school of entrepreneurial thought

 

             Entrepreneur according to Schumpeter (1950), an entrepreneur is a person who is willing and able to convert a new idea or invention into successful innovation. Entrepreneurship forces creative destruction across the markets and industries simultaneously creating new products and business models. This way creative destruction is largely responsible for dynamism of industries and long run economic growth.                    

Entrepreneurship is the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial and social risks and receiving the resulting rewards of monetary and personal satisfaction and independence.

It may also be defined as the dynamic process of creating wealth. This wealth is created by individual who assumes the major risks in term of equity, time and or career commitment of providing value for some product or service. The product or services itself may or may not be new or unique but value must somehow be infused by the entrepreneur by securing and allocating the necessary skills and resources.

The following are the school of entrepreneurial thought

The ideas are emanating from the macro and micro views of entrepreneurial thought and are further breakdown these two major views into six distinct school of thoughts, three within each entrepreneurial view. These areas follows;

 

1.     Macro View

       i.          Environmental school of thought

     ii.          Financial/Capital school of thought

   iii.          Displacement school of thought

 

2.     Micro View

       i.          Entrepreneurial traits school of thoughts/people school

     ii.          Venture opportunity school of thoughts

   iii.          Straight formulation school of thoughts

 

The Macro view of entrepreneurship presents a broad array of factors that relates to success or failure in the contemporary entrepreneurial ventures ‘It include external process that are sometimes beyond the control of individual. Three entrepreneurial thought represent the breakdown of macro view are;

    The environmental school of thought; this school of thought deals with external factors that affects a potential entrepreneurs lifestyle. There can be positive or negative factors the molding of entrepreneual desires.

The focus is on institutions, values, and mores that grouped together to form a sociopolitical environment framework that strongly influence the development of entrepreneurs. Also social group environment can affect positively or negatively potential development of entrepreneurs like friends.

      The financial or capital school of thought; It is based on the capital seeking processes. Search for capital and the growth of it is the entire focus of this thought. Venture capital process is vital to the development of an entrepreneur.Bussiness planning guides and text for entrepreneurs emphasize about this thought and there are development seminars focusing on the fund application process that are offered throughout the country on a continuous basis.

This school of thought views the entire entrepreneurial ventures from a financial management stand point. Decisions involving finances occur at every major point in the venture process.

 FINANCIAL ANALYSIS EMPHASIS

 

Venture stage	Financial consideration	Decision
Start-up or acquisition	Seed capital Venture capital source	Proceed or abandon
On going	Cash management Investment financial Analysis and evaluation	Maintain, Increase or reduce Size
Decline or succession	Profit question Corporate buy out Succession question	Sell, retire or dissolve operations

 

 

 

         The displacement school of thought; It focuses on group phenomena. It says that group affects or May eliminates certain factors that project the individual into an entrepreneur ventures. This thought also has its types;

       Political displacement; is caused by factors ranging from one political regime that rejects free enterprise to government regulations and policies that limit or redirect certain industries.

     Cultural displacement; deals with social groups. Religion, race, sex, ethnic background are examples of factors that figure in the minority experience

      Economic displacement; is concerned with economic variation of recession and depression. Job loss, capital shrinkage can create foundation for entrepreneurial pursuit just as it can affect venture development and reduction.

The Micro view; it examine the factors that are specific to entrepreneurship and are part of the internal locus of control. The potential entrepreneur has the ability or control to direct or adjust the outcome of each major influence. This approach also represents the entrepreneurial trait theory or people school of thoughts, the venture opportunity theory and the strategic planning theory. Unlike macro approach, micro approach concentrates on specifics from the inside looking out.

The following are thoughts which are within micro view

a)     Entrepreneurial trait school of thought;

 This deals with identifying some of the traits that are common to successful entrepreneurs. It is grounded in the study of successful people who tend to exhibit similar characteristics that if copied would increase success opportunity for emulators. Example determination, creativity, technical knowledge and achievement are four factors that usually are exhibited by successful entrepreneurs.

b)     The venture opportunity school of thought;

 This school of thought focuses on the opportunity aspect of venture development. The search for sources of ideas, the development of concepts, and the implementation of venture opportunity are the important areas of interest for this school. According to this school of thoughts, developing the right ideas at the right time for the right market niche is the key to entrepreneurial success. Another development from this thought is new pathways or opportunities will arise that lead entrepreneurs in different directions. The ability to recognize those opportunities enhances steps for action are key factors.

c)     The strategic formulation school thought;

 This entrepreneurial theory emphasizes the planning process in successful venture development. Ronstadt view the strategic formulation as a leveraging of unique elements; unique markets, unique people, unique products or unique resources are identified, used or constructed into effective venture formation. The interdisciplinary aspects of strategic adaptation become apparent in the characteristics element listed below

Unique markets;

              Which refers to identifying major market segments as well in between markets that arises from larger markets

Unique people;

 Which refer to the skills or special talents of one or more individual around whom the venture is build.

Unique products;  

            Which refers to innovations that encompass new or existing market

Unique resources;

          Which refers to the ability to gather or harness or special resources (land, labor, capital, raw materials) over the long term.

The following are the approaches to study of entrepreneurship in relation of ICT environment

Psychological Approach:

            An entrepreneur is not a common person. He has a typical personality with creative, managerial and imaginative skill who can innovate and contribute positively to an industrial project. This kind of personality develops in a person who has strong motivation for achievement. David McClelland, the greatest exponent of the psychological approach to entrepreneurship, is of the view that the genesis and performance of entrepreneurs requires strong motivation for achievement. The achievement motivation, according to McClelland, is a function of child rearing practices in a society. Joseph Schumpeter, the first to offer a systematic interpre­tation of entrepreneurship, had psychological perspective in his mind when he said that the entrepreneur possesses energy of will and mind to overcome fixed habits of thought and the capacity to withstand social opposition.

ICT environment helps people to become more creative and innovative unlike back days where technology and globalization were not rise in to the extent that can make people creative and support their ideas. This is  to say that technology helps people  to invest heavily in it because of the achievements that people obtains from it and also people has been developing some of the system that helps them in their market and also products. Example are digital marketing or online shopping and cloud computing.

Social behavior Approach:

The Social behavior Approach to the study of entrepreneurship deals with social and cultural factors responsible for the nature and growth of entrepreneurship development in a society. Entrepreneurship in this theory is explained as social marginality, people who are displaced or dislocated, family background, position, education background, gender networks and role models. It attempts to understand as to why a social structure and culture facilitates or inhibits entrepreneurial development. It believes that laws of development lie in the social structure and culture of a region. It tries to seek answer to the question, why one segment of social structure produces larger number of entrepreneurs than the other.

In this approach, ICT environment played a great role in widens up peoples mind in terms of creativity and innovation. Without looking on the educational level of a particular person, ICT has been helping people in doing many things. Developing system that relates with the societies environment also is the result of ICT, example some of the villages that are not well developed, internet technology cannot be used instead communication channel that is easier and available for them can be used example mobile phones where the supplier or seller can communicate easily with his customer. Likely to some places where people are well educated are capable of using internet, and different search engine can communicate easily either promote their products and service or purchase them using inline marketing.

Management science school of thoughts

Management scientists regard an entrepreneur as manager who manages entrepreneurial ventures. Entrepreneurial management focuses on changes, economic opportunity and organization-wide management. This school of thought argue that a true entrepreneur does not leave the world the way he found it.

ICT has played a vital role in automating such complex problems by introducing user friendly solutions. Many years past most of the resource management solutions were done manually and took a lot of time to accomplish it, example in keeping records, calculations and so many others. But the presence of ICT makes things easier that before, example things like CCTV cameras which helps in management security. With the help of ICT environment, people now can monitor and manage their activities wherever they are in the world using their personal computers, tablets and smartphones.

Economic based theories of entrepreneurship

                There is away economists’ sees entrepreneur as an agents of change, resource mobiliser, technology adopters, market openers and opportunity exploiters. For example Knight (1961), argue that an entrepreneur is uncertainty bearer. So Knight means entrepreneur plan for what and how he or she can do the business but does not calculate or consider for risks at future. For knight the one who calculate risk at first is not an entrepreneur.

  According to Kilby (1961), an entrepreneur has several functions such as perceiving an opportunity for profitable investment; committing the necessary risky capital; assembling factor inputs to build an enterprise; providing an ongoing management and responding to management and responding to competition. So Kilby means an entrepreneur is the one who organize factors of production such as capital, land and labor also manage those factors. And is the one who start the business who entry and know how to survive in the market through compete against other rivals in the industry.

 According to Cantillon (1734), regards an entrepreneur as someone who operates under condition of risky and uncertainty; Someone whose income arise from decision making rather than from orthodox/traditional efforts; someone with judgment, perseverance and knowledge of the world as well as of the business. For Cantillon define entrepreneurship is to operate the business to a risky condition as people say the higher the risk the greater income earned, the lower the risk the lower the income earned.

  According to Schumpeter (1934), views an entrepreneur as someone who defined by what he does and not for what he owns and innovation/creativity to him (entrepreneur) is central. For Schumpeter for a person to be entrepreneurship must do something new or modify something for example create a new product, new quality, and new process of production, new market or new industry. Also can utilize new resources of raw materials and carry out the new organization.

In relation to ICT environment, decision making is the heart of any bussines.and in order for a business to succeed has to go for market research that can enable the manager or owner of the business to make the right decision at the right time .ICT environment enables nowadays to conduct research even in online surveys, blogs, group discussion, using WWW, as well as in interviews.

ICT also has also help in the opening of new market, which are nowadays called digital marketing or online marketing or ecommerce .This online marketing helps in promote products and services all over the world by using different search engine optimization (SEO), emails, and social media like in smartphones applications advertisement.

ICT environment has helped entrepreneurs to provide customer satisfaction by introducing new goods and quality products because the internet technology has helped to communicate with millions of customer who are in different places. Now day’s people are using channels like emails, social Medias like Facebook, whatsApp, Instagram and online newsletter and text which makes communication easier than before. Sometimes systems like customer relationship management (CRM) are used to hold valuable data and understanding customer behaviors.