The Entrepreneur and Entrepreneurship: Operational Definitions Their Role in Society - Essay Example

INTRODUCTION There is always a debate going on whether leaders are born or made. But gone are those days when people believed that leaders a reborn. It is believed empirically that leadership can be developed through conscious efforts. The same is true for entrepreneurship also. When we come across some entrepreneur who has achieved great heights through entrepreneurship skill, it is easy to say that he/ she has the skill. But how did that person get that skill Some people may be born great with all the skills to be an entrepreneur. But anybody can be an entrepreneur if one has the thirst to achieve the goals. The era of globalization and the easy availability of information have opened up innumerable opportunities as never before. There is a considerable increase in the number of people who venture out of their comfort zones and explore new arenas to experience the challenges of entrepreneurship. What are the factors that motivate ordinary people to do extraordinary things What are the characteristics that make people to change the way things are done and to contribute to the development of the mankind These are some very interesting questions which have been attempted to answer by people across the world. This essay focuses on entrepreneurship and characteristic features of entrepreneurs that helps them to be successful in their ventures. A general survey of the available literature on entrepreneurship and an analysis of the characteristics of one entrepreneur, in this case, Mr. Bill Gates, is included. The purpose of this essay is to understand the psychological makeup of en entrepreneur, which will be very useful to groom ourselves into entrepreneurs. REVIEW OF LITERATURE To understand the characteristics of entrepreneurs, first we should know what is entrepreneurship and who is an entrepreneur. In his publication, Carton1(1998), has taken the idea from Peter Drucker that entrepreneurship is a practice. He mentions that entrepreneurship begins with action, the creation of a new organization. This organization may or may not become self-sustaining and in fact may never earn significant revenues. But, when individuals create a new organization, they have entered the entrepreneurship paradigm. The antecedents such as the scanning of the environment for opportunity, the identification of the opportunity to pursue, the evaluation of the feasibility of the new venture, the individual traits, characteristics, prior experience, knowledge, and education of the entrepreneur, the impact of role models, environmental munificence, and societal values are considered by the entrepreneur and all of these factors influence new venture formation and should be included in the entrepreneurship paradigm. However, entrepreneurs do not just plan. They act. It is this action that distinguishes them. Accordingly, without the creation of a new venture, entrepreneurship has not occurred. Hence, we should first understand that an entrepreneur is a person who acts. Paul Andrews2, biographer of Bill Gates, mentions that Bill Gates had the ability to look at software as a separate component from hardware. Until then, software was seen as a component of computer. Bill Gates is the Entrepreneur of the Millennium because of the way in which he built up on a new idea. The innovation makes the difference in the way people live and act across the world. In their Personal Interest, Attitude & Value (PIAV) survey, Gavin Devereux and Evan Popplestone (2001)3 mention that the major factor that motivates people to venture out into the paradigm of entrepreneurship is the Utilitarian attitude. 79.59% of the respondents had placed it on the top and this suggests that the overwhelming motivating factor for Entrepreneurs is to utilize and gain a return on their investment of time, talent and resources. The next factor that was mentioned by most of the entrepreneurs studied was the need for individualism and this suggests that Entrepreneurs are also motivated by a strong desire to personally advance, express Individualism and be in control of their own destiny and that of others. Another major factor that has to be noted here is that the lowest motivating factor is Traditionalism - none of the Entrepreneurs who were surveyed exhibited Traditionalism as a primary attitude, and only 3 people had it in their top 3. This research shows that Entrepreneurs are not seeking to conform to traditional practices and are in fact more likely to be motivated by non-traditional activities. This is lack of traditionalism is the basic motivating factor to ask questions about why things are in the way they are. Hence, entrepreneurs tend to take efforts to make a difference and that leads to innovations.. Yet another study that has to be quoted here is the study titled, Hunting the Heffalump: Can Trait and Cognitive Predict Entrepreneurial Orientation by Eva Cools and Herman Broeck(2006)4 The aim of the study was to contribute to further insight into whom the entrepreneur is. Their findings denote that entrepreneurs score higher on tolerance for ambiguity, self- efficacy, proactive personality, an internal locus of control, and need for achievement than the non-entrepreneurs. With regard to cognitive style differences, they have found a higher score for the knowing and the planning style for non-entrepreneurs than for entrepreneurs, indicating a larger focus on rationality and procedures from managers. The list of characteristics that have to be possessed by an entrepreneur as mentioned in the study by Martijn P. Driessen and Peter S. Zwart5, are knowledge, motivation, capabilities and characteristics. The authors have analyzed further and they have denoted that the knowledge an entrepreneur should possess are about the market, environment, people, production and finances. Te next factor, motivation is of two types, internal driven motivation and external driven motivation. The internal factors that can be the reason for motivation can be the need for autonomy. The need for achievement and the yearning for power. The external motivating factors can be unemployment, gap in the market, interest in the subject and certainty of the clients. The capabilities that are to be possessed by the entrepreneur are effectiveness, power, endurance, taking risks and his thinking styles should be like a pioneer, sales person, manager and expert. Lastly, the capabilities that have to be possessed by the person varies from the stage of business. In the early phase of the company, market orientation, creativity and flexibility are essential. But in the mature phase, the ability to manage, to motivate, to plan and to take care of financial administration are key success factors. When we analyze the starting of Microsoft and the growth of Bill Gates as an icon, the characteristics mentioned above are all prevalent in his growth. The need for autonomy, the need for individualism, ability to think like a pioneer and interest in the subject matter have all contributed in the growth of Bill Gates as an entrepreneur. BILL GATES AS AN ENTREPRENEUR Bill Gates born in an upper middle class family is an example of an entrepreneur who has taken his company from scratch to the level of multibillion dollar corporation. Out of all the characteristics in his personality that were instrumental in developing his business, the first character that has to be mentioned here is the interest in the subject field. His biography says that, he started programming for computers at an age of 13. When kids of that age spend their time on television and games, Bill Gates at that age had the urge to create something of value to solve some problems in the world. Bill gates and his friend Paul Allen wrote two programs in the eight grade, one played Tic - Tac - Toe and they were the computer consultants for a local company soon. In high school Gates and his friends devised program that analyzed traffic data for his hometown. This early pursuit for innovation is an example of his interest in his subject field. It is more than just interest, it is a passion. The passion is the seed for the interest and that interest creates the path for success. First there should be interest to observe things around us and to take notice of the way in which things can be improved. This scan of environment and the passion to create something new in the area of interest is the first and foremost characteristics feature that defines an entrepreneur. When a person is passionate about an idea, then the drive to find resources and the eye to look at opportunities fall in line automatically. As mentioned in the research works quoted earlier, the interest of Bill Gates in developing software solutions for computers across the world is the brain behind the venture and all other characteristics of the entrepreneur like leadership qualities, motivation, etc, etc, follows it. The next character that has to be mentioned here is the fierce intellect. In his article about Bill Gates in the Time magazine, Isaacson writes that, "his intellectualism is one which has to be wondered about. In his article about Bill Gates for the Time magazine, he says that "he has "incredible processing power" and "unlimited bandwidth," agility at "parallel processing" and "multitasking." Watch him at his desk, and you see what they mean. He works on two computers, one with four frames that sequence data streaming in from the Internet, the other handling the hundreds of E-mail messages and memos that extend his mind into a network. He can be so rigorous as he processes data that one can imagine his mind may indeed be digital: no sloppy emotions or analog fuzziness, just trillions of binary impulses coolly converting input into correct answers." Starting a new venture and taking the initiative to create something new is the result of an intelligent mind. An intelligent mind probes new avenues and is not satisfied with the available resources. Like mentioned in the study by Martijn P. Driessen and Peter S. Zwart, knowledge and intelligence are one of the important feature an entrepreneur should possess. There are so many kinds if entrepreneurs in the world, but Bill Gates is one of the kind who succeeds based on his intellectualism and his analytical thinking ability. For example in one of his interviews to the Time correspondent he says that, "Evolution is many orders of magnitude ahead of mankind today in creating a complex system. I don't think it's irreconcilable to say we will understand the human mind some day and explain it in software-like terms, and also to say it is a creation that shouldn't be compared to software. Religion has come around to the view that even things that can be explained scientifically can have an underlying purpose that goes beyond the science. Even though I am not religious, the amazement and wonder I have about the human mind is closer to religious awe than dispassionate analysis." This quote shows his depth of intellectualism which is instrumental in the development of products that revolutionize the world. In his book Business at the Speed of Light, Bill gates7 says that CEOs today are not utilizing the information technology to the full extent. He says that corporate across the world are using only the software products but openly very few companies are talking about information revolution which will change the way in which the business operates. He expresses that now companies are using software for production, accounting and human resource solutions, where software has just replaced manual operations. But in the future decades companies should start using information technology which will create a new world order in business. His book is an example of his intellect which tries to figure out new solutions for the existing problems. Bill Gates is one person who has influenced the whole world and has managed to influence the information technology industry through his business acumen. It is not sufficient if a person is intelligent and has interest in the field of study, but he/ she should be able to translate into money. Bill Gates was one of the most successful people who could build his idea into a revolutionary product. It is essential that an entrepreneur has the ability to look into opportunities in the market and make timely decisions to capitalize on it. There are so many instances which can be quoted from his biography for highlighting this character in his personality. For example, when he started his business he observed what is going on in the market and then he came out with idea. The software he sold first to IBM was actually software that was rewritten and altered from some other developer. Though there are many criticisms about him in this regard that he used unfair business practices. But, the lesson we have tot take from the way he has developed his business that, he was quick to identify gaps in the market and he was able to capitalize on it. When software written were shared by everybody to help more technical advancements, Bill Gates was the first person to advocate protection of software from piracy. He tried to control the use his software openly. He tried to protect Microsoft creations through copyright laws and this helped him amass more wealth in due course. Even today Microsoft leads the way in fighting software piracy across the world. Leadership style of Bill Gates is also another characteristic feature that can be discussed here. Most of the observers feel that his leadership style is authoritative. He is the brain behind the Company he formed and lead the company in the way he wanted it to go. There are advantages and disadvantages in leading the company in a tight control. The advantages are that the company does not lose its focus and the results are achieved. Also, the staff are clear about what are the goals to be achieved. This style is very effective when the business is starting up and when it is growing. The entrepreneur faces the challenges and directs, controls and leads the venture to success.. In one of the article at www.money-zine.com 8 , the author comments that "Bill Gates was able to successfully move Microsoft in the direction he saw the industry going. Even though Mr. Gates has removed himself from some of the daily operations of Microsoft, he is still thought of as an industry visionary - an authority. The personal computer is playing a greater role in America and Bill Gates has done much to further its advancement. He had a vision, he told the world, and he aligned the resources of Microsoft with that vision." But after the company stabilizes itself and starts to gain ground in the market, this kind of authoritative controlling style of management does not work very efficient. The authoritative style of the entrepreneur may create frictions among other managers and it will demotivate the human resource. Hence, when the company starts to grow, it is better to empower the managers by changing the style of leadership. Personal Interest, Attitude & Value (PIAV) survey, Gavin Devereux and Evan Popplestone (2001)3, mentions that many entrepreneurs do not like to stick with traditionalism. Entrepreneurs do not like the traditional barriers to be set as their limits. They try to explore new arenas and thereby try to establish themselves. Bill Gates is a perfect example of a person who does not like to be controlled by traditional beliefs and norms. His thoughts and ideas were far ahead of the norms that were used in the business era of that time. Even now he is considered as visionary, because he thinks beyond the traditional limits. His dropout from Harvard is an example of the behavior of not accepting traditionalism. Entrepreneurs try to follow their instinct and interest rather follow what is expected out of them. His decision to start his own company and protecting his products from piracy were all forms of not accepting the traditionalism. These example show his rebellion against the general norms accepted by everybody and thereby he established himself. In an entrepreneur rebellion to accepted norms is essential because it forms as a motivating factor to innovate and find new solutions. If the practices generally done by everybody are just followed then we cannot call the person as an entrepreneur. The ability to question why things were in that way and to make innovations makes a person the entrepreneur who can contribute to the wealth and knowledge of the world. Finally it is not complete if we do not mention his role as a visionary. Entrepreneurs are the people who can think ahead of their times. A person who is intelligent, knowledgeable, able to lead and motivate others, has the business acumen should also have the ability to envision the markets in future. If the entrepreneur is able to envision the future, he starts to become aware of the future opportunities. If he is aware f the future trend he can focus on his strengths and weaknesses and he will be able to focus his resources in the direction of the future opportunities. Bill Gates is very successful in his entrepreneurship effort because of his ability envision the future of the software industry. Microsoft also doesn't have a very strong position in the internet, that is also because of the lack if vision of Bill Gates that internet is going to be such a powerful tool. Hence, vision can be very instrumental in gaining the competitive advantage int eh industry. With the business acumen a person can spot opportunities and start a business. But for long term survival and growth, the entrepreneur has to be a visionary. The entrepreneurs vision is the only factr that will set him ahead of his competitors. After paving way for the revolution in information technology, Bill Gates will always be a visionary leading the way with ideas such as his opinion about human kind in his interview to the Time, "I don't think there's anything unique about human intelligence. All the neurons in the brain that make up perceptions and emotions operate in a binary fashion." Earthly life is carbon-based, he notes, while computers are silicon-based, but he doesn't see that as a critical distinction. "Eventually we'll be able to sequence the human genome and replicate how nature did intelligence in a carbon-based system." CONCLUSION Bill Gates is one of the world renowned entrepreneur who is praised for his ability to create an empire from scratches. On the other hand he is also criticized by his competitors for not allowing fair competition. Whatever may be the allegations and the scale of legal battle, it is a truth that nobody can deny that he is one of the sculptors of the software and information technology industry. His contribution to the world is a motivation for so many other entrepreneurs across the world. We can draw a number of useful lessons from his life which are discussed above. When a person ahs the combination of characteristics such as the knowledge, leadership, interest, a will to smash barriers and create your own destiny, vision and business capability, he is sure destined to be a successful entrepreneur. REFERENCES 1. Carton, R. B, Hofer, C. W, Michael, D. M (1998) "The Entrepreneur and Entrepreneurship: Operational Definitions Their Role in Society" , University of Georgia Terry College of Business, available at http://www.sbaer.uca.edu/research/icsb/1998/pdf/32.pdf. 2. Andrews, P(1999) How the Web was Won, Broadway books, New York. 3. Devereux, G and Popplestone, E (2001) "Entrepreneurs Operating Locally Nationally and Internationally (Their educational, Behavioral, attitudinal and motivational characteristics), Mind Screen, available at http://www.mindscreen.com/pdf/McGill%20Entrepreneurial%20Research%20Document.pdf. 4. Cools, Eva and Broeck, H.V. D(2001) Hunting the Heffalump: Can Trait and Cognitive Characteristics Predict Entrepreneurial Orientation, Working Paper, University of Ghent, available at http://www.feb.ugent.be/fac/research/WP/Papers/wp_06_427.pdf. 5. Martijn P. Driessen and Peter S. Zwart, The Entrepreneur Scan Measuring Characteristics and Traits of Entrepreneurs, available at http://www.entrepreneurscan.co.uk/files/E-Scan%20MAB%20Article.pdf. 6. Isaacson, W (1997) "The Gates Operating System" Time, January 13th, Vol. 149, No.2 7. Gates, B(1999) Business At The Speed Of Thought, Warner Books, New York 8. Authoritative Leaders, 2006, available at http://www.money-zine.com/Career-Development/Leadership-Skill/Authoritative-Leaders/ Read More