Entrepreneurship in Description - Literature review Example

Introduction Entrepreneurship has been difficult to define therefore academics have mostly resorted to defining its characteristics to derive the meaning of this function. Peter F. Drucker (1985) describes an entrepreneur as innovative person. According to him this special quality is what defines an entrepreneur. It is his capacity to either create a new resource or to give a new meaning to an existing resource that is his special attribute. However the entrepreneur is usually an individual, a person, rather than an institution, and as a consequence it is always the persona that is the focus in any discussion and in any environment, whether in an individualistic organisation or a conglomerate. He is the one who decides on the strategy of his enterprise. Literature Review An entrepreneur is a person whose chief and distinctive abilities are to take risks, has knowledge of market functions and manufacturing know-how, has marketing and management skills and finally possesses the ability to co-operate with others (Littunen 2000). He is able to foresee the unknown, and be daring enough to try it out of absolute desire to take risk. He identifies an opportunity, goes against conventional wisdom and pursues an untried strategy for the joy of achievement of his desired intention. Profit is but a secondary motive to the individual entrepreneur although in a corporate environment, as he cannot ignore it, he skillfully builds his actions around it. Interestingly Bird (1988, 1992) says that entrepreneurship is a state of mind that reflects how a person focuses his attention and uses his experience and behaviour to a specific objective. Intentions are what differentiate an entrepreneur from a normal person. According to Wiklund and Shepherd (2003) they have a mindset that has a strategic orientation for decision making in a specific style, method and practice. These characteristics can be individualistic or may even exist in a team and are capable of making strategic responses to situations in a different manner as these people are always on the lookout for opportunity. They are known to possess proactive, prospector mindset that is in pursuit of attractive opportunities. They are capable of using the energies of others to focus on implementation of innovative ideas, are willing to take risks but are driven by a desire to be independent and be competitively responsive to customer needs (McGrath and MacMillan 2000). Personal factors, mixed with contextual situations and external environments combine to shape intentions. Most individual intentions tend to influence decisions. They are affected by personal factors that are a product of experiences gathered in positions of employment or individual earlier entrepreneurship as well as personal traits and characteristics including abilities. The contextual characters comprise of changes in the market, social, economic and political changes and other variables like government regulations (Bird 1988). When there is talk of a mindset it leads to the study of the psychological make-up and Stewart et al (1999) have concluded that these attributes have contributed to sound predictions of a person’s capability and initiative to pursue entrepreneurship. Kourilsky (1980) also believes that the attributes like the craving for achievement, creativity, initiative, risk-taking and setting objectives along with self-confidence and internal control; and the underlying emphasis on independence and autonomy, motivation, energy and commitment and above all persistence against all odds are the psychological factors that can foretell an entrepreneur. Several other academicians have described the attributes differently laying emphasis on one or the other but all pointing to them as the vital characteristics that describes an entrepreneur. For instance Gorman et al (1997) state that the tendency toward entrepreneurship is related to several personal characteristics like values and attitudes, personal goals, creativity, risk-taking propensity, and locus of control. Similarly, McClelland (1965) have projected achievement motivation, risk taking and control as important features that prevail in any entrepreneurial venture. The result of these characteristics and traits is that the entrepreneur becomes self confident and self sufficient and reaches a state that may be described as self efficacy. This self efficacy is described as the belief by a person on his own capabilities (Bandura 1982). In such a state he is able to perceive how to perform certain tasks and uses all his personal skills to achieve this target or goal with excellence. This self perception is born out of the cognitive abilities and tendencies that he possesses and uses to obtain his objective. This is then converted into intentions and finally onward to activities. Bandura (1991) further describes that such a person is able to make choices, seek goals, and make additional efforts; his special trait being perseverance in the face of adversities. Self efficacy also becomes the stepping stone to higher ambitions and performance on the strength of skills acquired through experience. Efficacy develops in individuals on the four pillars of experience, observations, social persuasions and judgment of personal physiological state (Bandura, 1982; Wood & Bandura, 1989). In other words his exposure and encounters in the professional and social fields develop this acumen in him over a period of continuous experiences. This is strengthened further as the experience that builds on this four-fold information shows up in his performance (Gist & Mitchell, 1992). When an individual is able to evaluate the availability and constraints of his resources, both internal and external, and understands its implication on his performance, his self efficacy enables him to make judgments for the future (Gist & Mitchell, 1992). The net effect is that the self efficacy of the entrepreneur is the cornerstone of his ability and his special characteristic. Analysis Entrepreneurship is a process that changes the economic equilibrium by disturbing a set of accepted processes through innovative practice. It is a dynamic progression that changes the rules of the game and often creates new events. It symbolizes change and a departure from tradition. It challenges and tests conventions and commences upon new variations. It thrives on devising a new future for consumers which they not even be aware of at that moment in time. While entrepreneurship is not an institution nevertheless the process can be considered as pivotal in an institutional setting as well. Entrepreneurs are individuals that that have the exceptional qualities to do the extraordinary, both in individual setting or in an organisational set-up. Their frame of mind is same but they work with different strategies in either situation. Entrepreneur Extraordinaire Mr. Sim Wan Hoo readily fits the shoes of such an entrepreneur whose innovative ideas have literarily rocked the world. All the attributes described above are abundantly seen in his personality and work. In 1981 with just USD 6000 he formed Creative Technologies with the vision of building a personal computer that could talk, sing and play music, besides crunching numbers. However this innovation, offered in 1984, was ahead of its time and ended in a loss of USD 56 million to his company. Yet he did not lose heart but in 1989 and like an insatiable entrepreneur went on to offer sound blaster technology which is used in over 60% of computers today. The Sound Blaster Pro launched in 1991 has become the industry standard for multimedia PCs. According to Drucker (1985) innovations are not necessarily of a scientific nature nor are they bound within the realm of technology. He states that “amongst the history- making innovations, knowledge-based innovations rank high. The knowledge, however, is not necessarily scientific or technical. Social innovations based on knowledge can have equal or even greater im­pact”. Indeed Sim’s sound blaster is a product that falls in the latter category. In recognition of his services to technology the Singapore Government appointed Sim the chairman of Technopreneurship 21 Private Sector Committee, which is mandated to recommend changes that can facilitate growth of technopreneurship in Singapore. Creative was one of the first manufacturers that marketed digital music players in 2000 but later Apple took over the credit with the iPod; but Creative holds the US patent to the user interface, called the Zen Patent that was used by Apple in producing the iPod. However in 2006 both companies compromised to a formula under which Apple can now continue production of the iPod. This is despite the fact that in 2005 Sim accused the iPod to be a cheap product with less features than an ordinary Chinese product (News). This shows Sim as a progressive thinker who is not bitter on others cheating on his idea but is now engaged in producing even better products. The latest offering by Creative in the shape of Zen X-Fi is an excellent example of a product that challenges the iPod. The brilliance of Sim lies in the simplicity as well as the advance features of his products. From a modest start with barely USD 6000, this entrepreneur has proved his point to the world at large that while he is the product of his times, he has been an extraordinary person at the same time. His latest venture in creating a techno-park in China is the one of the greatest amongst his imaginative ideas that is already bearing fruit. He is still young at 56 and the world can expect much more from him in sound technologies in the future. Sim has also authored a book called NUTS in which he describes the peculiarities of rules in Singapore. In a nutshell, everywhere in the world you can do something that is not specifically banned. But in Singapore unless there is a specific rule nothing can be done beyond rules. According to Sim this is a regressive policy and he works for its change. Conclusions Entrepreneurs are gifted people who have the capacity to shape and change the market with their visionary perceptions. They are capable of thinking out of the box and offering different methods or solutions to the consumers that will be more satisfying. This kind of leadership has the courage and conviction to transform organisations using unconventional methods. They take risks and decisions that ordinarily would not be attempted normally but they are well planned. They rely on their education, experience and expertise and with the self efficacy that they have developed over a period of exposure and time they come up with radical solutions that will be compelling and acceptable to the consumer. To sum up entrepreneurship is a process defined by its characteristics and persons like Sim Wong Hoo, possessing this distinctiveness are entrepreneurs who have the capability of first making innovative strategies and secondly to implement them with conviction and self efficacy. Bibliography Bandura, A. (1982). Self-efficacy mechanism in human agency. American Psychologist, 37, 2, pp 122-147. Retrieved January 18, 2007, from Library and Information Service, Curtin University of Technology. Bandura, A. (1991). Social cognitive theory of self-regulation. Organizational Behavior and Human Decision Processes, 50, 2, pp 248-287. Retrieved January 18, 2007, from Library and Information Service, Curtin University of Technology. Bird, B. (1988). Implementing entrepreneurial ideas: The case for intention. Academy of Management Review, 13, 3, pp 442-453. Retrieved January 17, 2007, from Library and Information Service, Curtin University of Technology. Bird, B. (1992). "The operation of intentions in time: the emergence of new venture", Entrepreneurship Theory and Practice, 17, 1, pp 11-20. Retrieved January 17, 2007, from Library and Information Service, Curtin University of Technology. Drucker, Peter F., (1985), Innovation and Entrepreneurship: Practice and Principles, Harper & Row. Gist, M. E., & Mitchell, T. R. (1992). Self-efficacy: A theoretical analysis of its determinants and malleability. Academy of Management Review, 17, 2, pp 183-211. Retrieved January 18, 2007, from Library and Information Service, Curtin University of Technology Gorman, G., Hanlon, D., & King, W. (1997). Some research perspectives on entrepreneurship education, enterprise education and education for small business management: a ten-year literature review, International Small Business Journal. 15, 3, pp 56-79. Retrieved January 20, 2007, from Library and Information Service, Curtin University of Technology Kourilsky, M.L. (1980). Predictors of entrepreneurship in a simulated economy. The Journal of Creative Behavior, 14, 3, pp 175-199. Retrieved January 19, 2007, from Library and Information Service, Curtin University of Technology. Littunen, H. (2000). Entrepreneurship and the characteristics of the entrepreneurial personality. International Journal of Entrepreneurial Behavior & Research, 6, 6, pp 295-309. Retrieved January 15, 2007, from Library and Information Service, Curtin University of Technology. McGrath, R.G. & MacMillan, I. (2000). The Entrepreneurial Mindset. Boston, Massachussets: Harvard Business School Press. McClelland, David C., (1965), Achievement and entrepreneurship: A longitudinal study. Journal of Personality and Social Psychology. Apr Vol 1(4) 389-392 . Stewart, W.H., Watson, W.E., Carland, J.C., & Carland, J.W. (1999). A proclivity for entrepreneurship; a comparison of entrepreneurs, small business owners, and corporate managers. Journal of Business Venturing, 12, 2, pp 189-214. . Retrieved January 17, 2007, from Library and Information Service, Curtin University of Technology Wiklund, J., and Shepherd, D. (2003). Knowledge-based resources, entrepreneurial orientation, and the performance of small and medium-sized businesses, Strategic Management Journal, 24 (13): 1307-1314. Wood, R., & Bandura, A. (1989). Social cognitive theory of organizational management. Academy of Management Review, 14, 3, pp 361-384. . Retrieved January 18, 2007, from Library and Information Service, Curtin University of Technology. World Wide Web News, available at: http://www.pocket-lint.co.uk/news/news.phtml/2075/3099/creative-zen-vision-mp3 player.phtml Read More