Theories of Entrepreneurship

Theories of EntrepreneurshipJump toSociological Theories of EntrepreneurshipEconomic Theories of Entrepreneurshipethnical Theories of EntrepreneurshipPsychological Theories of EntrepreneurshipThis essay force backs at re passeling the uprisement of the enterprisingness, enterprisers and enterprisership publications to date. Comments from various authors point to the fact that this bea, twain as an orbital cavity of study and an bea of explore, is relatively juvenile when comp atomic number 18d with other palm of duty much(prenominal)(prenominal)(prenominal) as frugals and business anxiety. There argon withal a multitude of theories that score been propounded to rationalize the increases in the bea. These theories, their assumptions and pronouncements give be reviewed and critiqued in this essay. The concepts of uncovereding move, enterprisers and entrepreneurship will be discussed in the first section. The posterior section sh in all review major or le ading theories in the argona and the third section shall aim at the development of the core focal point intentness, the relevance of entrepreneurship within the area of occurrence solicitude and the role entrepreneurship has vie in the development of the industry.A supplement to this essay shall look at the skills an entrepreneur should possess from the perspective of divergent authors. A brief self-importance discernment of my own skills will be made and indications of how I program to develop these skills in the future will be steeplighted.EnterpriseThefreedictionary.com make up ones minds an enterprisingness as an undertaking especially one of some scope and fortune (www.thefreedictionary.com). Other online dictionaries on google.com use words and phrases like a b over-the-hill, a difficult, a dangerous, an important, a business venture, a company, requiring courage, energy, dedication to describe what an endeavour actually is.Veblen (2005) in his book, the conjec ture of business enterprise gives a more than subtle description of what an enterprise really is (in the business sense). He notes that the originator of business (an enterprise) is pecuniary gain, the method is essentially purchase and sale the point and usually the outcome is the accumulation of wealth (p. 16). This contention about the motive, the method, the aim and the outcome of an enterprise qualifies the former comment. The insight d peeledn from these phrases is that literally all establishments on the broad(prenominal) streets today and all the ways in which hatful try to earn a living is one form of enterprise or another. It could range from big businesses such as public companies with partnerships to family businesses and sole proprietorships. The resolution prime industry for example is composed of some(prenominal)(prenominal) event management enterprises. These are in general partnerships and private special(a) companies organize and managed with the goal of turning a cyberspace. Examples ac familiarity motor horn casing focal point LTD and Innovative Event Management. These comprise organizations where individuals come to take offher to provide a service to individuals and other businesses in return for a pro live.EntrepreneursCongruent with the translation of an enterprise, one jakes contend that an entrepreneur is that person who runs, manages or owns an enterprise. This contestation however does not fully describe who an entrepreneur really is. Arthur and Sheffrin (2003) necessitate an entrepreneur as a person who possesses a natural venture, a new enterprise or a new idea, assumes responsibility for the risks baffling in running such a venture or enterprise or pursuing his idea and sleep withs the benefits and outcomes from such activity. The recurrent theme in Arthur and Sheffrins view of an entrepreneur is new which in the literature notes to institution. As the resultant discussions will indicate, Innovation i s a central theme that runs through and through the entrepreneurship literature and practice. There are other views on this issues which will be expounded on shortly. The act of creative activity an entrepreneur is referred to as entrepreneurship. Both footherst part(a) are and so closely related and there is no marked characteristic in the literature between them. The discussion on entrepreneurs will therefore be culminated with entrepreneurship for simplicity and clarity.Entrepreneurship world power and Shane (2008) contend that there is no whizz agreed definition of entrepreneurship either as an activity or a field of study. They acknowledged that the definition of entrepreneurship introduced by Shane and Venkataraman (2000) is one with high popularity. Shane and Venkataraman (2000) define entrepreneurship as a field of business aimed at understanding how opportunities for purpose in marges of new products, services, markets, production address, raw materials, ways of or ganizing vivacious technologies, arise and are discovered (or in fact created) by individuals (entrepreneurs), who develop and exploit these opportunities through different ways to produce a gigantic range of effects (Baron and Shane, 2008).Baron and Shane, (2008) support this definition by accent that entrepreneurship involves identifying an opportunity that is say-so differencely valu qualified in the sense that it can be exploited in practical business term and yield sustainable profits and actually exploiting or developing this opportunity (p. 5). They extend this definition by emphasizing the unavoidableness to be able to run the resulting business triumphfully after the opportunity is developed. Early entrepreneurs in the event management industry recognized the take up for a service- event management. The history of world is marked with celebrations-man is a companionable being. People always come together, mainly temporary, to achieve accepted goals under a time limit. This raised the need for effectiveness in these meetings which today is ensured by the event management industry.The process in entrepreneurshipBaron and Shane (2008) present startling statistics revealing that over a million new businesses were started in the US over a 10 year period with over 10 million people being registered as self employed. The growth in entrepreneurship has been attri just nowed to three main factors. Baron and Shane (2008) argue that three factors have spurred growth in entrepreneurship through the twentieth and 21st centuries. These accommodate the media, fundamental changes in employment contracts and change in basic values (p.9). These conform to theories of social change discussed above. The media has shed entrepreneurship in a positive light with umteen entrepreneurs such as add-in Gates, taking up role model positions in the world. In terms of the employment contract, the writers argue that workers are increasely seeking for independence an d freedom. Employers as sanitary employ strategies to hire and fire with ease in order to bonk costs. This has made entrepreneurship a safety hob for most individuals.Theories on entrepreneurs and entrepreneurship some(prenominal) theories and a continuum of approaches have been developed over the days to describe entrepreneurs and to explain the development of entrepreneurship. Deakins and Freel (2009) surmises major contri only ifions and view points held in the area. Deakins and Feel (2009) contend that an entrepreneur has been considered as an innovator (Schumpeter), an organizer of factors of production and a catalyst for scotch change (Say, Casson and Cantillon), a highly originative individual (Shackle). Ucbasaran et al (2001) reviews the development of entrepreneurship literature and contends that various themes or lines of enquiry can be identify in the building of entrepreneurship possibleness. These hold entrepreneurs personalities, backgrounds and early experienc es entrepreneurs traits behavioral aspects of entrepreneurs cognitive processes in ratiocination making and heuristics (Ucbasaran et al., 2001). Below, I review some of the early contributions in this area under four different umbrellas sociological theories, frugal theories, pagan theories and psychological theories. This classification is pervasive in the literature (Ucbasaran et al., 2001 Deakins and Freel, 2009, Mohanty, 2005).Sociological theoriesseveral(prenominal) theories have been advanced to explain how social factors affect the growth of entrepreneurs. both established theories have been recurrently discussed in the literature the guess of spectral beliefs and the theory of social change. These theories explain how sociological factors accelerate the growth of entrepreneurs (Mohanty, 2005). surmise of phantasmal beliefs slime Webber was a known sociologist and political economist of German origin. His writings in the early 20th coke have tremendously influenced sociological, phantasmal and political thinking today. His books have been recompiled and republished. In his book the theory of social and economic organizations edited by Parsons (1964) Webber asserts that entrepreneurship is a function of religious beliefs and the impact of religion shapes the entrepreneurial culture (p. 36). He argues that entrepreneurial energies are exogenous i.e. they are come from international factors, and are fuelled by religious aspects (p.37). Webber argues that the rise of capitalist economy in Northern Europe was collectible to the Protestant theology which inspired many an(prenominal) followers to engage in work, open up enterprises, accumulate wealth and make investments. This he describes the spirit of capitalism (Parsons, 1964). One factor spurring the creation of businesses in his theory is the bonus of profit, where people are motivated by the prospects of making a profit from their enterprise (Parsons, 1964). His theory proposed in a nuts hell that, the Spirit of Capitalism arising from the Protestant ethic therefore coincides with the motive of profit resulting in the creation of many businesses.Needless to say, this theory has received heavy rebuke over the years from contemporaneous researchers mostly ground on the assumptions on which the theory was reinforced (Karotayev et al., 2006). Karotayev eta l., 2006 for example remark that the promotion of literacy, education and learning by the Protestant movement rather than the protestant ethic in itself resulted in the capitalism through the development of enterprises.Another yet related sociological theory of entrepreneurship was advanced by Everett E Hagen in his Theory of social change. He asserts that economic growth resulted from political and social change (Karotayev et al., 2006). His model shows that an entrepreneurs creativity was the main ingredient and driving force behind social shift key (change) and economic growth (Karotayev et al., 2006).Other social theories allow theory of entrepreneurial supply advanced by Thomas Cochran and theory of group take aim pattern propounded by Frank Young (Mohanty, 2005).Economic theoriesSchumpeters Theory of renewalIn his theory Schumpeter describes innovation as the central feature of economic development and an entrepreneur as the driver of change (Sweezy, 1943, Mohanty, 2005). He defines an entrepreneur as someone who perceives the opportunity to innovate by forming new enterprises (Sweezy, 1943, Mohanty, 2005). He views innovation as a form of creative oddment which is process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one (Sweezy, 1943, p. 95). The concept of creative destruction has been widely used in practice to refer to a power where something new and more advanced replaces and destroys its predecessors. For example, Oil replacing Coal. The concept of innovation has b een maintained as the core of entrepreneurship today. Innovation has been extended and expanded to include several aspects such as the introduction of new beloveds, the mitigatement of the tonicity of subsisting swells, the introduction of a new (cheaper, faster, more efficient) method of production, the denudation or spread of a new market, the discovery of a new source of raw material supply and/or the formation of a new organization (Burns, 2007, 2008, Gray, 1995, Lowe and Marriott, 2006).Schumpeterian theory of entrepreneurship come a presbyopiced that big companies were mainly behind the drive of entrepreneurship as they had the resources and capital to engage in research and development activities (Sweezy, 1943). Schumpeter subsequent complemented this position by contending that small companies were likewise drivers on entrepreneurship because their size allowed for tractability and agility (Sweezy, 1943). The relationship between size, innovation and entrepreneu rship has not seemingly been further established in the empirical literature. His position became controversial when he argued that both big and small companies are in the best position to innovate. This implies that size does not moderate innovation capacity. Some researchers criticize the stance of Schumpeter based on his assertion that individual business men as easy as directors and company managers were all entrepreneurs. This stance undermines the role of risk, taking, creativity, idea generation, and innovativeness as an integral part of entrepreneurship (Baron and Shane, 2008, Shane and Venkataraman, 2000). Again, Schumpeter uses innovation as the foundation of his theory asseverate that innovation was the main driver of entrepreneurship. This point is too subject to criticism as it uses innovation as a sole defining feature of an entrepreneur while undermining the role of risk taking, technical skills and organization abilities as key factors for entrepreneurship (Ward, 2005). Proponents of sociological and cultural theories of entrepreneurship will argue that this theory is limited in its view of the subject as it does not explain why entrepreneurship and entrepreneurial ability varies greatly across countries.Other economic theories of entrepreneurship include Knights theory of profit and Hayeks theory of market equilibrium (Mohanty, 2005). In the theory of profits, Knight views an entrepreneur as someone who takes risks and is exposed to un indisputablety (Mohanty, 2005). FH Von Hayek in his theory of market equilibrium showed that market equilibrium is characterized by the absence seizure of entrepreneurs. Though relevant these subsequent theories have not taken the pridefulness of place in the literature.Cultural theoriesThe basic tenet and argument put forward by cultural theorists is that entrepreneurship is a product of culture (Mohanty, 2005). Cultural theories of entrepreneurship explain the differences in entrepreneurial ability and sp irit across different cultures. The major attraction of these theories is that they explain why some countries are underdeveloped while others develop and grow so rapidly. Other theorists mentioned above such as Schumpeter and Hagen have no explanation of this occurrence.Hoselitz theory of entrepreneurship supplyMohanty (2005) noteworthy that Hoselitz theory posits that the supply of entrepreneurship is governed by cultural factors and culturally churlity groups are the spark plugs of entrepreneurial and economic development (p. 49). This attempts to explain why certain socio-cultural groups have spurred development and small business growth in many countries Mohanty (2005) quotes the examples of the Jews and the Greeks in Medieval Europe, the Indians in East Africa and the Chinese in mho Africa. These culturally minority groups have been at the forefront of enterprise development, entrepreneurship and economic growth in these areas.Hoselitz was one of the earliest theories to c ontend that managerial skills as well as leadership abilities in addition to the drive to gather up wealth were key to entrepreneurship (Mohanty, 2005). His theory is also in line with Max Webbers concepts of the protestant ethic and how it drives capitalism. This is through the realization that particular socio-cultural groups or classes cheer economic growth through entrepreneurship.Hoselitz realizes the role of change as a stimulus for innovation in his Hypothesis of the marginal men (Mohanty, 2005). He posits that marginal men are best suited to make creative adjustments in times of economic change and through these adjustments are able to introduce better ways through genuine innovations in social behavior (Mohanty, 2005).The theory seemingly presents a holistic view of entrepreneurship by considering the influence of factors such as change, innovation, culture, social class, managerial as well as leadership skills, personal traits etc.Other cultural theories of entrepreneurs hip include Stokes theory of entrepreneurship (Mohanty, 2005).Psychological theoriesPsychological theories look at how the psychology of the fellowship influences the supply of entrepreneurs (Mohanty, 2005). Although this strand of theories is not popular in the literature, it has received hearty contributions from Schumpeter, Krunkel and Carland (Mohanty, 2005).Other theoriesOne of the most esteemed management scholars of the operate century was Peter Drucker. Incidentally, Drucker has contributed colossally to the development of the entrepreneurship theory and literature. He has written several paper over the years which have led to the advancement of knowledge in this area. Peter Drucker defined an entrepreneur as one who always searches for change, responds to it and exploits it as an opportunity (Deakins and Freel, 2009). His focus is on the attitude of an entrepreneur and how he views the world around him. Drucker notes that two factors lead to entrepreneurship resource an d innovation. He argues that innovation creates resource and resource is anything with an economic value (Mohanty, 2005 Deakins and Freel, 2009). The main contribution of Drucker is his view that an entrepreneur must not be the owner or creator but he who manages or executes is also an entrepreneur. His works point out aspects that can be considered as entrepreneurship which include increasing customer satisfaction from a resource, increasing the perceived value of a resource, creating new value from an old product, converting a material into a resource, combining existing resources into a new and more productive configuration (Deakins and Freel, 2009). Drucker extends the view of entrepreneurship to non profit organization while emphasizing that the practice has a knowledge base, with concepts and theories and is not based on intuitions (Mohanty, 2005). Controversially, Drucker argues that entrepreneurship behavior rather than temperament traits spurs and enhances entrepreneursh ip (Mohanty, 2005). Several writers in the area have argued against this point presenting empirical evidence to show that there is a high correlation between certain types of personality traits and entrepreneurship behavior (Ward, 2005). Druckers contributions still die hard significant.Entrepreneurship as a processBaron and Shane, (2008) have extensively reviewed the literature on entrepreneurship building on early theories and propositions and have arrived at what they term the entrepreneurship process. This process involves a series of steps that a undefeated entrepreneur will take. Their model includes steps such as Recognition of an opportunity, decision making to proceed and assembling the essential resources, Launching a new venture, edifice success and managing growth, Harvesting the rewards (Baron and Shane, 2008). The writers advocate a more holistic view of entrepreneurship from idea recognition through development. In their view, opportunities for innovation are for eign and they arise from three sources Technological changes, political and regulatory change, social and demographic change (Baron and Shane, 2008). In conformance with the view of other writers such as Drucker, the researchers recognize various forms of innovation including a new product or service, a new way of organizing, a new market for existing products, a new method of production and a new raw material.This view is widely accepted and can be classed as contemporary as it is widely promoted in current entrepreneurship literature.Enterprise, Entrepreneurs and Entrepreneurship in the Events management industry (1000 words)Events management generally refers to managing event projects i.e. applying project management techniques to the management of events. Ramsbord et al., (2008) storied that event management involves several project management aspects such as brand analysis and consideration, analysis of event audience, creation of an event concept, planning and coordinating t he event delivery. The authors also noted that other aspects such as event appraisal and event profitability are growing in significance as part of the event management concept.An event performer several things to different people and variations will develop in terms of size of the event, the event audience, the significance of the event, the frequency of the event, the location of the event and the strength revenues to be generated from the event etc. In the context of event management however the word event takes a multitude of meanings. It includes unified events such press conferences, other business conferences, corporate meetings (such Annual General Meetings), corporate anniversaries and product launches amongst others. It also includes corporate marketing programs such as opening of business sites and road shows. Events in this sense may also refer to corporate hospitality events such as award ceremonies, fashion shows, characterisation premieres, music concerts, musi c launches. It can refer to national events such as National days and sporting meets (Olympics, world cup, champions league games and English premier league games). Bowdin et al., 2006 reviewing several concepts of events resolved that an event is an organized occasion such as a meeting, convention, exhibition, special event, gala, dinner etc. which is composed of several yet different functions. They assert that it is temporary in nature, it is unique and it stems from management, program, lay and people (p. 14). Aspects regard in event management as noted by Bowdin et al., 2006 include venue surveys, site design, budget drafting, supply stove and logistics management, cash flow management, project scheduling, materials procurement, health and safety, technical aspects (sound, light, video), security and tug management.As noted above, post-event appraisal and event profitability are increasing growing as a significant part of the event management discipline. This also constitut e major concerns for entrepreneurs. The view of classical theorists such Webber and Schumpeter shows that profitability is that main push behind entrepreneurship. The business of event management is relatively new when compared to other businesses such as retail and transport. Recognition for the need for an event management service it self indicates entrepreneurship. Before too long along, event organizers had to manage the event without the need for any headmaster and experienced organizer. Today many organizations can outsource event management to professional organizations which have the skills, experience and resources to run such events. This has tremendously improved the success of events.Within the events industry several innovations have been made over time. Sign-Up Technologies, a small US quick has recently released its eticketing system which allows event promoters to treat tickets and collect customer information online. This eliminates the need for third party retai lers who charge high commissions. It also expands the markets by allowing customers to easily access markets.The introduction of innovative video and sound technologies and new practices in stage design allows event managers to expand the capacity of events while ensuring that the customer experience and the quality of the event is not hampered. This helps to improve profitability.The use of new sophisticated surveillance and monitor equipment has improved the cost incurred by event management companies. An Irish Event Management Company, EventSec LtD uses a mobile monitoring system that allows it to reduce manning at events (cutting costs) but improve security through effective and efficient monitoring. EventSec LTD has also found a new market for its product and has now irresolute a contract to engage in traffic managementOWL Event management LTD current has gained fame in the events management industry through its use of contemporary technology in lighting, sound and video to i mprove the event experience of its customers. The firm also liaises actively with other firms to provide bespoke catering, security, cleaning and more services. This business model innovates by combining different resources in a configuration that serves a need. This comprehensive event management model improves the customer experience. OWL Event Management LTD also realized that exhibition stands where sometimes an important factor drawing potential customers towards exhibitionist. The design of exhibition stands has for a long time been taken for tending(p) by firms. Most firms use stands that provide sitting space, a duck and a shade. OWL Event Management has introduced its new range of stands which it provides to its customers. These stands are attention grabbing through their bespoke designs, their contemporary curves and their eye catching lighting. The firm argues that these stands keep visitors glued to exhibitionists thus facilitating the message delivery. The demand for these set up has helped the firm improve its profit position.SECTION BA manifestation on my current entrepreneurial skills andtraits, and a discussion on how I plan to develop these in the futureEntrepreneurial skillsThe literature and research in the area highlights several skills, traits, personalities and characteristics which should be possessed by successful entrepreneurs. One of the most holistic view of these has been provided by Ward (2005) in An integrated model for entrepreneurship and entrepreneurship.Ward (2005) asserts that entrepreneurs require a personality, technical skills and behavioral skills in order to be successful. The desired or winning personality traits according to his model include Risk tolerance, Self confidence, Achievement oriented, Proactive, Innovative, vision, flexibility, high energy, uncertainty tolerance, Desire for autonomy, assertiveness, resilience, tenacity, self awareness, creativity, capacity to inspire and emotional stability. These perso nality traits help in the generation of winning ideas. These must be matched by technical skills and behavioral skills which will enable the entrepreneur to transfer these ideas to feasible businesses through the establishment and management of the enterprise. As indicated by the model, the technical skills pertain include marketing, finance, business planning, strategic planning, human resource management, production management, ratified issues, logistics management and quality management (Ward, 2005). The behavioral skills involves include communications, judgment, negotiation, creativity, decision making, delegation, customer-supplier relationship, motivation, line of work solving and team working (Ward, 2005). The model indicates that all three types of skills are necessary for effective entrepreneurship.The model also shows that several external factors combine with these skills to determine the outcome of an entrepreneur. These external factors include, opportunities in th e market place which may arise from uncertainty or changes (Ward, 2005). The model shows that the availability of resources in the external environment coupled with the entrepreneurs control over such resources moderates the outcome. Such resources include the other factors of production such as material, land, building (Ward, 2005).Self assessment A reflectionAs an individual, I strongly believe that I am creative and innovative. I have always questioned the way things are done and thought of better ways of doing certain things. I guide a proactive approach by thinking ahead. I am open-minded, flexible and always happy to embrace change. I am not dismayed by uncertainty but find uncertainty but find change and uncertainty as an opportunity to break the status-quo and enjoy new experiences. I will confidently say I fit Wards (2005) personality profile of an entrepreneur. With respect to technical skills, I have expounded my knowledge in several areas of business through my course l earning and superfluous external reading. Despite my broad knowledge in the field of business, I am still unconfident about taking my ideas to the next level because I feel I lack the experience to by successful. I call this inertia. Most of my ideas only remain in my head. I am sometimes impressed with myself when my friends comment on how good my business ideas are. I however lack technical knowledge in legal issues and my knowledge on human resource management and logistics management needs to be improved.As concerns behavioral skills, I think I am a good communicator. This has helped my in my studies in building relationships with friends and creating alliances at work. I am good with team working and have been successfully involved in minor business negotiations. At certain times, I let my emotions get in the way of my negotiations and do end up regretting some of the decisions I make. I am working on being firm in my decision making and negotiations. I lack sufficient experie nce on certain areas such as delegation, motivation and problem solving.Plans for future developmentI plan to hone my entrepreneurial abilities by actually engaging in small scale ventures. I am currently setting up a small venture with a friend. The initial stages have involved drawing a business plan and meeting up with potential suppliers and customers. We have carried out market surveys and have taken a look at factors such as logistics, marketing, distribution and financial reporting. This experience has open(a) up my horizons and given me an insight of what entrepreneurship is all about. I also get very constructive feedback from my business partners. This helps me to amend and improve certain issues. simultaneous with the assertion of Ward (2005), external factors seem to play a huge role to the success of entrepreneurs. Some of the ideas, we have conceived cannot be implemented due to the lack of resources. Certainly, this current venture will not be my last or my best but it will allow me to develop my skills in the area. Aside from this, I also read books and listen to speeches from motivational writers and famous entrepreneurs. This inspires me to pursue my dreams as an entrepreneur.