Entrepreneurial Business Planning - Assignment Example

ENTREPRENEURIAL BUSINESS PLANNING INSERT NAME COURSE AFFILIATION INSTRUCTOR DATE Introduction As a factor of production, entrepreneurship seeks to combine the other three factors of production namely land, labour and capital. Through the combination of these factors, individual entrepreneurs establish organizations through which they pursue wealth generation and income (Bruin & Dupuis, 2003). In the process, they increase the national output by reducing unemployment and utilising the available resources efficiently. For the purpose of this report, entrepreneurs are defined as individuals that have realised a market opportunity that they have grasped by providing unique commodities aimed at exploiting the opportunity. This is unlike intrapreneurship whereby individual entrepreneurs advance a previous business idea through innovation and creativity. Entrepreneurship involves the development of a new idea and taking the necessary actions towards exercising the ideas in pursuit of wealth generation. This report seeks to discuss renowned entrepreneurs by looking at their behaviours, motivators, personalities, their individual backgrounds and its influence on their entrepreneurial activities. In this discussion, entrepreneurial theories will be utilised in order to point out the applicability of these theories towards entrepreneurship. Virgin Group (Branson) Dell Inc. (Michael Dell) Behaviors Risk Taking, Action-based, creative and motivated. Independent, risk-taker, motivated and flexible. Needs Achievement and affiliation Achievement, power and affiliation Motivator The need to achieve and assist others to achieve their dreams. The need to achieve by setting achievable goals. Decision processes Leaves the decision making process entirely to the professionals and the business idea owners. Makes the final decision as the chairman of the company’s board. Entrepreneurial Essence To empower people by enabling them to realize their dreams Increase consumer’s accessibility to technological devices such as computers. Richard Branson Having started his successful business venture in 1966 at the age of 16, British entrepreneur Sir Richard Branson has built his virgin empire on a global platform. His virgin brand comprises of over 360 organizations all engaged in commercial activities. Being the eldest in a family of three, Branson performed poorly in academic circles but was good in physical and extra-curricular activities (Shepler, 2009). This is because he suffered from dyslexia and therefore his IQ was limited although this did not apply in his passion for outdoor activities. Towards compensating on his weakness, Branson strived towards connecting with people by energizing their dreams as well as his own. Through this ability to interact with people, Branson has built an empire that comprises of more than 150 companies with a net worth of over 2.5 billion dollars. Richard Branson began his entrepreneurial activities with the publishing of a magazine and later on he opened a mail-order business before establishing a series of record stores. Since then, Branson has established his businesses in the transport, telecommunications and sports sectors (Shepler, 2009). Sir Richard’s entrepreneurial behaviour arises from his ability to identify with the needs of other people and attempt to satisfy them with an easy commercial touch. This way, Branson is able to identify unexploited market opportunities and develop creative and innovative strategies to tap its potential. Notable of his entrepreneurial activities, every business field is permissible as long as one has a clear plan on how to exploit the market. Owing to this attitude, the entrepreneur is always searching for new and interesting business venture to establish. Goal pursuance has been the entrepreneur’s sole objective in life that has been expanded by the need to achieve success. According to the physiological theory, entrepreneurial behaviour sprouts from highly motivated emotions that these individuals bear. Macllelands (1965) links entrepreneurial behaviour to the motivation of individuals within the society. Motivation arises from three basic needs namely; achievement, power and affiliation (Carsrud & Brannback, 2007). These three basic needs are evident in Branson as he seeks to make the fullest out of his life. His need for achievement is evident in his attempts to break travel records. Notable of Richard Branson’s business empire, the individual organizations have small offices around the world with few executive staff. His decision making processes are based upon his idea of empowering others to achieve their dreams by executing their ideas. He assists them in searching for the adequate resources to execute their dreams. Basically, he enjoys turning possibilities into successes and giving people a helping hand. The personality theory states that personal traits account for much of their business prowess acquired by entrepreneurs (Bolton & Thompson, 2004). Innate abilities are emotional in nature and individual motivation varies depending on biological differences. Simply put, this theory aims at validating the claim that entrepreneurs are born and not made. However, Branson was born in a peasant family where his parents did not own a single business enterprise. Therefore, the genetic personality traits cannot explain Branson’s motivation and entrepreneurial behaviour. As an agile and versatile business-oriented person, Branson is always scouting for business opportunities and assisting individuals in achieving their dreams. Most of his entrepreneurial activities have been influenced by environmental factors such as human suffering and poverty. Risk taking and optimism are two basic entrepreneurial characters exhibited by Branson and are the sources of his success. Michael Dell American entrepreneur, Michael Dell began his entrepreneurial activities at the age of 19 with the establishment of PC’s Limited. With this company, Dell sold refurbished computers directly to his customers hence reducing the product prices. This business model later paid off handsomely and saw the birth of Dell, Inc that has major outlets worldwide. The birth of the internet has positively impacted on the organization’s operations by improving the consumer’s access to its products. Michael Dell as the founder and chairman of Dell, Inc has an estimated fortune of $12.3 Billion (A Touch of Business, 2009). Born in an average family in 1965, Michael Dell became fascinated about computers at a tender age and could dismantle and re-assemble computers by the age of 15. Similar to Richard Branson, Michael abandoned his studies at the University of Texas at the age of 19 in order to concentrate on his business. After experiencing growth with PC’s Limited, he changed the organization’s name to Dell Computer Corporation and was listed on the NYSE valued at $80 million.The company continued to experience growth and was later renamed Dell Inc. as it sought to diverse its product range (A Touch of Business, 2009). Michael Dell’s entrepreneurial behaviour emerges from self-belief and knowing that he can achieve anything he sets his eyes on. In School, Dell attained average grades and although he got to receive tertiary education, he believed that it was wasting his time and limiting his abilities. Upon dropping out of school, his close peers discouraged him by stating that he will never get anywhere without sound education. However, the young ambitious man has since proved them wrong and has a position among the world’s billionaires. His pursued his interest in computers and established his own giant company that manufactures computers; a trait exhibited by majority of the entrepreneurs (Shook, 1980). On the contrary, Branson dropped out of school due to a mental condition but Dell dropped out of school due to his ambitious character. Entrepreneurs are known to be risk takers whereby they have to make major decisions in order to disturb the market conditions and in turn deploy their creativity and innovativeness. By dropping out of school at an age where education is considered the most important thing, Dell proved himself to be an entrepreneur that has the necessary skills to make it in business. Unlike Branson, Dell limits his entrepreneurial activities to his interests that are mainly technological. According to Sobel (2000), Dell qualifies as a craft entrepreneur as he posses the necessary personal skills that pushed him towards establishing his own company. Michael Dell is motivated by his need to excel and prove his childhood peers and critics wrong. The entrepreneur has the urge to implement and accomplish new things before any of his competitors in the industry. Similar to Branson, Dell has always wanted to compensate for his academic disadvantage by setting his heights higher and gathering the necessary resources in order to achieve the preset goals. With the increased technological advancements of the modern world, Michael is always searching for new market opportunities and thus increases his organization’s range of products. The sociological theories of entrepreneurship state that motivation among entrepreneurs emerges from their past experiences. Rostow (1960) developed the modern theory whereby he suggested that the levels of entrepreneurship are limited in under-developed nations compared to developed nations. This explains the market opportunity exploited by Michael Dell due to his exposure to computers at a tender age. However, this theory fails to recognise the innate abilities possessed by entrepreneurs that make them take action and implement business ideas. Branson Max Muir Zhang Leadership Chairman CEO CEO Self Starters Yes No No Decision Making At individual level Inclusive Inclusive Motivation Personal ambitions To see others prosper Empower the employees in order to build a global giant Max Muir Max Muir inherited his parent’s business entity E.E. Muir & Sons, formerly known as T.D Pratt that is currently run by the family’s fourth generation. Upon his father’s death, Max was destined to take over the operations of the organization with assistance from his brother, Doug. The two formulated the business’s vision and divided the administrative roles between them. Max’s ambition and visionary strategies resulted into the growth of the business organization through providing comprehensive solutions to the organization’s problems. Eventually Max became the business’s lifeline and established the organization within the horticulture industry (Pech, 2009). His personality relates to that of Branson in that they are able to connect with other people and assist them in achieving their objectives. Max Muir’s honest trade practices enabled farmers to experience increased harvest and hence achieve their farming dreams. On the other hand, business growth propelled Max towards establishing himself within the industry. This trend is also similar to Michael Dell’s success with his computer models. Notably, entrepreneurs start their businesses at a small scale that experience tremendous growth to become industrial heavyweights (Kuratko & Hodgetts, 2006). However, unlike Branson and Dell, Max took over an already established business although he re-strategized the business’s operations to experience significant growth.From the personality theory, Max does not qualify to be an entrepreneur because his family lacks the entrepreneurial traits exhibited by entrepreneurs. This theory fails to acknowledge that business skills can be learnt or acquired from the natural environment and that it is not a necessity that one has to be born with them hence contradicting the physiological theory. Despite taking over an already established business, Max exhibits basic entrepreneurial character such as innovative, action-oriented and flexible. These characteristics enable an entrepreneur to be able to develop new and creative ways based on events within the external environment. Max’s motivation is sourced from the need to provide solutions to problems in order to ensure that people live their lives fully without any barriers. He understood the plight of horticultural farmers and their suffering in the hands of fertilizer and seed suppliers. This negatively impacted on their returns and with the business in his hands; he sought to correct this trend that was establishing itself in the industry. According to the economic theory, entrepreneurs are economic change agents whereby they seek to disturb the economy through increased national output among other economic variables (Casson, 2003). E.E. Muir & Sons has enabled Australia to experience increased agricultural output thus contributing indirectly to the economy. This theory however fails to consider small-scale entrepreneurs that establish businesses that have very little effect on the economy. Zhang Ruimin Zhang Ruimin has proved himself as an entrepreneur following his appointment as the chief executive of Qingdao Refrigerator Factory. As Haier’s founder and CEO, Zhang has been honoured due to his entrepreneurial activities that have solidly established Haier in the global market. Haier’s growth has been attributed to Zhang’s visionary leadership and ambition through diversification, building brands and operating at an international scale. Zhang was a deputy manager of another organization prior to his appointment as the head of Haier. Similar to Max, Zhang took over an already established company that was facing difficulties owing to the harsh external environment (Pech, 2009). With his entrepreneurial skills, Zhang was able to transform the operations of Haier to its present image of a global manufacturing organization. Creatively, he was able transform the organization’s internal process through quality assurance programs. Zhang identified that the organizations poor performance was attributed to the low levels of motivation among the employees and he had to connect with them in order to inspire them in the delivery of their duties. He has also proved himself to be an independent thinker by shunning a reduction in the price of his company’s products due to increased competition in the white goods market. His sense of determination made him stick to his prices as competitors rushed to reduce the prices of their goods. He took the risk of maintaining the high prices and opted for creating demand for his organization’s products. Conclusion The entrepreneurial theories seek to explain the force behind entrepreneurship by focussing on their behaviours and activities. Variations in the behaviours and activities of entrepreneurs have resulted into the emergence of different theories. All in all, successful entrepreneurs exhibit high levels of motivation and self-determination that distinguishes their activities from those of other business personalities. Irrespective of their backgrounds and experiences, entrepreneurs exhibit similar characters that include risk-taking, action-oriented, independence, desire to achieve, creativity and innovativeness. These characters are evident from the four discussed entrepreneurs that have employed them to varying levels. From this discussion, it is evident that entrepreneurs do not have to start their activities from scratch and they can re-strategise the operations of an already existing business towards achieving success. Recommendations Individuals should not entirely focus on education in order to achieve success in their activities. Education should however equip individuals with knowledge and skills that will enable them make their entrepreneurial decisions accurately. Secondly, individuals should be supported towards the pursuit of activities that interest them as opposed to being directed towards issues that do not fascinate them. This will enable them engage in activities they like and creatively identify methods to achieve success. Due to this fascination, individuals are more motivated and can stay focussed towards the achievement of their goals. Lastly, no single theory can satisfactorily define the entrepreneurial activities and behaviours. Some entrepreneurs are born while others are made. Researchers should therefore concentrate on identifying specific motivators and characters that enhance success among entrepreneurs. References .A Touch of Business. (2009). Hw to Become a Successful Bus. Leader like Michael Dell. Retrieved on Oct 24, 2009 from < http://www.atouchofbusiness.com/business-topics/success-stories/business-leader-dell-0008.html >. Bolton, B.K. & Thompson, J. (2004). Entrepreneurs: Talent, Temperament & Technique, 2nd Ed. New York: Butterworth-Heinemann. Bruin, A.D. & Dupuis, A. (2003). Entrepreneurship. New Perspectives in a Global Age. Boston: Ashgate Pub. Ltd. Carsrud, A.L. & Brannback, M.E. (2007). Entrepreneurship. Michigan: Greenwd Pub. Grp. Casson, M. (2003). The Entrepreneur: An Econ. Theory, 2nd Ed. California: Edward Elgar Pub. Kuratko, D.F. & Hodgetts, R.M. (2006). Entrepreneurship: Theory, Process & Practice, 7th Ed. Carolina: Thompson South-Western. Pech, R. (2009). Entrepreneurial Courage, Audacity & Genius. Sydney: Pearson Educ. Shepler, J. E. (2009). Richard Branson’s Virgin Success: The Incredible Triumph of an Enigmatic Entrepreneur. Retrieved on Oct. 24, 2009 from < http://www.johnshepler.com/articles/branson.html >. Shook, R.L. (1980). The Entrepreneurs: 12 who Took Risks & Succeeded. Boston: Harper and Row. Sobel, R. (2000). The Entrepreneurs: Explorations Within the American Bus. Tradition. Denver: Beard Books Read More