Business Thinkers and Management Giants - Case Study Example

To what extent do you consider that Robin is an entrepreneur? To adequately answer the question whether Robin Byrdon is an entrepreneur, it would be necessary to define what an entrepreneur is to be able to determine whether Robin is an entrepreneur or not. According to Zimmerer and Scarborough “an entrepreneur is one who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying significant opportunities and assembling the necessary resources to capitalize on them. Although many people come up with great business ideas, most of them never act on their ideas. Entrepreneurs do” (2008). To sum it up, an entrepreneur is an individual who identify opportunities and creates business based on those opportunities and is willing to take risk to realize those business ideas a reality. Based on this definition of an entrepreneur, Robin qualifies as an entrepreneur and embodies its characteristics. Robin also has the essential skill of an entrepreneur of how to manage risk. This uncanny ability of Robin to manage risk was demonstrated when he was able to identify and seize opportunities without exposing himself to undue risk. This was manifested in the case when he started as a part time IT auditor with IT Alchemy yet he still took casual work to supplement his income. This demonstrates that while he was willing to explore opportunities with IT Alchemy, he is also a pragmatist that in case things will not work out, he still has another source of income as a fall back. It was not explicitly stated in the case but reading between the lines, Robin knew deep in his gut that there is an opportunity with IT Alchemy being a start-up company. This was evident with his inclination to stay with IT Alchemy when he was faced with the dilemma of not having the time for the lucrative contract with Heriot-Watt. This has to be stressed because if Robin had the mindset of an employee, he would have readily pursued the contract with Heriot-Watt because of the lucrative pay. Instead, he would have chosen IT Alchemy if he had to make a choice between the Heriot-Watt contract and IT Alchemy because he knew the potential of the company. This ability of entrepreneurs to discern and seize opportunity is elaborated by Timmons that entrepreneurs are able to create and see opportunities at the right time while others see it late or too early (2011). Robins also manifested his entrepreneurial tendency when he found a solution with his dilemma where he can stay with IT Alchemy and keep the contract with Heriot-Watt without losing anything. He was able to create a favourable value for himself because Mike Parr of IT Alchemy agreed with his idea and made him a part-owner of the company when Mike shared ownership of the company with Robin. This may not have been explicitly expressed in the case but Robin may have just been waiting for the right time where he can become a shareholder of IT Alchemy. The Heriot-Watt contract provided him the bargaining chip to leverage himself to become a part-owner of the company. He was able to turn a dilemma into an advantage which is the innovative characteristic of an entrepreneur. When Robin became the Director of the start-up, IT Alchemy, his entrepreneurial acumen to identify opportunities manifested which also proved to be beneficial to the company. As an IT expert, he was able to identify the opportunities spawned by the increased regulation of software licensing and made business out of it. He knew that with the heavy penalties imposed against non-compliance of software licensing, companies would conscientiously pay for renewal regularly in fear of licensing and copyright legislation to the point that they overpay their licensing fees. In a study by the Gartner Group, it was estimated that firms are paying 30% to 50% more on software licence compliance than they need to be. It may be unacceptable from a fiscal point of view for many firms but Robin was able to identify the opportunity that “many company owners and directors lacked the time, experience and expertise necessary to learn and operate the auditing tool”. There may be competition but their services are limited because they only “specialise in one auditing tool, and will sell both the tool and the expertise to clients”. Robin differentiated IT Alchemy from the competition by providing a consultative service that will identify the most appropriate tool for client’s needs, as well as performing the audit. This way, IT Alchemy’s clients were able to save money from the redundant licensing cost while making money for the company. Mere identification of what tool would be appropriate for the company already sufficed for Robin to create business. Another trait of Robin that is characteristic of an entrepreneur is confidence in his decision to stay in Galashiels despite the fact that they maintain a high-growth strategy. It is a manifestation of an entrepreneur’s tendency to have their own minds and confidence with their own decision (Foo et al 2009). He knew that all of the essentials of his business can also be sourced in Galashiels quoting “we have a continuing source of skilled labour available from Heriot-Watt and no matter where we were located we would still have to travel to client firms to operate. This is an international industry. We recently did an audit for a company in the USA. There is no reason to move and there is a good standard of living here.” We may agree or disagree with this decision but this only shows that Robin has the mindset of an entrepreneur to think independently and depart from conventional thinking (Zahra and Wright 2011). This mindset is what separate entrepreneurs from employees because they do not follow rules but instead create or rewrite them as what IT Alchemy did. This is the mindset that creates value and innovations which were thought not to be possible before. In the case, this decision proved to be right as IT Alchemy generated profit within its first year of business and continue to be a thriving business. The tendency of Robin not to conform to the conventional thinking of business dispelled myths about putting up a business. According to Katz and Green, for decades business owners had always thought that the greatest challenge that was facing their business was the insufficiency of financing to start their businesses (2009). IT Alchemy through Robin and Mike proved it wrong that a business does require vast amount of start-up funding. Given the right eye for opportunities and ability create value for the company, a business can thrive even without a huge amount of capital as what IT Alchemy had shown. IT Alchemy did not require vast capitalisation when it started by not tieing its resources in fixed assets. An entrepreneur does not even have to create a product, another misconception about starting a business that one has to make something to make money (Katz and Green 2009). Robin simply identified the opportunity afforded by the increasing regulation on the software licensing. As companies avoid penalties against license infringement, they tend to overspend on their licenses and Robin made business just by letting them know which soft wares were redundant that caused them to spend more. He did not make something, he only identified how their clients can save on cost and this still created value for IT Alchemy. Robin also has other unorthodox traits of an entrepreneur such as leaving school to pursue what they want. But being in the academe, I would not advise anyone to leave school as what Robin did when he was taking his Phd. It would be more advisable to finish college first just like what Robin did before pursuing what one really intends to do with his or her life to at least have the necessary knowledge and skills to succeed in ones chosen career. The method may seem undesirable but it is one of the characteristics of entrepreneurs to view learning not just to be confined in school but a continuous process just like what Bill Gates of Microsoft who dropped out of Harvard to put up his own company (Bloomsbury Business Library 2007). This is not a characteristic of an aversion towards learning by entrepreneurs but a bold trait to take risk and pursue what an entrepreneur really believes in (Dalglish 2010). Finally, entrepreneurs are self-driven with a highly disciplined work ethic that motivates them to achieve something (Del Giudice and Straub 2011). Profit is important because revenue is what keeps the business a going concern. Profit is the sign that an entrepreneur has added value to the scarce resources he or she is using (Mariotti 2007) But more than profit, successful entrepreneurs are also driven by a vision; a calling for higher purpose, be it in the quality of the products and services they provide to their customers to making a difference in the community they operate in and society at large. This trait was evident with Robin as IT Alchemy’s directors are both highly motivated not only to generate profit for the company, but also the benefits IT Alchemy can afford for the wider community. This motivation to make a difference in their wider community may be the main reason why Robin opted to stay in Galashiels and rewriting the rules of IT industry in the process. Given the directors motivation, vision, innovativeness and ability to see and create opportunities, IT Alchemy would have become one of the most successful company in the IT industry had IT Alchemy existed in the real business world. Bibliography Bloomsbury Business Library (2007). Bill Gates. Business Thinkers & Management Giants, p11-12 Dalglish, Carol (2010). Training for lifestyle entrepreneurs. International Journal of Lifelong Education, 29(6): 693-703. Del Giudice, Manlio and Straub, Detmar (2011). IT and Entrepreneurism: An On-Again, Off-Again Love Affair or a Marriage? MIS Quarterly, 35(4):3-7 Foo, Maw-Der; Uy, Marilyn A.; Baron, Robert A (2009). How do feelings influence effort? An empirical study of entrepreneurs’ affect and venture effort. Journal of Applied Psychology, 94(4): 1086-1094 Katz, Jerome A., and Green, Richard P. (2009). Small Business: Its Opportunities and Rewards. McGraw-Hill Companies, Inc. Mariotti, Steve (2007). Entrepreneurship: Starting and Operating a Small Business, 1e. Pearson Prentice Hall, Upper Saddle River Timmons, Jeffrey A (2011). New Venture Creation. Entrepreneurship for the 21st Century, Eighth Edition. McGraw-Hill Company, Maidenhead Zahra, Shaker A.; Wright, Mike (2011). Entrepreneurship's Next Act. Academy of Management Perspectives, 25(4): 67-83 Zimmerer, Thomas W. (2008). Essentials of Entrepreneurship and Small Business Management, 5e. Pearson Prentice Hall, Upper Saddle River Zimmerer, Thomas W. and Scarborough, Norman M. (2008) Essentials of Entrepreneurship and Small Business Management, fifth edition), New Jersey: Pearson Prentice Hall, Upper Saddle River Read More