Entrepreneurs in the 21st century face challenges unlike any faced in the past since the dawn of time. Organizations both new and old operate in vastly changing contexts. Some argue it has become more complex and others say it is more complicated. Most seem to agree that complexity in organizations is a lot more difficult to manage than organizations that are complicated. The salient points need to be considered in answering the above assignments are:1.Are the key entrepreneurial terms and concepts defined and backed by evidence and sources?2.How and what is understood by the statements and words? Is there a discussion and evaluation in the context of entrepreneurship?3.What are the challenges facing entrepreneurs and their organisations in general and are specific entrepreneurs and their organisations used as examples? What are the implications for new startups within such contexts?4.What approaches would you recommend to instill innovation and good organisational management considering complexity and complicated and the need for sustainability in entrepreneurship?5.How risks can be mitigated and are those proposals realistic? Were local and foreign examples used to demonstrate an application of those approaches?6.Was there a conclusion drawn linked to the discussion?
Trang 1MASTER OF BUSINESS ADMINISTRATION
INTERNATIONAL PROGRAM
ASSIGNMENT
ENTREPRENEURSHIP
Submitted to:
Submitted by:
ID No.:
Class:
Ho Chi Minh City, September 2014
Trang 2Table of Contents
1 Introduction 1
2 Main contents 1
2.1 Are the key entrepreneurial terms and concepts defined and backed by evidence and sources? 1 2.2 How and what is understood by the statements and words? Is there a discussion and evaluation in the context of entrepreneurship? 3 2.3 What are the challenges facing entrepreneurs and their organizations in general and are specific entrepreneurs and their organizations used as examples? What are the implications for new start-ups within such contexts? 4 2.4 What approaches would you recommend to instill innovation and good organizational management considering “complexity” and “complicated” and the need for sustainability in entrepreneurship? 7 2.5 How risks can be mitigated and are those proposals realistic? Were local and foreign examples used to demonstrate an application of those approaches? 9
3 Conclusion 11 References 11
List of Table Table 1.1: Definitions of entrepreneurship 2
List of Figures Figure 1.1: The elements affecting new venture performance 5 Figure 1.2: Risk Management framework 9
Trang 31 Introduction
Today, there is a new player emerging on the cultural and business scene that does attract of people concern: the idea of entrepreneur (John Butman, 2013) The idea is that entrepreneur is those usually a content expert and often an individualist, whose main goal is to influence how other people think and behave in relation to their valued topic
The bell about entrepreneurship is everywhere nowadays and becoming a hot issue from magazine covers to conferences, hotel lobbies and even at the kitchen tables The word entrepreneur first appeared in the French dictionary in 1723 described a person who organizes and operates a business by taking a financial risk Since then the world has completely changed bring new arguments for this terms and contexts There is a risen issue that:
“Entrepreneurs in the 21 st century face challenges unlike any faced in the past since the dawn of time Organizations both new and old operate in vastly changing contexts Some argue it has become more complex and others say it is more complicated Most seem to agree that complexity in organizations is a lot more difficult to manage than organizations that are complicated”
In order to have clearly view about this statement, the author would like to go through each of aspect as mention in the following contents
2 Main contents
2.1 Are the key entrepreneurial terms and concepts defined and backed by evidence and sources?
The word entrepreneur derives from the French word - entreprendre, where “entre” means
“between” and “prendre” means “to take” Therefore, it was originally used to describe people who “take on the risk” and “undertake” a task such as starting a new venture Although no single definition of entrepreneur exists and no one profile can represent today’s entrepreneur, research is providing an increasingly sharper focus on the subject
There are some definitions of entrepreneurship through decades:
1975 Entrepreneurship is the pursuit of opportunity without regard to resources currently
controlled
Howard Stevenson
Trang 41985 Entrepreneurship is an act of innovation that involves endowing existing resources
with new wealth-producing capacity
Drucker
1988 Entrepreneurship is the creation of organizations, the process by which new
organizations come into existence
Gartner
1997 Entrepreneurship is a way of thinking, reasoning, and acting that is opportunity drive,
holistic in approach, and leadership balanced
Timmons
2000 Three traits have been included in the definition of entrepreneurship: (1) Uncertainty
and Risk, (2) Complementary management competence, and (3) Creative opportunism
Outcalt [Source: Thierry Burger-Helmchen, 2012] Table 1.1: Definitions of entrepreneurship
As we can see from the Table 1.1, the academic understanding of entrepreneurship is broadened over time The first dimension of the entrepreneurial space is the continuum between economic approaches oriented towards the origin and context of entrepreneurship, social science approaches, and managerial concerns Entrepreneurship is defined as the process by which individuals pursue opportunities without regard to resources they currently control (led by Barringer & Ireland, 2010) In essence, an entrepreneur’s behavior finds him or her trying to identify opportunities and putting useful ideas into practice In this context, the author would like to list down an Integrated Definition of entrepreneurship in the twenty-first century:
“Entrepreneurship is a dynamic process of vision, change, and creation It requires an application of energy and passion towards the creation and implementation of new ideas and creative solutions Essential ingredients include the willingness to take calculated risks- in terms of time, equity, or career; the ability to formulate an effective venture team; the creative skill to marshal needed resources; the fundamental skills of building a solid business plan; and, finally, the vision to recognize opportunity where others see chaos, contradiction, and confusion” (Kuratko, 2009)
From that point of view, entrepreneurial venture bring new products and services to the market
by creating and then seizing opportunities The essence of entrepreneurship is creating value – which refers to worth, importance or utility - and then disseminating that value to customers Whatever the specific activity entrepreneurs engage in, they are considered the heroes of free enterprise in the twenty-first century
Trang 5In summarize, the concept of entrepreneurship is as the following figure (Mahendra, 2014):
Facebook Inc is well known a highly successful example of entrepreneurial firm Having recognized an opportunity, the entrepreneurs leading companies of this type create products and services that have worth, that are important to their customers, and that provide a measure
of usefulness to their customers that they would not have otherwise In Vietnam, VNG is a successful example of entrepreneurial firm, which based on the new era of information technology development VNG Corporation (VNG) is a Vietnamese technology company was founded in 2004 under the name of VinaGame with specializing in Digital Content and Online Entertainment, Social Network and E-commerce From the first contract signed with Kingsoft,
“Vo Lam TruyenKy” became 1st MMORPG online game and the turning point for the online Entertainment industry in Vietnam Within 1 month operations, “Vo Lam TruyenKy” game got
a great result 200,000CCU The owners of VNG have seen the opportunities and take advantages of human innovation to build the products and services for Vietnamese users such
as Zing Me (a social network) and Zalo (a free massage and call application on mobile)
2.2 How and what is understood by the statements and words? Is there a discussion and evaluation in the context of entrepreneurship?
As discussed in early, entrepreneurship is a dynamic and risky process It is an outcome of complex socio-economic, psychological, technological, legal and other factors A process of action an entrepreneur undertakes to establish his/ her enterprise It is considered a creative activity, the ability to create and build something from practically nothing Entrepreneurship is the attitude of mind to seek opportunities, take calculated risks and derive benefits, by setting
up a venture Therefore, the process comprises of numerous activities involved in conception, creation and running an enterprise Entrepreneurship is about the creation of new business (new
Those who seek to generate value,
through the creation or expansion of
economic activity, by identifying and
exploiting new products, processes or
markets
is the phenomenon associated with entrepreneurial activity
Entrepreneurial activity: is the enterprising human action in pursuit of the generation of value, through the creation or expansion of economic activity, by identifying and exploiting new products, processes or markets
Trang 6venture) All new business or increases in self-employment could be considered as creating new markets if one takes a liberal interpretation of ‘new” for example
A new venture goes through three specific phases which are prestart-up, start-up and
poststart-up The prestart-up phase begins with an idea for the venture and ends when the doors are open for business The start-up phase commences with the initiation of sales activity and the delivery
of products and services, and ends when the business is firmly established and beyond short-term threats to survival The poststart-up phase lasts until the venture is short-terminated or the surviving organizational entity is no longer controlled by an entrepreneur
At last, when references are made to entrepreneurship, it is a relation to the idea that there is something different about entrepreneurial businesses that sets them apart from other businesses For example, policy makers are not interested in merely encouraging the creation of new business as the be all and end all Their interest is in creating successful and sustainable entities with high-growth companies and gazelles Indeed, the creation of a business environment that nurtures and stimulates their growth of, and the growth of more productive, companies in general hence the encouragement of business creation Some high growth firms’ growth will not reflect entrepreneurship at all, and indeed, their growth may reflect the very antithesis of entrepreneurship, for example, firms in monopoly position with rapid growth
2.3 What are the challenges facing entrepreneurs and their organizations in general and are specific entrepreneurs and their organizations used as examples? What are the implications for new start-ups within such contexts?
According to the U.S Small Business Administration report, there are nearly 600,000 new business start-ups per year during the past 10 years In 2011, the smaller firms reached a records total of 27.5 million (Kuratko, 2009) The motivations for entrepreneurs start new venture including the need for approval, independence, personal development, welfare considerations, perception of wealth, tax reduction and indirect benefits, and following role model However, the ideas for potential new businesses are also surfacing challenges need to be concerned It related to the personal characteristics of entrepreneur, the environment and the venture itself It can be indicated as the following figure:
Trang 7[Source: Arnold C Cooper, “Challenges in Predicting New Firm Performance,” Journal of Business Venturing
(May 1993): 243, led by Kuratko, 2009]
Figure 1.1: The elements affecting new venture performance
The environmental effects are the risk of new products or services, narrow markets and scarce resources, the entrepreneur’s personal goals and founding process (reasons for start-up), and the diversity of the ventures themselves (differing scales and potential) In addition to the problems presented by the complexity of factors in new-venture performance, it is difficult to obtain reliable data concerning start-up, performance and failure Also, new-venture developments deal with established start-up businesses It requires the full-time commitment of one or more individuals, is selling a product or service, has formal financial support, and has hired one or more individuals Therefore, the real challenges for new venture start-up are for those firms to survive and growth
In specific, entrepreneurs also face challenges from numerous sources that include both internal and external challenges The followings are some of the most common internal and external challenges that are facing entrepreneurs nowadays:
Lack of Capital
Most entrepreneurs go into business with inadequate capital with hope to secure more capital once the business begins to grow However, most entrepreneurs face capital challenges a few months after operation When capital challenges are not addressed in time, most businesses fall flat on their face The recommendation for new start-up is sticking to a budget to avoid capital challenges Then, starting small and letting a business grow at its own pace also ensures that the capital generated from doing business can adequately cover all operational expenses and future expansion plans
Trang 8Poor management
Poor management may come from poor delegation of duties Most entrepreneurs starting businesses tend to delegate crucial duties that should be done only by owners to others.Therefore, for those new start-ups should be very careful when delegating duties It is usually advisable for a business owner to be involved in every aspect of their business when starting up to avoid management challenges brought about by delegation Poor time management is also among the management challenges facing entrepreneurs Most entrepreneurs tend to be reluctant in terms of observing the time they get to work or the time they dedicate to their business Time management also helps an entrepreneur supervise all delegated duties Entrepreneurs who manage time poorly may develop a poor working memory that may result in an entrepreneur forgetting critical aspects of daily running of a business Lack of proper organization:
Most upcoming businesses are facing poor organizational issues, one of which is poor paperwork storage Paperwork is very important regardless of the size of a business If an entrepreneur cannot be able to organize their paperwork, then they are most likely to misplace valuable documents such as invoices, customer information that may affect debt collection and competition strategies among many other vital operations of a successful business
It is advisable for entrepreneurs to be perfectionists so that employees can learn these skills from examples If an entrepreneur is very organized, then his staff is bound to learn organization and do things the exact way they should be done An entrepreneur needs to write down business goals and deadlines for meeting the goals to ensure that focus is generated It is possible to stop procrastination by focusing on the goals of a business It should start with basic personal experiences in problem solving
The case failing of Indochina Airlines in Vietnam is a foresee example for this issue Indochina Airlines was the first operational private airline based in Vietnam, originally licensed in May
2008 as Air Speed Up The founder and chairman of the board was Vietnamese musician Ha Hung Dung Indochina Airlines began selling tickets on 12/11/2008 and launched its first commercial flight from Tan Son Nhat International Airport in Ho Chi Minh City to NoiBai International Airportin Hanoi and Da Nang International Airport in Da Nang on 25/11/2008
Trang 9After a record of difficulties including unresolved debts and a drop in customers, Indochina Airlines terminated flying on 25/11/2009 Its schedule was canceled two days later
2.4 What approaches would you recommend to instill innovation and good organizational management considering “complexity” and “complicated” and the need for sustainability in entrepreneurship?
The distinctions between complicated and complex can be illustrated as the following:
- Complicated problems are best dealt with using formulaic and expert-knowledge approaches Sending a rocket to the moon is an example of a complicated The overall
problem can be mechanistically broken down into components parts (booster rocket, cabin environment, navigational equipment, etc.) and assigned to teams of experts who utilize the proven methodologies of their disciplines Meaning that success with one rocket provides reasonable assurance of success with future rockets When surprising events do occur, we can study these, build improvements into the system, and thus raise the probability of future success
- Complexity is the degree to which the innovation is perceived as difficult to understand and use An example of a complex issue is that of raising a child Success is raising one child is
no guarantee of success in raising another Past experience, coupled with advice from experts, can serve as a starting point; but we know that simply applying the formula that worked before may not lead to success, and may even lead directly to failure because of the second child’s resentment at being treated this way
An innovation need not be particularly complex from the viewpoint of its developers It is the perception of the end user that means the most for achieving public adoption of a new technology For example, personal computers were difficult to learn about when they first were introduced, which slowed their adoption despite their clear relative advantages
In summarize, innovation is the process by which opportunities are identified and exploited These opportunities are often radical, and potentially disruptive The key elements in developing successful innovation are:
- Creativity that challenges the taken-for-granted assumptions and unsettles the status quo;
- Entrepreneurial capability that will drive the commercialization the idea;
Trang 10- Management of the process, the staff and other resources, both from within and outside the organization;
- The motivation and ambition of the individuals to identify and exploit the opportunities
As an entrepreneur you are someone with the capacity to identify and exploit opportunities That is what entrepreneurs do; they have ideas and make them happen It takes commitment and perseverance to achieve this However, it can be very rewarding to contribute by delivering solutions that create environmental and social value and at the same time do this in a manner that is self-sustaining from an economic perspective Sustainable entrepreneurship aims to solve social and environmental problems by applying business principles This is accomplished through providing sustainable business solutions that are characterized according to Oriol et al., (2011) are:
- Solutions for one specific social and/or environmental problem
- Clearly defined business models;
- Scalable
- Inspire others to contribute or trigger action among others to develop their own solutions
Today, an individual that is empowered with a good idea, determination, and some easily accessible tools can challenge entire industries This has led to a new breed of individuals that use entrepreneurial values and approaches to solve major sustainability problem, we call such people sustainability entrepreneurs Sustainability entrepreneurs apply imagination to challenging problems to conceive, prototype, and create solutions that deliver environmental, social and economic value The need for sustainability entrepreneurship comes from three main reasons:
- There is limited availability of natural resources;
- Exponential human population growth,
- Current and future generations have the right to fulfill their needs
Example for a good practice for future sustainable energy company for renewable energy name
as synonymous with the entrepreneur is Urban Green Energy (UGE) in USA Mr Nick Blittrswyk found UGE in 2007 It is an international wind turbine supplier and designer of vertical axis wind turbine UGE focus on providing high performance, high quality, and attractive urban energy renewable products to customers around the world at an affordable