Entrepreneurship and the Implementation of Strategy in Theory and Practice - Assignment Example

Entrepreneurship and how it contributes to the implementation of strategy in theory and practice Introduction Any organized human activity, which is done in-group, will be most times constituted into structure called organization. So, Organization is a structure with a ‘collage’ of humans doing their allocated work under the supervision of a leader. The leaders of organizations can be differentiated into two types based on the origins of the organization and the leaders’ role in it. That is, some persons will enter an already existing or functioning organization and perform leadership duties. But, in other cases, some ordinary person (and not leader) will start an organization on its own from scratch with the aid of finance, workforce and set targets. This process is only called Entrepreneurship and entrepreneur is the owner who can create honour for their enterprises. That is, during entrepreneurship, entrepreneurs as a ‘founder’ cum ‘builder’ will launch a new enterprise by first building a team. He/she can build his/her team by associating individuals who came from the same ‘stable’ like friends, work mates, family members, etc and by recruiting new individuals with the right talent, knowledge and attitude. With this ‘living’ group, and the material things like capital, machines, infrastructure, etc, the entrepreneur will embark on an organization. So, during entrepreneurship, the entrepreneurs will set ups a new start-up to offer a new or existing product or service. After setting up and starting their start-ups, the next logical step in the process of entrepreneurship is the formulation and implementation of certain effective strategies. That is, after starting an organization, it is more important to successfully run it. Any enterprise can run successfully, reach its targets and become profitable, only if effective, feasible and optimal strategies are formulated and implemented to guide, improve, etc the organizations to the intended targets. If the targets are reached and the organization becomes successful, then only the entrepreneur will be regarded as a leader. So, even though, an entrepreneur will exhibit many leadership traits while setting up his/hers enterprise and while formulating strategies, he/she will be regarded a leader only if he/she shows success – that is the difference between an entrepreneur and a leader. The key aspect for the entrepreneur to become a leader is the formulation and implementation of effective strategies. So, this paper by first defining the concept of "entrepreneurship", will explain how it contributes to the implementation of strategies in theory and practice. That is, after defining the entrepreneurship, this paper will focus on the entrepreneurial skills or leadership traits of two British entrepreneurs Richard Branson and Alan Sugar and how it is implemented as part of strategies in their different organizations. Importantly, the paper by focusing on their skills or traits, will explain how those skills will only help any organization to implement their strategies in theory as well as in practice. Definition of Entrepreneurship Entrepreneurship is one of the important business processes, which have attracted a lot of attention all over the world in the last decade. There are many definitions for entrepreneurship but only few encompass the role of an entrepreneur. That is, entrepreneurship is the process, when an individual independently starts a venture with a product idea, capital, workforce, etc, absorbing the inherent risks. Boshoff and Wyk (2001, 215) define entrepreneurship as “A planned, long-term process of independently creating something, associated with a specific individual or individuals... as a novel combination and recombination of resources to utilize achievement opportunities, while accepting the financial, social and psychic risks involved”. Baumol defines entrepreneurship as the practice of revitalizing organizations or starting new organizations in response to new opportunities (2007, 23). Being a difficult practice, most new businesses are not successful, and so the key is transforming their idea into a successful venture. So, Schumpeter and Mises contrary to Boshoff and Wyk lays more stress on the business idea rather than the ability of the entrepreneurs. That is, Schumpeter and Mises have defined an entrepreneur as a person who converts a business idea into a successful innovation (Bird 33, 1992). Frank Knight and Peter Drucker on the other hand gave an added dimension to the definition of entrepreneurship by incorporating the element of taking risks, as one of the important entrepreneurial skills. A generally accepted, and now popular definition of entrepreneurship is, "Entrepreneurship is a process that involves the discovery, evaluation, and exploitation of opportunities to introduce new products, services, processes, ways of organizing, or markets" (Shane and Venkataraman. 2000; Venkataraman, 1997). Shane and Venkataraman focus more on the non-human factors like products, services, markets, etc while defining entrepreneurship. Kirby on the other hand focus more on the human or HRM skills of the entrepreneur. Kirby (2002, 360) defines entrepreneurship and a successful entrepreneur as one who has a range of personal skills, attributes and behaviours that go beyond the purely commercial. (The popular entrepreneur who fulfils all these definitions of entrepreneurship is surely Richard Branson) Entrepreneurship in United Kingdom (U.K.) Motivated entrepreneurs are present all over the world and United Kingdom is no exception. And the table below shows the data about UK citizens and their Propensities towards entrepreneurship. The above graph shows that in United Kingdom young people are more likely to believe that entrepreneurship represents a good career choice and that it brings status. Also, it shows that younger people are less likely to believe that there is enough media coverage of new businesses. Strategies in theory and practice To implement the strategies in theory and practice as part of entrepreneurship, entrepreneurs as mentioned above will exhibit certain leadership traits. Speaking about good leadership traits, the trait of having a good vision is one of the foremost ones, which will surely help the entrepreneur to implement the formulated strategies. Actually, the vision that arises in the mind of the entrepreneur only initiates the process of entrepreneurship. That mental picture or vision will only give them the clear path of success. They create a visual picture of their future goals and their dream to make their product a success (Casson 35, 2003). So, successful entrepreneurs are the ones who had vision of their successful ventures and will also have visions of their future success. The famous British entrepreneur, Richard Branson is the one who had a great vision even in his school days, as he thought that he could run his school better than the headmaster. This confidence in his vision is his major strategy and it is implemented in all his different types of organisations - Virgin brand has over 360 companies. One of the other Branson’s visions, which are turning into reality, is the concept of space tourism. That is, Branson launched Virgin Galactic to send people to space as tourists using a launch vehicle named Spaceship One. Likewise, Alan Sugar also implemented his vision based strategies in all his technology businesses including Computer technology and property development business. With the computer technology booming, the other British entrepreneur Alan Sugar had his visions in that sector. That vision turned into reality, when his company launched PC1512, a PC compatible computer. The importance of having good vision, while implementing strategies was put forward by Alan Sugar through one of his famous quote. "A good leader is not necessarily the most popular person in their business, but the best ones are liked because they are respected for their clarity and vision." So, optimum performance by organizational initiatives, Virgin Galactic and PC1512, proved the capabilities of the individual entrepreneurs, both Branson and Sugar The initial stage imposition of entrepreneur’s ideas and assumptions will set the correct tone for the success of the enterprise and will importantly create a strong entrepreneurial personality. This leadership trait of setting the tone should be carried out in the beginning itself because the workers mind will be fresh in their new organizational setup, and will be willing to make a good start. Branson tend to exhibit this entrepreneurial personality and optimal communication skills in most of his public appearances as well in private board meetings. At the Association for Financial Professionals Annual Conference, Branson had an in conversation meeting with AFP President and CEO Jim Kaitz. The utterances and tone in total the communication skills; Branson practiced impressed Kaitz very much. "Branson explained they have to be global in scope, enhance the brand... He set the perfect tone to kick-off three days of learning, education and networking” (Kaitz). To analyze the tone Alan Sugar uses, the BBC’s reality show, The Apprentice can be used as an example. While dealing with the participants, Sugar exhibits this entrepreneurial personality by using the tone and communication that borders on authority and intimidation. But, critics say that the tone he uses is more of intimidation which is a sign of poor communication and thus he fails in not evaluating the performance correctly. But, these critics are only the minority, because many people are fans of his tone and style, and it shows in the popularity of the show. Another good leadership trait that should be exhibited in the initial stages of strategy implementation is, the leader should live and work as an example for others to follow. In many organizations, leaders are the sole decision making authority, while managers will be able to take decisions after discussions with others. Importantly qualities like charisma will be visible more in leaders, when compared to managers, so leaders will be followed by the workers as an example. It will motivate the workers to work optimally and thereby improve the productivity of the organizations. Also, setting personal examples only can allow the leader to point out the faults in his workers and correct them. A leader leads by example not by Force. Both, Richard Branson and Alan Sugar are leaders, in every sense of the word because there are large group of employees willing to work under them. Both for them exhibit this trait of leading by example, giving an added impetus to their organization Normally in any organization or an enterprise, entrepreneurs themselves will commit mistakes while implementing strategies. When the entrepreneur himself/herself is found guilty of committing mistakes, it should be advisable for the entrepreneur to learn from the failure and take the corrective measures, to successfully implement the strategies. Branson is no stranger to failures; his many new initiatives and ideas have faced failures. The secret to his success has been his ability to make a strong recovery and initiate change management, so that the current failures can be change into a desired end state in the future. “He understood that an integral part of being an entrepreneur meant being willing to not only accept failure but to also be able to rise up and start again.” (evancarmichael.com). Branson exhibited this entrepreneurial trait and other traits while managing all his organizations, and did not exhibit only while managing a particular company in his group of companies. That is, because of this trait only, even after the failure of Virgin Cola, Virgin Vodka, Virgin Cosmetics, etc, Branson continued to launch many new products, wishing to achieve even more success. Branson had only scarce resources, when each failure crossed him, but he was able to make a recovery each time. In the case of Alan Sugar, different strategy was followed. That is, before buying the computer hardware manufacturer, Sinclair, Alan studied and learned why the company, Sinclair failed. After learning from the failure, he took over the company making it one of his important successes. Entrepreneur is not a single individual; he/she will be part of a team of skilled professionals. So, it is the duty of the entrepreneur to develop them also, so that all of them work in co-ordination as a team. If the restrictions in the working environment are removed, the worker will feel comfortable and work in a productive manner, importantly as a team member. That is, Entrepreneurs should act more like leaders than managers and invite others to discuss the organizations’ various strategies and importantly on how to successfully implement those strategies, so there is high level co-ordination. He/she should have the leadership trait to ask “what are your thoughts on this?” This productive trait can quickly develop the individual workers as well as the enterprise. So, the duty of the entrepreneur is break the shackles and create coordination among the employees and the management. Richard Branson did this, by first abolishing the hierarchical structures in his enterprise. His anti-hierarchical philosophies and his practice of allowing everyone to have access to him, developed the workers in an optimum way. Alan Sugar for his part does this act of developing others in a different way, by conducting the show, The Apprentice. Behind all the actions, projects, strategies, etc, the show is just a platform provided by Alan Sugar for talented individuals to get into his enterprise and develop himself/ herself. In this world each and every thing moves because of energy. That is, any individual particularly entrepreneur could exhibit invisible positive energy through his/her actions and communications. This exhibition of positive energy is an important trait of entrepreneurship and is more important to different organisations at different times. This trait can surely channelise the positive energy for the betterment of the enterprise. This type of positive energy is quite visible in Richard Branson as he handles different organizations, which needs different positive actions in different times. He is a high octane adventure seeker, who undertook expeditions like non-stop hot air balloon voyage around the world. Branson exhibited this positive energy particularly during the launch of the inaugural Virgin Atlantic flights to India. At the New Delhi airport, Branson came out of the plane dressed up in local costumes, dancing the local bangra dance to the music of drums. This type of energy creates a positive image and thereby positive energy for the enterprise as a whole, so that it can implement its strategies effectively. Also, by wearing local costumes during foreign visits and by imbibing the local culture, Richard Branson has the ability to ‘merge’ or associate with the host country in all aspects, while entering that country’s market. That is, he firstly builds high level Political connections and fully analysis the economy, social, technological, legal and environmental aspect of the host country, before entering the host country. So, this entrepreneurial trait show that Branson falls under the framework of PESTLE The trait that a successful entrepreneur will show to implement the formulated strategies in practice is the sense of urgency. That is, every individual should show activeness both physically and mentally and take calculated risks. If the entrepreneur and also managers in large firms shows this activeness and takes calculated risks, he/she could create a sense of urgency among his/her subordinates as well. For an enterprise to be successful in all its ventures, it has to take calculated risks and at the same time show punctuality in the entire process from manufacturing to shipment. Because of this sense of urgency only, Branson and Sugar has been able to launch their initiatives at the opportune time and reach the intended target. Setting achievable goals will also help in the successful implementation of the strategies. An organization can function and succeed only if the leader create opportunities, then set those opportunities as predetermined goals and formulate strategies to help achieve that goal. That goal will only spur the workers to work hard and give their best. But, if the goals were extremely difficult to achieve, it will be difficult to formulate strategies for it as well, leading to de-motivation. The basic point is tough goals and inadequate implementation of strategies would de-motivate the workers very much. So, it is always advisable to set achievable goals and thereby avoid de-motivating the employees. Richard Branson did exactly this with Virgin Galactic. Even though the concept of space tourism was considered a difficult proposition, Branson saw the opportunities in it and thought it is possible to achieve it and make a success out of it. So, this setting of achievable goal is one of the important traits, which placed Branson in the position of a top entrepreneur. “His goal was never to be the biggest... His goal was never to be the most profitable” (Morris). The same is the case with Alan Sugar who saw opportunities in the football field, set achievable goals and indeed achieved it, particularly, the goal of buying the English football club, Tottenham Hotspurs. So, he scored ‘goal’ in the ‘field’ of football also. While implementing strategies, entrepreneurs should also need to show decisiveness and take tough decisions. That is, when the employees are recruited, only the employees who show optimum creativity and commitment should be recruitment. Importantly, they should be monitored whether they show the same creativity through out their tenure. If the employees become too lazy, self-seeking, troubling, etc he/she should be fired from the organization. The organization would do well without these individuals. If the company’s survival itself hangs on the balance, due to financial restraints, the tough decision of downsizing can be taken. Richard Branson also agrees with this view, “if a company’s got into financial difficulties or something then — then they may, in order to save, you know, thousands of jobs have to take tough decisions” (Branson). In the case of Alan Sugar, he was forced to take tough decisions in the TV show, The Apprentice. That is, when the participants show their skills with lesser amount of mistakes, the job of Alan Sugar gets even tougher. Among the many factors, which he considers to select the winner, he gives importance to how the candidate suits the job. Alan Sugar in those situations will utter, "Very, very tough decision. I think its down to the job that I have in mind” Even though success is an important criterion, it is not the end of all means. So, the important thing, the entrepreneur should take care while implementing the strategies is, success should be achieved by adopting truthfulness and sincerity in the overall management. If the entrepreneur avoids these good qualities and goes in a wrong way to achieve success, it will surely lead a lot of limitations and to the eventual downfall of the enterprise. So, if he/she follows the unwritten rule of truthfulness and sincerity theirs’ enterprise success will be appreciated even more, more importantly from the ethical sense. Even though Branson exhibited this good traits most times, in 1971, Branson faced limitations, as he was charged and put behind bars for selling records that had been declared as export stock in his Virgin stores. This act of Branson highlighted the Porters’ threat of substitute products for the customers. And, he was made to go for an out-of-court settlement with UK Customs and Excise, with an agreement to repay the unpaid tax and fines. In the case of Alan Sugar, the same The Apprentice TV show, faced a lot of limitations, as it was accused of being stage-managed. That is, even though it is considered a reality show, some parts are created, edited and directed to give a product that is far from truthful and sincere. Failure will be part of every one’s life and the staffs in the enterprise will be no exception to it. So, one of the most important traits, the entrepreneur should practice to effectively implement the strategies is to support the staff during failures and positively influence them. That is, in cases of underperformance, the entrepreneurs should be available for support, based on the premise that the same staffs should not cause failures in the future. This same thing happened in the Virgin Atlantic Airways Ltd. Joe Ferry, Virgins head of design was entrusted with the task to create new sleeper seats that reclined at an angle. But after the trials, they found out that the seat did not work successfully, with passengers complaining about sliding and discomfort. At the same time, Virgin’s chief competitor, British airways came up with the hugely successful flat bed. Ferry himself acknowledged this fact that his design is inferior. But Ferry didnt get the axe from Branson. In fact, Branson exhibited “intrapreneurship” and correctly evaluated that Ferry can be given a chance. This evaluation made him to put confidence in Ferry and his creativity. So, based on the correct evaluation, he entrusted him to take on another crack at designing the sleeper seats committing around $127 million for that task. Ferry showed immediate success and this explains the positive influence Branson have on the people he comes into contact with. This, shows how, Richard Branson followed the important trait of supporting the staff during the failures. But, Alan Sugar on the other hand, in spite of owning a football club, Tottenham Hotspur FC compared the football players to thugs. This is not the correct way to support his staff and is the example of negative influence. But most times, he has given the needed support to all his staff in various companies, in times of failures. A successful entrepreneur while successfully implementing the strategies could also inspire or build confidence in other individuals, with whom he/she has no connection at all. That is, the entrepreneur could be at some place, while the person, whose confidence level gets heightened by the specific entrepreneur, could be at some other place. This is what Richard Branson did and thereby helped in the development of entrepreneurship in new ways. He was able to give confidence to a group of Indian graduates, helping them to become entrepreneurs on their own. “Phanindra, Sudhakar and Charan are all 25, from the BITS-Pilani class of 2002. They had always wanted to start their own business… They found their inspiration from a quote in (Sir) Richard Branson’s autobiography, “look around your life. If there is any process that can be improved, it could be the next big business idea”. Thus redBus was born.”(Chatterjee). Conclusion All these leadership traits will greatly help the organization and its leader or entrepreneur to implement all the strategies. An organization’s success only depends on the role a leader or entrepreneur plays and how effective his/hers formulated strategies is. Both are interconnected. That is, if an entrepreneur performs his role effectively, he would have also formulated and implemented effective strategies. Likewise, if an entrepreneur implements apt strategies in theory and practice and makes his/her organization succeed, he/she can be considered to have played the perfect role. Unison of workers into teams, with an urge to usher an organization into top echelons will be successful, if the entrepreneur performs optimally. If the entrepreneur performs optimally, organizations would have a ubiquitous presence all over the world. References Baumol, W. J. 2007, Good Capitalism, Bad Capitalism, Yale University Press Bird, B. 1992, "The Roman God Mercury: An Entrepreneurial Archetype", Journal of Management Enquiry, Vol.1, no 3, September, 1992 Boshoff, A. B and Wyk, R.V 2001, Socio-political and Psychological Perspectives on South Africa, Ed. Christopher R. Stones. Nova Publishers. Branson, R 2005, Transcript of Jane Pauley’s Interview with Sir Richard Branson, viewed April 2, 2008 http://www.business-opportunities.biz/2005/10/19/transcript-of-jane-pauleys- interview-with-sir-richard-branson/ Chatterjee, S, BITSian Entrepreneur Showcase, viewed March 31, 2008 http://sandpaper.bitsaa.org/13_entrepreneurs/showcase.html evancarmichael.com, Lesson #3: Keep Flying, viewed March 30, 2008 http://www.evancarmichael.com/Famous-Entrepreneurs/592/Keep- Flying-High.html Ferry, J, How Failure Breeds Success, viewed March 31, 2008 www.businessweek.com/magazine/content/06_28/b3992001.htm Greene, F. 2005, Youth Entrepreneurship: Latent Entrepreneurship, Market Failure and Enterprise Support, National Council for Graduate Entrepreneurship Policy Paper #002. Kirby, D 2002, Entrepreneurship, McGraw-Hill, Maidenhead Berkshire UK. Kaitz, J, 2006, Association for Financial Professionals Annual Conference, viewed March 31, 2008 http://www.afponline.org/pub/pr/pr_20061016_Branson.html Morris, B 2003, Richard Branson: What a Life Betsy, viewed April 2, 2008 http://www.mutualofamerica.com/articles/Fortune/September03/fortune.asp Shane, S., & Venkataraman, S. 2000, “The promise of entrepreneurship as a field of Research”, Academy of Management Review, 25, 217-226 Sugar, A, Leader values: quotes, viewed March 31, 2008 http://www.leader-values.com/Content/quotes.asp?Letter=A Sugar, A 2006, As Sir Alan tells his new apprentice shes hired, the real winner is the BBC, viewed April 2, 2008 http://www.guardian.co.uk/media/2006/may/11/realitytv.business Venkataraman, S. 1997, The distinctive domain of entrepreneurship research: An editors perspective. In J. Katz & R. Brockhaus (Eds.), Advances in entrepreneurship, firm emergence, and growth (Vol.3 pp 119-138). JAI Press wikipedia.com 2007, Entrepreneur, viewed April 2, 2008 http://en.wikipedia.org/wiki/Entrepreneur Read More