Entrepreneurial Performance of Matsushita - Essay Example

Topic: Entrepreneurship A. Introduction This paper seeks to answer several questions on entrepreneurship including an analysis of the entrepreneurial performance of Matsushita and reasons or his entrepreneurial success. Another part of the paper seeks to understand why some businesses grow and why some remain small. The latter part of the paper is an evaluation of my own entrepreneurial profile and identification of how I might strengthen my entrepreneurial capabilities. B. Questions and Answers: Question 1- Analyse the entrepreneurial performance of Matsushita, another entrepreneur (social, corporate or business) of your own choosing as well as the relevant literature. What do you learn about the reasons for entrepreneurial success? (60 Marks) Answer: To be able to it in a better manner let us define first what is entrepreneurship? After that we will know who is an entrepreneur? Having known, what are personalities of an entrepreneur? Only after understanding may we are in a better position to answer the question: “What makes Matsushita: The worlds Greatest Entrepreneur?” Wikipedia (2006) defines entrepreneurship as “the practice of starting new organizations, particularly new businesses generally in response to identified opportunities.” Further it said: “Entrepreneurship is often a difficult undertaking, as a majority of new businesses fail. Entrepreneurial activities are substantially different depending on the type of organization that is being started. Entrepreneurship may involve creating many job opportunities.” From the definition, we can now easily know the work of an entrepreneur and the necessary characteristics that he must have in order to undertake entrepreneurship. Since entrepreneurship entails succeeding and failing, the element of risk taking becomes as important characteristic of an entrepreneur. To understand more the work of an entrepreneur Wikipedia (2006) quoted several authors either defining or describing the work or characteristics of an entrepreneur as follows: According to David McClelland (1961), the entrepreneur is primarily motivated by an overwhelming need for achievement. He has a strong "urge to build". Collins and Moore (1970) studied 150 entrepreneurs and concluded that they are tough, pragmatic people driven by needs of independence and achievement. They seldom are willing to submit to authority. Bird (1992) sees entrepreneurs as Mercurial, that is, prone to insights, brainstorms, deceptions, ingeniousness and resourcefulness. They are cunning, opportunistic, creative, and unsentimental. Busenitz and Barney (1997) claim entrepreneurs are prone to overconfidence and over generalizations. According to Cole (1959), there are four types of entrepreneur: the innovator, the calculating inventor, the over-optimistic promoter, and the organization builder. These types are not related to the personality but to the type of opportunity the entrepreneur faces. Based on the knowledge of the characteristic of an entrepreneur, we are now ready to evaluate the entrepreneurial performance of Matsushita. Characteristics and Descriptions of Matsushita 1. Matsushita as a visionary. There is basis to agree that Matsushita is an entrepreneur from the characteristics learned earlier. Since theory does not mention about entrepreneur being highly educated, there is reason to believe it may be one of them. Matsushita appears to not to be highly educated. He is a visionary (Nanus, 1992) leader and a creator of a corporation which confirms his being an entrepreneur using creativity. Proof: Fortune Magazine (1997) said: The single biggest theme that runs throughout Konosuke Matsushita’s life is growth as human being, as a business person, as a leader. Young Matsushita was not highly educated, rich, charismatic, or well connected. Yet from this humble beginning, he grew and grew. As a young adult in his early 20’s he was nervous and sickly. Yet by the time he was 30, he was inventing business practices that would be adopted 50 years later by many of the world’s greatest corporations. By age 40, he had become a visionary leader, a creator of a corporation, Matsushita Electric, whose revenues eventually expected the combined sales of Bethlehem Steel, Colgate-Palmolive, Gillette, Goodrich, Kellogg, Olivetti, Scott Paper, and Whirlpool. 2. Matsushita exceeded some famous entrepreneurs. His success is not only seen in creating big business, but for the creation of a Nobel Prize-like organization, the founding of a school of government of reform Japan’s political system, and a number of other civic projects. Konosuke was a man of society wanting to contribute to its growth and development. Proof: Fortune Magazine (1997) said that on some dimensions, Matsushita’s achievements exceed those of much more famous entrepreneurs-he created an organization with bigger revenue growth in his lifetime than did Henry Ford, Sam Walton, or Ray Kroc. Fortune further said that the growth the company has continued to grow apace, with sales now exceeding $63 billion. The magazine further said that his incredible successes generated of billions of dollars in wealth that were used not for villas in France but for the creation of a Nobel Prize-like organization, the founding of a school of government of reform Japan’s political system, and a number of other civic projects. Further, the magazine said that during his later years, he wrote dozens of philosophy books, studied human nature with a small group of research associates, and prodded his government to do more for the citizenry. It is an accepted fact that although there are those who accumulated larger personal fortunes than him or there could be others who built even bigger enterprises or who made equally large contributions to their countries the Fortune believed but it said that overall, it is difficult to find 20th-century entrepreneurs or executives with a longer list of accomplishments. (Fortune Magazine, 1997) (Paraphrasing made) 3. Matsushita is an over-optimistic promoter. Matsushita hoped for the best despite the uncertainty in the making it’s sure that his product will turn out to be a success. This claim could be justified in the sale of bicycle lamps. Fortune Magazine (1997) in described how Matsushita built his capital early in business, on the basis of latter’s strong belief in its product in the case of the bicycle lamp. It confirmed this when it said: In early 1922, he found one. Demand for bicycle lamps was big and growing, yet all existing models had severe drawbacks. The flame in candle-lit models was often blown out by the wind…. Battery-powered units ran for only two or three hours…. Matsushita was convinced that the battery-powered concept was promising if only his company could manufacture a much improved version.... After more than 100 test models, he devised a bullet-shaped lamp that seemed to be especially attractive. … Prospects brighten when a new miniature bulb appeared on the market. ” With the new bulb and a battery which I had especially constructed,” Matsushita later wrote.” I found that the lamp would burn to 30 to 50 hours. 4. Matsushita is an organization builder and is concerned about its people. His passion for his people was best observed during an economic down turn where similar companies are cutting the number of their worker. Fortune Magazine (1997) reported the case where Matsushita cut production by half because less purchasing power of consumers in the industry as a result of bad economy. Matsushita did not dismiss any employee. What he did was to eliminate holidays and shift employees from production to marketing to improve selling activities. With so short a time it was found that the excess stocks were being sold out. When the economy normalized everyone went back to the regular shift. Because of motivated and loyal employees, the said employees was instrumental in having the old Matsushita to assume the leadership of the company after the World War II as a result of restriction on becoming part of the war in producing airplanes and other equipments for the World War needs. Fortune Magazine (1997) confirmed this when it said: Matsushita electric fell on hard times again after World War II, during which it had built ships and planes for the military. The Allied occupiers imposed many crushing restrictions on Matsushita for its rule in the war, and Matsushita himself was almost ousted. But here his paternalistic policies paid off; it’s a measure of the loyalty he inspired that the company’s labour union organized a petition, signed by 15,000 employees, asking that Matsushita be allowed o remain as president,. In the post-war years Matsushita nurtured a remarkably adaptive corporate culture that focused on the costumer, speed, quality, teamwork, and empowerment. 5. Matsushita as instrument in influencing 21st century leadership principles. It is a fact that Matsushita had many of his ideas about business by the late 1930’s, it is surprising that Fortune Magazine (1997) noted key lessons for modern companies could be learned from Matsushita’s aphorisms which include following: Treat the people you do business with as if they were a part of your family. Prosperity depends on how much understanding one receives from the people with whom conducts business. After-sales service is more important than assistance before sales; it is through such service that one gets permanent costumers. Don’t sell costumers goods that they are attracted to. Sell them goods that will benefit them. To be out of stock is due to the carelessness. If this happens, apologize to the customers, ask for their address, and tell them that you will deliver the goods that immediately. It’s not enough to work conscientiously. No matter what kind of job you should think of yourself as being completely in charge of and responsible for your own work. If you cannot make a profit, that means we are committing a sort of crime society. We take society’s capital, we take their people, we take their materials, yet without a good profit, we are using precious resources that could be better use elsewhere. Question Number 2: Evaluate why some businesses grow and others remain small. Why small business remains small- go for the net? (20 Marks) Some businesses grow basically because there is a continuing satisfaction of the needs (Lowenstein, 1997) and wants (Griffin, 2002) of customers. In the first place business exist for customer needs and wants, hence an entrepreneur must base all his activities based on this philosophy (Culpan, 2002). Failure to do so would be fatal. We have seen this in the case of Matsushita, Electric. The strategy is always a focus on the customer. If the customer needs change because of new technology, the manufacturer must be able to adjust accordingly. A non responsive business which does not react to what we call market will necessarily fail because it is no longer satisfying needs and wants. The nature of many things in business is to grow because products also have their life cycles (Lee and Stone, 1994), where there is a birth stage, a growth stage, a maturity age and declining stage. A business who sells a product at declining stage but does not realize the same will probably be failing without his understanding. The fact that a business remains small may thus be a misnomer when related to product development because of the growth stage and declining stage. Hence the fact of remaining small may be explained by the fact that the product is in its maturity stage and there are no more possibilities for growth but would just be expecting decline and the folly of the entrepreneur to recognize the sign to the decline will find its business failing. This is one of the reasons why sometimes business fail. We refer of course to business here to that of the organization which may either engage in the production , selling or distributing of the product which we have earlier assume to undergo different stages. Question No. 3. Critically evaluate your own entrepreneurial profile and identify how you might strengthen your entrepreneurial capabilities. (20 Marks) Having been an employee makes me think that I have my unique personality characteristic that could make me a good entrepreneur. I basically take risks because I enjoy my independence (Searle, et. al., 1995) whenever I make a choice. But sometimes it is hard for me to accept failures because I basically put by best also in any endeavour that I go into. With this realization that business may really fail and such is the nature of an entrepreneurship, I take pleasure in the sense that like Matsushita I should not lose heart when I fail. I must rise up when I fall because an entrepreneur is persistent. Like Matsushita as long as I know that my product would be patronized by customers when they will appreciate the benefits that I will incorporate in the design of the product, I take the challenges now ahead of me with more courage and optimism I also learned that an entrepreneur must be continuously creative. Although I believe, I have loved a little about the consistent application of rules and procedures in my work as an employee, I would like to believe my job requires me to have them. Although believe also that in business organizations there are also systems and procedure that may be done in routines and thus may make work boring, I could now see that being creative would be not just be an option but a mandate if I continue with my choice to become an entrepreneur. Perhaps creativity comes in improving existing procedure as long as any I improvement will serve the needs of customer in under a better quality since essentially business organizations really exists for customers. Conclusion and Recommendation Entrepreneurship is not purely based on being born with it. Although there are some who would say that an entrepreneur normally comes from a family of one entrepreneurial kind, there is a great chance for those who may opt to become entrepreneur simply because of the identification with some peculiar characteristics of an entrepreneur. Foremost of this based on my analysis is the characteristic of creativity and taking risk. Creativity comes out as a result of being responsive to the demand of changing needs and wants of customers, which are part of the changing conditions. An entrepreneur realizes that he is there to serve a need and in so serving a need he accomplishes his purpose. In so accomplishing, the purpose he needs employees whom he must empower; resources, which he must manage with professionalism; products and service which he must deliver to the customer of the best quality and in most convenient and fastest way of doing it. An entrepreneur is also part o a bigger society. He contributes to the fulfilment of community objective, in the improvement of the lives of people through satisfaction it creates and in providing employment to its people, whom it must love an give care to, and then seeing these people will be dedicated and responsible to identify themselves in jointly satisfying the needs and wants or customer. Having seen the roles that an entrepreneur does in society I become more attached to the knowledge of becoming more of an entrepreneur in my own way. Having evaluated my own profile and identifying ways of strengthening my capabilities, I believe I am now move able to move on in life and hopefully I will be seen my in a more-fulfilled way because I have chosen to be an entrepreneur. Bibliography: 1. Busenitz, L. and Barney, J. (1997) "Differences between entrepreneurs and managers in large organizations", Journal of Business Venturing, vol 12, 1997. 2. Cole, A. (1959) Business Enterprise in its Social Setting, Harvard University Press, Boston, 1959. 3. Collins, J. and Moore, D. (1970) The Organization Makers, Appleton-Century-Crofts, New York, 1970. 4. Culpan, R. (2002), Global Business Alliances: Theory and Practice; Quorum Books 5. Fortune Magazine, (1997), “What makes Matsushita: The worlds Greatest Entrepreneur? (p.61-67,Fortune March 31. 1997) 6. Griffin, J. (2002), Customer Loyalty: How to Earn It, How to Keep It; Jossey-Bass 7. Lee, H. and Stone J., (1994) , Product and Process Innovation in the Product Life Cycle: Estimates for U.S. Manufacturing Industries; Southern Economic Journal, Vol. 60 8. Lowenstein, M. (1997) The Customer Loyalty Pyramid , Quorum Books 9. McClelland, D. The Achieving Society, Van Nostrand, Princeton NJ, 1961. 10. Nanus, B. (1992), Visionary Leadership (September, 1992): How to Re-vision the Future ;The Futurist, Vol. 26 11. Searle, et. al. (1995),Enhancing a Sense of Independence and Psychological Well-Being among the Elderly: A Field Experiment, Journal of Leisure Research, Vol. 27, 1995 12. Wikipedia (2006), Enterpreneurship , {www document} URL http://en.wikipedia.org/wiki/Entrepreneurship , accessed June 3, 2006 Read More