Jerinabi & Santhi (2012) clarifies that enterprise entails the initiatives and risks one takes to invest in running a business. Entrepreneurship, additionally, involves the process that goes into designing, implementing and running a business that is new and often small in nature. He proceeds that people who create such kind of businesses are called entrepreneurs. Innovatively, entrepreneurs take initiatives to act on opportunities that emerge and translate technology into emerging market ready products. Inasmuch as all small business may be regarded as enterprising, not all of them are entrepreneurial. Entrepreneurial ventures have a complete set of ecosystem that we discuss in this essay. I, therefore, agree with Drucker that not every business is entrepreneurial. This paper highlights major reasons for this agreement and a counter reason opposing this assertion.
First, not all small businesses started by entrepreneurs have the systems that represent entrepreneurship. According to Hisrich & Kearney (2012), exploiting entrepreneurial openings includes the process of:
- Developing a plan of action,
- Hiring human capital
- Acquisition of resources, financial and material
- Providing guidance and leadership in the business
- Responsibility for success and failures in the venture
- Risk aversion
These systems are standard across all small businesses despite different academic bodies having different names for them. Some small business, however, do not have proper systems in place to fulfil on this requirement. According to Cohen (2016) over 25% of small businesses do not have an operational business plan and rely on daily decisions that have no backing whatsoever. Further, while some business people may take risks and initiative, not everyone takes responsibility for their actions. This lack of a clear system for the business owner to embrace makes the business non–entrepreneurial.
Secondly, according to Tataj & Cstells (2015), the entrepreneur has a crucial role similar to that of a creative destructor. Such an innovator is one who launches products and services that simultaneously destroy industries with old systems while providing new methodologies of operation. In fact, Tataj & Cstells proceeds that dynamic innovations have a crucial role to play in creating an economy that is healthy and sanitized. An emerging innovative spirit within the business world creates a spirit of emerging industries and firms that erupts from small businesses. Unfortunately, the current market in most countries is flooded with copied products and services with less modification or differentiation. When several businesses emerge as copycats in the market, the actual innovation becomes illusive and perhaps nonexistent. From this premise of replicated business models and ideas, certain businesses do not qualify as complete businesses.
On another note, inasmuch as most entrepreneurs are collapsed into a small business, the terms may be used interrelatedly. Their usage as such does not signify their direct correlation of one for the other. According to Drucker, several small businesses have a sole ownership which normally is the owner. In other cases, the business has a small number of staff. Besides this reason, some of the products offered in such businesses, are existing in the market and there is no clear indication of growth. On the other hand, ventures that have an entrepreneurial angle often have a variety of innovative products. In other cases, their services or processes as well as the entrepreneur have an aim of growing the firm. In a bid to scale, they could add more employees, seek international expansion among others. In the case described in the latter, the entrepreneur operates closely as a startup. This mentality becomes a direct correlation to the nature of work that the businesses does.
Finally, Bonaparte (1970) states that entrepreneurship often operates within an ecosystem which entails various elements that emerging enterprise should adhere to. The first ecosystem includes programs from the government such as services to boost entrepreneurial and startup support. Secondly, non-governmental agencies also form a part of this ecosystem to offer business mentoring and advice to business people. The ecosystem also entails small business as well as organizations that lobby and advocate for laws and regulations of business entities. Other ecosystem areas relevant to an entrepreneurship include education as well as programs offered in institutions and finally financing. Having this kind of ecosystem is crucial for any organization regarding itself as entrepreneurial; however, certain small businesses lack a connection to the ecosystem. Instead, they focus more on sole proprietorship with no clear plan of growth within the ecosystem.
Ideally Drucker define entrepreneurship in terms of innovation and risk taking to transform an idea into a business. While anyone starting a business demonstrates these traits by the virtue of their starting, innovation of new products, continuous process improvement, technology usage among other economical strategies create a business intelligence that is lacking among some small businesses.
On the other hand, any form of small business, regardless of following the systems or not, often reflect the structure of being entrepreneurial. Judging a small business based on whether they have the ability to make money or not does not reflect an accurate picture of business. According to Cohen, the qualities of starting an enterprise are sufficient to qualify any business as entrepreneurial. His approach majors on the qualities and traits that most entrepreneurs possess. Looking closely at taking risks, for example, the ideal value of any businesses, big or small is to take risks and avert the impact of those risks on the owner. Most entrepreneurs put their life on the line by committing their savings and other resources to start a business. This step of planning and launching a product or service requires a quality of risk taking that qualifies one as an entrepreneur. From this sense, all businesses, big or small, are entrepreneurial. Another trait that’s common among all business owners that qualifies small businesses as entrepreneurial is initiative. The entrepreneur, in this case, has the abilities to recognize the economic potential of a new idea and create activities consistent with the established firms.
In conclusion, while most people regard small businesses as entrepreneurial, this is not true as Drucker asserts. As established above, most small businesses have a sole proprietorship that ensures that only the only exists besides a few other employees. Further, the small businesses replicate current products and lack innovation in their product process. Finally, their ecosystem does not aim for growth.
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Bonaparte, T. H. (1970). Peter Drucker: Contributions to business enterprise. New York: New York University Press.
Cohen, W. A. (2006). The marketing plan. Hoboken, NJ: J. Wiley & Sons.
Hisrich, R. D., & Kearney, C. (2013). Managing Innovation and Entrepreneurship.
In Jerinabi, U., & Santhi, P. (2012). Creativity, innovation, and entrepreneurship.
In Little, S. E., In Go, F. M., & In Poon, T. S.-C. (2017). Global innovation and entrepreneurship: Challenges and experiences from East and West.
Tataj, D., & Cstells, M. (2015). Innovation and entrepreneurship: A growth model for Europe beyond the crisis.
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