Traits Necessary to Start, Manage and Develop Entrepreneurial Enterprise Using DUBS Model - Coursework Example

Critically discuss the characteristics and traits necessary to start, manage and develop entrepreneurial enterprise [Name] [Professor Name] [Course] [Date] Executive Summary There is a growing interest in entrepreneurship and the central characteristics and traits necessary for an individual to start, manage and develop and enterprise. In which case, concerns over the traits and capabilities that can influence the success of an entrepreneurship have increasingly become significant. This essay critically discusses the characteristics and traits necessary to start, manage and develop entrepreneurial enterprise using DUBS model and Competence theory. Based on DUBS model, the traits and characteristics necessary to start, manage and develop entrepreneurial enterprise include planning, ideas, doing and self-awareness. Based on competence theory, the traits and characteristics include the desire for power, autonomy, the need for endurance and affiliation, the need for tolerance of ambiguity, motivation, creativity, orientation and flexibility. Table of Contents Executive Summary 1 Table of Contents 3 Introduction 4 DUBS Model 4 Competence theory 6 Characteristics 6 Motivation 8 Knowledge 9 Capabilities 9 Conclusion 9 References 11 Characteristics and traits necessary to start, manage and develop entrepreneurial enterprise Introduction There is a growing interest in entrepreneurship and the central characteristics and traits necessary for an individual to start, manage and develop an enterprise. In Netherlands for instance, a number of researches over the last decade have attempted to establish a trend among people towards developing positive attitudes towards starting a business. A study estimated that 2.4 percent of the Dutch population, between the ages of 18 and 54 years, now consider starting a business of their own (Driessen and Zwart 1). In which case, concerns over the traits and capabilities that can influence the success of an entrepreneurship have increasingly become significant. Similarly, studies establishing a relationship between business success and traits or characteristics of entrepreneurs have become increasingly significant. This essay critically discusses the characteristics and traits necessary to start, manage and develop entrepreneurial enterprise using DUBS model and Competence theory. DUBS Model Stoof (36-38) summarized that traits and characteristics are practices where capabilities, competence, knowledge and attitudes accomplish behaviour. Based on DUBS (Durham University Business School) model, significant traits and characteristics important for starting an entrepreneurship include planning, being self-awareness, being creative and having the initiative to doing a business (van der Kuip & Verheul 12). Several studies have linked business success to effective and strategic planning (van der Kuip & Verheul 12; Otuya et al 204). In which case, it is critical to argue that effective and successful entrepreneurs are typically strategic planners. This trait is based on the DUBS model of enterprise, which distinguishes different types of entrepreneurial traits and characteristics to be around four components, namely planning, ideas, doing and self-awareness (Otuya et al 204). Ideas comprise the traits of investigating, seeking and creating; planning comprise the traits of problem solving and planning; doing entail the attributes of persistence, risk taking and commitment while self-awareness comprises the qualities of having initiative, motivation and self-confidence (van der Kuip & Verheul 12). It can therefore be argued that starting a business requires one to be a strategic planner. A survey of literatures shows that in granting credit to start a business, banks and financial institutions have tend to focus on determining the existence of this trait as a perquisite to giving a consideration towards advancing credit. Essentially, this is since banks judge applicants based on a written business plan. In which case, business starters view business planning to be of strategic important (Adegbite 10-12). Studies have showed that entrepreneurs without an effective business plan estimating financial projections disappear within five years (Driessen and Zwart 1). Strategic planning also has a second function, the trait is essential in managing and developing a business as it enables one to analyse the business situation, research on performance, compile useful data essential for decision-making and make end conclusions concerning facts revealed through research (Driessen and Zwart 3-5). Competence theory Competence theory designates characteristics as traits that make people to be capable or incapable for entrepreneurship. Based on competency theory, traits in entrepreneurship comprise the talents, a collection, characteristics or a set of knowledge and attitudes that enable one to be successful in business. Based on the theory, four components are suggested: motivation, characteristics, knowledge and capabilities (van der Kuip & Verheul 12). Characteristics The suggested cluster of characteristics under competence theory includes having an internal locus of control, having the need for achievement, motivation and having a risk-taking propensity. In some studies, other characteristics are discussed as well (van der Kuip & Verheul 12). These include the desire for power, autonomy, the need for endurance and affiliation and the need for tolerance of ambiguity. Motivation is characterized as a tendency to set challenging objectives and goals and strive for these goals through making efforts (Collins, Hanges & Locke 95-97). An early empirical study by van der Kuip and Verheul (14) showed that the high need for achievement drives people to become entrepreneurs. Need for autonomy characterizes the desire to be in control because of fear of external control. A study by Rauch and Frese (4-7) showed that individuals with a high need for autonomy often considers freedom and individualism as important and hence venture in activities that they can assume control over their activities. This relates to the need for entrepreneurs to engage in entrepreneurship where they can engage in personal and organizational management free from external influence (Driessen and Zwart 3-5). Creativity is defined by Stocker (10-11) as developing new methods rather than using standards procedures. Successful entrepreneurs have the capacity to develop new ways of managing their businesses, problem solving or making decisions. Initiative is the motivation to start work independently, or to take the first step towards trying new methods of doing something. Van der Kuip and Verheul (14) defined it as the capacity to undertake a business out of one’s own accord. Opportunity-seeking refers to the search or identification of unsatisfied wants in the marketplace, which is met by introducing a new product (Rasheed 8-9). Goal-setting refers to the capacity to define objectives attaining through allocation of efforts in entrepreneurship. It is also concerned with attaining business goals and objectives (van der Kuip and Verheul 14). Self-awareness depicts the level or realism in estimating and entrepreneur’s personal abilities that enhance sufficient response to the environment. Within this context, it can be argued that aside from the capacity to assess one’s own abilities, self-confidence is significant. Internal locus of control refers to the extent to which an individual achieving a business is dependent upon his capacities, behaviours and actions (van der Kuip and Verheul 14). Empirical studies have showed that successful enterprenuers tend to score higher on these traits than entrepreneurs with unsuccessful enterprises (Rasheed 8-9). On critical analysis, the clusters of characteristics under competence theory enable one to become opportunistic. In which case, entrepreneurs exploit the opportunities they see as well as challenge how things are done in the business. This may include questioning an opportunity to deliver services or create a product or a line of business. Successful entrepreneurs will pursue opportunities despite the currently available resources (Driessen and Zwart 3-5). Motivation Motivation is also a critical characteristic suggested by competence theory. The traits within motivation are mostly internal driven (Collins, Hanges & Locke 95-97). An example is ambition. Competence theory suggests that an entrepreneur who has a great deal of knowledge about certain tasks as well as the capacity to perform the task and lacks motivation is not likely to be successful in entrepreneurship. There are several motives for starting a business, mainly pull and push factors (Collins, Hanges & Locke 95-97). For instance, dissatisfaction with employment can enable one to start a business. This refers to push factors. They are basically externally-driven. Other factors include discovery of niche market. Conversely, pull factors refers to situations where an individual is attracted to entrepreneurship, motivating one to start a business. There are three internally driven motives for starting an entrepreneurship. These include autonomic and need for achievement. On analysis, motivation relates to tenacity and strong belief. In which case, an entrepreneur needs to have a strong belief on himself and what he is doing to cushion him from any setbacks or initial losses when starting a business. Without it, it will be difficult for an enterprise to set off. An entrepreneur also needs to posses the ability to keep focusing on the business goals despite the setbacks. A critical trait in this respect is resilience. Knowledge In competence theory, knowledge depicts a rational part or essential characteristic for starting and managing an enterprise. Knowledge relates to the capacity to be informed about components of an entrepreneurship (van der Kuip & Verheul 14). It may include knowing the rules for administration, being aware of the principles of marketing, knowing the rules governing running of a business within a particular jurisdiction. On critical analysis, successful entrepreneurs need to be experts in a field, allowing them to have the ability to know when it is time to change strategies as well as allowing them to take notice opportunities. It can be perceived that knowledge relates to expertise (Driessen and Zwart 3-5). Capabilities Competence theory also suggests capabilities as an essential cluster of characteristics necessary for starting and managing an entrepreneurship. Essentially, it refers to the ability to do something. A number of traits and characteristics can be identified as contributing to the success of an entrepreneur (van der Kuip & Verheul 14). They are divided into two groups: the early and the mature phase. The early phase includes creativity, orientation and flexibility while the mature phase includes organizing, planning, financial controlling, motivating and leadership. Conclusion In examining the varied perspective on entrepreneurship using DUBS model and Competence theory, a distinction can be made between constructs that emphasize the significance of entrepreneurial traits and characteristics and those that focus on the behavior and traits of the entrepreneurs. The first perspective considers entrepreneurship as a set of personality traits while the second distinguishes between successful entrepreneurs and unsuccessful entrepreneurs. Overall, based on DUBS model, the traits and characteristics necessary to start, manage and develop entrepreneurial enterprise include planning, ideas, doing and self-awareness. Based on competence theory, the traits and characteristics include the desire for power, autonomy, the need for endurance and affiliation, the need for tolerance of ambiguity, motivation, creativity, orientation and flexibility. References Adegbite, S., Ilori, M., Irefin, I., Abereijo, I. &Aderemi, H. "Evaluation Of The Impact Of Entrepreneurial Characteristics On The Performance Of Small Scale Manufacturing Industries In Nigeria." Journal of Asia Entrepreneurship and Sustainability 3.1 (2006): 1-17 Collins, Christopher, Paul Hanges & Edwin Locke. "The Relationship of Achievement Motivation to Entrepreneurial Behavior: A Meta-Analysis." Human Performance, 17.1 (2004): 95-117. Driessen, Martjin and Zwart, Peter. The Entrepreneur Scan Measuring Characteristics and Traits of Entrepreneurs, 2010. 27 Nov 2013, Rasheed, Howard. Developing Entrepreneurial Characteristics in Youth: The Effects of Education and Enterprise Experience. University of South Florida: Tampa , 2000 Rauch, Andreas & Frese, Michael. "Psychological approaches to entrepreneurial success. A general model and an overview of findings." International Review of Industrial and Organizational Psychology, (2000). 27 Nov 2013, http://www.eflglobal.com/sites/default/files/knowledge_center/Psychological%20Approaches%20to%20Entrepreneurial%20Success-%20A%20General%20Model%20and%20an%20Overview%20of%20Findings_0.pdf Otuya, Robert, Kibas, Peter & Otuya, Janet. "A Proposed Approach for Teaching Entrepreneurship Education in Kenya." Journal of Education and Practice 4.8 (2013): 204-2010 Stocker, Klaus. Why is non‐rational behaviour of small‐scale entrepreneurs successful? University of Applied Sciences Nuremberg: Nuremberg, 2011. Stoof, Angela. Tools for the identification and description of competencies. Open Universiteit Nederland: Heerlen, 2005 van der Kuip, Isobel & Verheul, Ingrid. Early Development of Entrepreneurial Qualities: the Role of Initial Education, 2003. 27 Nov 2013, Read More