoryresources/Home/conrad-hilton-s-oilfield-hotel, Date accessed 17/8/10 4. Hallett, A. & Hallett, D. (1997). Entrepreneur magazine encyclopedia of entrepreneurs. United States of America: Wiley and Sons, Inc 5. Rainsford, P. & Bangs, D. H. (1992). The restaurant planning guide. Chicago: Upstart Publishing 6. Rotter, J. (1966). Generalized expectancies for internal versus external control of reinforcements, Psychological Mono-graphs, 80(609). 7. Smith, N. R. & Miner, JB. (1989). Type of entrepreneur, type of firm and managerial motivation: implications for organizational life cycle theory. Strategic Management Journal, 4, pp. 225-240 8. Spector, P. (1992). Behavior in organizations as a function of locus of control. Psychological Bulletin, 91, 482-497 Read More