Entrepreneurship and Venture Management

May 26, 2007 0 comments

1. Introduction

The skills needed to set up and start a business and those required for successfully running a business may not be the same. Entrepreneurs may have a need to modify their behaviour pattern to become good managers while good managers may need to introduce new attitudes to realise their entrepreneurial potential.

Entrepreneurs are not readily identifiable because they come in all shapes and sizes, age groups, social, economic and ethnic backgrounds as well as political spectrums. It is therefore important to define what is meant by the term 'entrepreneur'. It is therefore important to define what is meant by the term 'entrepreneur'. Gibb and Ritchie in their social development have described it as a trait, a view supported by Crosby. He believes it is something a person is born with. Carsrud maintains that given the right combination of circumstances anyone can learn to be an entrepreneur. Kets de Vries emphasises the formative role of social influences.

Managers can also be difficult to spot; they have been variously described as individuals who engage in planning, organising, directing, co-ordinating and controlling the actions and utilisation of individuals combined with other available resources. A basic definition of management purpose by Michael Armstrong is 'deciding what to do and then getting it done through the effective use of resources'.

2. Entrepreneurship

People are not born entrepreneurs, they may possess characteristics that are conducive to acting entrepreneurially under the right conditions, and when the emerging combinations of opportunities and threats offer the right conditions, the entrepreneur emerges and acts. Professor Alan Carsrud maintains that "entrepreneurship is more than just a trait, it is socially determined," and "situational determined." But more than that, entrepreneurs act because of the way they view situations and value conditions. They see combinations of opportunities where others see only threats and problems.  He states "entrepreneurial behaviours occur or are most prevalent in unstable socio-economic environments especially an organisations which are subject to rapid change, in situations where they are resource poor and where ultimately the entrepreneur is creating value."

Professor Brian Loasby defines an entrepreneur  'as someone who conceives of a new theory and introduces a new policy', he recognises that this is not the only definition, nor is it complete. Buchanan and Huczynski suggest "An entrepreneur is someone who introduces new technical and organisational solutions to old problems, an innovator who introduces new products, new processes, new organisational arrangements.  This may involve promoting change in the face of resistance from others, and, at risk to the time and money involved.

There is a consensus that entrepreneurs tend to be highly motivated individuals who have a vision of something different and are prepared to mobilise resources and spend time in pursuit of its realisation, often risking both.  They don't gamble, but take calculated risks to maximise advantage and achieve objectives.

3. Types of Entrepreneur

All entrepreneurs are not the same, Ray Bagby offers a typology of six entrepreneurial types:

  1. craftsman-inventor;
  2. psychodynamic;
  3. displaced socially marginal;
  4. innovative entrepreneur;
  5. dealmaker-destructive entrepreneur;
  6. scientist.

However they all have different value sets and motivators that influence their degree of commitment. Their abilities differ, as do levels of satisfaction.  It is therefore useful to classify entrepreneurs into two broad categories of commitment. For this reason Carsrud employed the terms "craftsman" and "opportunistic" entrepreneurs, Bag by uses "small business owner" and "entrepreneur" for the same purpose.

 

The classification of 'craftsman or small business owner' includes all those skills based individuals who employ their skills to work for themselves; small professional businesses or small family businesses who want to keep control and are happy with the level of return against effort expended; artists and craft workers who see no point in growth; all those who for a wide variety of reasons want to remain small.

The 'opportunistic entrepreneur' is driven by a different value set, and is:

    someone who sees an opportunity for development and growth and does something about it;

    who is prepared to mobilize resources to achieve a profitable return;

    whose profit need not take a monetary form but come in a variety of benefits, some of which may be short or long term, personal or political, and not always readily identifiable;

    neither do they need to own the business or organization or resources, as long as they can control them over the period of use.

These simplistic definitions provide a guide to entrepreneurial types, however they are not stable characteristics as they fluctuate in response to environmental and operational disturbances.

Posted by Lisa
Categories: Business Entrepreneurship

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