Entrepreneurial Thinking and Behavior: Entrepreneurial Environment - Assignment Example

Background Richard Branson Richard Branson started is a British entrepreneur born in 1950 and by the age of 16 years he established a magazine publication business which he started with 4 pounds that was from his mother (Shepler 2010). He however did not manage to finish his education as he found the business option more pleasing and satisfying. Education to him was also a challenge that he did not wish to pursue. He was not actually a good performer in class as he admits. He was quite an excellent athlete more so in swimming as well as other sports. This was a talent that learning in the classroom environment could not help to uncover. He also had a profound ability to interact with people: another talent that saw him rise to be the big entrepreneur he is today. In 1970 he opened a mail-order business and 2 years later he established Virgin Records being a chain record store. By 1990 his empire had grown to cover airline business: Virgin Atlantic Airways which had become a force to reckon with in the Atlantic skies (Shepler 2010). The 1980s also saw him expand a great deal his recording label i.e. Virgin records which had also become a key player in the entertainment industry with huge revenue base for Branson. According to Shepler (2010) Branson has been labelled to be having a calling to start new ventures and through this move he has managed to start over 150 businesses all of which he heads without necessarily actively being involved in their day to day operations. Julian Hodge Julian Hodge on the other hand was another British entrepreneur whose concentration was in the banking sector. He was born in 1904 to a plumber which can be regarded to be quite a humble beginning considering what he had achieved at the age on 99 years (year 2004) when he died (Jones 2010). In contrast with Branson he was a good performer in school and he was active in various capacities that he served in various firms. He first worked in a chemist then became a junior clerk in Great Western Railway. At this time he was taking his free time to continue with his studies in accounting whereby he had become a corporate accountant by the age of 26 years (Jones 2010). In 1940 he receives a bank note from a person he has assisted with a loan of 22 pounds. This receipt changed everything in his life as he wondered how come a lot of money was being handled outside Wales. He began establishing small firms that aimed at arresting some control of such finances in Wales from London. It is through this that he set institutions that aimed to offer financial services in Wales. He later saw his empire grow to become Hodge Holdings whose business portfolio spanned from banking, insurance, motor vehicle retailing, engineering and manufacturing among others. Introduction In the world today there are many people who have been acknowledged to be superb entrepreneurs and their historical backgrounds seem to have contributed this. According to Morrison (2000), ones background cannot be ignored in determining how they are at present. History as it is said at some point repeats itself or gives a bearing on how the future will be and how the present conditions have unrolled (Kuratko 2008). For the purposes of explaining the above further this part of the paper the focus is on two entrepreneurs i.e. Julian Hodge and Richard Branson and how historical conditioning can affect ones entrepreneurial characteristics within a population and the degree to which entrepreneurship is accepted as socially legitimate. Historical conditioning, entrepreneurial characteristics and social legitimacy Branson started his businesses early and this has made him quite wealthy at an early age than most of his peers. The underlying historical background that he hails from was such that people of his age were not that vibrant in starting businesses that would grow to the degree that his grew. He however singled himself out of the crowd and achieved. He says that once his granny told him that he needs to make the most out of his life as he has just one chance to do it. According to Shepler (2010) this was after being asked to read A Brief History of Time that gave an account of how one should take each and every moment and treat it as their last. He goes further to say that these are words that echo in his mind and came to change his approach to life and to a huge extent made him who he is today. This is a historical even to him that keeps popping up in his mind and it gives him the driving force needed to move to the next level in the entrepreneurship ladder. Another issue that came to make him sink more into the line of business was his not so good appeal for education. As earlier stated he was not a good performer in class and this made him see that as compared to his peers who were going on with their education, he was rather to concentrate on what he seems to be doing best. This triggered the urge to have a sense of innovation and before he even knew it, he has an empire to run out of the many new businesses he had opened. The same lack of competence academically made him to also capitalize in the other ability that he had of maintaining good public relations. He tried to use this to have more and more customers for his Student magazine where big corporate companies set their adverts as well as having articles from celebrities of the time according to Shepler (2010). This to a huge extent created an impetus for him to yearn for greatness and he was well connected. The recoding company also worked well and was quite successful from the onset with Mike Oldfield as one of the clients whose first release with Branson became a hit for 247 weeks. At this time the recording companies were not as many and this made him famous and landed him many recording deals. Branson went ahead to establish Virgin Airlines which to date is one of the most prestigious enterprises he is running under the Virgin label. It seems that since he started doing business at the age of 16 years he has a drive to open new businesses which are challenging to operate notably the airline industry. The society at large seems to have accepted his endeavours as he has faced few issues related to bad practices by his companies. He has a passion to face challenges and rise above them and this is one of the strongest spirits he keeps talking about. It has served him well as for the airline, the routes plied at first seemed a daunting task to beat the competition but he overcame and now Virgin Atlantic is one of the most used airline in the Atlantic route. This being a historical trend for him since his first business he has followed it with a conviction that he will overcome all the challenges coming his way. This has gone to enhance his entrepreneurial trait of being persistent and resilient in facing problems and achieving success. Julian Hodge on the other hand was well educated and he ventured into a line of business that he had education background on (Jones 2010). This is unlike Branson who openly says that most of his ventures he had no prior knowledge about but manages them well through those who did. Hodge after receiving the bank note earlier stated, made him think of offering financial services. He however faced many obstacles in trying to achieve his desired results of having a bank in Wales. He therefore had to be innovative enough to come up with institutions that offered similar services. The historical account was that no company was allowed to operate under the name Bank at the time. This however did not deter him from expanding in the line of offering similar products and facilities. Due to difficulties that were there in the financial market e.g. prohibiting laws, he began diversifying to other ventures like selling cars and insurance. He was resilient enough and he never gave up his dream of once having a bank in Wales. In the meantime he scooped a great deal of wealth from the other ventures mentioned above as he waited for an opportunity to arise so as to have a bank. This historical accounts went ahead to make him more innovative and a risk taker in venturing into new areas of operation (Jones 2010). However, he was also a controversial businessman as people and the media believed that he used to fund campaigns (notably the one against devolution) and that his businesses deals always had a hidden motive. This saw him have rather sour relations with the community which caused to a huge extent the Catholic Church’s decline to take his donation of a Cathedral. Barriers to entrepreneurship An entrepreneur is affected by many challenges which starting a business or while in the course of doing it (Morrison 2000). The two entrepreneurs mentioned above have faced barriers that have hindered their progress. These barriers are in relation to PESTL analysis whereby external factors have a major part to play. Political barriers These are barriers that relate to the political system and the challenges that this poses. Hodge was notably affected by the politics of the day. He was however quite vocal in advocating for what he believed was for the best interest of his business and Wales at large. He had managed to have good relations though with some politically correct people such that whenever something went wrong in his business he always sought their help. An example was when the Bank of England refused to recognise Commercial Bank of Wales for quite some time between 1981 – January 1982 (Jones 2010). When the situation became worse he went to seek the intervention of Sir George Howe who was the Chancellor of the Exchequer and within a short time after this the bank was recognised again. Branson on the other hand has had good relations with the political class although the people’s wish for him to be the Mayor of London seems not to be the best of alternatives is may wish to take. He has been interviewed on this matter a number of times but seems not to be amused by it. He has tried to be impartial politically so as to receive least hindrances from the political class against his empire. Economic barriers Branson faces huge economic barriers as he expands his empire more so to other countries other than Britain. As much a he may have all the said wealth of over 3 billion pounds it is never easy to start up a business more so in new environments (Shepler 2010). This is one of the biggest challenges he faces although he often says that it is the challenges that make him try. The financial costs of starting some businesses are too high. To make a company grow finances are required and for an entrepreneur of the size of Branson or Hodge, the amount of money required for this growth is a lot even to them. Branson has a particular problem when it comes to coping with the technological trends in his lines of operations. Keeping pace requires huge investments in IT and staff which costs a great deal. Social barriers For a these entrepreneurs the societal forces have not spared their endeavours. For Hodge many people criticised his business deals terming them as the usurer of the valleys. The height of public outcry was in the 1960s when his companies were involved in a widely publicised pyramid scheme involving mortgages (Jones 2010). He was personally cleared of blame and at some point he claimed he was unaware of the dealings. This hampered a great deal the expansion strategies of his bank as customers felt betrayed. Richard Branson’s empire on the other hand faces huge barriers especially in the overseas ventures where the language spoken is different as well as people’s culture. He therefore needs to have a thorough knowledge of the markets to venture into and this reduces the speed of investment in certain regions. Technological barriers Technology has been a huge barrier to entrepreneurship world wide (Kuratko 2008). To Branson it has the bigger effect as compared to Hodge whose era as the leader in his bank was not intensely technological as Branson’s. Branson has to have the best technology in the market at any time for the many enterprises he runs. This is a challenge to keep up with the current technological trends considering also the costs involved. Legal barriers Hodge as stated earlier was unable to achieve his dream for over 30 years of having the Commercial Bank of Wales due to regulation and legislation barriers (Jones 2010). Jones (2010) says that it was not possible to have a name of an institution having the word Bank. This created one of the biggest barriers he ever faced in establishing the bank 30 years after his first intention. Branson on the other hand due to his quest to carry out businesses both locally and abroad faces different regulatory frameworks in the different countries of operation. A good example is the start-up period before a business is fully registered. This period in come countries is as short as a day while in others it can take more than a month. Attempts to Promote Enterprise Culture Enterprise culture tries to make individuals hunger for personal achievements by earning money through their own private businesses. Kuratko (2008) says that it is culture that creates a sense of independence to people by making them think and behave in entrepreneurial ways by opening their own businesses. Branson’s era at first was one that was conservative and people wanted to be employed after going through definite college courses. Government owned companies were still many although in the era of Hodge almost all major companies were government owned. This means that in the era of Hodge there was less awareness and initiatives towards private enterprise. There was more of the view that favoured collective achievement rather than personal achievement. Hodge was from Wales where at the time there were few huge businesses owned by individuals (Jones 2010). The enterprise culture was being encouraged indirectly through those who had entered into it at the time of Hodge’s entry into business. There is a slight contrast with the Branson’s time when there were many upcoming businesses which were individually owned. The Branson era was characterised by the period where the enterprise culture was termed as being American. It is important to note that Branson’s era is the one when globalisation has hit the world market arena where the globe has become one village and anyone can start business anywhere as long as they have the resources. This has acted as a huge incentive to Branson to expand his empire to overseas countries whereas the same privilege was not with Hodge’s era. Recommendations In the Hodge’s time there would have been the need to develop better legislations that did not restrict establishment of some businesses. The government should have also released its enterprises to the public for private ownership. This would have encouraged innovation and promote private enterprise development. Branson’s environment on the other hand should offer better rules and legislations that aim at making it easy to start a business. Countries should try to reduce the on the registration requirements and the process one has to follow. Initiatives to offer finances should also crop up to assist those who have entrepreneurial skills and ideas to pursue them. There is some good progress though in this line as banks in England are becoming more and friendlier in offering financial services to risk takers. The governments on the other hand have been relaxing the regulations on registration of businesses and this is helping a great deal as investors are able to cast their nets far and wide on the globe. References Jones, RL 2010, Man who built his own bank, viewed 11 August, 2010, . Kuratko, DF 2008, Entrepreneurship: Theory, process, and practice, 8th edn, Cengage Learning. Morrison, A 2000, Entrepreneurship: What triggers it? International Journal of Entrepreneurial Behavior & Research, 6(2), 59-7. Shepler, J 2010, Richard Bransons Virgin success: The Incredible Triumph of an Enigmatic Entrepreneur, May 9, 2010, viewed 11 August, 2010, . Read More