Critical Reflection on Entrepreneurship - Assignment Example

CRITICAL REFLECTION ON ENTREPRENEURSHIP Student’s Name Institutional Affiliation Task One The term ‘entrepreneur’ originates from the French word ‘entreprendre’ that means to undertake or take in between. Entrepreneurship refers to the process that involves the designing, initiating and running a new business that offers products or services to the society on cash sale or hiring terms (Kusmintarti, Thoyib, Ashar, & Maskie, 2014). It is imperative to note that entrepreneurship plays a critical role in both the social and economic sectors of every nation since it serves several important roles in the society. For instance, entrepreneurship greatly assists to drive the economy, leads to the creation of companies that offer various employment opportunities, which has led to the reduction of the rate of unemployment. It additionally assists in triggering creativity in the economic market, leads to provision of new goods and services as well as analysing the social and environmental impact of their products and activities. This paper will critically review the concept of entrepreneurship through identifying the various types and perspectives of entrepreneurs in addition to selecting two entrepreneurs and analysing the start-up and development of their entrepreneurial venture. It is critical to know the origin of entrepreneurship and entrepreneurial ideas to get a better view and understanding of wide concept entrepreneurship. Previously the word entrepreneur, which comes from the French word ‘entreprendre’ referred to, to undertake or take in between (Baugh, 2016). However, this word has gained a new meaning in the contemporary society meaning a business or social innovator with the ability to identify and taking advantage of opportunities and converting the seized opportunities into viable ideas. An entrepreneur also takes calculated risk to implement the idea despite the competition in the market and consequently achieve rewards from implementing those ideas. Several other languages and cultures also practised entrepreneurship and had different words to refer to it. For instance, the Thai term ‘Pupagongan’ refers to a person that brings people together while in Malay, the term ‘Ushawan’ means an individual that engages in commercial activities that have some financial risk (Shefsky, 1994). Various evidence such as the existence of a group of wise workers and the peaceful association of cultures through trade by Phoenicians show that entrepreneurship has existed through the ages. A unique attribute that entrepreneurs possess is an enterprising mindset, which ensures that they are imaginative and have the readiness to initiate and implement new projects. The various types of entrepreneurship theories include economic, resource-based, opportunity-based, sociological and psychological theories (Michael, 2007). Economic theories of entrepreneurship, through various schools of thought i.e. classic, neoclassical and Austrian Market process, suggest that entrepreneurship centre on economic condition and the opportunities they generate. On the other hand, resource-based entrepreneurship theories deal with identifying the means through which people utilise various kinds of resources to achieve rewards for entrepreneurial efforts. The opportunity-based theory that was put forward by Professor Peter Drucker suggests that the success of entrepreneurs originates from the identification and the seizing of opportunities that are brought about by socio-cultural and technological changes. Psychological theories centres on emotional and mental elements that guides and encourages entrepreneurs to achieve rewards for their entrepreneurial ideas. Lastly, sociological theories focus on the different social contexts that facilitate the leveraging of opportunities by entrepreneurs (Dontigney, 2016). There two categories of entrepreneurs are business entrepreneurs and social entrepreneurs. Business entrepreneurs mainly focus on profit maximization while the social entrepreneurs focus on filling the gaps that are not already seized by the public sectors and the market. Business entrepreneurs have to innovate constantly to secure or gain market share. The other types of entrepreneurs include the sceptical entrepreneur, the research entrepreneur, the accomplished entrepreneur, the determined entrepreneur, and the copycat entrepreneur. The sceptical entrepreneur is an individual who when he realizes that another entrepreneur is becoming successful, he immediately begins to question the reason for the success. The research entrepreneur, on the other hand, is the one who focusses on learning. These kinds of entrepreneurs research a wide range of ideas with an objective of initiating or growing a business. Accomplished entrepreneurs are the ones that receive rewards for their efforts through the success of their businesses. These type of entrepreneurs have undergone all the stages of entrepreneurship that have ensured they have received their success hence only focus on maintaining their market share. The determined entrepreneurs see value in entrepreneurship and focus on succeeding by focusing on identifying ideas that will facilitate their efforts to initiate or grow their business. The copycat entrepreneur tries to achieve success in their businesses by copying the entrepreneurs who are succeeding in their businesses (Kimanzi, 2016). There are various reasons that motivate different people to become entrepreneurs. The two main reasons that drive individuals to entrepreneurship include opportunity and necessity. Individuals who view the opportunity as the main encouragement to becoming entrepreneurs are also referred to as opportunity-based entrepreneurs. These individuals focus on achieving their goals and objectives, seizing opportunities and earning money. Additionally, opportunity-driven entrepreneurs strongly aspire to be independent since they become easily bored with routine work and desire to be their bosses. On the other hand, necessity-driven entrepreneurs rely on necessity as their motivation for becoming entrepreneurs. Veciana & Urbano, (2008) posit that this category of entrepreneurs is mainly comprised of individuals who have no better alternative other than becoming entrepreneurs were recently in some hardship. In analysing entrepreneurial mindset, it is significant to note that entrepreneurs have a unique way of recognizing, perceiving and reasoning. Most entrepreneurs incorporate the use of simplifying mental models in identifying and discovering new goods and services. They use this model to join previously unconnected pieces of information that will facilitate the assembling of appropriate resources for starting or growing a business. Various psychologists have come up with several characteristics that define entrepreneurs. These characteristics include; determination and perseverance where entrepreneurs are determined individuals who focus on conducting extensive research with the aim of identifying various ideas that will enable them successfully start-up or grow businesses. Entrepreneurs also have a characteristic of persevering through various hardships that they consistently encounter while identifying ideas used to initiate or grow businesses. The other attribute that entrepreneurs possess is the drive to achieve. Entrepreneurs have to possess the drive to achieve to accomplish successfully their goals and objectives of initiating and implementing the most viable ideas that will ensure the success of their businesses (Kusmintarti, Thoyib, Ashar, & Maskie, 2014). Entrepreneurs are also opportunity oriented people who identify and take advantage of various opportunities in the market to ensure the success of their businesses. Persistent problem-solving is another characteristic that entrepreneurs possess. They are faced with continuous problems that they are required to solve before it interferes with the success of the new or growing business. Entrepreneurs have also calculated risk taker who has to make very risky decisions that require a lot of prudence such as deciding on the best idea to implement while starting up or growing a business. Taylor (2016) posit that, creativity and innovativeness are another characteristics that entrepreneurs exhibit in all activities involving the running of the business. This characteristic ensures that the entrepreneur maintains their position in the market. Entrepreneurs, additionally, have the characteristic of team building which enables them to control and guide a specified group of people towards achieving set goals and objectives. However, entrepreneurs also face various challenges that are in the form of entrepreneurial risks such as financial risk, career risk, psychic risk and family risk. According to Shefsky (1994), entrepreneurs face increased risk of being exposed to bankruptcy compared to ordinary individuals. These entrepreneurs also experience the challenge of going back to the previous jobs when the one they are investing in fails as well as experiencing psychological problems in instances when the business fails. Entrepreneurs also miss out on their families thus failing to play their family role in instances that business demands too much of their time. Task Two. Richard Branson is an entrepreneur who owns the Virgin Atlantic airlines which dominate a high percentage of the travel airlines (Clarkson, 2014). Richard Branson revealed that his decision to start up Virgin Airlines emerged during a visit to the British Virgin Islands where he got stuck in Puerto Rico due to lack of enough passengers to warrant a flight to the Islands. He then hired a plane and filled up other passengers who were also stranded charging them an airfare of $39 one way to BVI (Clarkson, 2014). Branson then discovered the business opportunity in the air travel industry and bought his first plane, Boeing 747, which marked the birth of the Virgin Airlines. Branson ensured that his airlines were much more special than other competitors to attract more customers and retain their loyalty. Virgin airlines still maintain high-quality customer service and comfort for the passengers. It is evident that Virgin Airlines followed the classic start-up pathway where the entrepreneur initiates a business when they improve the product frontier, lower prices for a product or service or satisfy untapped demand. Branson discovered the untapped demand of passengers needing to travel to various destinations using the air at an affordable price and receive quality service. As such he started the Virgin airlines with the intention of satisfying the wide range of airline passengers’ demand for quality services and at affordable prices. I was able to secure an appointment with Emma Welsh, a renowned Australian entrepreneur who is the co-founder of Emma and Tom’s, despite her busy schedule. Emma and Tom had worked in the corporate world for several years when they decided to start up their own business. This decision was centered on the fact that they had identified a market gap in the provision of super-tasting juices where there was high demand for these juices by very many consumers. Today, Emma and Tom’s juices have gained a lot of popularity in the country with over 3000 stores selling their products. These entrepreneurs focus on café markets since they identified that they are very good at that market. Like Richard Branson, Emma and Tom also adopted the classic start-up to launch their business; this is because they identified the untapped demand for super-tasting juices and strived to satisfy it. Both Richard Branson and Emma qualify as social entrepreneurs because of what drove them to start up their business, both of then strived to fill the market gaps in their respective societies. These two entrepreneurs exhibited various entrepreneurial characteristics that are common with other entrepreneurs. Both Emma and Branson exhibited the characteristic of calculated risk when they decided to initiate their business. Also, they showed the characteristic of opportunity-oriented when they identified respective opportunities in the market and proceeded to seize them. Micro school of thought best explains the relationship between these two entrepreneurs and the success they achieved. Both Branson and Emma fulfilled the school of thought of entrepreneurial trait which refers to traits that successful entrepreneurs exhibit. These traits include a desire for achievement and self-efficacy (Squicciarini, 2016). In conclusion, entrepreneurship refers to the process that involves the designing, initiating and running a new business that offers products or services to the society on cash sale or hiring terms. Various sets of evidence show that the concept of entrepreneurship existed through the ages. These evidence include the existence of a group of wise workers and the peaceful association of cultures through trade by Phoenicians show that entrepreneurship has existed through the ages. It is imperative to note that the two main reasons that drive individuals to entrepreneurship include opportunity and necessity. Entrepreneurs exhibit various characteristic such as persevering through various hardships that they consistently encounter while identifying ideas used to initiate or grow businesses. Other characteristics include; determination, opportunity orientation, calculated risk-taking, creativity and innovativeness, drive to achieve and team building. Entrepreneurs face various challenges that are in the form of entrepreneurial risks such as financial risk, career risk, psychic risk and family risk. Richard Branson is an entrepreneur who owns the Virgin Atlantic airlines which dominate a high percentage of the travel airlines. On the other hand, Emma Welsh is a renowned Australian entrepreneur who is the co-founder of Emma and Tom’s. These two entrepreneurs exhibit similar entrepreneurial characteristics that ensured that they achieved their successes. These two entrepreneurs qualify as social entrepreneurs because of what drove them to start up their business, both of then strived to fill the market gaps in their respective societies. References. Baugh, J. (2016). Center for Entrepreneurship. [online] United States Association for Small Business and Entrepreneurship. Available at: https://www.researchgate.net/journal/1042-2587_Entrepreneurship_Theory_and_Practice [Accessed 29 Aug. 2016]. Clarkson, N. (2014). Why did Richard Branson start an airline?. Virgin. Retrieved 27 August 2016, from https://www.virgin.com/travel/why-did-richard-branson-start-an-airline Dontigney, E. (2016). Yourbusiness.azcentral.com. Retrieved 27 August 2016, from http://yourbusiness.azcentral.com/theories-entrepreneurship-23795.html. Kimanzi, C. (2016). The 5 Types of Entrepreneurs. Entrepreneur.com. Retrieved 27 August 2016, from https://www.entrepreneur.com/article/244210. Kusmintarti, A., Thoyib, A., Ashar, K., & Maskie, G. (2014). The Relationships among Entrepreneurial Characteristics, Entrepreneurial Attitude, and Entrepreneurial Intention. IOSR Journal Of Business And Management, 16(6), 25-32. http://dx.doi.org/10.9790/487x-16622532. Michael, S. (2007). Transaction cost entrepreneurship. Journal of Business Venturing, 22(3), pp.412-426. Shefsky, L. E. (1994). Entrepreneurs Are Made Not Born. New York: McGraw-Hill. Squicciarini, M. (2016). Entrepreneurship, innovation and enterprise dynamics. Small Bus Econ. Taylor, B. (2016). The Best Entrepreneurs Are Missionaries, Not Mercenaries. [online] Harvard Business Review. Available at: https://hbr.org/2016/04/what-separates-high-impact-entrepreneurs-from-those-who-dont-make-a-big-difference [Accessed 29 Aug. 2016]. Veciana, J. & Urbano, D. (2008). The institutional approach to entrepreneurship research. Introduction. Int Entrep Manage J, 4(4), 365-379. http://dx.doi.org/10.1007/s11365-008-0081-4. Read More