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Entrepreneurship – Just What Is It?

Few topics in the business area have attracted more attention than “entrepreneurship” among researchers and journalists.  Since emerging companies are generally thought of at entrepreneurial ventures it is important for us to have a working definition of entrepreneurship.  The Global Entrepreneurship Monitor (“GEM”), a partnership between London Business School and Babson College that administers a comprehensive research program to produce annual assessments of national levels of entrepreneurial activity, broadly defines entrepreneurship to include “… any attempt at new business or new venture creation, such as self-employment, a new business organization, or the expansion of an existing business, by an individual, teams of individuals, or established businesses”.  In his 1986 book, Entrepreneurship, J.G. Burch noted that entrepreneurship was the “initiation of change” and the “process of giving birth to a new business.”  Burch also listed the following categories of innovations that tend to be the specific byproducts of entrepreneurial activities: 

  1. Introduction of a new product or service that is an improvement in the quality of an existing product or service.
  2. Introduction of a new process or method that increases productivity.
  3. The opening of a new market, particularly an export market in a new territory.
  4. The conquest of a new source of supply of raw materials, half-manufactured products or alternative materials.
  5. The creation of a new organization.

It is generally assumed that entrepreneurship is a voluntary choice and, in fact, the GEM research  confirms that it is more likely than not that persons start a new business in order to take advantage of a perceived business opportunity, so-called “opportunity entrepreneurship”.  However, entrepreneurs also appear for other reasons including no better choices for work, so-called “necessity entrepreneurship.”  Differences in the incidence of entrepreneurial activity can be seen one looks at different characteristics such as age, education, industry and location and there are also significant variations among nations with respect to the level of risk (and possibility of failure) that persons are willing to assume before they start a new business.  Finally, it is no surprise that the likelihood of success for an entrepreneur will be impacted by factors such as the availability of capital and skilled personnel, governmental policies, and the communications and transportation infrastructure.

Why has entrepreneurship become such a popular path in the United States and in other developed countries?  Several factors have come into play, including the following:

  • Advances in technology that allowed smaller firms to take advantage of economies of scale that previously were only available to larger firms;
  • The ability of smaller firms, because of their size, to be more flexible and responsive to market changes;
  • Implementation of government policies calculated to encourage entrepreneurial activities and behavior;
  • Support from governments and other economic units that established procurement programs to assist small businesses;
  • High employment rates in the 1980s, which caused some workers to choose an entrepreneurial path rather than retrain for placement in an unsteady job market; and
  • Changes in typical career patterns away from expectations of long-term employment with large firms in a single occupation toward a “flexible” labor force.

Food for thought . . . People who think of themselves as entrepreneurs sometimes don’t take the time to understand how or why they ended up doing what they are trying to do.  In fact, taking a comment to step back and contemplate is sometimes seen as anti-entrepreneurial since it isn’t spontaneous, proactive or creative.  Nonetheless, founders and senior managers of an emerging company that seems to be fighting battles everywhere should consider what is driving their entrepreneurship . . . creating a new process or method, discovering and penetrating a new market, leveraging economies of scale and flexibility, etc.


Strategic Planning in Turkish Manufacturing Firms

Strategic planning is an important process for firms everywhere and planning techniques used in developing countries is an interesting topic.  This report describes the results of a study conducted in 2006 regarding strategic planning activities among a large group of manufacturing firms in Turkey.  Key topics include the formal planning processes implemented by the firms, the situs of responsibility for making decisions, the nature of the goals established as a result of the planning process and the sources of information relied upon to develop the strategic plan.


A List of Questions for Assessing and Comparing Organizational Culture

Organizational culture is
an important aspect of organizational performance and this report continues our coverage of the subject by providing a
list of questions and categories that
organizational leaders, both executives and managers, can use to identify key
issues associated with organizational culture so that they can be explored and
actions can be taken to either strengthen and reinforce desired cultural
characteristics or initiate changes that will hopefully lead to greater member
satisfaction and  enhanced organizational performance.


Prepare Business Development Presentations for Your Marketing Plan

Attorneys and law firms should develop an overall plan for building
and maintaining their law practice. Before getting down to specifics, the
attorney should determine the areas of focus, identify his or her professional
interests, and attempt to align those interests with the needs of the specific
geographic or industrial marketplace. Each attorney should develop their own
formal written marketing plan, and all of the marketing plans should be
combined into a firm-wide plan which can be used as the basis for making
decisions regarding larger marketing expenses, including sponsorship of
seminars, engagement of public relations consultants, and hiring of an in-house
marketing director.  This report covers a key element of that marketing plan: your own personal business development presentation.