Entrepreneurship Theory & Practice Assignment

Entrepreneurship Theory & Practice

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Introduction - Entrepreneurship Theory & Practice

In today’s world, the notion of entrepreneurship is massively growing giving rise to smart and advanced technologies and approaches to the world of business. Not only in the renowned and internationally recognised companies but also in “SMEs or Small and medium-sized enterprises”, “Entrepreneurial management or EM” is essential in contributing to growth and development.

Entrepreneurship management and business development

Concept of entrepreneurship management

“EM or Entrepreneurial Management” is defined as the practice of generating innovative ideas that are inherited by the entrepreneurs in creating a solid and strengthening structure of management within business organizations. In simpler terms, EM states the concept of utilization of abilities associated with the creativity and innovation, expertise, and high skills that are quite necessary for contributing to effective management and opening of a start-up organization (Newman et al. 2021). However, EM is quite effective in resolving the mass problems within the organization with the application of unique as well as smart solutions to business. EM is the most effective in developing a new business or any kind of start-up. This notion furthermore, contributes much to the economy across the world, as it offers a wide range of employment.

In addition to these, EM supports the development of new and enhanced services and goods that increase not only the satisfaction level of the customers but also generate the notion of value creation for the concerned company within the market arena (Prüfer and Prüfer, 2020). Both macroscopic and microscopic environments are immensely influenced by the concept of EM. Therefore, it is well understood, that the EM is useful in contributing to new ventures within the business arena, thereby stimulating enhancement within the marketing arena. Therefore, with proper implementation of EM, not only the company but the entire nation seems to get benefitted and further support the improvement of the economy. However, massive growth has been noticed with better entrepreneurs with a company across the world as it supports the development of a niche-specific to the company, thereby generating qualitative value.

Explanation of EM

EM is crucial to any business, as it has proved its contribution to success for several SMEs across the world. Moreover, they contribute a massive impact on the economy. Although it is believed that EM is essential, it is quite prime to enhance all the elements that belong under the EM. However, not only enhancement of these elements but also the abilities of entrepreneurship are also required. The five stated elements of entrepreneurship include, “innovation”, “vision”, “decision making”, “risk bearer” and lately “business organization” (Essel et al. 2019). All of these need to work hand in hand in order to contribute value to the company and to the nation across the world. Innovation is quite crucial to any sphere as it supports generating a niche for respective business organizations.

Figure 1: Elements of “Entrepreneurial Management”

(Source: Self-created)

In EM, the entrepreneur needs to inherit some qualities such as the individual needs to possess the notion of farsightedness in order to look at the recent future. This not only helps the company to generate quality revenue but also helps in acknowledging the market in an effective way. Innovation can be contributed to the company only when an entrepreneur can easily chart out the graph of demand and supply for the specific goods and services that are to be generated by society in the future (Audretsch et al. 2019). This further will support in creating a uniqueness that is specific to the company and will contribute enough support for commuting new ventures.

The organization is the most crucial element with EM that contributes to success within a business organization. This is because, without a proper structure and organization, it tends to create an unnecessary mess and leads to chaotic and unmanageable situations. This further tends to create losses within a business organization thereby, a reduction in goodwill, and low satisfaction levels among the customers. Therefore, in order to build up a successful EM, it is quite essential to create a well and honest structured organization, where each task will be carried out in a systematic way. Decision-making is crucial, as a proper decision can lead to success as well as may lead to the destruction of the entire business organization (Chege and Wang, 2020). However, it needs to be well understood that the entrepreneur needs to have the qualities to take up the high risk as well as responsibilities.

It is stated that with a good quality decision, the company can make immense products within the market arena and can expand its search thereby, creating value. This as well requires better listening skills, intuition, experience, and proper awareness of business environments. The next element is risk bearer that states the understanding quality of entrepreneurs of an organisation. It is to know that the notion of risk is quite inevitable; however, the extent of risk can be managed. More to this, entrepreneurs need to take proper responsibility for the risks they have decided on.

The risk may include restraint policies of the government both in the nation and across, low satisfaction level for the customers, high competitiveness among the rival companies, and facing difficulties in maintaining the required quality of products and services. These risks are to be eradicated by unique and effective solutions by the entrepreneurs. However, if the solution is not resolving the situation then also the entrepreneur needs to take up the responsibility for the actions conducted (Li et al. 2020). Vision is the last element that is essential for gaining any kind of success within an organization. This is because vision supports the company to achieve its set forth goals thereby fulfilling the objectives.

Impact of EM on SMEs

From the definition, the EM seems to massively influence SMEs across the globe. According to Sawaean and Ali, (2020), it is noticed that SMEs in Kuwait contribute immensely to the growth associated with the economy of the country, with the creation of new and productive jobs. This resulted in an increase within employment among youths as well as professionals. Furthermore, better implementation of EM has contributed to the enhancement of the diversification of incomes. However, many challenges are as well faced in Kuwait that relates to "learning orientation LO", "innovative capacity IC" and "entrepreneurial leadership EL". More to this, EM has supported the economy to gain long-term success together with better performances. In this journal, it is stated that the elements of EM such as IC, LO and EL have contributed to positive implementation from the recordable data of 384 out of 500 SMEs in Kuwait.

The levels of job satisfaction and enhancement of work culture are noticed quite well with the implementation of EM within SMEs. This has as well enhanced the performance level among the employees. According to Soomro and Shah, (2019), the study has been conducted on 326 cases that stated positive and significant impact on commitment within an organization.

Figure 2: Relationship between innovation and regulations

(Source: Wol.iza, 2022)

The notion of EM has led to a massive increase in the number of employment levels. According to Rashad, (2018), in Indonesia, it is noticed that SMEs have contributed much to the national trade and industry’s leading to the increase in GDP that amounts to, “55.56%”. With the effective incorporation of EM, SMEs employed almost 97.22% of workers across all regions. According to ASEAN, this leads to a considerable increase in the performance among the employees. 

Figure 3: Positive Impact of EM on SMEs

(Source: Wol.iza, 2022)

However, the incorporation of EM within SMEs resulted in massive innovation and several strategies for effective analysis of the environment. According to Wardi et al. (2018), the performance of the individual firms has drastically enhanced in the developing country of Kenya. In addition, these sustainable strategies are as well incorporated that will benefit the company over a long-term basis. As stated by Falahat, (2018), in Malaysia, records collected from 450 SMEs there noticed three types of business performances due to entrepreneurial innovativeness within EM. Furthermore, sustainable growth is as well acknowledged for SMEs in Malaysia.

Relevant examples

Innovation Theory

The “innovation theory of entrepreneurship” states the profit aspects that an entrepreneur gets to profit in the aspect of the implementation of innovations. This furthermore supports the reduction of the cost of production with successive increases in the rate of demand for the products and services offered by the business organisation. In this SME organisation, the3 same is noticed with the incorporation of modern innovative processes. It is noticed that EM has contributed much to the several SMEs across the world, for example, within the company of “Penske Automotive”, the founders noticed the recent future needs of the civilians, which implies that they understood that the individual will need retailing service facilities. However, they not only understood the market well but also noticed that the online service facility is provided at a quite reasonable rate, so most civilians will be able to take up such services. Therefore, we can see that the current valuation of this company has raised their bars with the support of proper EM (Abbas et al. 2019). More to this, it is noticed that the innovativeness and inventiveness have opened doors for new opportunities in the field of business. Not just services, they have provided the customers with better business valuations.

Behaviour Theory

The “behavioural theory of entrepreneurship”, deals with making enhanced decisions within the business firm. This helps the company in its near future and provides immense advantages from the markets in effectively competing with the rival companies. In this company, it is as well observed that the environment was better controlled with the application of the “behavioural theory of entrepreneurship”. The founders of “Verdant Leisure” understood the coming of a fast-paced life with many requirements for places of relaxation that are specific to Scotland and the Northern spheres of England that easily attract the customers for their holiday recreation. With proper EM they have successively increased the rate of employment doubled by the year 2019. With increase of skilled employee recruitment in the organisations, company become able to improve its productivity as well as profitability level. It also help to analyse the market trends and requirements of the consumers that aids in service innovation.

Explanation of Entrepreneurial Orientation and its five dimensions

"Entrepreneurial Orientation or EO", is stated, as the primary concept that supports the incorporation of the strategies associated with tends to generate hopes of conducting something innovative and new. However, this further leads to the effective exploitation of the opportunities that are not exploited by other organizations (Santos et al. 2020). EO refers to several processes that lead to the practice of better decision-making qualities within an organization. However, EO is an umbrella term that consists of respective five dimensions that include, “autonomy”, “risk-taking”, “competitive aggressiveness”, “innovativeness” and lastly “pro-activeness” (McKenny et al. 2018). It is thereby noticed that all these dimensions are highly effective in contributing success to any business organization that implies EO.

Reflective model on a dimension of EO (Gibbs reflection)

Description: The study focuses on determining the notion of “innovativeness” under the EO that has been experienced and is successively made a critical analysis with the support of the “reflective model of Gibbs”. This notion of “innovativeness” however, effectively supported in successively increasing the growth of the business organisation on a much broader prospect. This notion not only assisted in elevating the internal structure of the organisation but as well as improved the “macroscopic structure” of the said organisation. The internal structure has immensely enhanced with the implementation of skills among the employees leading to an increase in the level of productivity.

Feelings: A massive economic boost takes place with the introduction of “innovative technologies” that result in better deliverances of the services and products specific to the company (Chiu, 2019). This factor has created a feeling of positivity in me. I have noticed that developing new process innovation is quite necessary for determining such growth as the business organisation may suffer from a lack in economic growth. This factor has created a sense of negativity in me. However, ways for radical innovations are targeted that emancipate the growth. New opportunities were also identified that can support increasing the responsiveness of the target customers (Manning et al. 2020).

Evaluation: It is related majorly to the assimilation of information for both the divergers and the accomodators reflectively (Sukavejworakit et al. 2018). At the initiation of the project for EM, the concepts associated with “innovativeness” were discussed leading to the acknowledgement of the benefits that are associated with the growth and performance of the firm. In the aspect of “evaluation”, it can be well analysed that the “innovativeness” has accelerated the positive expansion of the business organisation leading to an increase in the reach towards the “target customers” present within the said market. The “innovativeness” included modern techniques, new merchandise and also the system of offerings to the customers.

Analysis: I have noticed that with the support of proper “EM or entrepreneurial management”, one can easily determine the increase of the growth factors associated with a business organisation that includes both SMEs and MNCs (Idris et al. 2020). However, in SMEs, this management is highly beneficial in terms of the productivity level it creates in such institutions. During entrepreneurship, the processing of information was conducted and therefore, it was realised that the “commercialization of the innovative ideas” is most effective by looking at its applications in other SMEs.

Figure 4: Gibbs reflective cycle

(Source: Adeani et al. 2020)

Not only that, “divergers and assimilators” effectively identified the value and meaning by analytical, with respect to the current situation of the company. Observations were, made with other interesting ideas and concepts. It made me realise about the notion that is built within the assimilator and the converger.

Conclusion: I have understood that entrepreneurship is independent, practical and technical and the process innovation can be done online with respect to the advertisement of the company. This will result in better performance and will extend the reach of the company. Experimentation for advertisement is done through social media and it has resulted in a massive increase in responses and reviews of products and services offered by the company.

Action plan:

Conclusion

This study has majorly focused on determining the notion of EM and its impact that are noticeable within SMEs all over the world. However, it is understood that the EO and EM are essential in contributing to growth and development within their respective market arena. In addition, successful entrepreneurship is also vital to the company.

Reference

Journals

Abbas, J., Raza, S., Nurunnabi, M., Minai, M.S. and Bano, S., 2019. The impact of entrepreneurial business networks on firms’ performance through a mediating role of dynamic capabilities. Sustainability, 11(11), p.3006.

Adeani, I.S., Febriani, R.B. and Syafryadin, S., 2020. Using Gibbs’reflective Cycle In Making Reflections Of Literary Analysis. Indonesian EFL Journal, 6(2), pp.139-148.

Audretsch, D.B., Cunningham, J.A., Kuratko, D.F., Lehmann, E.E. and Menter, M., 2019. Entrepreneurial ecosystems: economic, technological, and societal impacts. The Journal of technology transfer, 44(2), pp.313-325.

Chege, S.M. and Wang, D., 2020. The impact of entrepreneurs' environmental analysis strategy on organizational performance. Journal of Rural Studies, 77, pp.113-125.

Chiu, S.K., 2019. Innovative experiential learning experience: Pedagogical adopting learning cycle at higher education in Hong Kong. Cogent Education, 6(1), p.1644720.

Essel, B.K.C., Adams, F. and Amankwah, K., 2019. Effect of entrepreneur, firm, and institutional characteristics on small-scale firm performance in Ghana. Journal of Global Entrepreneurship Research, 9(1), pp.1-20.

Falahat, M., Tehseen, S. and Van Horne, C., 2018. Entrepreneurial innovativeness and its impact on SMES'performances. International Journal of Entrepreneurship, 22(3), pp.1-9.

Idris, F., Din, W.M. and Tajuddin, M., 2020. Adapting Experiential Learning Cycle In Enhancing Attitude And Skills Among Undergraduates Through Volunteerism’. AJTLHE, 12, pp.122-39.

Li, C., Makhdoom, H.U.R. and Asim, S., 2020. Impact of entrepreneurial leadership on innovative work behavior: examining mediation and moderation mechanisms. Psychology research and behavior management.