Entrepreneurship and Venture Creation - Research Paper Example

Entrepreneurship and Venture Creation Introduction Entrepreneurship can be considered as a process to start an organization or business. An entrepreneur usually develops a particular business model, acquires financial, operational and human resources, and is totally responsible for its failure or success. The overall operations of entrepreneurship take place within the ecosystem of entrepreneurship. In the current scenario, the concept of entrepreneurship has extended from its business origins in order to include political and social activity. Intrapreneurship is usually entrepreneurship within a large organization or some existing firm. This form of entrepreneurship encompasses corporate ventures in which subsidiary organizations are formed out of large entities. Entrepreneurs are even termed as leaders as they are willing to take major risks so as to explore available market opportunities. They aim towards implementing an initiative by planning, organizing and allocating resources to develop new products or services or further improve upon the existing product line. However in recent times the concept of entrepreneurship has been extended to include a specific mindset that gives birth to various entrepreneurial initiatives. This is observed in the form of social entrepreneurship, knowledge entrepreneurship or political entrepreneurship. Majority of working men living in United States or United Kingdom as soon as reach their retirement age have a period of one or more years for self employment. Amongst them majority working men are actively engaged in self employment activities for more than six years. The concept of entrepreneurship which was not taken into consideration in earlier years is a major field of study in the present decade. On the other hand, in United States as well as in Great Britain, entrepreneurship is regarded as the major economic growth driver. This approach often leads to implementation of innovative thoughts and ideas which helps to stabilize the economic position of a country. Entrepreneurial activities differ significantly depending on the creativity and organization type involved. The range of entrepreneurship basically varies from solo, part-time to even large scale undertakings. This in turn even creates wide base of jobs for individuals and reduces the rate of unemployment. There are certain entrepreneurial ventures of high value which seek angel funding or venture capital so as to raise capital for developing business. Entrepreneurs are even supported by many organizations such as specialized government agencies, science parks, NGOs, and business incubators. The three different categories of entrepreneurship which would be analyzed in this study are intrapreneur, social entrepreneur and family entrepreneur. There are certain characteristics possessed by each category of entrepreneurship which is greatly reflected in their respective entrepreneurial activities. Discussion An entrepreneur is an individual who has the capability to explore hidden market opportunities and focus more on creative or innovative ideas. There are certain characteristics which should be present within an entrepreneur as it determines whether a business venture would be successful or not. As stated by Deakins and Freel (2012), firstly, an entrepreneur should be passionate as for a start up founder the objective should not only be operating a business but there has to be deeper purpose. This characteristic is essential as it helps an entrepreneur to be motivated towards turning innovative ideas into reality. Perseverance is another such factor and this indicates ability of an individual to handle wide variety of obstacles. This factor even states that an individual shall not be shattered by hearing refusals but need to follow up with required personnel continuously so as to transform their ideas. Sponge-like behavior is one of the essential characteristic of an entrepreneur as this describes its nature to be continuously aligned towards learning. An entrepreneur must always acquire knowledge in order to handle effectively any form of situation. Resourcefulness can be defined as a characteristic of an entrepreneur as one should be able to properly allocate resources so as to reach desired goals and even must be able to optimally utilize resources. Finally, it is essential that an entrepreneur is open-minded in terms of taking in opinion from others and implementing it as and when required (Deakins and Freel, 2012). These characteristics can be regarded as a base for any entrepreneur but as per entrepreneurial approaches these characteristics often vary. For instance a social entrepreneur cannot execute its idea by being profit oriented but a family entrepreneur needs to implement their idea in such a fashion that it proves to be a profitable venture. Hence it can be stated that characteristics are directly linked with entrepreneurship category. This is highly argumentative as there are certain characteristics which are same for all categories. The four factors which are usually standardized for any of the categories are being passionate, possessing perseverance, sponge-like behavior and resourcefulness. Apart from these elements each of the categories encompasses certain additional qualities that should be present within respective entrepreneur. Intrapreneurship for instance is the act of exhibiting entrepreneurial activities while working along with a big organization. According to Carter and Jones-Evans (2012), in present scenario often organizations demand for an intrapreneur rather than hard working employee as they are able to contribute their innovative ideas in overall success of an organization. This concept has gained significance in the recent years where an individual in a large organization possess potential to implement creative idea into reality by undertaking risk. It is currently known as a common practice designed by corporate management that integrates innovation and risk taking approach along with motivational techniques and reward system. This kind of entrepreneurial activity is greatly observed in organizations where an individual undertakes an innovative approach without being told to do so by higher authority. Hence an individual can be termed as an intrapreneur if one focuses on creativity and innovation, to transform an innovative idea into a venture which is profitable while working within organizational environment. Intrapreneurs are even termed as inside entrepreneurs as they are aligned towards the organizational goal. It is an appropriate example of motivation which caused through job design either informally or formally. For instance marketing executives or team members who have undertaken projects of larger organization are given flexibility to act as entrepreneurs though they utilize resources, security and capabilities of the firm. This platform even gives an opportunity to employees to utilize their skills or competencies and learn from their failures. The basic characteristics of an intrapreneur are they do not consider money as their measurement tool though they are well aware about the importance of money. Intrapreneurs aim towards proving that they are valuable for an organization. They are even called as greenhousers because once an idea is conveyed intrapreneurs research and acquire all possible information in order to develop an idea into well proved plan. On the other hand they know how to pivot that is handle any particular situation. These individuals usually possess confidence and courage to take refusals and yet stay firm on their position so as to achieve ultimate goals. They behave with full integrity and make decisions which are justifiable (Carter and Jones-Evans, 2012). However some of the characteristics are contradictory as intrapreneurs tend to be money oriented since their innovative ideas bring forth profitable ventures. In real world scenario often intrapreneurs contribute less towards organizational success and utilize their skills and knowledge to gain competitive advantage. All of the characteristics are normally not present together within an individual such as intrapreneurs tend to be less humble as they consider themselves to be valuable asset for an organization in comparison to other team members. For instance if a person has wide base of knowledge, and focus on innovation or creativity but is not aligned with organizational goals then one cannot deliver desirable results. An individual needs to judge one’s internal characteristics appropriately so as to select the best possible entrepreneurial activity. Like a person who possess high integrity but do not have innovative skills then this particular field is not suitable for that person. On the contrary, it can even be stated that characteristic often do not play a major role in determining which of the entrepreneurial activity is most suitable. As situational changes make a person accustomed to different environmental conditions. For instance a highly competitive environment enforces an individual to acquire wide set of information, analyze it and derive at conclusions which can be effectively implemented in an organization. If such ideas prove to be profitable, then management considers them as innovative thoughts, delivered by a team member or an intrapreneur. 3M is a real time example of intrapreneurship as the higher authority encourages different types of projects within the organization. This company give their employees required freedom to design innovative projects and even supply them with funds. Intel and Google are other such firms which believe in the approach of intrapreneurship and motivate employees to take up challenging projects. However as per the overall scenario it can be stated that there is intense competition in these mentioned firms which encourage employees to think out of the box so as to grab attention of team leaders (Wilson and Rosenfeld, 1998). On the other hand, without being creative in nature and possessing high level of courage and confidence this form of entrepreneurial activity cannot be accomplished successfully. As per Kirby (2003), social entrepreneurship is a mechanism through which innovative solutions are outlined for social problems. Social entrepreneurs usually adopt a specific mission in order to sustain and create social value. They are inclined towards appropriate thinking both for non-profit as well as business worlds. This kind of entrepreneurial activity is observed in various organizations such as large and small, secular and religious, for-profit, hybrid and non-profit (Kirby, 2003). Business entrepreneurs are those who measure performance in terms of two parameters such as return and profit but social entrepreneurs takes into consideration majorly the positive return towards society. This form of entrepreneurship broadly comprises of environmental, social and cultural goals and is greatly associated with non-profit and voluntary sector. There are certain conditions in which profit too is considered as one of the goals for some organizations or social enterprises. However there have been arguments on whom to be regarded as a social entrepreneur. According to Burns (2007), there are different sorts of disciplines and fields that are related to social entrepreneurship. Environmentalists, philanthropists, socially oriented practitioners and other social activists can be regarded as social entrepreneurs. There are certain characteristics which uniquely defines social entrepreneurship so that it can be differentiated from other social activities. In modern society this form of entrepreneurship has been advantageous for millions of people and it majorly focuses on the probable benefits which can be explored by the society (Burns, 2007). A normal approach of entrepreneurship can be transformed into a social endeavor as soon as social capital is utilized in a way that positively affects society. The success story of a social entrepreneur is dependent on large number of elements which is often not prioritized by corporate business. A social entrepreneur possesses capability to immediately identify social problems but even has to properly analyze the broader context related to an issue that crosses theories, discipline and fields. There needs to be an understanding about how an identified issue closely relates to the society in order to develop innovative solutions. The ventures of social entrepreneurship are centered towards maximizing gains in terms of social satisfaction rather than achieving high profit margins. Both public and private agencies across the globe have initiatives of billion-dollar in order to empower deprived individuals and communities. The support which is gained from organizations such as private firms or government aid agencies initiate innovative ideas so as to reach to larger audience. As stated there are certain characteristics on basis of which social entrepreneur can be distinguished from other type of entrepreneurs. They usually formulate mission so as to sustain and create social value that could benefit the society. A social entrepreneur undertakes great deal of autonomy and economic risk associated with activities such as selling services or producing goods. They even explore new opportunities with the support of hidden resources in order to serve its mission. An entrepreneur belonging to this field should be passionate towards designing sustainable models on basis of feasibility study. There is even ongoing engagement in learning, innovation and adaptation by social entrepreneurs. Capital ownership is not a major factor in this type of entrepreneurial activity and power of decision making is not based on this factor. On the other hand, collaborative and participatory nature needs to be present within individuals belonging to the category of social entrepreneurship. This basically means that a social entrepreneurship has to work in collaboration with various stakeholders (De Wit and Meyer, 1998). There is a major drawback of this entrepreneurial activity that is individuals receive minimum paid work and there is limited profit distribution. However social entrepreneurs can explore change opportunities so as to develop better society. In certain context social entrepreneurs often face major challenges regarding acquiring sufficient funds so as to sustain their overall operations. It is essential that an individual is pervasive in order to handle such situation where one has to listen to many refusals. The objective of social entrepreneurship is to bring forth stability within the society and help those people who are deprived off their basic rights. While achieving this form of objective innovative skills are required but are not the primary concern unlike that in case of intrapreneur or other category of entrepreneurship. Hence it can be stated that this form of entrepreneurship requires specific skills such as understanding societal issues, shifting from profit oriented motive towards working for society, being pervasive and focusing on collaborative approach. These factors have a significant impact on entrepreneurial activity as those individuals who are profit oriented often lack required skills to resolve issues which cause problems in society. On the contrary, individuals who do not possess innovative skills are witnessed to outperform in this particular field since they are able to closely relate with various societal issues. In overall context, characteristics of social entrepreneur is aligned towards eliminating major problems from the society but this approach is totally different from corporate management practices since the funds or resources required is high but the return on investment cannot be calculated in monetary terms. The relation between individual’s characteristics and the form of entrepreneurial activity can be further outlined on basis of common goals and individual interests. Those individuals who are passionate about their career and desires to be at a stable position in the future years is not fit for becoming social entrepreneur. On the contrary, individuals who have suffered cause of various societal issues can rapidly identify problems present in a society that needs to be eradicated. However this statement is contradictory as there are many individuals who are passionate, possess innovative skills but have not undergone such sufferings have their NGOs running successfully across the globe. In this scenario it is not justifiable that specific characteristics within an individual makes one a social entrepreneur. This form of entrepreneurial activity even requires high risk taking nature, working in collaboration with others, making effective decisions, designing sustainable and innovative model, and maximizing gains (Birley, 1986). However these basic characteristics need to be present within an individual as it guides the steps to be taken by an individual to develop better society. It has been observed that basically those individuals tend to become social entrepreneur who are not profit oriented and mainly explore their skills and knowledge to provide required help and support towards backward class or community. Wickham (2004), in his studies stated that family entrepreneurship is another form of entrepreneurship that is frequently observed in present scenario. A family business is basically a commercial organization in which multiple generations those who are related to family by marriage or blood influences the decision making process. These generations are usually identified through ownership or leadership of a firm. The firms which are based on owner-manager entrepreneurship cannot be stated as a family business as they lack the dimension of multi-generation and even family influence that develop relationships and unique dimensions of family business (Wickham, 2004). Hence an individual who decide to perform such kind of entrepreneurial activity possess in-built skills related to handling family business effectively. These individuals are highly dependent on other generation and prefer to take collective decision than enjoying any form of autonomy. On the contrary, it is evident that a person who is well aware about the intricacies associated with family business and possesses sufficient market knowledge is more likely to enter into family entrepreneurial activities. As per Bolton and Thompson (2013), family business can be stated as one of the oldest form of economic organization. It ranges from corner shop to large publicly listed firms comprising of wide base of employees. However in the present decade big publicly traded firms are run in bureaucratic and rational manner by an individual referred to as an organization man. Family firms with complicated psychological process and specific management models are often not compared to large organizations. The major challenge for family business is that business and ownership roles encompass at times conflicting actions, values and goals. All of the members who are part of a family business need to be given equal share and in order to do so a family entrepreneur needs to secure high profit margins (Bolton and Thompson, 2013). These entrepreneurs should have higher confidence level to implement innovative ideas and shall be courageous to undertake high risk. In maximum cases family entrepreneur achieve success through big projects which consists of higher levels of risk. There are certain characteristics which should be present within an individual who wishes to become a family entrepreneur. One such factor is creativity on basis of which a business can witness success or failure. However inappropriate attitude of an individual can affect creative mindset or rather innovative skills which are essential for family entrepreneurship. The creativity factor comes in various forms like ability to develop varied approaches to a specific problem, possessing heightened awareness or perceptions, or visualizing things from different dimensions. Growth orientation is another element that states degree to which family or non-family members are motivated so as to explore strategic growth opportunities. This factor should be present within an individual involved in family business as this will help in sustaining business operations and acquiring larger market share. Adaptability states that in a family enterprise there are various reasons to respect and even honor any past traditions. On the other hand this ritual should be properly balanced with the demand towards adaptability to changes taking place in a family. The structure of a family business is subjected to constant change as per the varying conditions in the market place. Hence this is another quality that needs to be present within a family entrepreneur (Thurik and Wennekers, 2004). An individual who is rigid to any form of changes taking place in external environment and continue to follow traditional business procedure is not likely to gain long term competitive advantage. This is a major reason behind failure of family business as many individuals joining family firm feels that they just need to supervise the flow of business operations. Future focus can be stated as another vital component of family business. Most of the family firms proclaim that they desire to continue their business even through the next generation. The greatest strength of family business is they are able to take that long view which cannot be taken by other entrepreneurial firms. On the contrary, weakness of such firms is that they fail to plan a better future. Long-term and forward looking business strategy is essential for these types of family firms. Whereas the other characteristic that needs to be their within family entrepreneurs is self-determination. Great entrepreneurs can be defined as those who have the desire to win (Simmons, Armstrong and Durkin, 2008). These individuals basically are passionate and dedicated towards their job, and are willing to face good or bad results. However entrepreneurial parents do not encourage their children to take higher risks as they are over protected. This in turn even limits young family entrepreneurs to explore bigger opportunity prevailing in local or global market. Self-determined behavior is a must for these individuals as it helps them to set challenging goals and overcome all possible hurdles. In this context it can be stated that specific characteristics is required by an individual to succeed as a family entrepreneur. It is not necessary that those individuals who have a family business set up by their ancestors can become successful family entrepreneur. In order to achieve desirable goals a family entrepreneur needs to be self determined, creative and growth oriented (Storey, 1994). Hence as per analysis of different categories of entrepreneurship it is evident that characteristics possessed by an individual guide their entrepreneurial activity. Since a person who is not profit or growth oriented cannot succeed as a family entrepreneur but can set high standards as a social entrepreneur. A case study analysis can further clarify the need for appropriate characteristics to perform certain entrepreneurial activity. Jim Oswald and Larry Treanor have been able to achieve desirable performance standards for Bowzo. Jim Oswald was a design engineer and career inventor who had worked with Rolls Royce for more than 25 years. Jim as well Larry were a part of Coventry University’s Vision’s Works who are involved in developing innovative business ideas. These two individuals possessed creative skills and were highly determined to launch a multi-media design. On the other hand, Larry was a violin teacher and professional musician. While they both were inclined towards creating an innovative product, Larry revealed his thoughts about manufacturing a device that can help novice violin players to accurately play by bowing straight. This device was basically fixed to the neck of violin and offered control to students. Larry and Jim realized that manufacturing such a device would eliminate the long-withstanding problem that is faced by violin teachers and students. However the major discussion was on marketing channel as millions of violins are bought and sold every year. The most preferred channel which was chosen by Larry and Jim was traditional distributor or wholesaler to retailer network. They even conducted a market research which stated that there was a need for low cost device, that was convenient to use and manufacturing and design engineering priorities were even set. The product was finally launched in the 2006 and currently the team comprises of a group of design engineers, musicians, marketers and inventor (Hisrich and Peters, 2002). Jim in a press conference at product launch even stated that success of their innovative idea was not only their hard work and determination but they even exhibited a sponge-like behavior due to which they were able to incorporate creative ideas or opinions given by their team members. As per this case study, Jim and Larry previously possessed innovative skills and expertise. They were able to explore market opportunities and work in collaboration with other team members. On the other hand, they were motivated towards transforming their innovative ideas into reality. Conclusion According to this critical review on entrepreneurial characteristics it can be stated that certain qualities are inborn within individuals who become successful entrepreneur. However the characteristics differ across wide range of entrepreneurship categories. For instance individuals who can analyze societal issues well or are not profit oriented and take initiatives for prosperity of the society as a whole is likely to become social entrepreneur. These characteristics guide a person to opt for a particular career path. In the case study Jim and Larry possessed the required expertise to develop such innovative device and they were able to transform their creative thoughts to gain high profit margins. They were more passionate towards creating their own identity than being a part of large organization. Hence Bowzo was formed which made them successful entrepreneurs in the industry. The other two forms of entrepreneurship which has been described in the study are intrapreneur and family entrepreneur. In both categories certain qualities are same such as being creative, passionate, growth oriented and motivated. On the contrary, there are characteristics which are unique in respective categories, such as a family entrepreneur needs to be more open minded as one has to take into consideration opinion from all family members. Whereas, an intrapreneur is more focused on individual goals and are used to performing their tasks in full autonomy. The approach of an individual changes as per the internal qualities possessed by a person and this significantly affects the entrepreneurial activity chosen by an individual. References Birley, S., 1986. 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