Company Management Skills Recommendations
The concept of entrepreneurship is multi-dimensional. You'll find varied, diverse and somewhat contradictory sets of definitions of the term. As a way out the definitional dilemma, this article aims to describe the economic perspective on entrepreneurship.
The economic perspective rests on certain financial variables that include innovation, risk bearing, and resource mobilization.
Innovation/Creativity In this approach, entrepreneurs are those who carry out new combination of productive resources. The key ingredient, the carrying out of new combination (or innovation) distinguishes entrepreneurs from non-entrepreneurs. While new venture creation appears as the most prevalent form of entrepreneurship, there exist other forms. Entrepreneurship also involves the initiation of changes in the type of subsequent expansion in the amount of goods produced, company management and in existing form or structure of organisational relationships.
Within the entrepreneurship literature, some scholars have questioned the usage of organization creation as criterion for entrepreneurship. It's been argued that organizations such as political parties, associations and social groups tend to be created by individuals who are not "entrepreneurs." Interesting as it might sound, the terms entrepreneurship and entrepreneur have been adopted by varied scholars to meet the innovation and spirit of the time. This is evidenced by attempts to apply entrepreneurial thinking to contemporary team-oriented place of work strategies. Members of such groups - political parties, associations and social groups - as a result, may very well be called entrepreneurial teams. Besides, activities inherent in such groups have flourished presently, and are increasingly being described as social entrepreneurship.
Risk Taking This is another financial variable upon which the economic perspective revolves. Risk taking distinguishes entrepreneurs from non-entrepreneurs. Many times, entrepreneurs are calculated risk takers. They bear the uncertainty in market dynamics. This notion has its critics and advocates. Entrepreneurs might not necessarily risk her own funds but risk other personal capital for example reputation and the possibility of being more gainfully employed elsewhere.
Resource Mobilization here, entrepreneurship is reflected in alertness to perceived profit opportunities within the economy. This implies the allocation of resources in quest for opportunities with the entrepreneur playing the role of an opportunity identifier. This way, entrepreneurs are distinguished by their capability to identify persistent shocks or challenges (of long term opportunities) to the environment, and after that to synthesize the information and take decisive actions based upon it.
This article has conceptualized entrepreneurship based upon resource mobilization, risk taking, and innovation. Beyond the previously referred to economic variables, entrepreneurship can also be viewed determined by a group of personal characteristics, motives and incentives of the actor within the entrepreneurship act. This is the psychological perspective, the topic of a future article. Together with the psychological perspective, we shall also examine the process and small business perspectives.
