Term Paper on "Ethnic Entrepreneurship Personal Characteristics of Turkish Entrepreneurs in the UK"

Term Paper 35 pages (9953 words) Sources: 1+ Style: Harvard

[EXCERPT] . . . .

Ethnic Entrepreneurship

Entrepreneurship:

Entrepreneurship studies have consistently pointed out that opportunity recognition has been an essential characteristic of all entrepreneurs. In fact, the most commonly cited definition of entrepreneurs uses opportunity recognition as its benchmark. For instance, Bygrave and Hofer (1991:14) give the following definition of entrepreneurs:

Who perceives an opportunity and creates an organization to pursue it;" (Bygrave and Hofer 1991:14).

Similarly, Shane and Venkataraman (2000:218) in their management review also defined opportunity recognition as a benchmark of entrepreneurship. They write:

We define the field of entrepreneurship as the scholarly examination of how, by whom, and with what effects opportunities to create future goods and services are discovered, evaluated, and exploited;" (Shane and Venkataraman 2000:218).

Two distinct attributes of opportunity recognition have been the major focus of research in the field of entrepreneurship:

1) Multiple stages of opportunity recognition; and 2) Complex and intricate procedures

Amongst the two, scholars have been very keen to uncover the mysteries of the latter: complex and intricate procedures. The underlying reason for this heightened interest in this area of entrepreneurship research is twofold:

It acknowledges the versatility of opportunity recognition; and it helps in the discovery of dynamics of entrepreneurship.

For case in point, Long and McMullan (1984) presented a conceptual model of opportunity recognition. He founded this four-dimensional model on the results of his entrepreneurship research. The four dimensions are as follows:

Pre-vision;

Point of vision;

Opportunity elaboration; and the decision to proceed.

Long and McMullan (1984) assert that pre-vision is dependent on a number of other variables and that these variables can be both internal and external. For instance, pre-vision can be influenced by environmental forces, job forces, business alertness development, and moonlight venturing along with selection of job.

Similarly, Ardichvili et al. (2003) proposes that commencement of the journey of entrepreneurship is dependent on two sequential factors:

Identification of features in the area of proficiency, which results in recognition; and This identification is furthered by a complete evaluation of the probable opportunities of a successful business venture.

In the same way, Christensen et al. (1989) gave a twofold definition of opportunity recognition in the field of entrepreneurship:

Recognizing an opportunity to start a new business venture

Recognizing opportunities to enhance existing business activity

Correspondingly, Bhave (1994) too gave his version of opportunity recognition in entrepreneurship. He defined entrepreneurship as a process stimulated either (1) internally or (2) externally. Internal stimulation refers to the process where the individual sees a gap, identifies an unfulfilled need and decides to pursue a business venture. External stimulation refers to the need of pursuing a business venture, initially, and exploring ideas and opportunities, later on.

Kaish and Gilad (1991) identified that entrepreneurs give special attention to the risks associated with new business ventures before embarking upon them. Similarly, Cooper (1981) recognizes intuition and casual perception of the environment as two features of opportunity recognition of entrepreneurs. Stevenson et al. (1985) asserts that the primary driver of all entrepreneurs is opportunity recognition. Correspondingly, Stevenson and Jarillo-Mossi (1986) define entrepreneurship as a procedure where individuals combine all their available resources to create higher values so as to make use of an existing opportunity.

1.2 Personal characteristics of entrepreneurs

Preparation

Csikszentmihalyi (1996) presents a four dimensional model of preparation. These four dimensions are as follows:

Preceding experience

Acquired knowledge

Heightened interest in the specified area

Increased effort based on self-interest

Shane (2000) in his research identified (1) prior experience and (2) acquired knowledge as strong characteristics of entrepreneurs. In the same way, Bygrave (1997) Ronstadt (1988) identified prior experience as the underlying reason to start a business venture in more than 50% cases they studied in their research.

Incubation

Csikszentmihalyi (1996) identifies incubation as a process of contemplating an idea. He asserts that incubation is, "ideas churn around below the threshold of consciousness." He recognizes two features of incubation:

Intuitive

Non-intentional

Schumpeter (1942) asserts that incubation leads to discovery of various new relationships that had previously gone unnoticed. Similarly, in the field of entrepreneurship, Gaglio and Taub (1992) recognize incubation as an inherent attribute of entrepreneurs. They give a uni-dimensional definition of incubation: simmering of opportunities that had been recognized over time.

Insight

Insight is considered an inherent characteristic of all entrepreneurs. It occurs when there is a conscious recognition of a profitable opportunity by an entrepreneur. Gaglio and Taub (1992) define insight as an emotional and mental experience when the opportunity is recognized. In the same way, Long and McMullan (1984) signify insight as a "point of vision." Gaglio and Katz (2001) define insight as a discovery that ruptures the present means-ends perception. Hills (1995) recognize heightened levels of confidence as a distinct feature of entrepreneurship insight once they discover an idea. Similarly, Amabile (1988) recognize creativity and innovation as an inherent attribute of entrepreneur insight. Likewise, Singh (1998) views the influence of social networks as a key driver for entrepreneur insight.

Evaluation

Business formation is inherently dependent on the outcome of the evaluation. In the field of entrepreneurship, De Koning (1999) provides a two-dimensional model of evaluation:

Testing of ideas by talking to people

Refining of ideas by consulting social networks

In the same way, Bhave (1994) Gaglio and Taub (1992) recognize entrepreneurship evaluation as a two-dimensional process:

Preliminary market testing

Financial viability analysis

Long and McMullan (1984) identify two distinct attributes of entrepreneurs in the evaluation phase. Both these features greatly assist in overcoming risks and objections. These distinct attributes are:

Creative thinking

Preparation.

Vesper (1996) in his research identified that failure to comprehensively evaluate every aspect of business is the major reason for many entrepreneur business ventures to fail.

Elaboration

Csikszentmihalyi (1996) asserts that elaboration is the most difficult part of the entire process. He identifies four distinct aspects of successful entrepreneurs in this phase:

Extended business planning covering every aspect of business

Constant brainstorming to find solutions to the problems

Constant feedback and testing of ideas

Actual startup of the business venture

Bhave (1994) recognized two salient attributes of entrepreneurs in the elaboration phase:

Focusing on customer feedback to initially create and steadily formalize organizational procedures

Focusing on trial and error procedures in order to constantly change business procedures to enhance value

Both, Hills (1995) and Hills and Shrader (1998) identified failure to quickly adopt to the market conditions as the main reason of business venture closures.

1.3 Additional personal characteristics of entrepreneurs

Creativity

Creativity is the essence of entrepreneurship. Many scholars have signified that strong creative skills lead to effective problem solving. Many entrepreneurs too give a great deal of emphasis to creativity (Senge. 1990). Barron and Harrington (1981) present a six dimensional model of creativity. This model has been used as a benchmark by several entrepreneurship and leadership research studies (Senge. 1990). The seven dimensions of creativity are as follows:

Imagination;

Spontaneity;

Self-confidence;

Resourcefulness;

Enthusiasm; and Independence.

Senge (1990) asserts that a creative business environment can be extremely beneficial for the entrepreneur. However, forming a creative business environment is not a straight forward process. Many starters have found it difficult to do so. Senge (1990) identifies two attributes of a creative environment:

Open and friendly to creative thought

Free of disapproval and favorable to out-of-the-box thinking

Experimentation

Experimentation in entrepreneurship refers to the trying of new ideas that have yet to be tested in the real world. Vesper (1996) found that many successful entrepreneurs have gone ahead with the experimentation of their new idea by actually starting up a business. He cites five reasons for this entrepreneur behavior:

They were motivated by a small amount of the start-up expenses and low downside risks;

They found the cost of market research and product testing of a new idea more expensive than actually starting up a business;

They were not afraid to make mistakes;

They considered business collapses and ambiguous launches of business ventures as part of entrepreneurship; and They considered the knowledge acquired from such experience as priceless as it can be applied to future business ventures.

Ronstadt (1988) too found that entrepreneurs were not afraid to start up a business activity as they thought that even if they failed, the knowledge and experience will help them in their future endeavors (Ronstadt, 1988).

High levels of domain knowledge

Domain knowledge of entrepreneurs is considered to be more important than technical skills they possess. Prior knowledge and experience in the chosen field is also considered vitally significant by entrepreneurs. For instance, when venture capitalists were asked to give their opinion in the sudden bust of dot.com, they asserted that lack of domain knowledge as the single most destructive factor in the failure of new startup business ventures (Shane, 2000). Research shows that successful entrepreneurs possess two distinct qualities (Csikszentmihalyi, 1996):

They acknowledge the rules with which a venture operates in a particular environment and the business wisdom to compete in that environment; and Prior experience in the chosen field is high.

Application of good ideas

Successful entrepreneurs have the ability of refine their initial ideas and also investigate the feasibility of their idea… READ MORE

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