What Do We Know about Entrepreneurs - Coursework Example

What do we know about entrepreneurs? Place Literature review There have been numerous researches conducted in the past few years regarding the role of entrepreneurship and entrepreneur in economic development of the world. This review looks at the evidence of the available journal articles that support the notion of entrepreneur and its impact on the society. Thus, Journal of Small Business Management helps to define the term entrepreneurship and school of entrepreneurship thought. The Journal of Management explains the factor of opportunities that modern entrepreneurs have today. Driesses and Zwart illustrate the main characteristics necessary for entrepreneurs. Fonacier and Mueller highlight the value of innovation in entrepreneurship. Harbison talks about the dark sides of entrepreneurship. Introduction It is believed (Thompson & Bolton, 2007) that entrepreneurs create the potentials of the future and thus they should be found in each sphere of human life. Moreover, every community group or public organization has an entrepreneurial potential within it that wants to be released. Such consideration is called by the great economic value and the social impact that entrepreneurs bring with them. However, to fully analyze the influence of entrepreneurs on each field of human activity, it is also important to compare what is known about them, the historical development and most commonly cited characteristics of successful entrepreneurs. In addition, different types of entrepreneurship is called to perform various functions, thus such of them as corporate, social and academic entrepreneurship will be studied in this paper. The picture, however, would not be full if dark side of entrepreneurship and its confrontation with risk would be examined. Due to the rapid changeable business world, it is crucial for entrepreneurs to understand challenges for their activities as well as be ready to the unexpected success. The paper will also provide with the perspective of a policymaker on the question of entrepreneurs with its opportunities and considerations why new ventures fail sometimes. What do we know about entrepreneurs? The entrepreneur is a person who tackles with organization, managing and assuming the risks of one’s business (Kuratko, 2009). However, due to the multiplicity of their doings, such definition is much broader. In the modern society the entrepreneur innovates and develops, recognizes and seizes opportunities transforming them into workable ideas and adding value by its time, efforts and money. Moreover, a successful entrepreneur is able to assume risks of the severe competitive environment and implements those ideas that would be rewarded and appreciated by the main players, which for entrepreneur it is one’s customers. However, due to the lack of the research of the subject about entrepreneurs, there appeared through years numerous myths about them. Thus, Luke Pittaway (2011) considers that a consideration that entrepreneurs are born and not made is a false. He stated, that while entrepreneurial skills, abilities and perceptions fall under change over time with the appearance of certain experience and learning, it is false to consider that only those individuals with entrepreneurial capabilities are proned to success in business. Another myth about entrepreneur is that its performance is synonymous to the creation of new venture. It is however, not right due to the various activities that entrepreneurs do in the modern business, where not just creation of new venture is a success, but its management and nurturance are also essential. Gartner (1985) however, states that definition of new venture is a synonymous with the creation of new organization where there is an independent entity with the new profit center and its founders are experts in certain products, market or technology. Kuratko (2009) defines the other myth of entrepreneurs, which illustrates entrepreneurs as doers and not thinkers. However, that is not so, as long as with doing, entrepreneurs are very methodical people who should think of their plans in order to move certain direction in their business. Besides, there is also a myth that entrepreneurs have little effect on academic and social organizations. However, due to the increasing appearance of social enterprises and educational establishments that work as entrepreneurships, this consideration is also not very correct (Kuratko, 2009). The research activity on entrepreneurship falls under certain set of beliefs, thus categorizing this question according to the interest in studying characteristics, opportunities and need for adapting the existing entrepreneur (Cunningham & Lischeron, 1991). There is a “Great Person” school of entrepreneurship, the central focus of which is the intuitive ability of entrepreneur, one’s traits and instincts with which one was born. The school considers that without such an inborn trait, the individual would not differ from the rest of people. The psychological characteristics school defines entrepreneur with the set of unique values and attitudes and whose behavior results from attempts to satisfy needs. For the classical school of entrepreneurship the central idea is the innovation, which is a critical aspect in entrepreneurship. Cunningham and Lischeron (1991) explain management school entrepreneurs from the point of view of economic venture where all processes are organized, managed and the risk is assumed. According to this school, entrepreneurs are taught in the technical functions of management. Kuratko (2009) explains leadership school as the one that sees entrepreneurs as leaders, however, they are not able to achieve their goals without the contribution of others. The intrapreneurship school sees entrepreneurship as the developed independent units that create and expand the services. The interest in studying the entrepreneurship and entrepreneurs has increased considerably (Driesses & Zwart, n.d.). However, the most important in these studies question is about the traits and capabilities of the entrepreneur that influence the success of enterprise the most. Thus, Robinson (2014) defines tenacity, passion, tolerance of ambiguity, vision, self-belief, flexibility and rule breaking as the main characteristics that are crucial for each entrepreneur. Driesses and Zwart (n.d) consider that characteristics of entrepreneur are only the component of competence and they are the traits that make entrepreneur more or less capable to do business. Bowser (n.d.) illustrates eight important traits for successful entrepreneurs. One of them is the knowing of what others do not know, meaning that good entrepreneur is not afraid to ask questions and therefore is able to provide meaningful answers with the insight to their effect. Besides, the success of enterprise is predermined by the functions and activities that different type of entrepreneurship performs. Thus, the academic entrepreneurship is defined as intellectual entrepreneurship in which universities cooperate with the communities in order to create certain values and ideas (What is academic entrepreneurship, n.d.). The academic entrepreneurship produces knowledge and transfers it to the society. Therefore, the success depends on the overall community behavior. Corporate entrepreneurship on the contrary refers to narrower field, where entrepreneurs seek the ways and opportunities within large businesses that would enable them to improve the profitability of organization and thus increase its competitive position (Bouchard, 2011). However, there is certain paradox in the corporate entrepreneurship, since it is actually the creation of new organization or innovation within the existing business. Besides, it is unclear how can innovations and individual initiative can live side by side with the highly structured establishment and how can individuals and organization associate (Bouchard, 2011). At the same time, there is another type of entrepreneurship, the social, that also creates unique possibilities for the society, developing certain values and thus having its personal infrastructure (Bornstein & Davis, 2010). The concept of social enterprise and social entrepreneur was rarely discussed in the recent years. However, with the appearance of social entrepreneurs, it obtained new perspective (Defourny & Nyssens, 2010). Thus, Bornstein and Davis (2010) state that social entrepreneurship involves the effort to identify people with those ideas and practical models that would suit the achieving societal goals, functioning in the society and would develop support systems to assist in achieving significant social impact. Defourny and Nyssens (2010) also declare about the explicit aim of social entrepreneur on the community with its goal to create social value rather that distribution of profit. What do we NOT know about entrepreneurs? Being an entrepreneur has never been more desirable than it is in the modern world (Harbison, 2014). However, there is a great risk to all the entrepreneur dreams, since there are many misconceptions of entrepreneurship and fear of failure as well as the unexpected success to which many are not ready. The hidden threat to many entrepreneurs is the pressure that comes under during the startup period of business. The pressure is also in the confrontation with risk. That calls most entrepreneurs to evaluate risk very carefully. Thus, financial risk is the most common for every new venture, since usually there is a significant portion of investment and savings put into certain business. In case of failure, these resources and money would be lost. Besides, there is a great concern of almost each entrepreneur to be able to find a job if the venture fail. The risk to lose job calls for certain family and social risks, as every losing of job has direct consequence on the family income and for those entrepreneurs who are responsible for a family with children, that risk is even greater (Kuratko, 2015). For the entrepreneur, growing a business is delegating and trusting other in order to deliver the common goals to the certain results. That means that right people are hired and engaged, different business skills are required for the need of business as well. However, the growth of business does not always mean it is directed in the proper way. Thus, the entrepreneur growth ensures value creation, however, when not properly managed, growth can destroy value, especially when it exceeds managerial capacity or weakens customer’s importance (Hess, 2002). Besides, growing bigger for business is not always better, because it makes entrepreneur increase the complexity, requires more bureaucracy, rules, managerial people and information systems. All these factors negatively influence the entrepreneur soul, especially when the firm is small. The great risk for the entrepreneur is the changing business environment. It is, however, not the new thing and if managed well, it only creates more opportunities for innovation and sometimes even for reinventing businesses. Entrepreneurial firms are the business mostly that invented themselves and to survive, they should turn their ideas into certain products and services and be able to get them to the market. However, with all the planned risks the uncertainty of the products or services is still high and raises concerns of whether the product will be used as planned and whether it will deliver the desired benefits to the consumers (Khavul, 2002). What should we know about entrepreneurs? There is a great role of exploitation of all opportunities in creating a successful business. Therefore, for each entrepreneur it is crucial to seek for such opportunities and also be able analyze them and make right decisions. While the outcome of such exploitation is new products and services, entrepreneurship involves all means for discovering, evaluating and using of opportunities (Choi & Shepherd, 2004). A resource-based view states that such valuable new product is able to generate the competitive advantage for the entrepreneur and be sustainable until the new product appears. While the decision on utilizing certain opportunities is made, it at the same time enables entrepreneur to represent the commitment to the market entry. Along with the opportunities, each entrepreneur should realize the power of innovation. Fonacier and Mueller (2007) state that innovation is the tool of entrepreneurship and together with the creativity they ensure the development of entrepreneurial culture. However, without understanding the modern business with its problems, risks and opportunities, it will be impossible to make an impact on the changes. To successfully manage them, each entrepreneur should know where the business is going and how to get there. It is possible only by means of innovation that adds something new to the existing system and creates more opportunities for better fulfillment of the goals (Fonacier & Mueller, 2007). The motive for new development is the desire of entrepreneur to grow through experience and undertake innovative instruments in order to build new venture. For that purpose the guarantee of successful entrepreneurship will be generated business model and business plan. Despite the fact that few companies utilize and live their activities by the business plan, however, this tool is necessary for building the strategy that would predetermine from where and to where the entrepreneur should more (Morris, Schindehutte & Allen, 2005). While developing a business model, an entrepreneur should be aware of managerial concepts that are related to it, as it will capture the main components of business plan. It is not, however, a strategy, but contains a number of strategic elements. It enable the firm to understand how it will create value, for whom it will create value, what is the internal source of advantage and how the firm can make money. Conclusion Cuervo, Domingo and Roig (2007) state that the well-being of each country depends on the competiveness of its businesses which refer to the scope of entrepreneurs and their capabilities to create something new that would bring a considerable advantage to the society and country in general (Cuervo, Domingo and Roig, 2007). Whether the specialization of modern companies lies in the capabilities of entrepreneurs to manage economic activity, a lot should be known from the history of entrepreneurship. In the modern world more researchers is prove the myths about entrepreneurship, however, as it may be seen from the paper, the myths are not supported due to the specification of modern business and the diversity of tasks of entrepreneurs. Moreover, with the appearance of social enterprises the role of entrepreneurs became even more visible. However, with the appearance of such type of entrepreneurship, there appeared threats to modern businessmen and these are what most of them are not aware of. The complications during the startup period, confrontation with risk that can cause the failure of venture are the main threats that if underestimated can lead to the issues and negatively influence the business. However, as it is seen from the paper, when all the opportunities are analyzed, the power of innovation is fully realized and there is a well-planned strategy of where the venture or enterprise is moving, the entrepreneur has more chances foe business success. References Bouchard, V., 2011. Exploring Corporate Entrepreneurship : A Corporate Strategy Perspective, European Entrepreneurial Learning, [pdf] Available at: < http://www.hadjarian.com/esterategic/tarjomeh/balideh1.pdf > [Assessed on February, 12th, 2015]. Bowser, J., n.d. 8 traits of successful entrepreneurs--Do you have what it takes? The Minority Business Development Agency, [online] Available at: http://www.mbda.gov/node/337 [Assessed on February, 12th, 2015]. Choi, Y. and Shepherd, D., 2004. Entrepreneurs Decisions to Exploit Opportunities, Journal of Management, 30(3) 377-395, [pdf] Available at: [Assessed on February, 12th, 2015]. Cuervo, A., Domingo, D. and Roig, S., 2007. Entrepreneurship: Concepts, Theory and Perspective, Springer Science & Business Media Cunningham, B. & Lischeron, J., 1991. Defining entrepreneurship, Journal of Small Business Management, [pdf] Available at: http://www.taranomco.com/wp-content/uploads/2013/11/390.pdf [Assessed on February, 12th, 2015]. Defourny, J. and Nyssens, M., 2010. Conceptions of Social Enterprise and Social Entrepreneurship in Europe and the United States: Convergences and Divergences, Journal of Social Entrepreneurship, Vol. 1, No. 1, 32–53 [pdf] Available at: < http://ec.europa.eu/internal_market/social_business/docs/conference/defourny_en.pdf > [Assessed on February, 12th, 2015]. Driesses, M. and Zwart, P., n.d. The Entrepreneur Scan Measuring Characteristics and Traits of Entrepreneurs, [pdf] Avilable at: http://www.entrepreneurscan.com/wp-content/uploads/2010/10/E-Scan-MAB-Article-UK.pdf [Assessed on February, 12th, 2015]. Fonacier, R. and Mueller, J., 2007. The value of creativity and innovation in entrepreneurship, Journal of Asia Entrepreneurship and Sustainability, Volume 3, Issue 2 [pdf] Available at: [Assessed on February, 12th, 2015]. Gartner, W., 1985. A conceptual framework for describing the phenomenon of new venture creation, Academy of management review, Vol.10, 10 Harbison, N., 2014. 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