Features Of The Entrepreneurship Practice - Research Paper Example

Features Of The Entrepreneurship Practice Contents Contents 1 Introduction 1 Literature Review 2 Data analysis and discussion 7 Conclusion 9 References 10 Abstract This study outlines the various dimensions that are needed for identifying entrepreneurial opportunity. In this research study innovation and creativity are considered as the major components which support entrepreneurship. Some theoretical frameworks have been included in order to support the idea. The research topic has further been analyzed on basis of real world examples. Introduction Entrepreneurship can be defined as a process for creating something new or valuable for the society. Entrepreneurial activity encompasses investing effort and time and reward achievement due to efforts or risk invested. An entrepreneur usually can identify exceptional business opportunities that can facilitate acquiring high revenue margins. Perceive business opportunity can only deliver appropriate results when entrepreneur strong believes in the proposed idea. Innovation and creativity are vital components in order to transform business opportunity into a successful venture for future years. Creativity can be stated as ability to develop methods and identify problems in a particular situation. Innovation on the other hand is bringing new process or services or products to general use. In overall context creativity and innovation plays a significant role in context of problem identification, effective use of opportunities witnessed by firms and development of problem solving methods. An entrepreneur who is aligned towards innovative and creative ideas is able to successfully meet changing needs of contemporary society. This study would be focused towards analysing data that proves creativity and innovation as basis of entrepreneurial opportunity. The major aim of this study is to highlight the role of innovation and creativity in entrepreneurship. Research question for the study is – “what is the role of innovation and creativity in entrepreneurship opportunity?” Literature Review According to Bridges, O’Neill and Cromie (2005), innovation is often considered to be a tool of entrepreneurship. Entrepreneurship demand and innovation facilitate creativity. Creativity is defined as a mechanism which changes symbolic domain of culture. Creativity is the art to bring into reality something new or unique such as a new solution, new object or device, new method, etc. This aspect is all about moving towards unknown from known. Culture is treated as a negative force that greatly affects creativity. An enterprise or entrepreneur cannot sustain its leadership position unless it is recognized that modern business world is subjected to change. Survival and growth are two important pillars of any business activity. A firm can only sustain its business operations when it consists of a strong creative base. On the other hand, innovation is stated as incorporating something new to an existing process or product. It is the successful exploitation of wide array of new ideas. Innovation is basically initiated from creative ideas or creativity is the starting factor for any form of innovation (Bridges, O’Neill and Cromie, 2005). As per Chakravorti (2004), entrepreneurship comprises of many factors like creative, new, flexible, dynamic, ability to undertake risks and innovative. Apart from resources, organization and possibilities are also major components of overall entrepreneurial process. Entrepreneurial process components have been elaborated in figure 1. Figure 1: Entrepreneurial process components (Source: Thompson, 2005) As per figure 1, three components that is organization, resources and possibilities are connected by an entrepreneur and at the end result is obtained. Ability of an entrepreneur is usually identified through meeting specific requirements. There are even certain characteristics which reflect abilities of an entrepreneur such as self-accomplishment, self-confidence, acceptance of risk, independence, innovation, creativity and vision. These factors clearly state that innovation and creativity forms a vital aspect of entrepreneurial characteristics. They are even responsible for developing opportunities that can be explored by an entrepreneur (Chakravorti, 2004). As stated by Drucker (2005), there are certain elements that best describe creativity such as creation of organizations or new business ventures, creation of goods, production methods, services or markets, identification of existing or new opportunities, etc. This characteristic is closely knitted with outlining solutions and finding required solution. Creative entrepreneur is able to recognize business opportunities and possess required skills to implement them. Modern business is basically characterized in terms of high degree of risk and uncertainty (Drucker, 2005). According to Sikszent (2007), a successful entrepreneur is one who can relate uncertainty with wide base of business ideas or opportunities. Creativity depends on some elements like knowledge, personal characteristics, intellectual abilities and motivations. Creative people are observed to think divergently and they engage into development of creative ideas in order to solve any problem. It is a continual process and comprises of four phases such as preparation, incubation, illumination and verification as stated in figure 2. Figure 2: Creative process phases (Source: Stevenson and Gumpert, 2005) The preparation phase deals with problem definition since a well defined problem forms the base of its solution. A problem can be solved efficiently when an entrepreneur is able to structure the problem appropriately. Knowledge, experience and information needs to be applied together by an entrepreneur in order to understand a specific problem and simultaneously identify right opportunities or new business ideas. Incubation phase of creativity process is also known as discovery phase. In this phase entrepreneur successful moves away from an identified problem (Sikszent, 2007). Okpara (2006) in his studies stated that creative solutions usually occur below conscious threshold with information and ideas connected in a more liberal manner. Entrepreneur in this phase is inclined towards other activities that are not related with the problem. It is a complex phase since creative solutions cannot be developed so easily. Illumination phase is often considered as a part of incubation phase. In this phase solution to a particular problem appears at a certain moment. During an illumination phase an innovative idea is developed. Solution for a problem that is defined is analyzed during the verification phase. Testing of solution feasibility is highly important which takes place in this phase. The preparation phase is basically repeated when a feasible solution is not obtained. There exists certain principle of creativity that states creative ideas can only be obtained when problem is recognized appropriately. An entrepreneur needs to possess a sense of challenge in context of cracking an identified problem (Okpara, 2006). As per Meredith, Nelson and Neck (2007), creativity encompasses three main components like expertise, motivation and creative thinking skills. The principle even highlights that creative ideas do not evolve instantly but a sequential process is followed though it appears to be chaotic. Innovative process is slightly different from creative process but both these elements are encompassed within entrepreneurial activity. It is usually stated that innovation process is built and is based on creative process. The idea is developed within creative process. Invention is new ideas being transformed into new process, services or products. However in innovation process, new idea is transformed into market process, products or services. Figure3 outlines the process of product development and creation. Figure 3: Innovation Process (Source: Barron, 2009) There are certain techniques for development of innovation and creativity (Meredith, Nelson and Neck, 2007). As stated by Okpara (2006), potential entrepreneurs have to possess specific skills in order to succeed towards their business goals such as technical, conceptual and human. Brainstorming is regarded as effective technique that deals with emergence of a new idea instantly. Team members bring forth different ideas associated with potential problem solution. Brainwriting is a similar process but in this ideas are written on a sheet and are later exchanged. Creative orientation method is based on heuristic principle in which current situation is analyzed from a different angle. Creative confrontation method comprises of class synectics, visual synectics, stimulating words analysis, integration methods of adjacent fields, forced connection, semantic intuition and catalogue technique (Okpara, 2006). Data analysis and discussion The entire research study is conducted on basis of secondary research. Journals, articles, websites, magazines, etc., are analyzed thoroughly in order to obtain data related to the research topic. As per data obtained it is clearly evident that innovation and creativity had led to sustained growth and development of many real world organizations. Without any additional innovations growth and development of firms is not possible. These additional innovations tend to make a firm more glamorous. The winning performance of a firm or rather an entrepreneur is guided by many factors like competing not on prices but quality, market niche domination, having tight operating and financial controls, frequent service or product innovation. Own strategies are implemented by every business but competitive advantage can only be gained by being innovative. Problem solving and learning activities are common procedure in today’s working environments but true entrepreneurship is established when basic ways of thinking are ignored and focus is on novel solutions and ideas. Innovatory process best defines entrepreneurship and is all about developing an economic enterprise. It is often predicted that small organizations are more prone towards following innovative approach in comparison to large firms. There are different innovative ways adopted by small firms mostly in marketing and management sector. In order to grow and prosper, firms have to improve upon product or services or rather incorporate innovative changes. Entrepreneurs who are more aligned with innovation finds opportunity in existing product line or services unless it becomes non-competitive by nature. Creative skills of entrepreneur facilitate exploring new business opportunities in terms of launching new products or services. At times excess creativity leads to completely new characteristics or features that are not competitive enough to generate funds required for creative activities. Leaders who aim towards being successful in future years, considers innovation and creativity as their strategic priorities. Today’s business environment is highly competitive in nature and there is a high need for identifying business opportunities in unknown domain. This aspect can be explored efficiently on basis of creative and innovative skills (Porter, 2005). In today’s changing and competitive business environment, innovation is regarded as a main source for success within market economy. Entrepreneurial activities which are not innovative or creative would not be able to survive in the industry. Enterprises or entrepreneurs are continuously being innovative as well as creative to meet customer demand and accomplish business goals. Application of innovation or creativity solves problems that are witnessed by a company. They play a significant role in overall entrepreneurial process. Competitive advantage can be gained through creating new services, processes or products, innovation process or improving existing product line. An entrepreneur’s ability is well reflected when creative skills of an entrepreneur are utilized to turn constraints and obstacles into advantages. The matrix given in figure 5 represents on one hand relationship of innovation and creativity with entrepreneur and on the other business knowledge and expertise. Figure 4: Entrepreneurship Matrix (Source: Coulter, 2006) On basis of figure 4 it can be concluded that an individual who desires to become a future entrepreneur must possess high level of business knowledge and expertise along with innovative and creative skills. There is a relationship between creativity, innovation and entrepreneurship. Creativity is all about making new discoveries and innovation is implementation of new discoveries in real time practice. These processes are combined to create new market discoveries which are the main function of an entrepreneur (Alvarez and Barney, 2010). In real world there are many such industry leaders who were able to start on their entrepreneurship journey due to innovative and creative skills. Hindustan Unilever has achieved high performance standards due to effective contribution from Nitin Paranjpe. He believes in constraining resources and raising ambition level. Victor Fernandes is another such entrepreneur who believed in creating experiences for customers rather than focusing on sales. He developed the idea of direct cosmetic selling and now has an established firm in Brazil known as Natura Cosmetics (Wickham, 2004). The products represented creativity of the entrepreneurship and developing memorable experiences highlighted innovative skills of Victor Fernandes. Steve Jobs is a well known name when it comes to listing innovative or creative entrepreneurs. He was an American entrepreneur who had provided a new dimension to technology. The mentioned real world entrepreneurs could identify feasible business opportunities through innovation and creativity. Conclusion As per this study all individuals who manages and leads entrepreneurial process is known as entrepreneurship. It is an individual with future vision and who believes in developing creative ideas. Successful entrepreneurs are majorly characterised by flexibility, hard work and determination. An entrepreneur should possess innovative skills in order to survive in the market place. Changes are generally viewed as innovation by entrepreneurs and it is incorporated within business operations. These changes can be well explored when an entrepreneur is innovative and creative in nature. On the other hand, creativity is stated as developing new idea on the basis of imaginative skills. Innovation is all about transforming new idea into general use. There are different techniques of creativity or innovation that are generally used in order to identify entrepreneurship opportunities. Innovative and creativity are at the core of enterprise spirit. In modern world presence of intense competition facilitate an entrepreneur to think in divergent areas. Success is only achieved when an entrepreneur shifts from basic thinking process and adopts innovative and creative skills to determine opportunities. References Alvarez, S., and Barney, J., 2010. Entrepreneurship and epistemology: the philosophical underpinnings of the study of entrepreneurial opportunities. Academy of Management Annals, 4 (1), pp. 557–583. Barron, F., 2009. Creative person and creative process. New York: Holt. Bridges, S., O’Neill, K., and Cromie, S., 2005. Understanding enterprises: entrepreneurship and small business. New York: Palgrave MacMillan. Chakravorti, B., 2004. The New Rules for Bringing Innovations to Markets. Harvard Business Review. Coulter, M. K., 2006. Entrepreneurship in action. London: Prentice Hall. Drucker, P. F., 2005. Management challenges for the 21st century. London: Butter Worth Heinemann. Meredith, G. G., Nelson, R. E., and Neck, R. A., 2007. The practice of entrepreneurship. Lagos: University Press. Okpara, F. O., 2006. 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