Definition of entrepreneurship and discussion of its relevance in the context of start-ups and established firms.

Introduction.

            Throughout human history, an entrepreneur has been a most active player in areas of technological, economic, and social development. After Richard Cantillon’s work, Essay on the Nature of Commerce in General (Essai sur la Nature du Commerce en general) was published in 1755, the words, “entrepreneur” and “entrepreneurship” have been increasingly used in the business and economics literature (Eisenmann and Eisenmann, 2013). Today, entrepreneurship research involves many disciplines such as economics, management, cognitive science and sociology.  Acknowledging that there are different approaches to defining the entrepreneurship and many opinions of its importance in modern business environment, this assay research mainly addresses the relevance of entrepreneurship in the context of start-ups and established firms from the perspective of economics and management.

            What is entrepreneurship?

            According to Professor Howard Stevenson, the godfather of entrepreneurship studies at Harvard Business School, entrepreneurship is the pursuit of opportunity beyond resources controlled(Bgi.edu, 2014). However, the most common definition of entrepreneurship is the next: "entrepreneurship is the willingness to take risks and develop, organize and manage a business venture in a competitive global marketplace that is constantly evolving" (BusinessDictionary.com, 2014). Entrepreneurs are inventors, innovators, pioneers and leaders. They are at the front line of social and technological movements – in their fields, in their forward thinking, in their desire to push the frontiers. They are dreamers and most importantly – doers. The most obvious example of entrepreneurship is the starting of new businesses.

Body.

            In the body of the essay the researcher is going to discuss positive and negative aspects why start-ups and established firms might choose the way of entrepreneurship and  the well-established notion that large and mature organizations stifle an employee’s ability and motivation to become an entrepreneur (Kacperczyk and J, 2012, pp. 484--521). The essay will consist of four paragraphs minimum.

            First paragraph will cover why many start-ups choose to be entrepreneurships. One of the reasons is that "“Pursuit” implies a singular, relentless focus"(Bgi.edu, 2014). In other words entrepreneurs often perceive a short window of opportunity. They need to show tangible progress to attract resources and "the mere passage of time consumes limited cash balances" (Morris and Paul, 1987, pp. 247--259). Consequently, entrepreneurs have a sense of urgency that is seldomly seen in established companies, where any opportunity is part of a portfolio and resources are more readily available. Opportunity  implies an offering that is novel in one or more of four ways and may entail:  pioneering a truly innovative product; devising a new business model; creating a better or cheaper version of an existing product; or  targeting an existing product to new sets of customers (Boonchoo and Wadeson et al., 2013, pp. 61--78). These opportunity types are not mutually exclusive. For example, a new venture might employ a new business model for an innovative product. Likewise, the list above is not the collectively exhaustive set of opportunities available to organizations. Many profit improvement opportunities are not novel, hence not entrepreneurial, for example, raising a product’s price or once a firm has a scalable sales strategy, hiring more reps.

            Second paragraph will discuss why many new firms prefer to copy already existed businesses in terms of market, product and service. Many entrepreneurs keep expenditures to a bare minimum while investing only their own time and, as necessary, their personal funds. In some cases, this is adequate to bring a new venture to the point where it becomes self-sustaining from internally generated cash flow (Tanan and Isti et al., ). With most high-potential ventures, however, founders must mobilize more resources than they control personally: the venture eventually will require production facilities, distribution channels, working capital, and so forth. Another point is risk. It is well-known that most of entrepreneurs are risky. However, a lot of people are not risk takers, as such they are far from entering entrepreneurship as a business way.

            Third paragraph will talk about  the factors that push established organizations fully or partially to transform into an entrepreneurship. As entrepreneurship is "a distinctive approach to managing" rather than a specific stage in an organization’s life cycle such as a start-up or a specific role for an individual (i.e., founder), or a constellation of personality attributes (e.g., predisposition to risk taking; preference of independence), so in this view, entrepreneurs can be found in many different types of organizations, including large corporations(Writework.com, 2005). Especially ones that have intention and spare funds to expand their businesses.

            The last paragraph will explain decisions that were made by established organisations to leave current type of employment in order to operate and assume risks for well-organised businesses. Large and mature firms "generate bureaucratic processes that hinder development of the kinds of employee skills", motivations, and aspirations favourable for new venture formation (Abeuk.com, 2014). This view implies that, as firms grow and mature, they become increasingly able to absorb the entrepreneurial drive of their employees.

Another way is that many firms, by exposing employees to highly specialized and closely monitored tasks, inhibit the ability to "challenge the existing order and to engage in creative problem solving"(Mospace.umsystem.edu, 2014).

Conclusion.

            An entrepreneur is some­one who searches for change, responds to it, and exploits change as an opportunity. For these people starting up their own business offers a greater possibility of  achieving significant financial rewards than work­ing for someone else.

It provides the ability to be involved in the whole  operation of the business, from concept to design and creation, from sales to business operations and customer response. Because entrepreneurs are pursuing a novel opportunity while lacking access to required resources, they always face considerable risk. Another question is funds needed, which are much easier to forecast when calculating for already existing business. That is why, many new businesses continue to follow well-approved business paths. Nevertheless, not only start-ups are famous as source of entrepreneurship, but many well-established companies go by this way in order to improve their positions in market or expand its influence even further. On the other hand, such issues as bureaucracy and close monitoring of employees become obstacles on the way of entrepreneurship.