Entrepreneurial Initiative

Entrepreneurship

Many assume that entrepreneurship is a fancy term used for being a business owner. Nevertheless, the literature presented arguments that scholars are uncertain of the exact meaning of entrepreneurship and that it involves more than starting a business. This paper seeks to understand the historical progression of entrepreneurship and its evolution as a separate ongoing field of study in management. The conceptualization of entrepreneurship is a challenge because of its dynamic characteristic. However, resource-based theory, economic theory, and innovation theory are a few underlying frameworks that provide grounding guidance to fulfilling entrepreneurial success.

Entrepreneurship’s Conceptualization

Carland et al. (1988) recognized that literature presented no generally accepted definition of entrepreneur, although the term originated in the 1700s. More recent studies attempted to define entrepreneurship specifically but presented a complex explanation using lengthy words and descriptions as a synonym for business owners. Lazear (2005) offered descriptions intertwined with various business-making techniques such as economics, management, and human capital. Entrepreneurship is associated with risk-taking ventures and exceeding the regular profits (Vereshchagina & Hopenhayn, 2009), but empirical studies do not support this claim (Macko & Tyszka, 2009). No entrepreneurship theory has been established to describe or foresee when an entrepreneur may show or participate in entrepreneurship (Bull & Williard, 1993). This explanation signifies the ongoing study of what the entrepreneurship concept is based on.

Successful entrepreneurs portray the process of going through trial-and-error, which Alvarez and Barney (2008) recognized as ideational trial and error concepts. Mark Zuckerberg developed various mobile applications and games before landing on the invention that made him a successful entrepreneur, Facebook. Entrepreneurship demonstrates a different level of dedication and focuses on achieving the target growth. Despite the difficulty in isolating entrepreneurship as a theory, there are causal concepts (Hofer & Bygrave, 1992; Mason & Harvey, 2013) that contributes to the overall concept of entrepreneurship, such as the resource-based theory (Alvarez & Busenitz, 2001)., economic theory (Brown & Thornton, 2013), and innovation theory (Lounsbury et al., 2019). These theories are only a few of the many frameworks that guide aspirant entrepreneurs to be successful. Alvarez and Barney (2017) recognized these frameworks as theoretical bases that can be utilized to explain, forecast, and empirically observe entrepreneurial phenomena.

Resource-based theory

The resource-based view is a persuasive viewpoint in organizational science (Kellermanns et al., 2016). A perfect example of this theory was Jeff Bezos when he used available resources to maximize potential growth in retail. The resource-based view is not involved tangible resources but includes knowledge that made Bezos react to economic changes and the development of the internet, a resource that can be used to start Amazon (Day, 2014). The resource-based theory urged entrepreneurs to be familiar with all the resources that can be used to start a venture.

Economic Theory

            Warren Buffett is an ideal example in using the economic theory integrated to entrepreneurship, where he understood the influence of economic strategy in a business. Warren Buffett is a strong advocate of investing and introduced the snowball effect (Lipschultz, 2017). All successful entrepreneurs know that basic economic knowledge is a prerequisite to starting a business and going beyond the normal range of regular establishments.  Jeff Bezos took risks of investing in tools and instruments to initiate the plan requiring basic economic understanding. Steve Jobs is one of the entrepreneurs that shows success in following innovation theory, but basic financial knowledge is necessary also.

Innovation Theory

            Mitton (1989) demonstrated how Steve Jobs incorporated the innovation theory to become a successful entrepreneur. Knowledge workers intend to be demonstrated in conducting entrepreneurial quests (Veeraraghavan, 2009). The willingness to take risks and enter into creative damage and invention is displayed as an entrepreneur's unique qualities. The innovation theory presented that creativity, invention, and innovation contribute to predicting a person’s entrepreneurial competencies.

Conclusion

            Defining entrepreneurship is based on the process that an individual took to become successful. Literature provided several conceptual frameworks, to begin with, entrepreneurial endeavors. Persistence and conducting a trial-and-error process intend to contribute to a person's success in entering a new venture. Resource-based theory contributes to raising an individual's awareness of the assets and instruments to use in entrepreneurship. The economic theory provides quantifying and measures these resources to predict returns. Lastly, the innovation theory adds motivation to aspiring entrepreneurs to be creative to discover a breakthrough.

References

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