Entrepreneurship as a concept

Entrepreneurship is a concept which is defined in many ways. The word entrepreneur means a person who undertakes from the French term called eneteprendre. In terms of business, the term entrepreneur means starting a business. An entrepreneur is a person who manages, organizes, and takes over all the enterprise or business risks. Other definitions include a person who has high ambition and aptitude to initiate change is known as an entrepreneur.

The entrepreneurial school of thought is based on vision: a mental representation of strategy created or at least expressed in the head of the leader as perspective, specifically a sense of long term direction of organizations future and a sound vision and visionary CEO can help organization in turbulent times or in very difficult years for the organization also it have shortfalls that hanging on the health and whim of single person, the death or health problem of that person result in crisis of organization. nd one of present day successful entrepreneur and its strategic moves in the direction of the school of thought is discussed. Historical background of the school Throughout the theoretical history of entrepreneurship, scholars from multiple disciplines in the social sciences have grappled with a diverse set of interpretations and definitions to conceptualize this abstract idea.

Over time, “some writers have identified entrepreneurship with the function of uncertainty-bearing, others with the coordination of productive resources, others with the introduction of innovation, and still others with the provision of capital” (Hoselitz, 1952). Even though certain themes continually resurface throughout the history of entrepreneurship theory, presently there is no single definition of entrepreneurship that is accepted by all economists or that is applicable in every economy.

Although there is only limited consensus about the defining characteristics of entrepreneurship, the concept is almost as old as the formal discipline of economics itself. The term “entrepreneur” was first introduced by the early 18th century French economist Richard Cantillon. In his writings, he formally defines the entrepreneur as the “agent who buys means of production at certain prices in order to combine them” into a new product (Schumpeter, 1951). Shortly thereafter, the French economist J.

B. Say added to Cantillon’s definition by including the idea that entrepreneurs had to be leaders. Say claims that an entrepreneur is one who brings other people together in order to build a single productive organism (Schumpeter, 1951). Over the next century, British economists such as Adam Smith, David Ricardo, and John Stuart Mill briefly touched on the concept of entrepreneurship, though they referred to it under the broad English term of “business management. Whereas the writings of Smith and Ricardo suggest that they likely undervalued the importance of entrepreneurship, Mill goes out of his way to stress the significance of entrepreneurship for economic growth. In his writings, Mill claims that entrepreneurship requires “no ordinary skill,” and he laments the fact that there is no good English equivalent word to encompass the specific meaning of the French term entrepreneur (Schumpeter, 1951). The necessity of entrepreneurship for production was first formally recognized by Alfred Marshall in 1890.

In his famous treatise Principles of Economics, Marshall asserts that there are four factors of production: land, labor, capital, and organization. Organization is the coordinating factor, which brings the other factors together, and Marshall believed that entrepreneurship is the driving element behind organization. By creatively organizing, entrepreneurs create new commodities or improve “the plan of producing an old commodity” (Marshall, 1994). In order to do this, Marshall believed that entrepreneurs must have a thorough understanding about their industries, and they must be natural leaders.

Additionally, Marshall’s entrepreneurs must have the ability to foresee changes in supply and demand and be willing to act on such risky forecasts in the absence of complete information (Marshall, 1994). Like Mill, Marshall suggests that the skills associated with entrepreneurship are rare and limited in supply. He claims that the abilities of the entrepreneur are “so great and so numerous that very few people can exhibit them all in a very high degree” (1994).

Marshall, however, implies that people can be taught to acquire the abilities that are necessary to be an entrepreneur. Unfortunately, the opportunities for entrepreneurs are often limited by the economic environment which surrounds them. Additionally, although entrepreneurs share some common abilities, all entrepreneurs are different, and their successes depend on the economic situations in which they attempt their endeavors (Marshall, 1994). Since the time of Marshall, the concept of entrepreneurship has continued to undergo theoretical evolution.

For example, whereas Marshall believed entrepreneurship was simply the driving force behind organization, many economists today, but certainly not all, believe that entrepreneurship is by itself the fourth factor of production that coordinates the other three (Arnold, 1996). Unfortunately, although many economists agree that entrepreneurship is necessary for economic growth, they continue to debate over the actual role that entrepreneurs play in generating economic growth. One school of thought on entrepreneurship suggests that the role of the entrepreneur is that of a risk-bearer in the face of uncertainty and imperfect information.

Knight claims that an entrepreneur will be willing to bear the risk of a new venture if he believes that there is a significant chance for profit (Swoboda, 1983). Although many current theories on entrepreneurship agree that there is an inherent component of risk, the risk-bearer theory alone cannot explain why some individuals become entrepreneurs while others do not. For example, following from Knight, Mises claims any person who bears the risk of losses or any type of uncertainty could be called an entrepreneur under this narrow-definition of the entrepreneur as the risk-bearer (Swoboda, 1983).

Thus, in order to build a development model of entrepreneurship it is necessary to look at some of the other characteristics that help explain why some people are entrepreneurs; risk may be a factor, but it is not the only one. Another modern school of thought claims that the role of the entrepreneur is that of an innovator; however, the definition of innovation is still widely debatable. Kirzner suggests that the process of innovation is actually that of spontaneous “undeliberate learning” (Kirzner, 1985, 10).

Thus, the necessary characteristic of the entrepreneur is alertness, and no intrinsic skills-other than that of recognizing opportunities-are necessary. Other economists in the innovation school side more with Mill and Marshall than with Kirzner; they claim that entrepreneurs have special skills that enable them to participate in the process of innovation. Along this line, Leibenstein claims that the dominant, necessary characteristic of entrepreneurs is that they are gap-fillers: they have the ability to perceive where the market fails and to develop new goods or processes that the market demands but which are not currently being supplied.

Thus, Leibenstein posits that entrepreneurs have the special ability to connect different markets and make up for market failures and deficiencies. Additionally, drawing from the early theories of Say and Cantillon, Leibenstein suggests that entrepreneurs have the ability to combine various inputs into new innovations in order to satisfy unfulfilled market demand (Leibenstein, 1995). Although many economists accept the idea that entrepreneurs are innovators, it can be difficult to apply this theory of entrepreneurship to less developed countries (LDCs).

Often in LDCs, entrepreneurs are not truly innovators in the traditional sense of the word. For example, entrepreneurs in LDCs rarely produce brand new products; rather, they imitate the products and production processes that have been invented elsewhere in the world (typically in developed countries). This process, which occurs in developed countries as well, is called “creative imitation” (Drucker, 1985) The term appears initially paradoxical; however, it is quite descriptive of the process of innovation that actually occurs in LDCs.

Creative imitation takes place when the imitators better understand how an innovation can be applied, used, or sold in their particular market niche (namely their own countries) than do the people who actually created or discovered the original innovation. Thus, the innovation process in LDCs is often that of imitating and adapting, instead of the traditional notion of new product or process discovery and development. As the above discussion demonstrates, throughout the evolution of entrepreneurship theory, different scholars have posited different characteristics that they believe are common among most entrepreneurs.

By combining the above disparate theories, a generalized set of entrepreneurship qualities can be developed. In general, entrepreneurs are risk-bearers, coordinators and organizers, gap-fillers, leaders, and innovators or creative imitators. Although this list of characteristics is by no means fully comprehensive, it can help explain why some people become entrepreneurs while others do not. Thus, by encouraging these qualities and abilities, governments can theoretically alter their country’s supply of domestic entrepreneurship. (David Burnett, thechnoprenurial. com September 2000)

Main content of the school The most central concept of this school is vision: a mental representation of strategy created or at least expressed in the head of the leader as perspective, specifically a sense of long term direction of organizations future. That vision serves as both an inspiration and a sense of what needs to be done a guiding idea, if you like. True to its label, vision often tends to be a kind of image more than a fully articulated plan (in words and numbers). That leaves it flexible, so that the leader can adapt it to his or her intuition and experiences.

The strategic vision is malleable this suggests that entrepreneurial strategy is both deliberate and emergent: deliberate in its broad lines and sense of direction, emergent in its details so that these can be adapted en route. The school of thought focuses on creating new ideas at the right time to suit the market niche. This leads to the success of the entrepreneurial activity. The tendency of the strategy to take the form of niche allows it to protect market position from the forces of outright competition (Blue ocean strategy).

Market awareness and creativity are the most essential aspects according to this school of thought. In strategy making it’s dominated by active search of new opportunities in dramatic leaps forward in the face of uncertainty and growth is the the dominant goal of the organization. The process of strategy formation is semiconscious at best, rooted in the experience and intuition of the leader, whether he or she actually conceives the strategy or adopts it from others and then internalizes it in his or her own behavior the power is centralized in the hands of Chief executives.

Contribution discussion A sound vision and visionary CEO can help organization to sail cohesively through muddy waters especially in early or very difficult years for the organization. Deliberate in broad line but flexible and emergent in the details. The malleable and emergent nature of vision and cognition of a manager can enable to explore the opportunities that exist focusing on the actions that lead to creation of value in the present day shifting landscape of business environment. Limitation discussion It presents strategy formation as all wrapped up in the behavior of single individual.

It didn’t say about the process. Cruising in predefined image or vision can blind someone for potential unexpected danger or developments. Vague vision; strategies are designed manly based on the leader’s intuition. How and when to find the right charismatic visionary leader with the qualities is hard and could be subjective. It requires full knowledge of all the processes and operation. It’s risky that hanging on the health and whim of single person, the escape or death of that person result in crisis of organization.

Back ground of Liu Yongxing (East Hope Group) After resigned their jobs and sold their bicycles and watches to raise money, Chairman Chen Yuxin and his three brothers Liu Yongyan, Liu Yongxing, and Liu Yonghao returned to their hometown county of Xinjin in Sichuan province end of 1982. With the initial ? 1000 raised collectively, they established their own business, the Yuxin Fine Breed Farm, to raise quails and chickens. The company had great profit and had established their strong footing in the industry of breading farm.

They also have helped to transform the county of Xinjin to the largest quail farm in the world In 1987, Liu Yongxing and his brother Chen Yuxin developed new high-end pig feeds in order to compete with then dominating foreign high-end big feeds products and at the same time with substantial cost advantages. The Liu brothers therefore soon expanded their company into the animal feeds industry and had achieved their second biggest milestone in the making of the company history. By 1995, the Hope Group had won awards of No. 1 of China 100 Feeds Companies and No. of China 500 Private Enterprises.

The Hope Group had grown so rapidly that the four brothers decided to split it into four entities: Continental Hope, East Hope, West Hope, and New Hope led respectively by Liu Yongyan, Liu Yongxing, Chen Yuxin, and Liu Yonghao. After separating with other brothers he established the head quarter of east hope group in Chengdu High -Tech Development zone which was moved to shanghai Pudong in April 1999. The east hope group still focuses on feed production, mainly on expanding to the upstream and the downstream along the feed industry chain.

Apart from the two feed companies in Vietnam the East hope Group led by him had 68 subsidiary companies in 16 province, cities and autonomous region in china whose main business area was feed production, together with some other related industries such as flour, food, bio engineering , fertilizer ,electrolytic aluminum and investment.

During the 20 year development in feed and investment areas, the group had been made rolling development by relying on its own capital its investors include Mingsheng bank , Guang Ming diary industry, Sino Korea BBQ Western Fast food, Beijing Nanshan skiing field ,etc. n order to build world competitive industry chain incorporating aluminum and electricity the group had been engaging in series of projects: electrolytic aluminum plant with the annual yield of 160,000 tons and a power generator set with an annual yield of 310,000 kilowatts in Liaocheng; two phases of construction of 500,000-ton electrolytic aluminum plant and auxiliary generator set and bio-engineering project in Baotou of Inner Mongolia; alumina project in sanmenxia , Henan province.

East Hope Group had over 70 subsidiary companies across 16 Provinces, Cities and autonomous regions in China with a total asset of Billions of yuan, and nearly 10,000 employees. The board chairman Liu yongxing had thus won a Variety of Social Honors. The honorsare ? In 2001, Liu Yongxing and his brothers were rated as the top of China’s Most Successful Businessmen by“Forbes”, awell-known U. S. financial magazine. ? In 2002, Liu Yongxing was rated as one of “2001CCTV Top 10 China’s Economic Leaders” and “Sohu 2001 Top10 Financial Leaders” ?

And after that strategically the brothers owned Entereprnual Company diversified in to four different entities. Mr. Liu Yongxing as East hope group keep on focusing the feeding industry and and strategically by rolling development by relying on its own capital it included other companies to build world competitive industry incorporating aluminum and electricity and bio engineering projects and in present day one of China’s largest privately held industrial materials manufacturers.

The company is investing more than $1 billion in an aluminum and power complex and also putting money into commercial real estate in Sichuan’s capital, Chengdu. Starting with 250 ? on proportion and Sound Vision, Excellence and Charisma Today with 5. 8 Billon $ Mr. Liu Yongxing is 5th and173rd richest person in china and world respectively. throughout his progress he is avisionary person creating new ideas at the right time to suit the market with the pusue of growth semiconsciously that enabled him to be one of influential and great Business manager in the World.