Historical Foundations of Entrepreneurship Research - Case Study Example

? Topic: A Historical and Critical Analysis of an Entrepreneurial Venture A historical and critical analysis of an entrepreneurial venture An entrepreneur is a person who commits to undertake a task. It originates from a French word meaning one who undertakes. The tasks vary from opening an enterprise, rewarding, and motivating employees to taking considerable risks all for the business. An entrepreneur can also be referred to as a person who identifies a business opportunity and gets the necessary resources to start the business (Landstro?m, 2010). Entrepreneurship is therefore, the process of identifying business opportunities and gathering the necessary resources to start the business. Historically, in the 20th century, Joseph Schumpeter advanced one of the most used theories. He spearheaded the venturing process and gains credited for making it happen. He claimed that an entrepreneur replaces an existing economy by destroying one and making a better economy. Schumpeter’s first example of entrepreneurship was the combination of steam engines, which used coal and wagons. From this came the horseless carriages. This led to the invention of the car. We can see there was usage of already existing technology, which just got bettered. This came with a significant reduction in cost. Entrepreneurs learn from experience and with time the entrepreneurial culture grows. An example of an entrepreneurial venture is the Starbucks, a leading coffee company in Washington. It is the largest coffee house in the world, having outlets in most significant world cities. Starbuck commenced its operations in Seattle Washington in March 30 1971. The founders were Jerry Baldwin, Zev Siegla and Gordon bowker. It used the following strategies in the venturing process to make it a success story. Strategies employed in venturing processes The process of starting a new venture in encompassed in the process of entrepreneurship, the Entrepreneur must evaluate the opportunity before venturing into it. He also must counter all the forces that are against creation of the new venture. The process has four phases in which these strategies are embedded. First, one must identify and evaluate the business opportunity. This is what Starbuck did. There was a need to start coffee chains in the area and they capitalized on this opportunity. Consumers are mostly the best source of information, as they are the end users. Many other entrepreneurs have been able to identify business opportunities through discussions with retailers, wholesalers, or representatives of the manufacturer. Starbucks was able to carry out thorough market research by means of questionnaires. They sought information from existing consumers and other related businesses. Starbucks invested in modern coffee brewing technologies. It also stood a decent chance against the competitors. It is worth noting that opportunities do not offer financial reward commensurate to the risks that the entrepreneur chooses to take. Starbucks also had a concrete assessment plan which they put to use. It provides a basis explaining why to adopt or not adopt the opportunity. The plan usually defines the product or the service we are interested in, and the entire requirement necessary to actualize it and make it a viable venture. It also outlines the financial requirements necessary. The next thing is the development of the business plan. A business plan can only be made after having identified the opportunity. It is unique for that particular business opportunity. The business plan will assist the entrepreneur gauge the resources needed in developing the business opportunity. It also helps identify resources required to achieve the same, and how and where to gather such resources. The business plan also details how to manage the venture once it has come into operation. The Starbuck business plan outlines how they planned to venture into the market and how they planned to raise funds. After coming up with the business plan, one must come up with a financial plan. These details all financial aspects and determining resources required. One must identify the critical and non critical funds and separate them. Care should also be taken not to overestimate or under estimate required resources. The cons associated with in appropriate funding should also be addressed. Another aspect in the financial plan is the timely access to required funds. This should be solely taken care of by the entrepreneur especially at the initial stages. Starbuck had in place a money raising scheme which worked to their advantage (Casson, 2008). As the business expands, the entrepreneur will identify other sources of funding at the lowest possible cost. Theories and conceptual framework of entrepreneurship There are various perspectives in the study of the development of entrepreneurship. As earlier defined, entrepreneurs are agents of change in society. They usually bridge the gap between a plan and the reality (Michelli, 2007). It is worth noting that Entrepreneurship is usually not the same across the board. Entrepreneurial activities should be distributed uniformly throughout different communities and environments. Entrepreneurs also bridge the larger communities with basic economic units. Entrepreneurs identify business opportunities and gather resources to actualize the same. However, they are usually limited by a few factors. Such factors include religion and political affiliation. This usually shapes their entrepreneurial activities. For instance Muslims can not engage in sale of pork and its products as their religion prohibits it. Starbuck was timely in identifying a commodity that was consumable by most people. Entrepreneurs are usually risk takers. They are able to identify strengths, weaknesses, opportunities and threats before taking up these risks. They base their decisions on thorough research and observations. Starbuck engages in thorough research before venturing to the coffee market. They were not sure how the reception would be. Entrepreneurs also employ freethinking (Wood, Fielden, & Davidson, 2012). They are able to harness creativity and experience to their advantage. They usually verse themselves well with social, political, and economic information. They are also up to date with technological advancements. Entrepreneurs also take up a key role in industrial development by creation of employment hence contributing to economic growth. Self-advancement is a key concept surrounding goals of many entrepreneurs. They do not want to remain in one place but want to be the key people spearheading economic growth in a country (Landes, Mokyr & Baumol, 2010). Starbuck entrepreneurs had mentors who kept challenging them on how to better their venture. Social and economic development can only be achieved where entrepreneurs are many and are well distributed across the population. Entrepreneurship has been steadily rising since the days of the industrial revolution. Data collected throughout this time period has been instrumental in analyzing the behavior of entrepreneurs. No single factor in isolation can be utilized in the recognition of the same. However, some factors influencing entrepreneurial behavior have been considered supreme than others. Starbuck employed the same technique. The entrepreneurial success was a combination of not one but many factors (Schoonhoven, 2001). Psychological approach to Entrepreneurship According to McClelland, the need to achieve or motivation is what leads to the growth of entrepreneurships. People need to be motivated in order to achieve. There is usually a strong desire in everybody to make it and be successful. The Starbuck management spends a lot in the motivation of its employees (Landes, Mokyr & Baumol, 2010). They invest in activities that better them as persons. He observed that there was a lot of entrepreneurial growth in America China and other states because their literature emphasized on the need to achieve. The culture automatically motivated people to work hard. This culture made it easier for Starbucks to penetrate the market. Children are also brought up knowing they must make it. Egan on the other hand argues that disadvantaged minority groups are usually the source of entrepreneurship. This is because they need to free themselves from this particular situation. He used the case of Japan after the bombings to illustrate this ((Wood, Fielden, & Davidson, 2012). He argues that any factor creating disruption in society breeds creative individuals. He also observed that technical innovations are made by people who are marginalized than others. Sociological approach of entrepreneurship Max Weber advanced this approach in his policies. He specifically analyzed the effect of religion on entrepreneurship. Religion according to him had the power to influence an entrepreneur’s direction. They influence the kind of businesses one venture into and limit profit margins. Weber also argued on the basis that entrepreneurship relied on the ethics held by a society. He stated that Entrepreneurships grow faster in societies with ethical values. Thomas Cochran also advanced cultures influence on entrepreneurship activity. The culture played a prominent and significant role in shaping the entrepreneurial spirit (Stokes, Wilson & Mador, 2010). He insisted that how someone brings up a child influences his performance of entrepreneurial roles. There must be supportive parties in the growth process of the child. This includes the parents, family, relatives, and close friends (Michelli, 2007). Integrated approach Some analysts such as Udai Pareek theorized that developing a theoretical framework happens in sequences, which lead to entrepreneurship development. The first in this ladder is the need to achieve. This is characterized by having goals and objectives that push somebody to action. Secondly, one must be consistent and fully involved in this particular action. Thirdly, one must gather the entire indispensable wherewithal to realize the goals and objectives. Fourthly, one must have social and political support in order to venture. This will also be necessary when it comes to expansion of the business activity. The integrated approach dictates that no one factor in isolation can lead to entrepreneurial growth. There must be a combination of all these factors in reasonable proportions. Starbuck carefully followed the integrated approach to ensure that their entrepreneurial venture was an immense success (Michelli, 2007). Entrepreneurship venture has the potential to grow and make it successful as evidenced by Starbucks. Starbucks now gives back to society and mentors other upcoming entrepreneurships. It also has a fund for grants to give back to society. Bibliography Casson, M. 2008. The Oxford handbook of entrepreneurship. Oxford: Oxford University Press. Landes, D. S., Mokyr, J., & Baumol, W. J. 2010. The invention of enterprise: Entrepreneurship from ancient Mesopotamia to modern times. Princeton, N.J: Princeton University Press. Landstro?m, H. 2010. Historical foundations of entrepreneurship research. Cheltenham, U.K: Edward Elgar. Michelli, J. A. 2007. The Starbucks experience: 5 principles for turning ordinary into extraordinary. New York: McGraw-Hill. Schoonhoven, C. B. 2001. The entrepreneurship dynamic: Origins of entrepreneurship and the evolution of industries. Stanford, Calif: Stanford Univ. Press. Stokes, D., Wilson, N., & Mador, M. 2010. Entrepreneurship. Hampshire, UK: South-Western/Cengage Learning EMEA Wood, G. J., Fielden, S. L., & Davidson, M. 2012. Minorities in entrepreneurship: An international review. Cheltenham: Edward Elgar. . Read More