Approaches to Explain Entrepreneurship - Coursework Example

APPROACHES TO EXPLAIN ENTREPRENEURSHIP by goes here] Presented to [your goes here] [your goes here] [your university’s name] [due date of the paper] Approaches to Explain Entrepreneurship 1. Introduction Wallener (n.d.) states, “An entrepreneur is an individual who accepts financial risks and undertakes new financial ventures”. An entrepreneur is a person, who attempts to start a new business. Almost every society gives value to entrepreneurship. Personal traits of an entrepreneur and environmental factors, such as, family, education, and government play an important role in shaping the mindset of an entrepreneur. There are several approaches using which one can analyze the personality of an entrepreneur. In this paper, we will discuss some key approaches, which can help us explain an entrepreneur. 2. Environmental Background of An Entrepreneur Environmental background of an entrepreneur is very important to consider when assessing different approaches to explain entrepreneurship. Environmental background includes several elements, which play critical roles in the development of an entrepreneur. Some of those elements include family, education, role model, experience, and government support. Let us analyze these elements in some detail. 2.1 Family Family plays a vital role in the development of an entrepreneur. Professions and businesses of the family members of a person have a lot of influence on his/her professional mindset. According to Bruin and Dupuis (2003, p. 93), family business has a deep association with the concept of entrepreneurship. In some families, if the father of a person is involved in the business of construction, son will also try to step into that business by opening a firm or an independent construction company. Similarly, businesses of relatives also influence the mindset of an entrepreneur. 2.2 Education Education also plays a critical role in shaping professional approach of a person. Education makes a person aware of the legalities of different businesses, which help him/her become an entrepreneur at some stage of life. Education not only creates awareness among the entrepreneurs but also ensures economic development. Bruin and Dupuis (2003, p. 178) state, “Raising overall education and skill levels of indigenous peoples is undoubtedly crucial to indigenous economic development”. 2.3 Role Model Another element, which plays a role in shaping the mindset of an entrepreneur, is role model. As discussed earlier, a person is likely to step into the business of his/her ancestors. The reason is that success of parents or other relatives in any specific business positively influences the professional thoughts of an entrepreneur, which results in making that person an entrepreneur at some stage of life. Similarly, some successful businesspersons also become the role models for some people and they try to test their luck in the businesses of those people. 2.4 Experience Professional work experience is also an important element in the life of an entrepreneur. According to Bruin and Dupuis (2003, p. 69), entrepreneurs having little or no prior experience are less likely to succeed in their ambitions. A person is likely to start his/her own business after getting some experience in the related field. For example, a person doing job in a fresh food store or in a construction company may open his/her own company at some point in life after getting some practical experience and knowledge of all issues related to the business. 3. Entrepreneurs are Born or Made According to Shefsky (1994, p. 2), entrepreneurs are made, they are not born. Various factors play their roles in shaping an entrepreneur. Every entrepreneur is a normal person like every other person. The difference is just of their approaches to professional life. A normal person is generally less enthusiastic and innovative. He/she does not think of starting an independent business. On the other hand, an entrepreneur has some determination to do something new in life. Various factors, such as, family, education, and experience influence the mindset of an entrepreneur making him/her step into a new business. Casson (2003, p. 9) states, “Anyone who has the sort of information necessary to predict the behavior of entrepreneurs has a strong incentive to stop theorizing and become an entrepreneur himself”. The statement shows that entrepreneurs need some information and knowledge to become an entrepreneur. Entrepreneurs develop such characteristics with the passage of time, which help them move progressively in their respective fields. These characteristics are also not present in a person by birth; rather a person develops these characteristics in different stages of life. Awe (2006, p. 1) states, “Required entrepreneurial skills include a compelling vision, a driving passion, versatility or flexibility in planning and changing plans, and confident execution”. Therefore, we can say that a person is not an entrepreneur by birth; rather various factors develop a person into an entrepreneur. 4. Traits Approach Nowadays, we define an entrepreneur by his/her characteristics more than his/her education. An entrepreneur has such personal characteristics, which distinguish him/her from other people. “Characteristics of an entrepreneur include spontaneous creativity, the ability and willingness to make decisions in the absence of solid data, and a generally risk-taking personality” (Wallener n.d.). An entrepreneur is also future-focused, collaborative, curious, self-fulfilled, and action oriented. Let us discus these characteristics in some detail. 4.1 Spontaneous Creativity Spontaneous creativity is one of the main personal characteristics of an entrepreneur. An entrepreneur is a person who comes up with a unique idea regarding business. “A research team accidentally discovering a unique property of a new material and seeing a market opportunity, is an example of spontaneous creativity” (Baumgartner 2006). An entrepreneur seeks such opportunities, which can facilitate him/her in promoting the new ideas. The creative nature of a person is the key towards his/her success as an entrepreneur. An entrepreneur is a person who dares to be different from others and embraces all sorts of creative ideas that pass through his/her head (Premji 2008). An entrepreneur develops innovative ideas in his/her mind and tends to transform the ideas into realities when he/she finds proper opportunities. 4.2 Ability and Willingness to Make Decisions The ability and willingness to make decisions in the absence of solid data is another personal characteristic of an entrepreneur. An entrepreneur is a person who can make correct decisions even when he/she does not have the required data and statistics. A normal person needs to have data to make decision regarding any specific mater but an entrepreneur is a step higher than a normal person is because of the ability to predict what is going to happen in future. An entrepreneur has the ability to forecast what will be good and bad regarding any decision. Correct decisions need good thinking abilities of the decision maker. An entrepreneur is a person who can judge the unforeseen facts and figure while taking decision regarding any new venture. Another important thing, which one needs in correct decision-making, is willingness. An entrepreneur shows willingness to do something and to achieve something out of nothing. An entrepreneur is not an afraid person who is not willing to go for some venture in absence of solid facts. Rather he/she is a person who has courage to do something not only for his/her own benefits but also for the benefit of whole society. 4.3 Social Responsiveness An entrepreneur is also socially responsive. A social entrepreneur is a person who is involved in solving the society’s most critical social problems. “Social entrepreneurs identify public problems and apply business acumen to resolve them” (Osalor 2010). They do not leave everything up to the government; rather they try themselves to handle the problems in the most efficient manner. They not only solve social problems but also navigate social barriers to the communities (Light, 2008, p. 123). They offer a wide range of ideas to the people living in any particular society in order to manage their social problems. “Social Entrepreneurs Identify and Solve Problems on a Large Scale” (Coggins 2009). A social entrepreneur possesses many distinguishing characteristics. “Social entrepreneurship can change the world by bringing forth the humanity in each of us” (Bratcher 2010). Social entrepreneurs commit themselves to change the direction of the society and want to implement their vision practically for the betterment of the society. “Social entrepreneurs seek to attain long-term social effects” (Cuizon 2009). Some of the core activities of a social entrepreneur include creating and sustaining social values, helping the individuals find solution to their problems, continuously pursuing learning and innovation, and taking bold steps to tackle major social issues even with limited resources. 4.4 Future Focused Another personal characteristic of an entrepreneur is his/her future focused approach. An entrepreneur gets experience from the past and uses that experience to improve his/her future life. “Entrepreneurs always learn from their mistakes and don’t make it twice” (Marshall 2010). This ability of an entrepreneur makes him/her successful in life. “Keeping a keen on whats coming up is a crucial trait for a successful small business owner” (Popper 2011). An entrepreneur is not a shortsighted person. Rather he/she is a person who has a clear picture in mind regarding future prospect of a new business and this future focused approach makes him/her go for a new venture. ‘Entrepreneurs shift past the negatives, discover solutions and then keep their eyes steadfast on the top of the mountain” (Schreiber 2011) 4.5 Collaborative An entrepreneur works well in collaboration with other people. When an entrepreneur starts a business, he/she considers the viewpoints of his/her managers and employees in decision-making processes. The reason is that every person has a unique set of thoughts regarding different issues and an entrepreneur is successful only if he/she considers the advices and viewpoints of others. “Guardian study found that the knowing how to collaborate was the single most important trait for someone running a business” (Popper 2011). A good entrepreneur knows the ways to delegate tasks to managers and employees, develop strong and persistent relationships with team members, and create opportunities for every employee in a way that everyone is motivated to reach organizational goals. 4.6 Action Oriented One of the main qualities of an entrepreneur is action-orientation. An entrepreneur believes in doing things practically rather than doing impractical planning. Successful entrepreneurs are those who keep their words by taking proper actions. They do not just throw arrows in the air rather do things practically. “These are great people to have on a team and are an amazing resource to motivate and inspire other team members” (Sheikh 2008). Such entrepreneurs know that they need to define action steps clearly for practical implementation of strategies. Therefore, when they plan to do something, they take appropriate steps to accomplish their missions. 4.7 Competitiveness An entrepreneur is also competitive by nature. Competitiveness is one of such qualities of entrepreneur that keep him/her focused towards his/her goals and objectives. “Having that competitive drive is one of the things that keep entrepreneurs -- who spend 100 hour weeks developing their idea into a tangible product – excited” (O’Connor 2010). 4.8 Self-Confidence An entrepreneur is a person who is confident about his/her ideas. A successful entrepreneur is one who has high level of confidence in himself/herself. “They are also typically self-assured, comfortable with staring their ideas with others and often pretty convincing” (Cohen n.d.). Entrepreneurs usually create such products in which initially a few believe but the entrepreneurs are confident about the success of those products and this belief and confidence often get them to the point of success, which they actually desire. Entrepreneurs are also able to handle all sorts of business stresses confidently. “They have the stability to handle stress from business and from personal areas in their lives” (Glick-Smith n.d.). 4.9 Motivation Entrepreneurs are also highly motivated and determined to accomplish their tasks properly. Motivation is the key to success for entrepreneurs. Motivation keeps entrepreneurs stimulated towards the accomplishment of their missions. Both intrinsic and extrinsic types of motivation drive the behaviors of entrepreneurs. However, intrinsic factors, such as, needs and desires motivate an entrepreneur more than extrinsic factors. “For entrepreneurs, the most important motivational factor is the intrinsic one” (Johannsen n.d.). 5. Conclusion Summing it up, an entrepreneur is usually a person who attempts to start a new business or launches a new product in an existing or new market. A person is not an entrepreneur by birth; rather various environmental factors, such as, family, education, and government support play their roles in developing a person into an entrepreneur. These factors are very important to consider when assessing the environmental approach to explain entrepreneurship. Along with environmental factors, there are some key personality traits, such as, social responsiveness, motivation, competitiveness, and spontaneous creativity, which help us analytically explain the concept of entrepreneurship. References Awe, S 2006, The Entrepreneur’s Information Sourcebook: Changing the Path to Small Business Success, Greenwood Publishing Group, West Port, CT. Baumgartner, J 2006, Spontaneous Versus Solution-Oriented Creativity, viewed 06 January, 2012, . Bratcher, S 2010, Social Entrepreneurship Can Change the World, viewed 06 January, 2012, . Bruin, A & Dupuis, A 2003, Entrepreneurship: New Perspectives in a Global Age, Ashgate Publishing Limited, Hampshire. Casson, M 2003, The Entrepreneur: An Economic Theory, Edward Elgar Publishing Limited, Cheltenham. Coggins, E 2009, Five Characteristics of Social Entrepreneurship, viewed 06 January, 2012, . Cohen, D n.d., Key Personality Traits of an Entrepreneur, viewed 06 January, 2012, . Cuizon, G 2009, What is Social Entrepreneurship, viewed 06 January, 2012, . Glick-Smith, J n.d., Successful Entrepreneurs, viewed 06 January, 2012, . Johannsen, M n.d., Nine Characteristics of Successful Entrepreneurs and Business Leaders, viewed 06 January, 2012, http://www.legacee.com/Info/Leadership/LeadershipEntrepreneurial.html Light, P 2008, The Search for Social Entrepreneurship, Brookings Institution, Washington. Marshall, J 2010, Entrepreneurs Characteristics, viewed 06 January, 2012, . Osalor, P 2010, Understanding Social Entrepreneurship. viewed 06 January, 2012, . O’Connor, K 2010, Nine Psychological Traits of an Entrepreneur: Do You Have What It Takes?, viewed 06 January, 2012, . Premji, F 2008, 7 Personality Traits Of A Successful Entrepreneur, viewed 06 January, 2012, . Schreiber, S 2011, Defining The Characteristics Of Entrepreneurs, viewed 06 January, 2012, . Shefsky, L 1994, Entrepreneurs are made not born, McGraw-Hill, New Jersey. Sheikh, U 2008, Are You Action Oriented?, viewed 06 January, 2012, . Wallener, D n.d., What is an Entrepreneur?, viewed 06 January, 2012, . Read More