The purpose of this unit is to give an understanding of the concept of enetrepreunership. The whole course of the unit covered different aspects of entrepreneurship ranging from entrepreneur to entrepreneurial ventures and so on. Thus, it is justify sating that from one a thorough knowledge of business and entrepreneurship can be gained upon successful competition of the unit.
As per Carlsson et al. (2013), the term or concept entrepreuneurial venture refers to the idea of an organization which gives special attention on innovation and opportunism in an attempt of generating social as well as economic value. The main factor which defines the concept of entrepreneurial venture is innovation. On the other hand, the other most important factor of entrepreneurial venture is that this concept challenges the conventional theory of business. However, the concept of entrepreneurial venture has a strong correlation with characteristics entrepreneur.
The entrepreneur ventures can be classified into four types that are small business ventures, scalable start-up ventures, large company ventures and social entrepreneurial ventures.
Small business ventures
Mainly grocery stores, consultants, e commerce storefronts, hair dressers, travel agents, electricians, carpenters, plumbers, etc fall under the category small business ventures. These kinds of ventures are run and owned by any persons (Morris et al. 2018). In addition, these entrepreneurs hire local employees or mainly the family members in order to assist in the business process. These ventures do not aim to become a million dollar business, instead they run the ventures in order to feed their family while securing a limited margin of profit. For the purpose of funding, these entrepreneurs rely on friends, family members and small business loans from different sources.
Scalable Start-up ventures
The Silicon Valley entrepreneurial ventures are the idea example of start-up ventures. According to Kuratko, Morris and Schindehutte (2015), these scalable start-up ventures generally start their business operation with a vision of changing the world. They generate investments from the same kind of investors who wants to bring change like the venture capitalists. In order to operate their business operations, the best professional are hired who generally look for a scalable as well as repeatable business models based o which more expansion depends on.
The large company mostly grow adopting the disruptive innovation offer new products or services that are different from their usual products (Morris et al. 2018). Not only that, addressing new market requirements the large companies mainly create new product range for a completely new customer base within a new market. These ventures either adopt disruptive innovation in its product range or they acquire innovative ventures.
Social entrepreneurial ventures
As per Kuratko, Morris and Schindehutte (2015), the social ventures are focused on creating products and services which would fulfil a social purpose. More than drawing profits, the social entrepreneurial ventures aim to contribute to the society making it a better place to live.
iii. After giving examples and discussing the ventures above, you are then required to relate it to the ventures below which are classified as the typology of entrepreneurship. Explain how the above are consistent (relate) or inconsistent with the ones mentioned below.
The lifestyle business or firms mainly aim to provide support to the owner in sustaining the balance between his personal life and his professional life more than maximizing revenue (Kuratko, Morris and Schindehutte 2015). Hence, the type of the firm or business depends upon the personal choice of the business owner so that beside of making profit he can enjoy the work. Thus, it can be seen that the small businesses fall under the category of lifestyle firms since the entrepreneurs of small businesses keep a small profit margin do not aim to become million dollar business.
Unlike the lifestyle firms, the owners of small firms run their businesses in order to earn their livelihood. While the entrepreneurs of lifestyle businesses run their businesses based on their choice and likings, the owners of survival firms are driven by the need of income (Morris et al. 2018). Mostly it is seen that the entrepreneurs are plumbers, grocery shop holder and so on. These business entrepreneurs struggle for the purpose of investment. Hence, the small business ventures are the part of the survival firms or businesses. The social entrepreneurial ventures also fall under this type since their purpose is not making profit rather to contribute to the good cause of the society. Thus, these social entrepreneurial ventures are often seen to be struggling with lack of funding.
The managed growth firms or businesses are those companies that grow faster than other companies in the same industry. These firms generally focus on generating revenue at a rapid pace so that they can scale up their businesses in a rapid manner (Kuratko, Morris and Schindehutte 2015). Thus, it is seen that these characteristics can be related with the scalable start-up businesses as these businesses or firms focus on the idea of bringing a change in the world while assuring a rapid growth of the business.
Aggressive growth firms refer to the businesses which are already established and follow a rapid growth strategy either by product diversification or by disruptive innovation or by some other strategy th7roeugh which maximum number of customer can be targeted aiming to achieve a large scale of profit (Morris et al. 2018). Therefore in order to align this type of entrepreneurship, it is seen that the large company ventures fall under this category since these they adopt aggressive approach towards the growth.
While there are certain similarities between the entrepreneurial ventures, certain differences also can be evidently seen.
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Small business ventures |
Scalable Start-up ventures |
Large company ventures |
Social entrepreneurial ventures |
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The small business ventures are concerned with earning nominal amount of money so that basic needs will be fulfilled. The small businesses hire people within the local circle. The small businesses ventures rely on the family funding and other small business loans for the purpose of funding. Grocery shop holders, plumbers, carpenters, etc are the example of small business ventures who aim nominal profit. |
The scalable start-up ventures are the businesses that aim to generate a large amount of revenue at a rapid pace. The scalable start-up ventures hire the best professional. The scalable start-up ventures generate funding from similar venture capitalists who aim to bring change. The businesses in silicon valley are the examples of scalable start-up ventures since they bring unique concepts in the business sphere. |
The large company entrepreneurial ventures focuses on aggressive growth strategy with an aim of accelerating the profit margin at a rapid manner. The large company ventures like the scalable start-up ventures hire the best talents. For the purpose of funding, the large company ventures tie up with large banks and other investors. The large companies like Coca-Cola are the example of large company ventures as these companies adopt disruptive innovation in order to accelerate their business growth. |
The social entrepreneurial ventures instead of focusing on profit, aim to serve towards the good cause in the society. Mostly the social workers, philanthropists join the social entrepreneurial ventures enthusiastically without having any desire of gaining profit. The social entrepreneurial ventures are primarily depended on donations and financial assistance from both the institutional source and individual sources. The non profit organizations who mainly work for the well being of the people of the society are the examples of social entrepreneurial businesses. In addition, the profit organization with a purpose of contributing to the society can also be considered as the social ventures. |
Source: (Madsen 2013)
As per Kuratko et al. (2015), a corporate sector entrepreneurship refers to the type of business who holds the part within the economy and operates business in order to make profit. The corporate sector businesses do not have the ownership of government. On the other hand, Leyden (2016) opines the public sector entrepreneurships are either affiliated to government or enlisted as the property of government. The public sector entrepreneurships mainly provide the services of government and make themselves available in the stock markets. A perfect example of public sector entrepreneurship can be 3M. The company is well known for manufacturing as well as offering the products like waterproof sandpaper, scotch bands and tapes, sand papers and so on. The company is considered as public sector entrepreneurship since they sell their company shares over the stock market. The number of shareholders that 3M has is large in numbers. The major shareholder of them is The Vanguard Group Inc. as it possesses 45,793,887 shares. On the other hand, a good example of corporate sector entrepreneurship can be the W. L, Gore. The company is considered as a multinational manufacturing company of fabrics. The business operation of the company is operated privately in Newark of Delaware, where the headquarter of company is located. The company allocated 10% of daily working hour to the employees so that they can think of new ideas and can give their best efforts to their personal projects.
Thus, from the above analysis, it can be seen that the entrepreneurs do not indulge in doing business by communicating the customers directly. The role of entrpruenuers is to bring innovation in product range as well as in the service so that the target market and the target customers can be benefitted (Burns 2016). In this regard, the name of Dr Spencer needs to be mentioned since his making of an adhesive was suitable for the use in Aerospace. This incident denotes the innovation aimed to bring change even if it was done accidentally. Meanwhile, the employees of W.L. Gore are also considered entrepreneurs since they are given a certain time from their daily working hours in order to think of new ideas.
As per Storey (2016), pprivately owned as well as operated businesses with limited number of resources are regarded as small businesses. There are certain characteristics which determine a small business. Such as, a small business has maximum of 500 to 1500 employees if the company is in manufacturing site. However, in wholesaling, the number of employees generally ranges from 100 to 500. The small businesses are generally growing businesses.
The small businesses impact on the economy of United Kingdom to a greater extent contributing 47% revenue to the economy of the country. The small businesses occupy a large part of the UK economy boosting the growth of economy of the country to a considerable manner (Cowling et al. 2015). Majority of the businesses of the United Kingdom are small and medium by size. The employee structure of those businesses is less than 250 people with combined average annual turnover of $1.9 trillion which makes up 51% private sector turnover in the country. The entire small business sector increases at the rate of 4% averagely (Cowling et al. 2015). Hence it is seen that the growth of small business in the country boosts the rate of employment in the country as a large amount of people are being hired by the small businesses.
-Consider the role of organisations like co-operative insurance, funeral care, Oxfam, cooperative societies etc. to the growth of the social economy.
The term social economy are generally comprises of cooperative, non-profit and voluntary organizations that are distinct from private and public sectors. A large number of small businesses fall under the organization that has a social cause to serve (Autio et al. 2014). Over the past few years a massive growth of the companies that are non profit or with less profit margins have been seen. The organizations like cooperative societies with only female employment are seen to be growing since these kind of organizations give employment opportunity to the under privileged women while assuring growth of the social economy. According to Goss (2015), the organizations like non profit organizations are in rise all over the world with a core social mission. A wide range of organizations inclusive of social enterprises or community enterprises, self-help organizations, social or community finance co-operative finance organizations have been creating a large number of employment opportunities assuring the growth of social economy. The organizations under social economy does not only create job opportunities but create better job opportunities which are way more different from regular 10 to 6 job roles. Employees involved in organizations like non profit worldwide organization Oxfam work closely with the people at ground level and their daily life issues (Goss 2015). It is seen an average of 21% young graduates join non profit organizations or cooperative organizations in order change the social scenario by elevating the status of the unprivileged people.
Distinguish between small, medium and large size businesses.
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Small businesses |
Medium businesses |
Large businesses |
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In small businesses, the founder or founder’s family hold the equity. |
In medium businesses, the owner privately holds the equity primarily. However, sometimes equity is also held in share. |
In large businesses, equity is held by primarily the private investors. |
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The managerial process is looked after by the owner of the business. |
In large business, the owners along with other associate professionals operate the managerial practices. |
In large businesses, there are several mangers or professionals in every department to look after the managerial operations. |
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In small business, decisions are made by the owner of business. |
In medium business, important decisions power is distributed among the owner, CEO and other professionals in higher positions. |
The decision making process is distributed within the organizational hierarchy in the large business. |
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The owner takes short term business plans. |
Both long term and short term plans are taken the executives and the owner. |
Extensive long term plans are determined by particular teams. |
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In small businesses, capital is generated from personal source of the owner. |
In medium businesses, sources for capital are either bank loans or the personal sources. |
In large businesses, there are a wide range of sources to fund the business operations. |
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The customer base of small business is small. |
The customer base of medium business range from small to medium, limited to the geographical boundary. |
Most of the large business operate in more than one market, mainly in the international markets. |
Source: (González-Benito, Muñoz-Gallego and García-Zamora 2016; Berisha and Shiroka Pula 2015)
The small and medium size businesses contribute to the economy of United Kingdom by 28% revenue. On the other hand, large businesses contribute to the country’s economy by 49% (Cowling et al. 2015). It is largely considered that smaller and medium size businesses make the economy stronger than the large companies since individually they generate more revenue and more employment opportunities.
(b) Provide a critical examination of the impact of small business on different levels of the economy including local, regional, national and international.
The impacts of small business are significant in creation of job opportunity, providing support to the community as well as entrepreneurship. In the local level, the major contribution of small businesses is job opportunities. In a country like UK which has unemployment rate 4.4%, small businesses help the economy by creating job opportunities for people of the country (González-Benito, Muñoz-Gallego and García-Zamora 2016). As seen, getting job in small businesses is way easier than getting a job in large companies. Hence, the recruitment rate in small businesses is greater than the recruitment rate in large companies as small businesses are focus more on productivity and will than excellence which remains on the focus of large businesses while recruiting (Autio et al. 2014). In the regional level, the contribution of small businesses since it strengthens a region’s economy by making up new industries in a region. For example, the content writing is a growing industry even if it is a new. Being a new industry, content writing field experience a huge employment flow with a high revenue rate.
Assess in-depth how, micro and other small businesses have contributed towards the growth and development of GDP, number of small businesses created, new products and brands, technology and R&D investment, innovations, social initiatives, capital attractions and investments etc. Address how some of these factors mentioned above have made these entrepreneur ventures to increase and grown in size.
The majority of the businesses around the world are mainly small. Many small businesses rise only with workforce of as fewer as 10 people. The structure of these businesses might be small but the impacts of those businesses are significant in the growth of economy (González-Benito, Muñoz-Gallego and García-Zamora 2016). The main way through which small businesses accelerate the GDP growth is encouragement of innovations and new inventions, and being innovative the products manufactured by small businesses experience high sales margin (Hall et al. 2014). As a social initiative, small businesses give opportunity of becoming financial independence to the people (Autio et al. 2014). Since, these companies recruit people through easier way than the large companies, presently the number of small businesses is high and the sole reason is high employment opportunity (Wong, Ho and Autio 2015).
Define entrepreneur
According to Poschke (2013), rather than being an employee, an entrepreneur is a business individual who establishes a small business with an innovative approach while taking risks and assuming rewards.
Provide an analysis of different characteristics of successful Entrepreneurs that make them standout.
Difference between characteristics of successful Entrepreneurs and Managers
(a). A crucial aspect of entrepreneurial personality is the passion of bringing something innovative, a pull factor, rather than making profit at a large scale (Segal, Dan and Jerry 2015). One of the main motivations for an enetrepreuner is the owning a business than being a mere employee which are considered as push factor since it drives an individual to become entrepreneur. An entrepreneur always seeks to showcase his innovative idea by making it practical (Shane, Locke and Collins 2013). Hence the indomitable will is another essential feature of entrepreneurial personality motivating towards entrepreneurial venture.
(b) Explore and examine different lines of argument relating to entrepreneurial characteristics
-Nature or Nurture – according to social psychologists, entrepreneurs are born rather than made. An entrepreneur is born with the indomitable will of bringing change which is difficult to incorporate within someone to make himself an entrepreneur (Wadhwa et al. 2016).
-Effects of previous experience an individual’s experience as manager or leading professionals make him able to have more clear vision with practical approach (Bolton and Thompson 2013).
-What they value – the main thing that an entrepreneur values is innovation or creativity distinctive from the general, traditional approach of doing business (Wadhwa et al. 2016).
Give examples: The most appropriate example of successful entrepreneur is Walt Disney who brought the innovation of animation in the world of entertainment (Wadhwa et al. 2016).
Background plays a main role on making a person entrepreneur. On the other hand, it also becomes a crucial factor in failure of a person to become entrepreneur. For example an urge of elevating the social status from poverty drive one to become an entrepreneur (Bornstein 2017). On the other hand, low self esteem makes a person disable to become entrepreneur.
Steve Jobs, the founder of Apple was born with an indomitable will in a poor family. Jobs had to discontinue his education due poverty. He was a college dropout who brought revolution in the computer science sphere (Kuratko 2015).
On the other hand Walt Disney was initially terminated by his boss for not having innovative ideas. However, later the innovative idea of the person gave birth to the world famous ‘Walt Disney World’ (Bornstein 2017).
Provide examples of 3 successful Entrepreneurs. Your example should include:
Local Entrepreneur- Tara Lee de Wit preferred owning a placement agency instead of owning a working a as a recruiter in a company (Bolton and Thompson 2013).
International Entrepreneur- Larry Page secured his name in history by making world’s no.1 search engine (Bornstein 2017).
Social Entrepreneur- Muhammad Yunus received Nobel Prize for his creation of Grameen Bank what aims to empower villagers (Bolton and Thompson 2013).
References
Autio, E., Kenney, M., Mustar, P., Siegel, D. and Wright, M., 2014. Entrepreneurial innovation: The importance of context. Research Policy, 43(7), pp.1097-1108.
Berisha, G. and Shiroka Pula, J., 2015. Defining Small and Medium Enterprises: a critical review. International Small Business Journal, 13(1), pp.98-113
Bolton, W. and Thompson, J., 2013. Entrepreneurs: talent, temperament and opportunity. Routledge.
Bornstein, D., 2017. How to change the world: Social entrepreneurs and the power of new ideas. Oxford University Press.
Brockhaus, R.H., 2013. The psychology of the entrepreneur.
Burns, P., 2016. Entrepreneurship and small business. Palgrave Macmillan Limited.
Busenitz, L.W. and Barney, J.B., 2017. Differences between entrepreneurs and managers in large organizations: Biases and heuristics in strategic decision-making. Journal of business venturing, 12(1), pp.9-30.
Carlsson, B., Braunerhjelm, P., McKelvey, M., Olofsson, C., Persson, L. and Ylinenpää, H., 2013. The evolving domain of entrepreneurship research. Small Business Economics, 41(4), pp.913-930.
Cowling, M., Liu, W., Ledger, A. and Zhang, N., 2015. What really happens to small and medium-sized enterprises in a global economic recession? UK evidence on sales and job dynamics. International Small Business Journal, 33(5), pp.488-513.
Gartner, W.B., 2016. “Who is an entrepreneur?” is the wrong question. American journal of small business, 12(4), pp.11-32.
González-Benito, Ó., Muñoz-Gallego, P.A. and García-Zamora, E., 2016. Role of collaboration in innovation success: differences for large and small businesses. Journal of Business Economics and Management, 17(4), pp.645-662.
Goss, D., 2015. Small Business and Society (Routledge Revivals). Routledge.
Hall, J.K., Daneke, G.A. and Lenox, M.J., 2014. Sustainable development and entrepreneurship: Past contributions and future directions. Journal of Business Venturing, 25(5), pp.439-448.
Kuratko, D.F., 2015. The emergence of entrepreneurship education: Development, trends, and challenges. Entrepreneurship theory and practice, 29(5), pp.577-597.
Kuratko, D.F., Hornsby, J.S. and Hayton, J., 2015. Corporate entrepreneurship: the innovative challenge for a new global economic reality. Small Business Economics, 45(2), pp.245-253.
Kuratko, D.F., Morris, M.H. and Schindehutte, M., 2015. Understanding the dynamics of entrepreneurship through framework approaches. Small Business Economics, 45(1), pp.1-13.
Leyden, D.P., 2016. Public-sector entrepreneurship and the creation of a sustainable innovative economy. Small Business Economics, 46(4), pp.553-564.
Madsen, T.K., 2013. Early and rapidly internationalizing ventures: similarities and differences between classifications based on the original international new venture and born global literatures. Journal of International Entrepreneurship, 11(1), pp.65-79.
Morris, M.H., Neumeyer, X., Jang, Y. and Kuratko, D.F., 2018. Distinguishing Types of Entrepreneurial Ventures: An Identity?Based Perspective. Journal of Small Business Management, 56(3), pp.453-474.
Poschke, M., 2013. Who becomes an entrepreneur? Labor market prospects and occupational choice. Journal of Economic Dynamics and Control, 37(3), pp.693-710.
Segal, Gerry, Dan Borgia, and Jerry Schoenfeld. 2015. “The motivation to become an entrepreneur.” International journal of Entrepreneurial Behavior & research 11, no. 1 (2015): 42-57.
Shane, S., Locke, E.A. and Collins, C.J., 2013. Entrepreneurial motivation. Human resource management review, 13(2), pp.257-279.
Storey, D.J., 2016. Understanding the small business sector. Routledge.
Wadhwa, V., Holly, K., Aggarwal, R. and Salkever, A., 2016. Anatomy of an entrepreneur: Family background and motivation.
Wong, P.K., Ho, Y.P. and Autio, E., 2015. Entrepreneurship, innovation and economic growth: Evidence from GEM data. Small business economics, 24(3), pp.335-350.
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