Entrepreneurship Positive Characteristics - Risk Bears, Organizers, Leaders, and Creative Innovators - Essay Example

Running Head: Entrepreneurship Customer’s Name: Institution: Customer’s Course Tutor’s Name March 15, 2016. Entrepreneurship has been defined as a business that incorporates different ventures. It can also be related to a process of planning, initiating and beginning a new business. This is usually referred to as start up business that can either choose to offer products or services. This start up is accompanied by diverse risks hence can also be defined as the willingness and capacity to develop and manage activities that will reduce risks associated and maximize on profits (Walras, 1995). An entrepreneur on the other hand is that individual who comes up with various ideas of how a business venture can be ran and how risks can be reduced. Mostly, this individual is termed as an innovator as he seeks to explore different markets which are often faced with a lot of risks. This makes him/her have the spirit of a risk taker and innovator at the same time. For many decades, there has been use of entrepreneurial opportunities where they are responsible in coming up with business plans, providing leadership skills and at the same time; the opportunities determine the success or failure in business. With the recent trend, entrepreneurs are termed as creative and at the same time destructors hence the term creative destruction. It is with this that a healthy economy is created because of the changes seen in the markets. Entrepreneurs operate in an environment where there is interaction with the government and other organizations. They come in as they offer a platform for mentoring and providing programs that would be beneficial to start up companies. As entrepreneurs are commonly perceived to be innovators, they can also be designers of business processes that should be assigned with the responsibility of building strong teams. This brings us to the conclusion that, entrepreneurs have the following attributes: they are leaders; they have management abilities and are good team builders. One of the major characteristics would be risk taking. According to Frank Night the theorist, risk taking is where the entrepreneur is willing to concentrate all his efforts including his or her finances and risks different opportunities that have uncertain outcomes. Uncertainty is classified in three areas. One would be ambiguous risk which in most cases cannot be measured statistically, measurable risk and Knightian uncertainty which are mostly referred to as true uncertainty. In the true uncertainty, one is able to estimate the level of risk one is exposed to. Entrepreneurship can further be distinguished to two different types. These are entrepreneurial opportunities or individuals involved in enterprising. Research shows that more people engage in entrepreneurship as opportunities present themselves rather than starting out an enterprise because many people are involved in it (Bruyat and Julien 2000, p.170). It has been argued that many business people get the energy to be entrepreneurs as they are motivated by open chances to invest. This would be because this is the only chance presented to them in order to survive or meet daily needs. With the recent economy, many chances present themselves hence people seek to individually employ themselves hence increased entrepreneurship in developing and developed countries. One would conclude that entrepreneurship has become a necessity for most countries as a way of survival rather than opportunity. Different business stakeholders have different perceptions of what entrepreneurship is. It can be argued that all ideas are generated from the innate ability of different individual’s opinion. Using mass media as a source of communication, this channel of communication gives a wide opinion of individual’s perception on entrepreneurship. An entrepreneur is motivated by individual traits and the ability to handle risks as they come. Introduction of methods to work efficiently, improved technology and increased productivity leads to generation of new ideas thus creation of new products and services (Eisenhardt and Schoonhoven 1996). As stated earlier, only the ones willing to risk will be associated with entrepreneurship in a successful way. It would otherwise be right to point out that entrepreneurship is genetic. There are some factors that will determine success of an entrepreneur. Methods of conducting entrepreneurship would be one of them where if proper growth strategies are implemented such as maintenance of a strong human resource system and availability of required raw materials are presented on a timely basis, an entrepreneur will have a positive competitive advantage compared to those who do not come up with such like strategies. The market can be another factor to entrepreneurial achievement where a growing industry will lead to positive impact in technology and with that brings large capital base that will satisfy many small sized entrepreneurs. Entrepreneurs who work in a team are more likely to be successful as many ideas are put together and split in different sections depending on the type of business venture involved. This in turn helps enterprises to be motivated as profits are equally distributed as there is no cut throat competition. In order to achieve the above, an entrepreneur should take into consideration of what they enjoy doing most. This will contribute to personal satisfaction and that plays a key role in a business venture as one is motivated in what they do and they are willing to take all the risks involved. In this case, money is not a motivating factor but the passion in the individual. It is likely that the venture will be a success than that entrepreneur who is motivated by money rather than the enjoyment that is there (Shane and Venkataraman 2000, p.220). Entrepreneurs should be serious in what they do and should have confidence in what they sell. It is not only about the economic determinants, but how serious one is able to plan all the processes (Aghion and Bolton 1992). Planning requires a process of critically analyzing different situations and coming up with the best option. This will be followed by a series of collecting data in different researches and various conclusions. Money management is also another characteristic that entrepreneurs should have. With constant cash flow, an enterprise will be successful as all the expenses will be met. This calls for wise management of funds as entrepreneurs will look for ways of putting their money where running costs are minimized and revenues are maximally generated. Many enterprises say that the customer is always right and this has to be the first agenda that an entrepreneur will look at before establishing the venture. This are the main people who determine the success of a business hence critical market research should not dwell on the services or products one is to sell but one should be customer focused. This will include the policies implemented, hours of operation and strategies used in promotion (Banerjee and Newman 1993, p.25). This therefore means that, positive interaction should be developed between the customer and the entrepreneur. Getting to know customer specifics can be of importance as any product or service rendered will be based on customer specifications. With creation of customer made products or services, there is reduction of costs related to mass production of products that are not preferred by the customers. This brings about positive image in the enterprise as the entrepreneur will seek to provide the best that is in the market hence he/she can be viewed as the market changer in terms of creativity. A successful enterprise is built by several people who have the same vision and mission. It is that team that forms stakeholders who have common interest in the venture. By building a top notch team, ideas are easily generated and the same team criticizes the ideas where the best selected are brought forward and implemented. An entrepreneur seeks to perfect their art hence they need to be experts in problem solving (Lafontaine 1992, p.30-35). It is through being an expert that many clients will rely on someone for information. In business, there has to be key stakeholders and startup entrepreneurs really have to struggle to come up with something unique that will grab the attention of the market. Though there are high costs involved in promotion of their products and services, it is their characteristic that they should aim at attracting both new and old clients as this is the only way to sell. Henry Ford is one of the greatest entrepreneurs that lived. He is remembered as one of the people driven by passion for he made metals turn to a locomotive. Though born in a family that practiced farming, His vision was not to remain at home and get involved in farming, so he decided to go sell his idea to Thomas Edison where he allowed him to manufacture two vehicles in his warehouse. Though his first vehicles were not of quality as he expected, he risked so much that the business went bankrupt. After much determination, persistence and a heart of not dying neither giving up, Ford has remained to be the best car seller company reporting billions in profit. Walt Disney is another entrepreneur who was driven by passion. Despite all odds and denial to join the army as a matter of his age, he was determined to make it in business. His passion for art drove him to come up with a team that would form an artist company where they would be involved in advertising (Becker, 1993:p.32). Though there were challenges at the start, he took up animation as another start up enterprise where he would cut out animations and this time the company was faced with bankruptcy as not much profit was being generated and the staff he employed has to be paid. Walt had encountered several failures that made him stronger and stronger. With various market searches and putting the customer in mind, his success came when there was a lot of demand for Mickey Mouse animations. This has remained a legacy for many years even after his death and all this is attributed to not giving up and taking much risk that has turned this company to generate billions in revenue. These two entrepreneurs among many pose the same characteristics where they had to face different phases in order for them to succeed. They had to risk even after several failures, they had to be experts in what they are doing and they had to believe in themselves. This among many other attributes describes the character of an entrepreneur and shows the mindset that they should portray. This is stated in Frank Knights and Alfred Marshall theories of entrepreneurship. Frank states that profits are not necessarily as a result of taking unknown risks but profits are as a course of organizing resources that are productive to face unknown consequences. Alfred on the other hand uses the four factors of production as a way of maximizing profits (Aldrich and Wiedenmayer, 1993). Incorporating all the characteristics of an entrepreneur, Alfred states that skill and ability to take more risks determines how successful an entrepreneur is. Though there are various arguments from different economists, it is argued that entrepreneurship is a factor for economic growth. Other schools of thought claim that entrepreneurs in the mixed economy of uncertainty and confused information, a successful enterprise will only survive as a risk bearer. The above theories would pose as a challenge to developing countries as many may not have the resources to implement entrepreneurship. This is because in less developed countries, innovation is not a determinant to being an entrepreneur but is seen as a way of survival. Imitation plays a great role in such like countries where many entrepreneurs will change certain aspects in a product to suite what the client would want. It would be argued that such like entrepreneurs do not have confidence in their products hence are not willing to attract any attention of their brand. It can be concluded that, entrepreneurship poses various positive characteristics and among the specified characteristics being risk bears, organizers, leaders and creative innovators, there is deemed to be positive economic development. With the help of private sector and government, entrepreneurship is the next big thing in both developing and developed countries. It can thus be summarized as; entrepreneurship is a way of exploring new business ventures and coming up with dynamic ways of creating jobs to improve the society as a whole. REFERENCES Aghion, P. & Bolton, P. 1992. An incomplete contracts approach to financial contracting. Review of Economic Studies, 59 (3): 473-494 jul. 14 123 Aldrich, H. E. and Wiedenmayer, G.: 1993, From traits to rates: and ecological perspective on organizational foundings, in R. H. Brockhaus and J. Katz (eds), Advances in Entrepreneurship, Frim Emergence, and Growth, JAI Press, Greenwich, pp. 145–195. Banerjee, A.V. & Newman, A.F. 1993. Occupational choice and the process of development. Journal of Political Economy, 101 (2): 274-298 Apr. 15 122. Becker, G. S.: 1993, Human Capital, A Theoretical and Empirical Analysis with Special Reference to Education, The University of Chicago Press, Chicago. Bruyat, C., & Julien, P-A. (2000). Defining the field of research in entrepreneurship. Journal of Business Venturing, 16, 165-180. Eisenhardt, K.M. & Schoonhoven, C.B. 1996. Resource based view of strategic alliance formation: strategic and social effects in entrepreneurial firms. Organization Science, 7 (2): 136-150 Mar-Apr. 13 124. Lafontaine, F. 1992. Agency theory and franchising - some empirical results. Rand Journal of Economics, 23 (2): 263-283. Shane, S.A. & Venkataraman, S. 2000. The promise of entrepreneurship as a field of research. Academy of Management Review, 25 (1): 217-226 Jan. 16 116 Walras, L.: 1995, Elements of pure economics, or the theory of social wealth, in Hodgson (ed.), Economics and Biology, Augustus Kelley, New York. Read More