The Concept of Entrepreneurship - Term Paper Example

Entrepreneurship Introduction The concepts of entrepreneurship have been widely applied to business initiatives taken by individuals for the purpose of wealth generation, enhancing employment scope and utilize resources for the benefit of communities. The concept of entrepreneurship has been viewed in numerous perspectives and definitions of the term involve risk assumption and identifying new opportunities for growth and development. Schumpeter defined entrepreneurship as “innovators who implement entrepreneurial change within markets, where entrepreneurial change has 5 manifestations: 1) the introduction of a new (or improved) good; 2) the introduction of a new method of production; 3) the opening of a new market; 4) the exploitation of a new source of supply; and 5) the re-engineering/organization of business management process” (Ahmad & Seymour). Thus entrepreneurship refers to an enterprise that exploits existing opportunities through the optimized usage of available resources for the purpose of profit making. While profit making and revenue generation may be the primary objectives of entrepreneurial activities the fact that these enterprises cannot be assumed without risks is a ground reality. Entrepreneurship in the current business environment presents multiple challenges in the form of global markets, intense competition, technology advances, and competency management that shape the competitive advantage of firms. The contribution of entrepreneurs to economic growth and development cannot be ignored, however, a key dimension to this perspective is the ability of the entrepreneur to lead the enterprise and overcome environmental challenges that shape the industry trends. This involves the ability to identify opportunities, the skill to harness resources and the competency to mitigate risks inherent in business ventures. Leadership and managerial capability feature a high priority among potential entrepreneurs (Scheiner). The paper provides a deeper insight into the different perspectives associated with the concept of entrepreneurship in different types of startups, contexts and roles with the aim of evaluating my personal skills and competencies in this direction. Types of startup and its demand on entrepreneurship Different types of entrepreneurial ventures require different skills and level of competencies. The size of enterprise depends on the ability of the entrepreneur to accumulate the desired investment to develop and support resource allocation for operations. There are several factors that need to be considered before starting a micro enterprise. The first and foremost requirement is an in-depth understanding and knowledge of the business context and the various aspects that drive the market trends and consumer behavior in the particular segment (Henry). This involves a good knowledge of basic business management practices and knowledge in the areas of accounting, marketing, inventory, costing and pricing. One of the primary constraints facing any startup venture is the lack of adequate financial resources that limits the scope of undertaking an in-depth market assessment and research required for promoting business enterprises. Capital funding from financial institutions expose a certain degree of risk that can discourage many individuals from taking entrepreneurial initiatives (Scheiner). Among other constraints facing the micro and small enterprise development initiatives is lack of adequate knowledge and information related to industry trends, market behavior and consumer preference. Resource shortages in terms of lack of necessary equipments can also impact the ability of entrepreneurs to undertake risks. Medium and large enterprise start-ups are capital intensive and cannot be undertaken on individual basis. A strategic alliance or partnership where stakeholders have a mutual interest in promoting business goals is an important aspect related to this kind of entrepreneurship. In such cases, the entrepreneurs seek venture capital and external sources of funding to promote their innovative ideas and business enterprise development goals. Such entrepreneurial ventures face increased challenges from operational process efficiency and resource allocation to managerial practices and work culture (Scheiner). Various research studies in this context have revealed that small and micro enterprises focus more on survival rather than on business development and expansion initiatives (Gray). The entrepreneurial capabilities are very limited in such enterprises. The extent to which business owners exhibit entrepreneurial qualities is much influenced by his judgment and perception of challenges facing his business and market goals that are in turn shaped by personal experience and knowledge. Considering the needs of a micro and small enterprise start-ups, I strongly feel that I have a good understanding of business management and understand the risks associated with such initiatives. However, a small amount of capital risk undertaken with an in-depth understanding of the business environment can help in reaping benefits in terms of revenue and profit generation potentials. Entrepreneurial context Organizations operate for profits and entrepreneurs seek to build strategies that focus on maximizing their market value and profitability. Entrepreneurs are individuals who facilitate the organization to grow and support the activities of the organization by enabling access to required resources and planning of production and marketing activities. However, not all businesses operate for profit and hence the context in which entrepreneurship is undertaken differs from one individual to another. While some organizations are socially motivated to contribute to their community and environmental causes, there are others that focus on delivering technology based solutions to improve the lives of others (Open University). The concept of social entrepreneurship is based on the practice of organizations that exist for facilitating society and community benefits. The primary difference between business entrepreneurs and social entrepreneurs lie in the fact that the former is always seeking profits while the latter is driven by the urge to improve the society in which they live (Bornstein). The concept of corporate entrepreneurs is based on their focus on maximizing profits and pursuing growth strategies to promote and expand their operations. The international entrepreneur has similar goals with the vision of a global enterprise that supports a strong brand name under its flagship. Entrepreneurs are driven by opportunities in any field and the entry of enterprises into any industry is driven by goals and objectives that provide the entrepreneurs with a sense of achievement in the long run. However, it is not necessary that such enterprises exist only for earning profits (Scheiner). The above sections have highlighted the different types of environmental contexts in which entrepreneurs operate and the forces that drive such initiatives. Introspection into my abilities and skills reveal that I have always been motivated by the urge to help others and contribute to the community in which I live. My education and experience so far, has instilled a deep rooted sense of responsibility to my immediate surroundings and I feel my satisfaction lies in promoting a business enterprise that can help the society in some way. This does not in any way indicate that I will not pursue profit making activities but a greater part of this profit will be used for social benefits and causes. I strongly feel that a social entrepreneur is driven by social purpose that is underlined by generating business returns for the purpose of obtaining the necessary resources to achieve the goals. Future roles There are various roles associated to entrepreneurship and these roles can range from small business banker, community based advisor to venture capitalist and professional consultant. Each of these roles play an important part in delivering specific nature of services to the customers and requires specific skill-sets that assist in carving out a niche market for such services. While the role of a small business banker and venture capitalist involves high degree of efficiency in numerics and finance combined with a deep understanding of business environment, community based advisor and professional consultant need expertise in problem solving and identifying business potentials for further growth and development. An assessment of my personal skills and competencies reveal that my strengths lie in the area of problem solving and ability to perceive situations well to come up with appropriate solutions. I have good listening skills that help in interact well with others and understand their problems. This proves to be effective in providing them with adequate solutions to the existing problems. I am a good team player and have a participative leadership style that focuses on discussion and analysis of problems with the team before taking the final decision. I believe these qualities can help me become a good advisor who can promote community interests through a social entrepreneurial initiative. However, this also requires an in-depth understanding of existing environment and the ability to identify the potential of growth and development in the given context. This is where I can apply my fast learning abilities and quest for knowledge to evaluate situation through a deeper understanding of the given context. Conclusion The evaluation of different entrepreneurship concepts and its application in various contexts has helped me in assessing my capabilities and existing skills to identify the key areas where I can apply this knowledge. I understand that such initiatives may not be easy since the existing business environment presents numerous challenges to entrepreneurs and managers. However, the key to these challenges lie in exploring personal potentials and driving oneself to deliver optimum results in terms of leading and managing resources. Motivation and goal oriented action are important factors that can result in effective entrepreneurship. Effective leaders can achieve big objectives with their vision and passion overcoming barriers with their enthusiasm and energy. References 1. Ahmad, N. & Seymour, R.G. Defining entrepreneurial activity. 2008. The University of Sydney, Australia. 2. Bornstein, D. How to change the world: social entrepreneurs and the power of new ideas. 2007. Oxford University Press. 3. Gray, C. Enterprise and culture. 1998. Routledge. 4. Henry, S. Good practices in business development services: how do we enhance entrepreneurial skills in MFI clients? 2006. Alterna Savings. 5. Open University. Entrepreneurial qualities. 2011. Available from http://openlearn.open.ac.uk/mod/oucontent/view.php?id=397405§ion=2 6. Scheiner, C.W. Fundamental determinants of entrepreneurial behaviour. 2008. Gabler Verlag. Read More