Entrepreneurship and Its Role in Business - Essay Example

Self Help Guide Name: Course: Institution: Date: Table of Contents Table of Contents 2 1.0 Entrepreneurship and its role in business 3 1.1 Innovation and Creativity 3 1.2 Risk Management 4 2.0 Important Elements in Creating Entrepreneurial Ventures 4 2.1 Internal organisational elements 4 2.1.1 Organisational Resources 4 2.1.2 Organisational Capabilities 5 2.2 External Environmental Analysis 5 2.2.1 Technology Development Level and Changes 5 2.2.2 Competition and Consumer base characteristics 6 3.0 Managing Growth and Overcoming Obstacles in Entrepreneurial Development 6 3.1 Financial Training 6 3.2 Cross-Cultural Management Skills 7 3.3 Technology Skills’ 8 4.0 Source of Relevant Data 8 4.1 Entrepreneurship Summits and Seminars 8 4.2 Online Information Sources 9 References 10 1.0 Entrepreneurship and its role in business An entrepreneur is a person with the skills and activities to develop and create new products in the market. This is emerging as a critical and very crucial part of today’s business operations. In this case, the fundamental role of entrepreneurship is hedged on the changing global business environment. In this regard, the market is changing on two main fronts (Stokes, Wilson & Mador, 2010). On one hand, the global market is changing with respect to increasing market competition. This is as a result of increased globalisation that has allowed the emergence of both large and small business enterprises. Moreover, aspects such as free trade markets have increased the internationalisation of multinational corporations, increasing the intensity and magnitude of domestic markets. On the other hand, the global market is shifting with respect to changing customer preferences. In this context, the rise of globalisation, technology developments, and cultural integration have increased a changing customer preference and needs in the market. All the above changes necessitate the development of new business operations and systems, leading to the core role of entrepreneurship in such a business development process. This section identifies the areas in which the process of entrepreneurship allows ventures to mitigate and overcome the enumerated changes. 1.1 Innovation and Creativity The process of entrepreneurship is hedged on the principles of creativity and innovation. As such, the fundamental basis of emerging as an entrepreneur is being innovative. In the context of business operations in the society, innovation can be evaluated and classified into various aspects. The fist and most obvious entrepreneurship innovation are through creating new products in the markets, or improving the existing products. This includes developing products with new designs and functionalities that meet the changing customer base. The second are of innovation is in business operations and strategies (Casson, 2008). Good entrepreneurs allow for the formulation and designing of new business models and strategies, such as customer targeting approaches and operations and value addition systems, which increase the value and organisational market competitiveness. A combination o the above two innovation systems serve as a means of creating a market sustainable competitive edge. 1.2 Risk Management The second strategic role and benefits of entrepreneurs’ in a business enterprise us the aspect of risk management. In risk management, there are different forms of dealing with risks. They include, risk avoidance, risk mitigation, and after risk occurrence management. In this regard, it is imperative to understand that in the wake of increased globalisation, business risks have increased exponentially. As a result, Henry (2007) noted that a high number of international business failures emerge as a result of poor risk management systems. Entrepreneurship skills in a business enable managers and business leaders understand and identify risks proactively. The entrepreneurship spirit is hedged on proactive measures rather than reactive measures development. Thus, through the role played by entrepreneurs in a business, ventures are able to develop and equip their operations with the desired risk management systems preparedness. This has the overall net effect for reducing potential loss and damage causes by risks occurrences. Through such increased risk preparedness, organisations effectively develop and create 2.0 Important Elements in Creating Entrepreneurial Ventures In the formulation of an entrepreneurial venture, it is vital to consider and evaluate a number of factors in both the organisational and the external environment respectively. This section argues that the key important elements can be classified into the organisational internal elements and the eternal environment elements receptively. 2.1 Internal organisational elements The process of identifying the key organisational elements to support the formulation and development of an entrepreneurial venture cam be achieved through a situational analysis approach, this includes the use of approaches such s a value chain analysis and an organisational SWOT analysis respectively. 2.1.1 Organisational Resources The first internal element to consider is the existing organisational resource base. In this context, the resources should be understood under the theory of resource based view. The theory holds that organisational resources are not only the tangible physical assets, but also include the intangible assets as well. Thus, the formulation process should evaluate the exiting tangible assets such as financial capabilities, and the existing intangible resources such as the corporate culture among others (Hunt & Davis, 2012). The evaluation of the available resources in a venture ensures that the formulated entrepreneurial business ha the required operational resources’ base form the venture. This reduces the risk of formulating an over ambitious entrepreneurial venture that cannot be supported by the existing business and organisational conditions respectively. 2.1.2 Organisational Capabilities The second element of evaluation in the global market is the aspect of organisational capabilities. The process of identifying and classifying an organisational capability should include the evaluation of the current venture capabilities and its expected foreseeable future capabilities. This is often established through the evaluation of the expected venture development and growth plan in the global market. Through a proper capabilities and capacity evaluation, it becomes easier and imperatively simple to formulate an entrepreneurial venture whose strategic goals and development plan needs are aligned with the organisational strategic goals. As a result, his ensures that the entrepreneurship business goals and objectives are aligned and do not contrast or oppose the venture long term goals (Jiang, 2014). This ensures that the entrepreneurship venture and function formulated support the organisation in its long term development objectives. 2.2 External Environmental Analysis The process of evaluating the key elements to consider in the formulation of n entrepreneurial ventures includes a critical evaluation of the external business environment. This process is achieved through the use of two main external market evaluation tools, namely the PESTLE and the Porters fiver forces analysis tools respectively. 2.2.1 Technology Development Level and Changes The first key element to consider in formulating an entrepreneurial business is the existing level of technology in the market as well as the changing topography respectively. This element rationale is hedged on the role of technology in the modern business operations. In this case, technology is applied as a requisite component of business in all operations, including new product development, operations scheduling and planning, as well as in risk management and decision making possesses respectively. In this regard, the ability by any business enterprise to apply technology in its various operational systems is limited to the existing level of technology growth and infrastructure development levels in the market. Thus, although an organisation could have the resources and capabilities to support such a technology support system, its success would be curtailed if there lacks a corresponding ICT infrastructural development capacity in the market. This would lead to the failure of a well designed entrepreneurial venture (Hsu, 2008). 2.2.2 Competition and Consumer base characteristics The second key consideration element in entrepreneurial business formulation and development is the existing level of market competition as well as the expected market changes, both in the short and long term periods. I this context, the evaluation of the existing competition ensure that the formulated new business design is of superior nature over the competition. Moreover, an understanding of the expected macroeconomic changes in the market long term period ensures that the formulated entrepreneurial ventures long term strategy and development plan is in line with the expected market changes, to ensure a sustained competitive advantage in the long run period. 3.0 Managing Growth and Overcoming Obstacles in Entrepreneurial Development This analysis section offers a critical yet descriptive analysis if the required and the key elements for enhancing entrepreneurial venture rapid growth management as well as those applied in managing operational challenges in the market. The first key aspect to ensure that the entrepreneurs are equipped to manage rapid business growth as well as overcome any potential obstacles is through training. The training process should be in different aspect and areas as discussed in the following sections. 3.1 Financial Training The aspect of financial training includes the development of capital management skills among the entrepreneurs. As ventures rapidly expand, there arises the need to prioritise on investment projects. This is because, although there are numerous available investment plans available for the ventures, the profitability and viability of such investment opportunities should be examined. One of the main experienced challenges in investment in a rapidly growing venture is the overinvestment in long term projects leading to a low operating and working capital for the ventures in the short and medium term periods. This has the implications of such a venture failing to meet their short and medium term liability obligations, an aspect that risks the ventures failures, although their long term projects could be highly profitable. The possession of key financial management skills would also enable entrepreneurs overcome potential financial obstacles and challenges through understanding the right and relevant prioritisation process in the market. 3.2 Cross-Cultural Management Skills The second key essential training tool is on cross-cultural management skills. Although an entrepreneur could be skilled n talented into innovating and creating new business products and services, they often lack a cross-cultural understanding skill. In this case, it becomes hard for such entrepreneurs to interact and operate in different cultures. As a business expands exponentially in the global market, there is a high tendency that the ventures would go beyond the domestic host market into the international markets. Such entry into the international markets is characterised by the emergence and the need to cope with new and strange cultures to the entrepreneurs. As a result, a lack of skills and understandings of such cultures lead to business failures. In this context, Vasilache (2014) noted that one of the key causes of business failures in the global markets is the lack of cultural understanding in the global markets. This often leads to the formulation of business strategies and structures that are incongruent to the existing cultures in the market. Thus, this analysis established that through equipping the entrepreneurs with the right cross-cultural management skills, the risk of cultural diversity as a cause of business failure is exponentially reduced. In addition as ventures expand; there is the increased aspect of workforce diversity in the global market. However, although workforce diversity is an added value element in entrepreneurial ventures, due to diversity in perceptive, if not managed well through a cultural understanding and sensitivity approach, they could lead to business failures’. This is mainly based on the rise of potential workforce disagreement and conflicts, which derail entrepreneurial, venture operations expansion and employees productivity in the markets. However, with the right cross cultural management skills, the entrepreneurs have the capacity and ability to manage cross-cultural team and create high performing teams in the long run period. 3.3 Technology Skills’ The third set of skills relevant for the entrepreneurs to effectively handle rapid growth in business as well as operational challenges is technology expertise. This skills rationale is hedged on the changing global market and business landscape. In this regard, the global market is shifting toward automation and the use of technology in all business avenues. The application of ICT systems expands from the traditional internal operations in a business such as in communication and data analysis to encompass the external venture stakeholders. This is characterised by the use of modern technology systems such as ERP systems that support internal operation and strategic decision making and other external support systems such as CRM for customers and SCM for venture suppliers. As a business rapidly expands, it means that organisational strategic decisions on expansion and operations have to be developed in more limited time. As such, it is vital for the managers and entrepreneurs to understand the key skills and approach into making the key strategic decisions in the market. The use of technology plays a critical part in the development of such key and quality decisions in the market (Zhao, 2008). On the other hand, key business challenges in the market include aspects such as challenges and obstacles in relating with an ever increasing portfolio of suppliers and customers as a venture expands. However, through the proper use of technology such as CRM and SCM systems, as well as platforms such as social media platforms, organizations are able to address such emerging issues and challenges in the market. Some of the key challenges in the global market are in relation to effective communication with the eternal stakeholders, where message distortion and barriers to communication were a major expansion failure, thus, the use of technology and real time communication systems is bound to overcome the challenges. 4.0 Source of Relevant Data In the development of required global entrepreneurial cultures and skills, the market is characterised by a series of informational sources. This section explores the main sources of information for global entrepreneurs in the last 50 years. 4.1 Entrepreneurship Summits and Seminars The global market has in the last two decades realised and appreciated the role played by entrepreneurs in the market. Besides the provision of the key required services, entrepreneurs have been linked with increased national growth potentials as well as increased employment opportunities. In this regard, it has been established that through increased entrepreneurial ventures, the rate of unemployment reduces exponentially in different nations. This has led to the organisation of global entrepreneurship workshops and seminars in the market. This has been a major source of entrepreneurship development information source for global entrepreneurs, especially those in the emerging markets. One such source of information for entrepreneurs is the global entrepreneurship summit developed and established by the USA government under leadership of President Obama. The summit provides an opportunity through which key successful entrepreneurs meet the young and emerging entrepreneurs form the global market. As such, they interact and share. Of key significance is the successful entrepreneurs sharing their path to success as well as recounting on the many challenges faced on their path to success and the applied approach to overcoming them. Through such sharing sessions, the emerging and young entrepreneurs acquire not only skills but also the requisite motivation to start up and push on with their entrepreneurial ventures in the global market. Besides the global summit, additional global entrepreneurship summit in, different NGOS and lobby groups have been at the fore of developing entrepreneur development seminars, epically aimed at the youth and women in the global market. 4.2 Online Information Sources Over the last decade, technology developments and expansion have been on the rise. In this case, technology and internet connectivity has not only been in the developed nations, but also in the developing and emerging markets respectively. In this regard, much information is now available online on new business development practices. Thu, a majority of the young and emerging entrepreneur can now access vital information through the online platform. Besides just accessing information, different entrepreneurial groups have developed information centres where members can share and interact with one another and as such exchange vital information on the way to develop and expand their skills. As such, this provides a suitable base of information from which global entrepreneurs can source information form with much ease and at their own convenience. References Casson, M. (2008). The Oxford handbook of entrepreneurship. Oxford: Oxford University Press. Henry, C. (2007). Entrepreneurship in the creative industries: An international perspective. Cheltenham, UK: Edward Elgar. Hsu, D. H. (2008). Technology-based entrepreneurship. Handbook of Technology and Innovation Management. Blackwell Publishers, Ltd: Oxford, 367-387. Hunt, S. D., & Davis, D. F. (2012). Grounding supply chain management in resource‐advantage theory: in defense of a resource‐based view of the firm.Journal of Supply Chain Management, 48(2), 14-20. Jiang, W. (2014). Business partnerships and organizational performance: The role of resources and capabilities. Heidelberg : Springer Stokes, D., Wilson, N., & Mador, M. (2010). Entrepreneurship. Hampshire, UK: South-Western/Cengage Learning EMEA. Vasilache, S. (2014). Cross-cultural training and teamwork in healthcare . Hershey, PA : Medical Information Science Reference Zhao, F. (2008). Information technology entrepreneurship and innovation. Hershey PA: Information Science Reference. Read More